Which Tax Allowances Can Save You Money in the UK?

Introduction

Most UK taxpayers will, at some point, stare at a tax calculation — on a payslip, a pension statement, a Self-Assessment return or a CGT form — and wonder how the bands and allowances actually interact. Income tax bands, dividend allowance, savings allowance, CGT exempt amount, pension Annual Allowance, ISA allowance, nil-rate band, residence nil-rate band, SDLT thresholds, NI thresholds — it is one of the more opaque bundles of numbers in British public life. This guide is a complete map of every band and allowance that ordinary taxpayers are likely to encounter in the 2025/26 tax year, how they apply, and how they interact.

The guide starts with income tax, then moves through savings, dividends, CGT, inheritance tax, VAT, National Insurance, SDLT, stamp duty on shares, Corporation Tax, and the many smaller allowances that are easy to overlook. Each section explains the figure, when it applies, and the practical implication. Case studies at the end show how the bands stack in realistic situations. A summary reference table at the close pulls the numbers into one place.

All figures are those confirmed by HMRC and the Scottish Parliament for the 2025/26 tax year. Main UK thresholds are currently frozen until April 2028, so many 2026/27 figures are already known to be unchanged. Where there is a known phased change (for example Business Asset Disposal Relief rates), I flag it. Where the Autumn 2025 Budget or Spring 2026 Statement may have altered a number after my knowledge cutoff, I direct readers to GOV.UK.

Income Tax Bands

Income tax is charged on a person’s total taxable income for the year, stacked in bands, with different rates applying to each band. The bands are set by the UK government for England, Wales and Northern Ireland, and separately by the Scottish Parliament for Scotland.

England, Wales and Northern Ireland (2025/26)

• Personal Allowance: first £12,570 of income, taxed at 0%.
• Basic rate: next £37,700 (£12,571 to £50,270), taxed at 20%.
• Higher rate: £50,271 to £125,140, taxed at 40%.
• Additional rate: above £125,140, taxed at 45%.

The Personal Allowance is reduced by £1 for every £2 of adjusted net income above £100,000, falling to zero by £125,140. This creates a 60% effective marginal rate on the £100,000–£125,140 band — a crucial point for high earners.

Scotland (2025/26)

• Personal Allowance: £12,570 (set by Westminster, not devolved).
• Starter rate: 19% on the next £2,306 (£12,571 to £14,876).
• Basic rate: 20% on the next £11,685 (£14,877 to £26,561).
• Intermediate rate: 21% on the next £17,101 (£26,562 to £43,662).
• Higher rate: 42% on the next £31,338 (£43,663 to £75,000).
• Advanced rate: 45% on £75,001 to £125,140.
• Top rate: 48% above £125,140.

Scottish residents on higher incomes pay materially more than their counterparts in England or Wales — the gap widens from around £5,000 a year at £50,000 of income to tens of thousands at very high incomes.

Wales

The Welsh Parliament has the power to set its own rates within the UK framework. To date, it has matched the UK rates exactly, so Welsh taxpayers are in practice taxed at the same rates as English and Northern Irish ones. The mechanism by which this works — each UK rate reduced by 10p in Welsh payslips with the Welsh government adding 10p back — is invisible to most taxpayers.

Northern Ireland

Northern Ireland uses the UK rates directly.

Personal Allowance

The Personal Allowance is the foundational tax-free slice of income every UK resident individual receives. In 2025/26 it is £12,570. It has been frozen at this level since 2021/22 and is currently planned to remain frozen until April 2028 — a long-running stealth tax rise as wage inflation pushes people into tax.

Key points:

• One allowance per person, not per job.
• Used against whichever income would otherwise be taxed at the highest rate.
• Tapers between £100,000 and £125,140 of adjusted net income.
• Transferable: Marriage Allowance permits transferring 10% (£1,260) to a basic-rate spouse.
• Blind Person’s Allowance adds an extra £3,130 for eligible individuals.

Marriage Allowance

Available to married couples and civil partners where one is a non-taxpayer and the other is a basic-rate taxpayer. The non-taxpayer transfers £1,260 of their Personal Allowance to the higher earner, saving up to £252 in tax. Can be backdated four tax years.

Blind Person’s Allowance

£3,130 in 2025/26, added to the Personal Allowance. Available to those registered blind in England/Wales or satisfying the equivalent test in Scotland/Northern Ireland. Transferable to a spouse or civil partner if unused.

