The short answer
For most employees, the announced changes do not change the tax on the same salary. The Personal Allowance, the higher-rate threshold and the National Insurance thresholds are all frozen until April 2031. Someone earning £45,000 every year pays £9,080.40 in Income Tax and NI in 2026/27 and the same in 2030/31.
The changes bite in three ways:
- When your pay rises, frozen thresholds take a bigger share of it. This is the largest effect for most people.
- If you have savings interest or rental profit, the rates on that income go up by 2 percentage points from April 2027.
- If you sacrifice more than £2,000 a year into a pension, you pay National Insurance on the excess from April 2029.
What this calculator includes
The calculator only uses measures the government has announced and published on GOV.UK, mostly in Budget 2025 (26 November 2025) and its tax documents. It does not guess at what future Budgets might do. Where something has not been announced, such as Scottish rates after 2026/27, it holds today’s figures and says so.
It compares each tax year from 2026/27 to 2030/31, the last year of the threshold freeze. It covers salary, salary sacrifice pension contributions, personal pension contributions, savings interest, dividends, rental profit and mortgage interest, and Plan 2 student loans. For a full payslip in the current year, use the salary calculator.
The changes, year by year
- 6 April 2026Dividend rates rise
Ordinary rate 8.75% to 10.75%, upper rate 33.75% to 35.75%. Additional rate stays 39.35%.
- 6 April 2027Savings and property rates rise
Both become 22%, 42% and 47%. The cash ISA limit for under-65s falls to £12,000. Unused pensions come into inheritance tax.
- 6 April 2028Freeze extended
Thresholds were due to rise from here; they now stay frozen.
- 6 April 2029Salary sacrifice NI cap
National Insurance on pension salary sacrifice above £2,000 a year, for employees and employers.
- 5 April 2031Freeze ends
The last day of the frozen Personal Allowance, bands and NI thresholds, unless a later Budget changes it.
Frozen thresholds to April 2031
The Personal Allowance has been £12,570 since April 2021. The basic rate limit is £37,700, so the higher rate starts at £50,270, and the additional rate starts at £125,140. Budget 2025 extended the freeze by three more years, from April 2028 to April 2031.
Normally these thresholds would rise with inflation each April. Holding them still is a tax rise that does not change any rate: as wages and prices rise, more of everyone’s income is taxed, and more of it at higher rates.
A freeze is not a cut
Your tax only rises if your income rises. At the same salary, a freeze changes nothing. But with inflation, the same salary buys less, so most people’s pay does rise, and that is where the freeze takes its share.
Fiscal drag: why a pay rise costs more tax
Economists call this “fiscal drag”. The calculator measures it by comparing your tax with frozen thresholds against your tax if every threshold had risen in line with your pay. The difference is the cost of the freeze to you.
- Salary in 2026/27£45,000
- Salary in 2030/31£50,648
- Income Tax and NI in 2026/27£9,080.40
- Income Tax and NI in 2030/31£10,714.72
- Of which: cost of the freeze in 2030/31£494.65
Most of the rise is ordinary tax on a higher salary. The £494.65 is the extra caused by thresholds standing still, and it grows each year: £105.59 in 2027/28, £214.34 in 2028/29, £326.36 in 2029/30 and £494.65 in 2030/31. In 2030/31 this person’s salary passes £50,270 and part of it is taxed at 40%.
The freeze at different salaries
The cost depends on where your pay sits. These figures assume 3% pay rises each year, and show the cost of the freeze in 2030/31 alone:
The jump at £50,000 is the higher-rate threshold: with frozen thresholds, more and more of the pay rise falls into the 40% band. People already well inside the higher-rate band, like the £80,000 earner, lose a similar amount. Use the pay rise calculator to see what a single rise is worth after tax.
National Insurance thresholds
Employee National Insurance is 8% on earnings between £12,570 and £50,270 and 2% above that. These thresholds are tied to the Income Tax ones and are frozen to April 2031 too. So is the £5,000 threshold above which employers pay 15%.
With no change in the rates, NI on the same salary does not change. Our £45,000 earner pays £2,594.40 in every year. With 3% pay rises, it rises to £3,023.56 by 2030/31.
