UK Government Maintains Frozen Personal Tax Allowance Until Budget

The Government of the United Kingdom continues to freeze the standard personal tax-free allowance at £12,570, a policy slated to remain in place until at least 2028. Despite this freeze, individuals can increase their tax-free threshold up to £16,960 for the 2025-26 tax year by combining specific HM Revenue and Customs (HMRC) allowances. These include a Blind Person's Allowance of approximately £3,130 to £3,250 for those registered as blind or severely sight impaired, as well as the Marriage Allowance.

The Marriage Tax Allowance allows a lower earner to transfer £1,260 of their personal allowance to a spouse or civil partner who is a basic rate taxpayer. Financial expert Martin Lewis noted that this can result in an annual gain of £252, with eligible households able to backdate claims for four previous tax years to receive payments of around £1,000.

Prime Minister Andy Burnham has stated that there is no current commitment to change the general personal allowance threshold. He indicated that any potential adjustments will be reviewed alongside other fiscal measures during the upcoming Budget overseen by Chancellor John Healey to avoid making unfunded promises.