Savings Income Allowances

Savings income (interest from banks, building societies, corporate bonds, gilts, peer-to-peer, NS&I) has three separate reliefs that can stack.

Personal Savings Allowance (PSA)

• £1,000 for basic-rate taxpayers.
• £500 for higher-rate taxpayers.
• £0 for additional-rate taxpayers.

Interest above the PSA is taxed at the individual’s marginal income tax rate.

Starting Rate for Savings

Up to £5,000 of savings income at 0%, but only if non-savings income is below the Personal Allowance. The £5,000 reduces pound-for-pound as non-savings income rises above the PA, and runs out when non-savings income reaches £17,570.

Interaction Example

Someone with £10,000 of non-savings income and £12,000 of interest:

• Personal Allowance covers the £10,000 non-savings income fully.
• Remaining £2,570 of PA is used against interest — tax-free.
• Starting rate of £5,000 also applies (since non-savings income is below £12,570) — next £5,000 of interest tax-free.
• PSA of £1,000 (basic-rate as total income is in basic band) — next £1,000 tax-free.
• Remaining £3,430 of interest is taxed at 20%.

Combined, this person has enjoyed £8,570 of tax-free interest on top of their non-savings PA coverage.

ISA Wrappers

Cash ISAs and Stocks & Shares ISAs entirely shelter interest and investment income from UK tax. No limit on total wealth held in ISAs; only a limit on annual subscriptions (£20,000 in 2025/26).

Dividend Allowances

Dividend income has its own allowance and rates, layered on top of other income.

Dividend Allowance

£500 for 2025/26 and all taxpayers regardless of marginal rate. This is not an exemption — the £500 still uses up bands.

Dividend Tax Rates

• 75% in the basic-rate band.
• 75% in the higher-rate band.
• 35% in the additional-rate band.

Dividend rates apply UK-wide; Scottish taxpayers pay the same dividend tax as English taxpayers.

Capital Gains Tax Allowances

Annual Exempt Amount (AEA)

£3,000 for individuals in 2025/26. £1,500 for most trusts. Gains up to the AEA are untaxed; above it, tax is charged at:

• 18% in the basic-rate band, 24% in the higher-rate band, for most assets.
• 18% / 24% for residential property too (unchanged when the rates on other assets were raised in October 2024).
• 14% for Business Asset Disposal Relief and Investors’ Relief up to the £1 million lifetime limit each, rising to 18% from April 2026.
• 28% for carried interest in 2025/26 (higher rate).

The AEA has fallen from £12,300 in 2022/23 to £3,000 — a dramatic tightening that has brought many ordinary taxpayers into CGT for the first time.

Inheritance Tax Thresholds

Nil-Rate Band (NRB)

£325,000 per individual. Frozen since 2009 and currently planned to remain at £325,000 until April 2030.

Residence Nil-Rate Band (RNRB)

£175,000, applicable when passing the main home to direct descendants. Tapers by £1 for every £2 of estate above £2 million. A couple can therefore pass a combined £1 million tax-free (two NRBs plus two RNRBs), provided the estate structure qualifies.

Annual Exemption

£3,000 of lifetime gifts per year, outside the estate. One year’s unused allowance can be carried forward. Plus £250 small gifts to unlimited individuals, wedding gifts of £5,000/£2,500/£1,000 depending on relationship, and gifts out of normal surplus income.

Rates

40% standard; 36% where at least 10% of the estate is left to charity; lifetime Chargeable Transfers taxed at 20% where they exceed the NRB.

Business and Agricultural Reliefs

100% or 50% relief from IHT on qualifying business or agricultural assets. Reformed from April 2026 so that combined BR/AR above £1 million will receive 50% relief rather than 100%.

Pension Allowances

Pensions operate under several overlapping limits.

Annual Allowance

Standard: £60,000 for most individuals in 2025/26. Contributions from you, your employer, and third parties all count.

Tapered Annual Allowance

Above £260,000 of adjusted income, the Annual Allowance tapers by £1 for every £2, down to £10,000 at £360,000+.

Money Purchase Annual Allowance (MPAA)

£10,000 once flexibly accessed a defined contribution pension (taking more than the 25% tax-free lump sum).

Carry Forward

Unused Annual Allowance from the previous three tax years can be used, up to a combined four years’ worth in one contribution, provided you were a pension scheme member in each carry-forward year.

