£67,700 of Tax-Free Allowances Just Reset — Here's Your 2026/27 Checklist Before HMRC Takes Its Cut

Your ISA allowance resets to £20,000 on April 6. Split it however you like across cash, stocks and shares, innovative finance, and Lifetime ISAs. With the Bank of England base rate at 3.75%, cash ISAs from the best providers are paying 4.4-4.7% — entirely tax-free. For a higher-rate taxpayer, that's equivalent to a gross return of 7.3-7.8%. No investment fund in the FTSE 100 offers that on a risk-adjusted basis. Our cash ISA analysis breaks down why this is the best deal in British finance right now.

The pension annual allowance remains at £60,000 (or 100% of earnings, whichever is lower). Higher-rate taxpayers get 40% relief on contributions — put in £10,000 and it costs you £6,000. Additional-rate payers get 45% relief. If your employer offers salary sacrifice, you save National Insurance too: 8% employee NI on top of the income tax relief.

The personal allowance stays at £12,570. Yes, it's been frozen since 2021/22. But it's still £12,570 of completely untaxed income — and if you're married or in a civil partnership, you can transfer £1,260 of unused allowance to your spouse via the Marriage Allowance, saving £252 a year in tax.

For those weighing ISA versus pension, the maths depends on your tax band and access needs. Our pension vs ISA debate lays out both sides. The short answer: use both if you can. The ISA gives you flexibility; the pension gives you a larger tax break. A higher-rate taxpayer who maxes both shelters £80,000 of new money from HMRC in a single tax year.

Don't overlook carry-forward. If you didn't max your pension annual allowance in 2023/24, 2024/25, or 2025/26, you can carry unused allowance forward. A higher-rate taxpayer who contributed nothing to a pension for three years could potentially contribute up to £180,000 in 2026/27 (three years of £60,000) and reclaim £72,000 in tax relief. Even partial use of carry-forward generates extraordinary tax savings. Check your previous years' pension statements — the unused allowance may surprise you.

Beyond the headline figures, several smaller allowances compound into serious money.

The dividend allowance is £500 — not much, but it means your first £500 of dividend income from shares held outside an ISA is tax-free. The personal savings allowance gives basic-rate taxpayers £1,000 of tax-free savings interest, and higher-rate payers £500. Combined with a cash ISA, a basic-rate taxpayer can earn interest on roughly £45,000 of savings before paying any tax at all.

The <a href="/posts/capital-gains-tax-uk-202526-rates-allowances-and-how-to-pay-less">capital gains</a> tax annual exempt amount is £3,000. Small, yes — down from £12,300 just two years ago. But if you hold investments outside a tax wrapper, you should be crystallising £3,000 of gains every April to use this allowance. Sell and immediately rebuy (bed and ISA) to reset your cost base. Over a decade, that's £30,000 of gains sheltered from CGT at 18-24%.

The trading allowance (£1,000) and property allowance (£1,000) round out the picture for anyone with a side income. Sell items on eBay, rent a room, or do freelance work up to £1,000 per year and you owe nothing. The rent-a-room scheme goes further — £7,500 tax-free for letting a furnished room in your home. These aren't headline allowances, but they're real money for real people.

The BoE has cut rates four times since August 2024 — from 5.25% to 3.75%. Markets expect at least one more cut in 2026. This creates a specific, time-limited opportunity.

Fixed-rate savings accounts and cash ISAs haven't fallen as fast as the base rate. You can still lock in 4.5%+ on a one-year fix. If the base rate drops to 3.25-3.50% by year-end (as swap rates suggest), today's fixed rates will look generous in hindsight.

For mortgage holders, the maths runs the other way — and it's equally positive. If you're remortgaging in 2026/27, you're doing so into a falling rate environment. Our mortgage calculator can show you the exact monthly saving. Two-year fixes have come down from their 6%+ peaks. Our savings hub tracks the best rates available. Overpaying your mortgage while rates are still above 4% gives you a guaranteed, tax-free return — and every rate cut makes your next fix cheaper.

The savings picture is more nuanced. Our debate on savings strategy highlights how higher-rate taxpayers may be better off in Premium Bonds or ISAs than taxable savings accounts. At 40% marginal rate, a 4.5% savings account yields just 2.7% after tax — less than inflation.

Here's what to do in the first week of the 2026/27 tax year — in order of priority:

1. Max your ISA. If you have the cash, front-load it. £20,000 on April 6 earning 4.5% for 12 months generates £900 tax-free. Waiting until March 2027 halves that.

2. Review pension contributions. Check your employer's salary sacrifice scheme. Every £1,000 you sacrifice saves you £80 in NI (8%) plus your marginal income tax rate. For a £50,000 earner, that's £400 of tax saved per £1,000 contributed.

3. Claim Marriage Allowance. If one spouse earns under £12,570 and the other is a basic-rate taxpayer, claim online — it takes five minutes and saves £252/year. You can backdate four years.

4. Bed and ISA. If you hold investments in a general investment account, sell enough to use your £3,000 CGT allowance and rebuy inside your ISA wrapper. You'll pay no CGT on the gain and shelter all future growth.

5. Check your tax code. Your 2026/27 tax code should be 1257L. If it's different, HMRC may be collecting underpaid tax from a previous year — or making an error. Check via your personal tax account.

6. Review your tax position. If you earn between £100,000 and £125,140, you face the 60% effective tax trap — your personal allowance is withdrawn at £1 for every £2 earned. Pension contributions can bring your adjusted net income below £100,000 and restore your full allowance. At £110,000, a £10,000 pension contribution saves you £6,000 in tax — a 60% effective return before any investment growth.

One move most people overlook: if you hold a Lifetime ISA, your £4,000 annual LISA limit sits within the overall £20,000 ISA allowance. A first-time buyer saving for a deposit gets a 25% government bonus on LISA contributions — £1,000 free per year. Combined with the employer pension match, that's thousands of pounds of free money left on the table by people who "haven't got round to it."