The Chancellor confirmed that from 6 April 2021 the Personal Allowance and higher rate threshold (HRT) will rise in line with CPI to £12,570 and £50,270 respectively then remain at these levels until 5 April 2026. The chancellor expects this five year freeze to raise an extra £8bn a year by 2025/26 for the Treasury.
The Personal Allowance and HRT for savings and dividend income apply across the UK. The HRT for non-savings and non-dividend income will apply to taxpayers in England, Wales, and Northern Ireland. The Scottish rates for non-savings and non-dividend income were announced on 28 January 2021 and can be found here.
No changes were announced in relation to the dividend nil rate allowance, the 0% starting rate for savings or the personal savings allowance. They will remain at the current levels which are detailed below.
Dividend nil rate allowance |
£2,000 |
£2,000 |
Starting rate for savings |
£5,000 |
£5,000 |
Personal savings allowance for basic rate taxpayers |
£1,000 |
£1,000 |
Personal savings allowance for higher rate taxpayers* |
£500 |
£500 |
*Additional rate taxpayers are not entitled to the personal savings allowance
National Insurance Contributions (NICs) thresholds will rise with CPI from 6 April 2021, bringing the NICs primary threshold/lower profits limit to £9,568 and the upper earnings limit (UEL)/upper profits limit (UPL) to £50,270, in line with the income tax higher rate threshold. The UEL/UPL will then remain aligned with the higher rate threshold at £50,270 until April 2026. All other NIC thresholds will be considered and set at future fiscal events. NICs thresholds apply across the UK.
The CGT annual exempt amount (AEA) will remain at £12,300 for the next five years for individuals and personal representatives. For most trusts the limit will be £6,150.