Personal Allowance Frozen at £12,570: Why More UK Workers Could Pay More Tax

The UK Personal Allowance is frozen again at £12,570 from 6 April 2026.

That may not sound dramatic. But for many employees, it helps explain why take-home pay can feel tighter even when salary goes up. If your wages rise but the tax-free allowance does not, more of your income can be pulled into tax.

That is why searches for personal allowance changes UK, HMRC personal allowance change, and why is my tax higher UK keep rising at the start of the new tax year.

What the Personal Allowance is

Your Personal Allowance is the amount of income you can usually earn before Income Tax starts.

For most people, that figure is £12,570.

If you are employed and paid through PAYE, HMRC usually gives you this through your tax code. The standard code for many workers is 1257L.

In simple terms:

• the allowance reduces the part of your pay that is taxed
• it affects how much Income Tax comes off your payslip each month
• if your allowance stays flat while your pay rises, you can end up paying more tax

What the HMRC change means in practice

The biggest current change is not a new higher Personal Allowance.

The key point is that the Personal Allowance is still £12,570 for the 2026/27 tax year. That means there is no inflation uplift to the amount most people can earn before paying Income Tax.

For PAYE workers, that can matter in two ways:

• pay rises can push more of your income into taxable pay
• HMRC can adjust your tax code if it believes more tax should be collected through payroll

So even if the headline allowance does not go down, your monthly tax deduction can still go up.

Why your tax can feel higher even without a big rule change

This is where many workers get caught out.

You may look at the headline tax rules and think nothing changed. But in real life, small shifts can still reduce your take-home pay.

Common reasons include:

• your salary increased but the Personal Allowance stayed frozen
• HMRC changed your tax code
• you moved further into the basic-rate or higher-rate band
• extra benefits or underpaid tax were added into your code

That is the real personal allowance reduction impact many workers notice. The allowance itself may not have been cut, but its value falls in real terms when it stays frozen.

Who is most affected

The people most likely to feel the impact are:

• employees earning roughly £30,000 to £100,000+
• workers getting annual pay rises
• people close to key thresholds like £50,270, £60,000, or £100,000
• PAYE taxpayers with a changed tax code

If you are close to the higher-rate band or other tax cliffs, even a small salary increase can make a visible difference.

Real example: before vs after

Here is a simple example of how a frozen allowance can affect a PAYE worker.

Example: salary rises from £35,000 to £36,500

The Personal Allowance stays at £12,570 in both cases.

That is a simple way frozen thresholds can make tax feel higher.

It is not because the Personal Allowance fell below £12,570. It is because your pay rose while the tax-free amount did not.

Can you increase the amount of income you keep tax-efficiently?

You usually cannot increase the standard Personal Allowance itself unless a specific rule applies to you.

But you may still be able to improve your overall tax efficiency.

Options that can matter include:

• Marriage Allowance if you are eligible
• ISA savings so interest and investment growth stay outside Income Tax
• Personal Savings Allowance if you earn savings interest
• salary sacrifice if your employer offers it

For employees, salary sacrifice is often the most practical option because it reduces gross pay before Income Tax and employee National Insurance are calculated.

That can help by:

• lowering taxable pay
• improving pension contributions
• reducing the impact of frozen thresholds on take-home pay

You can read more in our salary sacrifice guide, tax code guide, and child benefit guide.

What to check now

If you are wondering, why is my tax higher UK, check these first:

1. your current tax code on your payslip
2. whether your salary increased this tax year
3. whether HMRC has adjusted your code for benefits or earlier underpayments
4. whether salary sacrifice could lower your taxable pay

This article is for general information only and is not financial advice.

FAQ

Has the Personal Allowance changed in the UK for 2026/27?

For most taxpayers, no. The standard Personal Allowance remains £12,570 for the 2026/27 tax year.

What is the HMRC personal allowance change?

The main point for most employees is that the allowance stays frozen at £12,570. There is no broad increase for the new tax year, so more pay can become taxable as earnings rise.

Why is my tax higher in the UK even if my tax code looks normal?

One common reason is that your salary increased while the Personal Allowance stayed the same. That means more of your pay is taxed, even without a dramatic headline rule change.

Can HMRC change my tax through PAYE?

Yes. HMRC can update your tax code so tax is collected through payroll. That can happen if there is underpaid tax, taxable benefits, or other adjustments.

Does salary sacrifice help?

It can. Salary sacrifice reduces gross pay before Income Tax and employee National Insurance are worked out, which can improve take-home efficiency and increase pension funding.

Can I increase my tax-free income?

You may not be able to raise the standard Personal Allowance itself, but you may be able to improve tax efficiency through things like Marriage Allowance, ISAs, savings allowances, and salary sacrifice.

Final word

The most important point is simple: the Personal Allowance is still £12,570, but that does not mean your tax bill stands still.

If your pay rises and the allowance stays frozen, more of your income can be taxed through PAYE.

Use the UK Salary Calculator to see exactly how this affects you