April 2027 tax changes: pensions, savings and ISAs explained

According to our analysis, successive UK Budgets over the past decade have delivered more than 150 notable changes to personal finance rules, touching on tax, savings and pensions.² The Autumn Budget 2026 on 28 October added further measures to that tally, while reversing one of the most significant announcements from the previous year.

The Budget prompted a swift public response. Our snap poll, surveying 2,064 people from the UK on the day of the Budget, found that around one in five (19%) said it left them feeling less confident about their own wealth plans, and a quarter (25%) said they were concerned about the impact on their retirement planning.

For many, keeping track is a challenge. RBC Wealth Management research found that just 22% of people find it easy to keep track of Budget changes to their wealth plans, and only around a third (35%) are confident their wealth plans reflect the relevant changes.³ The gap between awareness and confidence matters. Without a clear picture of what has changed, it’s hard to make informed decisions about your financial future.

This guide sets out what’s actually changing from April 2027, what has been reversed, and what to consider reviewing before the deadline.

What has been reversed: Cash ISA reforms

At the Autumn Budget 2025, the government announced three Cash ISA reforms for April 2027: cutting the Cash ISA limit to £12,000 for under-65s, introducing a 22% charge on cash held in stocks and shares ISAs, and banning transfers from stocks and shares to Cash ISAs.

At the 2026 Autumn Budget, Chancellor John Healey confirmed that all three measures have been reversed. The Cash ISA limit stays at £20,000 for all savers aged 18 and over. The 22% charge and the transfer ban will not be introduced. The government will instead work with the investment industry to explore a new ISA incentive for first-time Stocks and Shares ISA investors.

What this means for you: If you had already moved money or restructured your ISAs in anticipation of the £12,000 limit, you are not affected by any deadline. Your full £20,000 annual ISA allowance remains available for cash, stocks and shares, or any combination.

What’s still to come from April 2027

While the Cash ISA reforms have been reversed, several significant changes are still going ahead from 6 April 2027.

Pensions and inheritance tax planning

From 6 April 2027, most unused pension funds and death benefits will count towards a person’s estate for inheritance tax (IHT), for the first time.

For decades, pension pots have passed largely free of IHT. From April 2027, that changes. The nil-rate band remains frozen at £325,000 until April 2031, and the residence nil-rate band at £175,000 until the same date. With pension pots now joining the estate, the government estimates that around 10,500 estates will become newly liable for IHT in the 2027/28 tax year, and a further 38,500 will pay more than they do now. See our full breakdown of the IHT pension change.

According to our market research, just 30% of people know the IHT treatment of pensions is changing, and fewer than half (43%) of those approaching or in retirement recognise this. Taken together, only 17% of people are both aware of the change and able to correctly identify it.

Action to consider: If your wealth plan relies on passing pension pots on free of IHT, it may need to be updated. A wealth manager can help you understand how the new rules apply to your specific decumulation plans and goals. This case study helps put the changes into context.

Savings and property income tax rises to 24%, 44% and 49%

From 6 April 2027, the tax rates on both savings income and property income held outside an ISA will increase by four percentage points across all bands.⁴ This combines a two-percentage point rise legislated for in the Autumn Budget 2025, with a further two-percentage point rise announced at the Autumn Budget 2026. By April 2027, rates on savings and property income will rise to 24%, 44% and 49% for basic, higher and additional rate taxpayers respectively.

For property income, these rates apply in England, Wales and Northern Ireland, with the devolved governments of Scotland and Wales given the power to set their own property income rates. Dividend tax rates on income from dividends, along with tax rates on income from capital gains, are unchanged.

Tax band	2026/27 rate	2027/28 rate	Increase
Basic rate	20%	24%	+4%
Higher rate	40%	44%	+4%
Additional rate	45%	49%	+4%

The Personal Savings Allowance remains unchanged at £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers receive no Personal Savings Allowance. All interest earned within an ISA remains tax-free, which makes the ISA wrapper more valuable than ever for savers.

For landlords and property investors, the impact is compounded by how reliefs are applied. Reliefs and allowances are allocated to other income sources first – those subject to lower rates – before being applied to property and savings income. This can push more of your property and savings income into the higher tax bands, increasing your overall bill beyond what the headline rate change alone would suggest.

