The personal allowance is the amount you can earn before paying any income tax. For 2025/26 and 2026/27, it is £12,570. This threshold has been frozen since 2021 and will remain frozen until at least 2028.
This freeze is known as fiscal drag. Because wages are rising with inflation but the personal allowance stays fixed, more of your income gets taxed each year. Someone earning £30,000 effectively pays hundreds of pounds more in tax each year compared to if the threshold had risen with inflation.
You lose your personal allowance if you earn over £100,000. It reduces by £1 for every £2 you earn above £100,000, and is completely gone by £125,140. This creates the notorious 60% tax trap where your effective marginal tax rate is around 60%.
If you are married or in a civil partnership and one partner earns less than £12,570, they can transfer £1,260 of their unused personal allowance to the other partner through Marriage Allowance. The receiving partner must be a basic rate taxpayer. This saves £252 per year, and you can backdate claims for up to four years — potentially claiming £1,008.
To apply for Marriage Allowance, go to GOV.UK and search for Marriage Allowance. The lower earning partner needs to apply, and it is done online in about 10 minutes.
Some people have different personal allowances. If you were born before 6 April 1948, you may be entitled to a higher allowance, though this is being phased out. Blind Person's Allowance adds an extra £2,870 to your tax-free income.
Use our take-home pay calculator to see how the personal allowance affects your take-home pay at any salary level.