Lump Sum Allowance

£268,275 — maximum tax-free lump sum available from pensions across a lifetime.

Lump Sum and Death Benefit Allowance

£1,073,100 — limit on aggregate tax-free lump sums during life and after death. Replaced the Lifetime Allowance from April 2024.

ISA Allowances

Total £20,000 per adult across all ISA types:

• Cash ISA.
• Stocks & Shares ISA.
• Lifetime ISA (limited to £4,000 of the £20,000, plus 25% government bonus).
• Innovative Finance ISA.

Junior ISAs: £9,000 for under-18s.

Help to Buy ISAs closed to new subscribers in 2019 but existing ones continue.

British ISA

Announced in the Spring 2024 Budget, providing an additional £5,000 allowance for UK-listed equities. It was subsequently withdrawn by the incoming government in late 2024, so in practice the British ISA has not been implemented. Readers should check GOV.UK for current status.

National Insurance Thresholds (2025/26)

NI has its own set of thresholds, independent of income tax bands.

Employee Class 1

• Primary Threshold: £12,570 — same as income tax PA.
• Upper Earnings Limit (UEL): £50,270 — same as the higher-rate income tax threshold.
• Main rate: 8% between PT and UEL.
• Additional rate: 2% above UEL.

Employer Class 1 (Secondary)

• Secondary Threshold: £5,000 (from April 2025, reduced from £9,100).
• Rate: 15% (from April 2025, up from 13.8%).
• Employment Allowance: £10,500 a year (from April 2025) off Employer NI for eligible employers — a significant uplift in 2025/26.

Class 2 and Class 4 (Self-Employed)

• Class 2: abolished as compulsory from April 2024. Still payable voluntarily for State Pension credits by those below the Small Profits Threshold (£6,725 in 2025/26).
• Class 4 main rate: 6% between £12,570 and £50,270.
• Class 4 additional rate: 2% above £50,270.

Class 3

Voluntary contributions to fill gaps in your State Pension record. £17.75 a week in 2025/26.

VAT Thresholds

• Registration threshold: £90,000 of taxable turnover in any rolling 12-month period.
• Deregistration threshold: £88,000.
• Flat Rate Scheme: available for businesses with turnover under £150,000.
• Cash Accounting Scheme: turnover under £1.35 million.
• Annual Accounting Scheme: turnover under £1.35 million.

VAT Rates

• Standard rate: 20%.
• Reduced rate: 5% (e.g. domestic energy, children’s car seats, certain renovations).
• Zero rate: 0% (most food, books, children’s clothing, exports).
• Exempt: outside VAT entirely (e.g. financial services, insurance, education, healthcare).

The distinction between zero-rated and exempt matters — zero-rated businesses can reclaim input VAT, exempt businesses cannot.

Stamp Duty Land Tax (England and Northern Ireland, 2025/26)

From 1 April 2025, SDLT thresholds reverted after the temporary 2022–2025 uplifts expired:

• Nil rate up to £125,000 (residential).
• 2% on the portion £125,001–£250,000.
• 5% on £250,001–£925,000.
• 10% on £925,001–£1.5 million.
• 12% on the portion above £1.5 million.

First-Time Buyer Relief

No SDLT up to £300,000, with 5% on £300,001–£500,000. Properties above £500,000 don’t qualify for FTB relief.

Additional Property Surcharge

5% additional rate on second homes and buy-to-let properties (from October 2024 Budget, up from 3%). Applied on top of the standard SDLT.

Non-Resident Surcharge

2% additional rate for non-UK residents buying residential property.

Scotland: Land and Buildings Transaction Tax (LBTT)

Scotland has its own regime with different rates and an Additional Dwelling Supplement (ADS) on second homes (currently 8%).

Wales: Land Transaction Tax (LTT)

Wales likewise has its own regime set by the Welsh Revenue Authority, with different rates and bands.

Stamp Duty on Shares

• 5% on UK share purchases over £1,000, rounded up to nearest £5.
• 5% on shares entering a depositary receipt system (rare).
• No stamp duty on:
  • AIM shares.
  • Foreign shares.
  • ETFs (usually).
  • Shares bought in an ISA or SIPP (the 0.5% still applies technically but is built into the cost of the trade — no separate relief).