Savings interest: 22%, 42% and 47%
From 6 April 2027, taxable savings interest is taxed at 22% for basic-rate taxpayers, 42% for higher-rate and 47% for additional-rate: 2 points more at each rate. The change applies across the whole UK, including Scotland, because savings income is taxed at UK rates.
| Salary | 2026/27 | 2027/28 on | Extra a year |
|---|---|---|---|
| £30,000 | £400 | £440 | £40 |
| £60,000 | £1,000 | £1,050 | £50 |
| £130,000 | £1,350 | £1,410 | £60 |
The rise is modest because the allowances in the next section still cover the first part of most people’s interest. It only applies to interest above those allowances.
Allowances that still protect savers
Three allowances keep savings interest tax-free before the new rates apply:
- the Personal Savings Allowance: £1,000 of interest for basic-rate taxpayers, £500 for higher-rate, none for additional-rate;
- the starting rate for savings: up to £5,000 at 0% if your other income is low, held at £5,000 until April 2031;
- any unused Personal Allowance.
The Personal Savings Allowance calculator shows how much of your interest is covered. Interest inside an ISA is tax-free and does not use these allowances at all.
Cash ISAs from April 2027
From 6 April 2027 the most you can pay into cash ISAs each year falls to £12,000 if you are under 65. The overall ISA limit stays £20,000, so you can still put the other £8,000 into a stocks and shares ISA. Savers aged 65 or over keep a £20,000 cash ISA limit. The regulations were laid before Parliament in September 2026.
With savings rates rising at the same time, moving savings into an ISA before and after April 2027 is the simplest way to avoid the extra tax.
Dividends: the April 2026 rise
Dividend rates rose by 2 points on 6 April 2026: the ordinary rate from 8.75% to 10.75% and the upper rate from 33.75% to 35.75%. The additional rate stays at 39.35%, and the dividend allowance stays at £500.
Because this happened in April 2026, it is already in every year the calculator shows. The calculator also shows what it added compared with the old rates. Someone earning £45,000 with £5,000 of dividends pays £90 a year more; someone on £30,000 with £2,000 of dividends pays £30 more. No further dividend changes have been announced. The dividend tax calculator works through the 2026/27 rules in detail.
Rental income: the new property rates
From 6 April 2027, property income has its own rates in England, Wales and Northern Ireland: 22% basic, 42% higher and 47% additional. Allowances and reliefs are set against your other income first, such as wages and pensions, and only then against rental profit, so more of a landlord’s rent is likely to be taxed.
- Basic rate
- 20%
- Higher rate
- 40%
- Additional rate
- 45%
- Finance cost relief
- 20%
- Property basic rate
- 22%
- Property higher rate
- 42%
- Property additional rate
- 47%
- Finance cost relief
- 22%
The rise is 2 points at every rate, so the extra tax is 2% of your taxable rental profit. On £12,000 of rental profit that is £240 a year. Check how this changes your returns with the buy-to-let yield calculator.
Mortgage interest relief for landlords
Landlords of homes cannot deduct mortgage interest from rental profit. Instead they get a tax reduction of 20% of the interest. From April 2027 that reduction is worked out at the property basic rate, 22%, which softens the rise for landlords with mortgages.
- Extra tax on rental profit at +2 points+£240
- Finance cost relief: 20% then 22% of £6,000£1,200 to £1,320−£120
A higher-rate landlord on £60,000 with the same rental figures also pays £120 more: the property higher rate rises by the same 2 points, and the relief is the same. The calculator does not model the rule that limits finance cost relief when profits are low.
The salary sacrifice NI cap from April 2029
Salary sacrifice lets you give up salary in return for an employer pension contribution. Today you save Income Tax and National Insurance on all of it. From 6 April 2029, sacrifice above £2,000 a year will pay employee and employer Class 1 National Insurance in the usual way. Income Tax relief is unchanged.
| Salary and sacrifice | Sacrifice a year | Above £2,000 | Your extra NI | Employer's extra NI |
|---|---|---|---|---|
| £30,000 at 5% | £1,500 | £0 | £0 | £0 |
| £40,000 at 10% | £4,000 | £2,000 | £160 | £300 |
| £60,000 at 8% | £4,800 | £2,800 | £56 | £420 |
Higher earners pay less extra NI on the same excess, because their pay above £50,270 is charged at 2% rather than 8%. The employer’s cost matters too: some employers pass part of their NI saving into staff pensions, and may stop. HMRC says the details will be set in regulations. See what salary sacrifice saves today with the salary sacrifice calculator.
