Income tax and allowances: For the 2025/26 tax year, which runs until 5 April 2026, the personal tax-free allowance will stay at £12,570. This allowance begins to reduce for those earning over £100,000 and phases out entirely at incomes above £125,140.

Income tax rates: Income tax rates and thresholds remain frozen at their current levels for the 2025/26 tax year. After applying the personal allowance, income will be taxed as follows:

• Basic Rate (20%) for income up to £37,700.
• Higher Rate (40%) for income between £37,701 and £125,140.
• Additional Rate (45%) for income above £125,140.

For savings income, basic and higher rates apply as above, while dividend income tax rates are 8.75% for basic rate, 33.75% for higher rate, and 39.35% for additional rate taxpayers.

Scottish and Welsh Taxpayers: Scottish residents pay income tax on other income at different rates and thresholds, with bands ranging from 19% for starter rates up to 48% for top-rate taxpayers. Scottish rates for 2025/26 are expected in December’s budget announcement. Welsh income tax rates typically follow UK levels, with confirmation expected in December.

Savings and Dividend Allowances: The tax-free savings allowance for 2025/26 will stay at £1,000 for basic rate and £500 for higher rate taxpayers. ISAs remain a tax-free option for savings income. Dividend income up to £500 will continue to be tax-free, and dividends earned in a stocks and shares ISA will remain exempt from tax.

ISA Contributions: The total ISA limit remains at £20,000 for 2025/26, with up to £4,000 allowed in a Lifetime ISA. Junior ISAs and Child Trust Fund limits will remain at £9,000, and these ISA caps will stay fixed until 2030.

High-Income Child Benefit Charge (HICBC): The HICBC applies to individuals with income over £60,000 who receive child benefit, clawing back 1% of the benefit for every £200 of income above the threshold, reaching full clawback at £80,000. The government has decided against switching to a household income basis for calculating the HICBC, keeping it based on individual income.