Action to consider: If you hold significant savings outside an ISA, review whether you could move more into your ISA allowance. With the Cash ISA limit staying at £20,000, the full allowance can shelter savings interest from the higher tax rates. If you receive rental income, review how your property income interacts with your other income sources, as the ordering of reliefs may push more of your property income into higher bands. For couples, it’s worth using both partners’ ISA allowances – together a couple can shelter up to £40,000 a year in ISAs.

For larger portfolios, ISAs and pensions are not the only wrappers worth considering. General investment accounts, international bonds and investment bonds can each play a role in managing tax exposure, particularly as savings rates rise. The right structure depends on your circumstances, income level and time horizon, and is best reviewed with a wealth manager.

Business Asset Disposal Relief limit halves to £500,000

From 6 April 2027, the lifetime limit for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000.⁵ BADR reduces the rate of capital gains tax on qualifying business disposals from the standard rate to 18%.

The government estimates that around three-quarters of the approximately 51,000 claimants will be unaffected, with roughly 13,000 individuals expected to be affected as some gains that would previously have qualified for the relief will no longer do so.4 Previous BADR claims continue to count towards the reduced lifetime limit.

The government is also introducing a new Founders’ Relief from 6 April 2027, taxing qualifying share disposals at 10% up to a lifetime limit of £10 million.⁶ The relief is targeted at founders and early investors in high-growth, innovative UK companies who have held a significant stake for at least five years. Any BADR claimed from April 2027 will reduce the Founders’ Relief lifetime limit. However, the details remain subject to a technical consultation closing on 30 November 2026.

Action to consider: If you are a business owner planning to dispose of business assets, review the timing. Disposals made before 6 April 2027 can still use the £1 million lifetime limit, while those on or after that date will be subject to the new £500,000 cap. If you have already used part of your lifetime limit, you may have less scope to benefit from the relief on future disposals.

Income tax thresholds remain frozen

Income tax thresholds, including the Personal Allowance of £12,570 and the higher rate threshold of £50,270 (Scottish rates can be found here), remain frozen until 5 April 2031. The Autumn Budget 2026 confirmed the freeze will continue. As earnings rise with inflation, more people will be pulled into higher tax bands through fiscal drag, even though the rates themselves are unchanged.

It’s important to note that once your adjusted net income passes £100,000, you lose £1 of your £12,570 Personal Allowance for every £2 you earn, until it is gone at £125,140. Across that band, the effective income tax rate is 60% (67.5% in Scotland), plus 2% National Insurance. Parents can also lose tax-free childcare and funded hours at £100,000. RBC research found over 40% of high earners were unaware of, or unsure about, these costs, commonly known as the ‘60% tax trap’.

Action to consider: If your income is close to £50,270 or £100,000, consider whether pension contributions, salary sacrifice or charitable giving could reduce your taxable income and keep you below a threshold. All rates and allowances can be found on gov.uk here.

Trading allowance rises to £3,000

From 6 April 2027, the trading allowance increases from £1,000 to £3,000. Individuals with trading or miscellaneous income at or below £3,000 will no longer need to report that income through self-assessment.

Action to consider: If you have small-scale self-employment or miscellaneous income, check whether the increased allowance simplifies your tax reporting from April 2027.

New Pension Tax Allowance: who benefits from 6 April 2027?

From 6 April 2027, the government is introducing a Pension Tax Allowance to ensure that pensioners whose total income is up to the value of the full new State Pension (rising to £13,036.40 in 2027/28) do not face the administrative burden of paying small amounts of income tax. The allowance is available for tax years 2027/28 to 2029/30 and is withdrawn at a rate of £1 for every £3 of income above the State Pension level.

Action to consider: If you or a family member are recently retired with income close to the State Pension level, this allowance may simplify your tax position from April 2027.

Reviewing your plans before April 2027

With several changes taking effect from 6 April 2027, there is a window to review your wealth plan and make any necessary adjustments. The changes that matter most will depend on your individual circumstances, but the following areas are worth particular attention:

• Pension arrangements and estate planning, given the new IHT treatment of unused pension pots.
• ISA allocations, now that the Cash ISA limit has been retained at £20,000 but savings tax rates outside an ISA are rising.
• Property income and rental arrangements, given the four-percentage point rise in property income tax rates and the way reliefs are ordered.
• Income positioning near tax thresholds, given the continued freeze until 2031.
• Business asset disposal plans, if you are likely to exceed the new £500,000 BADR lifetime limit.
• The mix of investment wrappers across your portfolio, including pensions, ISAs, general investment accounts, international bonds and investment bonds, to ensure your assets are held in the most tax-efficient structures for the new rate environment.