Plan 2 student loans
The Plan 2 repayment threshold is £29,385 in 2026/27 and is held at that level for three years from April 2027. Repayments are 9% of income above it. As pay rises, repayments rise faster than they would if the threshold kept pace.
With 3% pay rises, someone on £35,000 repays £505.35 in 2026/27 and £900.70 in 2030/31. The calculator assumes the threshold stays at £29,385 in 2030/31 as well, because nothing has been announced for that year. Other plans are not modelled here.
Pensions and inheritance tax from April 2027
From 6 April 2027, most unused pension funds and death benefits count towards the value of an estate for inheritance tax. This does not change the tax on your pay, so the calculator does not include it, but it matters if you have been treating a pension as a way to pass on wealth. Inheritance tax thresholds are also frozen, now to April 2031. The inheritance tax calculator shows how an estate is taxed.
Scotland and Wales
In Scotland, the Scottish Parliament sets the rates and bands on wages, pensions and rental profit. It has not set them for 2027/28 onwards, so the calculator holds the 2026/27 Scottish figures. Savings and dividends are taxed at UK rates everywhere, so those changes apply in Scotland.
The new property rates apply in England, Wales and Northern Ireland. The UK government has said it will work with the Scottish and Welsh governments so they can set their own property income rates, so this may change for Welsh and Scottish landlords.
What is not included
To keep the calculator honest, it leaves out:
- anything not yet announced, including whatever the 28 October 2026 Budget contains;
- Scottish rate changes after 2026/27, and Plan 1, 4, 5 and Postgraduate loan thresholds after 2026/27;
- the High Income Child Benefit Charge, the Marriage Allowance and other personal circumstances;
- changes that do not affect income tax on pay, savings or rent, such as the council tax surcharge on homes worth £2 million or more in England from April 2028, and the per-mile charge on electric cars from April 2028.
The Budget on 28 October 2026
The Chancellor has confirmed the next Budget for Wednesday 28 October 2026, with the Office for Budget Responsibility’s forecast on the same day. Any new tax measures will be announced then. We will update this calculator on Budget day with whatever is confirmed, and leave out speculation before it.
- Income in 2026/27£55,000 salary with 6% salary sacrifice, £2,000 savings interest, £3,000 dividends, £8,000 rental profit, £3,000 mortgage interest£68,000
- Savings rates, by 2030/31+£30
- Property rates and relief, by 2030/31+£100
- Salary sacrifice cap, at the same pay+£26
- Cost of the freeze, 2030/31£1,378.86
Ways to soften the changes
None of these suits everyone, but they are the usual places to start:
- Use your ISA allowance. Interest and dividends inside an ISA are tax-free, so the new savings rates and the dividend rise do not touch them.
- Pay more into a pension. Contributions still get Income Tax relief at your top rate, which helps most when a pay rise takes you over £50,270 or £100,000. Salary sacrifice up to £2,000 a year stays free of NI after April 2029.
- Share income with a spouse or civil partner. Savings or rental property held jointly, or by the partner who pays less tax, can use two sets of allowances. Transfers between spouses are usually free of Capital Gains Tax, but take advice on property.
- Check your tax code each year. With frozen thresholds and more people paying tax on savings, HMRC adjusts more codes. A wrong code means the wrong tax.
Before acting on any plan, think about access to your money, fees and your wider circumstances. For larger sums, a regulated financial adviser or tax adviser can help.
How to read your results
The calculator shows the same information in a few ways:
- The headline figure is the change in your yearly Income Tax, NI and student loan between 2026/27 and 2030/31, including any pay rise you entered.
- From the rule changes holds your income still and shows only what the new rates and the salary sacrifice cap add.
- Cost of the freeze appears when you enter a pay rise. It is the extra tax compared with every threshold, allowance and limit rising in line with your pay.
- Take-home is what is left of all your income after tax, NI, student loan, pension contributions and mortgage interest.
Leave the pay rise at 0% first to see the rule changes on their own, then try a realistic rise. Every input is saved in the address bar, so you can share or revisit your figures after the Budget.