Corporation Tax

Since April 2023:

• Main rate: 25% on profits over £250,000.
• Small profits rate: 19% on profits up to £50,000.
• Marginal relief tapers between £50,000 and £250,000.
• Associated company rules can reduce the thresholds where companies are part of a group.

Diverted Profits Tax, Digital Services Tax, Bank Surcharge

Additional special regimes apply to particular sectors.

Smaller Allowances Worth Knowing

Trading Allowance

£1,000 of gross trading or miscellaneous income tax-free per year. Can be used instead of claiming expenses.

Property Allowance

£1,000 of gross rental income tax-free. Same rules — use allowance or claim actual expenses.

Rent-a-Room Relief

Up to £7,500 a year of gross rental income from a lodger in your main home is tax-free, if conditions are met.

Help to Save

For low-income workers: save up to £50 a month for four years, earn 50% bonus (up to £1,200) from the government.

Universal Credit and Taxable Benefits

Some benefits are taxable (Jobseeker’s Allowance contribution-based, taxable pensions, State Pension) and some are not (most Universal Credit, Disability Living Allowance, Personal Independence Payment).

Worked Examples

Example 1: Basic-Rate Employee With Some Interest

Sophia earns £35,000 salary, £1,500 interest.

• PA: £12,570 against salary.
• Basic-rate band: £22,430 of salary at 20% = £4,486.
• PSA: £1,000 tax-free interest.
• Remaining £500 of interest at 20% = £100.
• Total tax: £4,586.

Example 2: Higher-Rate Earner With Dividends

Tomasz earns £70,000 salary, £6,000 dividends.

• PA covers £12,570 of salary.
• Basic-rate band covers £37,700 of salary at 20% = £7,540.
• £19,730 of salary at 40% = £7,892.
• Dividend allowance: £500 tax-free.
• Basic-rate band already used up; all remaining dividends in higher band.
• £5,500 dividends at 33.75% = £1,856.25.
• Total tax: £17,288.25.

Example 3: Additional-Rate Earner With Multiple Sources

Rachel earns £180,000 salary, £10,000 savings interest, £20,000 dividends.

• PA: £0 (fully tapered — adjusted net income above £125,140).
• Basic-rate band: £50,270 of salary at 20% = £10,054.
• Higher-rate band: £74,870 of salary at 40% = £29,948.
• Additional-rate band: £54,860 of salary at 45% = £24,687.
• PSA: £0.
• All £10,000 interest at 45% = £4,500.
• Dividend allowance: £500.
• All £19,500 of dividends at 39.35% = £7,673.25.
• Total tax: £76,862.25.

Example 4: Scottish Taxpayer With Investment Income

Aidan, Edinburgh resident, earns £60,000 salary, £4,000 UK dividends.

• PA: £12,570 against salary.
• Starter rate (19%) on £2,306 = £438.14.
• Basic rate (20%) on £11,685 = £2,337.
• Intermediate rate (21%) on £17,101 = £3,591.21.
• Higher rate (42%) on remaining £16,338 of salary = £6,861.96.
• Dividend allowance £500; remaining £3,500 dividends at the UK higher-rate dividend rate 33.75% = £1,181.25. (Dividend rates are UK-wide, not Scottish.)
• Total tax: £14,409.56.

Example 5: Capital Gain Combined With Income

Pete has taxable income of £42,000 and a capital gain of £15,000.

• Basic-rate band remaining after income: £50,270 − £42,000 = £8,270.
• AEA: £3,000 tax-free gain.
• First £8,270 of remaining gain in basic band at 18% = £1,488.60.
• Remaining £3,730 of gain in higher band at 24% = £895.20.
• Total CGT: £2,383.80.

How Bands Stack: The Order of Income

UK income tax follows a specific stacking order that matters whenever a taxpayer has multiple income types:

1. Non-savings, non-dividend income (salary, self-employment, pension, rent).
2. Savings income (interest).
3. Dividend income.
4. Capital gains (separately, on top of income for banding purposes).

Allowances are applied to maximise relief. The Personal Allowance is allocated to the income that would otherwise bear the highest rate, though for PAYE purposes it is applied to employment. Dividend and savings allowances only apply to their respective categories.

Devolution and Divergence

Three key points where devolution creates different outcomes:

1. Scotland sets income tax on non-savings, non-dividend income. Its rates and bands are significantly different and generally higher at the top end.
2. Scotland and Wales each have their own property transaction taxes (LBTT and LTT) with different band structures.
3. Scotland sets its own additional dwelling supplement rate (8%, materially higher than the rest of the UK).

