Personal Allowance in Real Terms 2010–2027 — UK Erosion Analysis
Original analysis of how the UK Personal Allowance has eroded in real terms from 2010-11 to 2027-28. Year-by-year nominal vs CPI-adjusted real value, the post-2022 freeze, and what it costs the median earner.
Year-by-year table
| Tax year | PA (nominal) | CPIH (2010 = 100) | PA in 2010 £ | vs 2010 baseline |
|---|---|---|---|---|
| 2010-11 | £6,475 | 100.0 | £6,475 | +0.0% |
| 2011-12 | £7,475 | 104.5 | £7,153 | +10.5% |
| 2012-13 | £8,105 | 107.4 | £7,547 | +16.6% |
| 2013-14 | £9,440 | 109.7 | £8,605 | +32.9% |
| 2014-15 | £10,000 | 111.4 | £8,977 | +38.6% |
| 2015-16 | £10,600 | 111.5 | £9,507 | +46.8% |
| 2016-17 | £11,000 | 112.5 | £9,778 | +51.0% |
| 2017-18 | £11,500 | 115.6 | £9,948 | +53.6% |
| 2018-19 | £11,850 | 118.2 | £10,025 | +54.8% |
| 2019-20 | £12,500 | 120.4 | £10,382 | +60.3% |
| 2020-21 | £12,500 | 121.3 | £10,305 | +59.2% |
| 2021-22 | £12,570 | 124.4 | £10,105 | +56.1% |
| 2022-23 | £12,570 | 134.1 | £9,374 | +44.8% |
| 2023-24 | £12,570 | 143.4 | £8,766 | +35.4% |
| 2024-25 | £12,570 | 148.5 | £8,465 | +30.7% |
| 2025-26 | £12,570 | 152.0 | £8,270 | +27.7% |
| 2026-27 | £12,570 | 156.0 | £8,058 | +24.4% |
| 2027-28 (frozen) | £12,570 | 160.0 | £7,856 | +21.3% |
"vs 2010 baseline" = real-term gain/loss against the 2010-11 PA of £6,475 expressed in 2010 pounds. Positive = the real PA is higher than the 2010 baseline. Negative = real value has fallen below the 2010 starting point.
Why this matters
A frozen Personal Allowance is a stealth tax rise. If the £12,570 had been CPI-indexed from 2021-22, it would be approximately £15,150 by 2026-27 and £15,550 by 2027-28. Every £1,000 of the gap is taxed at 20% basic rate (or 40% higher rate above £50,270) — a structural tax increase that compounds with the frozen higher-rate threshold.
The freeze is one of the largest implicit tax rises in modern UK history measured in expected revenue. The OBR's November 2022 EFO estimated the income-tax threshold freeze alone would raise approximately £25 billion/year by 2027-28 — comparable to a 4p rise in the basic rate of income tax — without ever appearing as a rate change in the Budget.
Try the relevant calculators
- Income Tax Calculator — see your tax with the £12,570 PA in 2026-27
- Take-Home Pay Calculator — full PAYE breakdown
- Tax Year Comparison — 2026-27 vs 2025-26 take-home
- UK Fiscal Drag 2026-27 research — companion analysis on threshold freezes
Re-publishable under CC-BY 4.0. Please link back to this URL so corrections propagate.