A wealth manager can help you understand how these changes affect your individual circumstances and guide you through the options available. Given the complexity and the awareness gaps highlighted by our research, professional advice can make a meaningful difference. To discuss your wealth plan, contact our team on 020 7246 1111. Opening hours are Monday to Friday 9am to 5pm.

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Frequently asked questions

–          Which tax changes are going ahead in April 2027, and which have been dropped?

Five changes start on 6 April 2027: inheritance tax on unused pensions, savings and property income tax rising to 24%, 44% and 49%, a £500,000 Business Asset Disposal Relief limit, a £3,000 trading allowance and a new Pension Tax Allowance. Income tax thresholds stay frozen until 5 April 2031. The £12,000 Cash ISA cap, the 22% charge on cash in stocks and shares ISAs and the transfer ban were dropped.

–          Can I still put £20,000 into a Cash ISA?

Yes. The planned £12,000 cap for under-65s was reversed at the Autumn Budget 2026, so everyone aged 18 and over keeps the full £20,000 allowance. It can go into cash, stocks and shares, or a mix. A couple can place up to £40,000 a year between them. Savings outside an ISA could now face higher tax implications, which the next answer covers.

–          How much more tax will I pay on savings interest outside an ISA?

From 6 April 2027, rates rise four percentage points to 24% (basic), 44% (higher) and 49% (additional). Interest inside an ISA stays tax-free.

–          Will my pension count towards inheritance tax from April 2027?

Most unused pension funds and death benefits will count as part of the estate from 6 April 2027. The change is law under Finance Act 2026.

Example: a £300,000 unused pot that used to sit outside the estate would now be added to its total. That total is tested against the £325,000 nil-rate band and, where it applies, the £175,000 residence nil-rate band. Illustrative only.

–          How does the Business Asset Disposal Relief change affect a business sale?

From 6 April 2027, the lifetime limit on gains that qualify for the 18% rate halves from £1 million to £500,000, and relief already claimed counts towards it. Disposals made before that date can still use the £1 million limit.

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About the author

Daniel Hough

Associate Director, Wealth Manager

Guy joined RBC Brewin Dolphin in 2006 and has previously served as Head of Research before becoming the Chief Strategist. His responsibility covers the investment strategy, providing recommendations on tactical investment strategies to our investment managers and leads the Investment Solutions business.

A key member of our growing Financial Planning team in Glasgow, Daniel provides advice to both individuals and families on pensions, wealth protection, ISAs and estate planning.

Daniel is focused on helping clients identify and then meet their investment objectives whatever changes to financial legislation may be introduced and whatever the prevalent market conditions. The Financial Planning Team works hard to support clients and provide answers to any queries, whether that’s online, by telephone or face-to-face. Daniel previously worked at Advanced Financial Planning in Aberdeen and then led the Glasgow office of Mattioli Woods before joining RBC Brewin Dolphin in 2020. He holds the Level 4 Diploma in Regulated Financial Planning from the Chartered Insurance Institute.

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¹Find Out Now surveyed 2,064 respondents on 28 October 2026 for RBC Wealth Management, filtered to be nationally representative by age, gender and region. Find Out Now is a member of the British Polling Council.

²Analysis was conducted by RBC Wealth Management in November 2026 and reviewed changes announced during Budgets (including Spring and Autumn statements) which had a potential financial planning impact.

³Find Out Now surveyed 2,064 respondents on 16-17th September 2026 for RBC Wealth Management, filtered to be nationally representative by age, gender and region. Find Out Now is a member of the British Polling Council.

⁴Income Tax — changes to tax rates for property and savings income, gov.uk, 29 October 2026

⁵Capital Gains Tax: new Business Asset Disposal Relief lifetime limit, gov.uk, 29 October 2026

⁶Founders’ Relief: technical consultation, gov.uk, 28 October 2026

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