Inheritance Tax: Thresholds, Rates and How to Reduce Your Bill
Inheritance tax is often called the most hated tax in Britain. With frozen thresholds and rising property values, more families are getting caught by it than ever before.
Your trusted guide to UK personal finance
Expert advice on tax, mortgages, pensions, insurance and savings for UK residents
National Insurance Contributions: Rates, Classes and What You're Paying For
National Insurance is one of those deductions you see on every payslip but might never have looked into properly. It funds more than you'd think.
Tax Codes Explained: What the Letters and Numbers Mean
Your tax code is a string of numbers and letters that determines how much income tax is deducted from your pay. Getting it wrong can cost you hundreds.
Marriage Allowance: How to Claim £252 Off Your Tax Bill
If one of you earns under the personal allowance and the other is a basic rate taxpayer, you could be missing out on a straightforward £252 annual saving.
High Income Child Benefit Charge: When You Have to Pay It Back
Earning over £60,000 and claiming child benefit? The tax charge claws some or all of it back. But stopping your claim entirely could be a mistake.
How Mortgages Work: A Beginner's Guide to Home Loans
A mortgage is probably the biggest financial commitment you'll ever make. Understanding the basics before you start looking at properties will save you stress and potentially thousands of pounds.
First-Time Buyer Guide: Everything You Need to Know
Buying your first home is daunting, expensive, and bureaucratic. But with a clear plan and realistic expectations, it's entirely doable.
Remortgaging: When to Switch and How to Get the Best Deal
When your fixed-rate deal ends, you'll probably land on your lender's standard variable rate. That could mean paying hundreds more each month than you need to.
Fixed vs Variable Rate Mortgages: Which Should You Choose?
Fixed rates give you certainty. Variable rates give you flexibility. The right choice depends on your circumstances, your risk tolerance, and what you think interest rates will do next.
Mortgage Overpayment: How Extra Payments Save You Thousands
Overpaying your mortgage by just £100 a month on a typical loan could save you over £15,000 in interest and knock years off your term. But it's not always the smartest move.
Help to Buy and Government Homeownership Schemes
The Help to Buy equity loan scheme closed in March 2023, but several government programmes still exist to help people get on the housing ladder.
Shared Ownership: How Buying a Share of a Home Works
Can't quite afford to buy a home outright? Shared ownership lets you start with a smaller share and work your way up. But it's more complicated than a standard purchase.
Frequently asked questions about UK personal finance
What are the UK income tax rates and thresholds for 2026/27?
The UK income tax system for 2026/27 applies progressive rates to taxable income above the Personal Allowance. The Personal Allowance remains frozen at GBP 12,570 until at least April 2028 following the Autumn Statement freeze. The basic rate of 20 per cent applies to income between GBP 12,571 and GBP 50,270. The higher rate of 40 per cent applies from GBP 50,271 to GBP 125,140. The additional rate of 45 per cent applies above GBP 125,140 (threshold lowered from GBP 150,000 in April 2023). The Personal Allowance is reduced by GBP 1 for every GBP 2 earned above GBP 100,000, fully tapered at GBP 125,140. Scottish residents face different rates set by the Scottish Parliament with six bands ranging from 19 to 48 per cent. Dividend allowance remains GBP 500 and Capital Gains Tax annual exempt amount stands at GBP 3,000 from April 2024.
How does the ISA allowance work for the 2026/27 tax year?
The annual Individual Savings Account (ISA) allowance for 2026/27 remains GBP 20,000 per adult, unchanged since 2017/18. This can be split across Cash ISAs, Stocks and Shares ISAs, Innovative Finance ISAs and Lifetime ISAs in any combination. The Lifetime ISA has an annual cap of GBP 4,000 (within the GBP 20,000 overall allowance) and offers a 25 per cent government bonus on contributions up to GBP 1,000 per year, available to those aged 18 to 39 when opening. Funds can be used towards a first home purchase up to GBP 450,000 or retirement from age 60 without penalty. Withdrawals for other purposes incur a 25 per cent penalty. The Junior ISA allowance for children under 18 stands at GBP 9,000. Since April 2024 savers can subscribe to multiple ISAs of the same type in a single tax year, providing greater flexibility. All income and capital gains within ISAs are tax-free and do not need to be reported on Self Assessment.
What is pension auto-enrolment and how much must I contribute?
Since October 2012 UK employers have been legally required to enrol eligible workers into a qualifying workplace pension scheme under the Pensions Act 2008. Eligibility criteria for automatic enrolment: aged between 22 and State Pension age, earning over GBP 10,000 per year (2026/27 threshold), and working in the UK. The minimum total contribution is 8 per cent of qualifying earnings, with at least 3 per cent from the employer and the remainder (typically 5 per cent) from the employee inclusive of tax relief. Qualifying earnings are calculated between GBP 6,240 and GBP 50,270 (2026/27). The Lifetime Allowance was abolished in April 2024 and replaced by the Lump Sum Allowance of GBP 268,275 and Lump Sum and Death Benefit Allowance of GBP 1,073,100. The annual allowance for pension contributions receiving tax relief is GBP 60,000 with tapering for high earners above GBP 260,000 adjusted income.
How does Inheritance Tax work in the UK?
Inheritance Tax (IHT) is charged at 40 per cent on estates above the Nil Rate Band (NRB) of GBP 325,000 per individual, frozen until at least April 2030. Spouses and civil partners can pass unused NRB to the survivor, effectively doubling the threshold to GBP 650,000. The Residence Nil Rate Band (RNRB) of GBP 175,000 applies when passing a main residence to direct descendants, giving a combined threshold of up to GBP 1 million per couple. The RNRB tapers by GBP 1 for every GBP 2 over GBP 2 million estate value. Lifetime gifts become exempt after seven years (Potentially Exempt Transfers) with taper relief from year three. Annual exemptions include GBP 3,000 per year, small gifts up to GBP 250 per person, wedding gifts, and normal expenditure out of income. From April 2027 pensions will be included within the estate for IHT purposes, a major change announced in the October 2024 Budget. Agricultural and Business Relief has been capped at GBP 1 million from April 2026 with 50 per cent relief above that threshold.
When do I need to file a Self Assessment tax return?
Self Assessment is required for anyone with untaxed income, including self-employed sole traders earning over GBP 1,000, partners in business partnerships, landlords earning over GBP 1,000 from rental property, company directors with additional untaxed income, anyone with total income over GBP 150,000, those earning over GBP 50,000 receiving Child Benefit (High Income Child Benefit Charge), and those with foreign income, capital gains above the allowance or dividends over GBP 500. Registration deadline is 5 October following the tax year end. Paper returns must be submitted by 31 October; online returns are due by 31 January, which is also the payment deadline for any tax owed. Late filing incurs an immediate GBP 100 penalty plus daily penalties after three months and percentage-based penalties after six and twelve months. Making Tax Digital (MTD) for Income Tax Self Assessment applies from April 2026 for sole traders and landlords with annual income above GBP 50,000, expanding to GBP 30,000 from April 2027, requiring quarterly digital submissions via compatible software.