Dividend tax, savings tax, CGT, IHT, VAT, Corporation Tax, NI and stamp duty on shares are all UK-wide and identical regardless of where in the UK a taxpayer lives.

The Frozen Threshold Problem

Most UK tax thresholds — Personal Allowance, higher-rate threshold, NI primary threshold, IHT NRB and RNRB — have been frozen for years, typically since 2021 or earlier. The current freeze is scheduled to continue to April 2028 (and IHT thresholds to April 2030). With wage and asset inflation running above zero, frozen thresholds pull more income and estates into tax each year. The OBR has estimated four million additional higher-rate taxpayers by 2028 purely from freeze-driven fiscal drag.

For taxpayers, the implication is straightforward: you should expect to drift into higher bands over time, and plan accordingly. Pension contributions and salary sacrifice are the main tools for pulling back from this drift.

Summary Reference Table (2025/26)

Common Mistakes

1. Assuming the Personal Allowance applies to every job — it doesn’t; it’s one allowance.
2. Not knowing the PSA differs by tax band.
3. Forgetting that the starting rate for savings is conditional on low non-savings income.
4. Believing Scotland sets dividend tax (it doesn’t).
5. Mixing up the NRB and RNRB when estate planning.
6. Forgetting that the AEA is £3,000, not £12,300 (it was cut twice since 2022/23).
7. Missing the 60-day property reporting window by confusing it with annual Self-Assessment.
8. Over-reliance on employer share scheme thresholds without checking current figures.
9. Not knowing that NI thresholds and income tax bands differ.
10. Ignoring SDLT surcharges that now reach 5% plus the standard rate on second homes.

Looking Ahead to 2026/27

Thresholds are largely frozen. The main known changes for 2026/27 are:

• BADR rate rises from 14% to 18%.
• Inheritance Tax reforms on Business Relief and Agricultural Relief above £1 million take effect April 2026.
• Furnished Holiday Lets regime ended April 2025 — first full year of new treatment in 2025/26.
• Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) phases in from April 2026 for landlords and self-employed above £50,000, then £30,000 from April 2027.
• State Pension triple lock increases continue, pushing the State Pension increasingly close to the Personal Allowance.

There will likely be further changes from the Autumn 2025 Budget and Spring 2026 Statement that were announced after my knowledge cutoff. Always verify live figures on GOV.UK.

Conclusion

The UK tax system is really a lattice of bands and allowances: simple in any single dimension, but complex in how they interact across income types, marital status, place of residence, age, and source. Knowing the figures — or at least knowing where to look them up — is the foundation of any personal tax plan. Filing a clean return, claiming the reliefs you are due, and avoiding the traps that frozen thresholds increasingly create takes less effort than most people assume, but the effort has to be annual, not one-off.

How Allowances Interact in Practice

One of the most common real-world questions is how the various allowances stack when a taxpayer has several income types at once. The UK system applies them in an order that maximises relief for the taxpayer: non-savings income first, then savings, then dividends, with the Personal Allowance applied against whichever income would otherwise bear the highest rate.

Consider a semi-retired taxpayer, Janet, who has £10,000 of State Pension, £4,000 of private pension, £6,000 of interest and £2,000 of dividends. Her non-savings income is £14,000, which uses all of her Personal Allowance plus the first £1,430 of the basic-rate band. She has £48,840 of basic-rate band left. Her starting rate for savings of £5,000 is reduced because non-savings income exceeds £12,570 by £1,430 — so she has £3,570 of starting rate available. Her PSA is £1,000 (basic-rate taxpayer). So £4,570 of interest is covered by starting rate plus PSA; the remaining £1,430 is taxed at 20% (£286). Her dividend allowance covers the first £500 of dividends; the remaining £1,500 is taxed at 8.75% (£131). On the £1,430 of non-savings income in the basic-rate band, she pays 20% (£286). Total tax: roughly £703 — a tiny bill on £22,000 of gross income, which is exactly what the allowance interaction is designed to deliver for retirees with modest multi-source income.

Now compare someone earning £150,000 of salary with the same £6,000 interest and £2,000 dividends. They have lost their Personal Allowance entirely, their PSA is zero, their dividend allowance is the same £500, and every incremental pound of interest or dividend falls in the 45%/39.35% bands. The same £8,000 of investment income contributes around £3,300 of extra tax. The allowances are generous for modest earners and almost entirely absent for high earners — a deliberate design.

