Jason Coppard Financial Planning Manager


Understanding the key tax changes ahead If you think your finances are on track, the next wave of tax changes might tell a different story


The extension of the income tax band freeze through to the 2030/31 tax year is set to draw more earners into higher tax brackets as incomes rise. This “fiscal drag” effect means individuals may find themselves paying more tax even if their real income has not meaningfully improved. Planning ahead – especially when it comes to pension contributions and making full use of tax- efficient wrappers – will be essential.


Alongside this, several changes to taxation of investment income will further influence personal finances. Dividend


income will face a 2% rise in tax rates from 2026/27, followed by a similar 2% increase on savings and property rental income from 2027/28. These adjustments may reduce net returns for investors and landlords, making tax- efficient investment strategies even more important.


Further limits are also emerging around savings allowances. From 2027/28, the Cash ISA allowance will fall to £12,000 for those under 65, while Stocks and Shares ISAs retain their current £20,000 limit – an important consideration when deciding how to allocate any savings you have accumulated.


There are significant gains to be made when optimising your ISA allowances (see chart below), demonstrating how even small adjustments to your tax-efficient savings strategy can compound over time – an opportunity not to be missed.


Together, these changes underline the value of reviewing your financial strategy early, ensuring your


income, savings and investments remain aligned with the shifting tax landscape.


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