How to make the most of your tax allowances post-Budget

With most changes announced in the budget not kicking in until 2027 to 2029, here’s how you can make the most of your tax allowances post-Budget

Published: 17 Mar 2026 6 mins read

Key points

The tax thresholds will stay frozen until April 2031, meaning you could find yourself paying more in income tax thanks to fiscal drag.
From April 2029, you'll only be able to sacrifice £2,000 of your salary to a workplace pension before paying National Insurance contributions, so think about making the most of your options now before they change.
From 6 April 2027, cash ISA limits for under-65s fall to £12,000, but you'll still be able to invest up to £20,000 per tax year into stocks and shares ISAs.
Most unused pension funds and death benefits will be subject to inheritance tax (IHT) from April 2027.

After months of speculation, the Autumn Budget was finally presented to Parliament back in November 2025. They unveiled a range of changes to tax rates and allowances. But while we’re no longer in doubt about what changes are coming, you may be wondering how they’ll affect you and what you can do about it.

Although most of the changes won’t be kicking in until April 2027 to 2029, now could be a good opportunity to start thinking about your finances. So, we’re breaking down how you can get the most out of current tax rates and allowances.

That way you can go into the next financial year prepared for the changes ahead.

The impact of ‘fiscal drag’

As part of the Budget, the Chancellor confirmed that income tax thresholds will remain frozen for another three years. This means that bands such as the personal allowance and higher rate threshold won’t rise again until at least 2031.

At first, it might not seem like this affects your finances – after all, the tax rates themselves aren’t changing. But a freeze can still mean you end up paying more tax over time. That’s why many are effectively calling this a ‘stealth tax’.

Here’s why: if the tax bands stay the same but your earnings increase, more of your income may fall into a higher tax band. This effect is known as fiscal drag.

So, if your pay goes up while the tax thresholds stay the same, you could be pulled into paying a higher rate of tax, or paying tax on income that previously fell below the threshold.

Using salary sacrifice for tax relief on pension contributions

Right now, pension contributions through salary sacrifice offer generous tax advantages.

You can currently save £60,000 into a pension pot before having to pay tax. But from April 2029, there’s an important change coming. Only the first £2,000 of any pension contributions made through salary sacrifice will get National Insurance relief.

That means now is a good time to review and consider increasing your contributions – if you can – while you can still benefit from the full tax relief available today. Choosing to contribute more to your pension from your salary can keep more of your income out of higher rate tax bands. Talk to your employer about salary sacrifice and your pension contributions.

A new limit on cash ISA contributions

If you’re looking to save into a cash ISA, you can currently contribute up to £20,000 every tax year.

But from April 2027, that limit is set to drop to £12,000 for anyone aged under 65. The aim is to encourage younger savers to consider investing rather than relying solely on cash savings.

The good news is that the annual contribution limit for stocks and shares ISAs isn’t changing. You’ll still be able to add up to £20,000 into those ISAs each tax year. That’s why now is a great time to think about starting your investment journey with a stocks and shares ISA, so you can make the most out of future allowances.

Plan ahead for future inheritance tax changes

From April 2027, most unused pension funds and death benefits will be subject to inheritance tax (IHT). This means anything left in your pension after you die could be included in your estate for IHT purposes. This doesn’t include death in service benefits that come from a registered pension scheme.

Your personal representatives (the people handling your estate) will be liable for reporting and paying any inheritance tax due on your unused pension funds and pension death benefits, alongside your pension beneficiaries. In most cases, your personal representatives and/or pension beneficiaries will be able to arrange for the associated IHT to be paid from the pension itself.

If you want to reduce the risk of your pension increasing the size of your taxable estate, you may want to consider taking and spending your tax-free cash earlier, as this may help lower the amount exposed to IHT.

Remember, tax rules can change and you should speak to an adviser before making any big decisions about your pension.

What you can do before 5 April to make the most of current tax allowances

If you’re not sure how you can make the most of current tax allowances, you could talk to a financial adviser. They’ll be best placed to give you tailored advice about your financial situation and what you can do to get ahead of the Autumn Budget changes.

But here’s some things you could consider:

Max out your pension contributions, especially through salary sacrifice
Use your ISA allowance, prioritising stocks and shares
Review estate planning and pension cash options with an adviser

If you have £300,000 or more in total across all your pension and investment savings, you can get financial advice with us. Find out more about Aviva Financial Advice.

Don’t have £300,000 or more, or not sure if financial advice is for you? We have a range of helpful guides, tools, and other information that can help you manage your money.

You could also get advice through MoneyHelper, a government-backed service that offers guidance on managing your money. Learn more about MoneyHelper.