Allowances People Often Miss

Marriage Allowance When One Spouse Is Retired

If one spouse has only State Pension income, their Personal Allowance is often partly unused. Transferring £1,260 to a working spouse is £252 that would otherwise be wasted. Backdate four years at the same time. The HMRC online application takes ten minutes.

Starting Rate for Savings in Retirement

Particularly valuable for those who retire early with a low-income year before State Pension kicks in. A £5,000 slice of interest income tax-free can give planners a useful bridge year.

Personal Savings Allowance for Higher-Rate Taxpayers

£500 may sound small, but at 5% interest rates it covers £10,000 of a cash deposit. Combined with ISA headroom, few higher-rate taxpayers should be paying tax on ordinary cash interest.

Dividend Allowance

£500 a year, every year. Over a decade, 20 years of a couple’s dual allowance shelters £20,000 of dividends from tax entirely.

Trading Allowance

If you earn small amounts from a side activity — a bit of Airbnb income under the rent-a-room route, a hobby business, the odd freelance job — the £1,000 Trading Allowance means no tax and, in many cases, no need to register for Self-Assessment at all.

Gift Exemptions for IHT

£3,000 annual exemption, plus wedding gifts, small gifts, and gifts out of surplus income. Families that use all the exemptions consistently can shift meaningful amounts over time without triggering the seven-year PET rule.

Employment Allowance

£10,500 off Employer NI for small businesses. A sole-director company may not qualify after reforms narrowed the rule, but any company with two or more directors/employees earning above the secondary threshold usually does.

A Note on the Frozen Thresholds

Because so many thresholds are frozen until 2028 (and IHT to 2030), the effective tax rate on a given real income has been rising for several years and will continue to do so. The Personal Allowance at £12,570 has not moved since April 2021. The higher-rate threshold at £50,270 has not moved since April 2021. The additional-rate threshold was actually reduced in April 2023, from £150,000 to £125,140 — one of the few examples of a real threshold cut in recent years. The combined effect is that average income tax as a share of GDP is at or close to its post-war peak, without any explicit rate rises.

For individual taxpayers, this has three implications. First, tax planning becomes more important, not less, because frozen thresholds make each incremental pound more likely to be taxed at a higher rate. Second, inflation-linked pay rises feel smaller after tax — the gap between headline salary growth and take-home pay growth widens. Third, the break-even points for decisions like pension contributions, Gift Aid, and salary sacrifice shift in favour of contributing more, because the marginal rate avoided is increasingly likely to be 40% or 45%.

The Political Debate Around Thresholds

Freezing personal tax thresholds is sometimes called “stealth taxation” because no one formally voted for a tax rise, yet the real tax take climbs each year. The arithmetic is uncontroversial: if wages grow 5% and thresholds are frozen, the share of wages falling into higher bands rises. Over a decade, modest annual freezes compound into a substantial reduction in take-home pay.

Successive Chancellors have relied on the freeze as a revenue-raiser without the political cost of explicit rate increases. The Office for Budget Responsibility regularly reports the fiscal impact of the freeze — typically tens of billions a year by the late 2020s. Whether a future government will unfreeze thresholds depends on fiscal pressures, and at present both major parties have indicated the freeze is likely to continue into 2028 before being reviewed.

For planning, the takeaway is simple: do not assume that the basic-rate threshold will meaningfully increase before 2028, and build that into long-range decisions like pension contributions and property purchase timing. A taxpayer who was comfortably in the basic rate in 2021 may be a higher-rate taxpayer by 2028 purely through wage growth, without ever having had a promotion.

Personal Allowances and Age

There used to be age-related Personal Allowances in the UK, with higher allowances for those aged 65 and 75. These were phased out and fully merged into the standard Personal Allowance from 2016/17 onwards. Today, age alone does not change a person’s Personal Allowance. What does change with age is eligibility for certain reliefs (e.g. tax-free pension lump sum access from 55, rising to 57 from 2028) and the composition of income (State Pension typically begins at State Pension age). For most purposes, the tax system treats a 75-year-old pensioner and a 25-year-old graduate identically in terms of allowances — the differences emerge in the mix of income they receive rather than in the thresholds applied.