Personal Allowance freeze extended to 2030 to 2031 at Autumn Budget 2025

The Personal Allowance remains at £12,570 from the 2021 to 2022 tax year through to 2030 to 2031, following the extension of the freeze at Autumn Budget 2025¹. The figure was confirmed in HMRC's Income Tax Liabilities Statistics, published on 15 July 2026, which sets out finalised outturn data for 2023 to 2024 alongside projections to 2026 to 2027¹.

HMRC said the frozen allowance, combined with income growth, is expected to increase the number of people liable to Income Tax¹.

There were an estimated 36.7 million Income Tax payers in 2023 to 2024, an increase of 2.2 million on 2022 to 2023, which HMRC attributes to the frozen Personal Allowance and income growth¹. The total is projected to rise to 40.8 million by 2026 to 2027¹.

The shift between rate bands is set out in the projections. The higher rate threshold has been frozen from 2022 to 2023 through to 2030 to 2031 at its 2021 to 2022 level¹. HMRC says this, plus earnings growth in the middle and higher parts of the income distribution, explains a projected move from basic rate to higher rate¹.

Source: HMRC, Income Tax Liabilities Statistics¹. Figures may not sum due to rounding¹.

The additional rate threshold was lowered from £150,000 to £125,140 from April 2023 onwards and frozen at that level¹. HMRC says the introduction of the advanced rate of Scottish Income Tax in 2024 to 2025 reclassified some Scottish Income Tax payers, with those whose marginal rate is the advanced rate now classified as additional rate payers¹.

Separate reporting on 16 September 2026 said the freeze had been extended to April 2031 in the November 2025 Budget, after an earlier commitment not to extend it beyond April 2028². That report said the number of higher rate taxpayers reached 6.6 million in the last financial year, and that tax paid by people in retirement rose from £21.1bn to £29.8bn, an increase of over 40 per cent in two years, according to HMRC pension participation figures². It also cited a Pension Bee poll in which nearly 70 per cent of taxpayers said they wanted the allowance unfrozen, over 40 per cent wanted the decision overhauled immediately, and one in five did not know what the allowance was². The poll's fieldwork dates, sample size and methodology have not been reported².

Why it matters for households

The allowance has been fixed at £12,570 since April 2021². Because it does not rise with earnings, more people cross the threshold at which Income Tax becomes payable, and more move into the higher rate as pay grows¹. HMRC projects 40.8 million Income Tax payers by 2026 to 2027, up from 36.7 million in 2023 to 2024¹.

The effect is not evenly spread. In 2023 to 2024, 8.16 million Income Tax payers (22.2%) were over state pension age¹. By 2026 to 2027, HMRC projects 9.58 million payers (23.5%) will be above state pension age¹. The State Pension age for men and women rises to 67 between 2026 and 2028¹.

The higher rate threshold freeze runs to 2030 to 2031¹, the same end date as the allowance freeze. The additional rate threshold has been £125,140 since April 2023¹. People with income above £100,000 lose part of their Personal Allowance under the taper, which is covered in our guide to losing your Personal Allowance above £100,000. Where one partner does not use all of their allowance, Marriage Allowance allows part of it to be transferred, and our guide compares it with Married Couple's Allowance. More on how Income Tax works is in the tax hub.

What happens next

The allowance freeze runs to 2030 to 2031¹. Reporting on 16 September 2026 said a Budget was due on 28 October, with calls for the freeze to be ended². From April 2027, pensions are to be included within the scope of inheritance tax, so unused funds and death benefits will count towards the value of a person's estate².