How much is the UK personal allowance in 2025/26?
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The personal allowance is £12,570 for 2025/26. This is the amount you can earn tax-free. Above this, you pay 20% basic rate tax up to £50,270.
Does pension reduce my tax bill?
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Yes. Pension contributions reduce your taxable income. If you contribute £200/month to a pension, your tax bill reduces because your taxable income falls by £200/month (£2,400/year).
What is the student loan repayment threshold?
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Plan 2 repayments start at £27,295/year. Plan 1 starts at £22,015/year. You repay 9% of income above the threshold. So on a £35,000 salary (Plan 2), you'd repay 9% of (£35,000 − £27,295) = £693/year.
What is the higher rate tax threshold?
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You start paying 40% income tax on income above £50,270 per year (2025/26). On a £60,000 salary, you pay 40% on the £9,730 above £50,270 = £3,892 in higher rate tax.