In Rishi Sunak's covid budget, the personal allowance hit £12,750 from April 2021 and was frozen for at least five years - which was then extended to 2031. Analysis by AJ Bell estimates that if it had kept pace with inflation, the Personal Allowance would now stand at £16,072 for the 2026/27 tax year – £3,502 higher than it is today. Against a Personal Allowance of £12,570, that leaves virtually no headroom before other taxable retirement income starts creating an Income Tax liability." He added: "With the Personal Allowance now set to remain frozen until 2031, that squeeze is no longer a distant concern. Recommended readingCooney said: "People may see their State Pension increasing each year under the triple lock and assume that the whole increase improves their spending power.