The 2026/27 tax year has officially begun, bringing with it a great opportunity for households to undertake a financial wellness check.
To help understand what can be done to boost savings and incomes, money expert Martin Lewis has issued his ‘new year resolutions’ with several easy tips for all households.
Those at every income level should benefit from ensuring they have got their tax affairs right, and are taking advantage of the various offers and allowances that are currently on the market.
Mr Lewis writes: “Forget 1 January, the New Year that matters for your pocket is the New Tax Year, which started yesterday, 6 April. It’s when tax code changes take effect, ISA allowances reset, benefits are uprated & more.”
Here is an overview of the money expert’s latest advice:
Maximise ISA power
With the start of a new financial year, every individual’s Isa allowance resets, meaning another £20,000 can be deposited cash-free.
There is a slight difference this year, however, as it is the last one where savers can put this allowance into a cash Isa. This is because the allowance for this kind of Isa will drop to £12,000 for under-65s from April 2027 under changes announced by chancellor Rachel Reeves at last year’s Budget.
“But it’s business as usual this tax year,” Mr Lewis writes, “and cash ISAs are a clear winner if you pay tax on savings. Even if you don’t, easy-access cash ISAs pay higher rates than normal savings right now, so you may as well put your money there first.”
The money expert gives several recommendations for Cash Isas offering the best rates as the new financial year kicks off.
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For new customers, Trading 212 is offering a 4.61 per cent savings rate on its Cash Isa. Meanwhile, Virgin Money is offering 4.15 per cent for transferred accounts, and Plum 4.08 per cent.
There are also several fixed-rate offers on the market, meaning the rate will remain the same for a set period (usually a year). Mr Lewis recommends Tandem Bank at 4.51 per cent, HSBC at 4.5, and Nationwide at 4.35.
Make sure you’ve got tax right
Millions more workers will continue to pay higher tax beyond 2026 due to the freeze on income tax thresholds which was extended at last year’s Budget.
Freezing tax thresholds creates what economists call ‘fiscal drag’ – more people are pulled into higher tax brackets as average earnings increase, but the thresholds stay the same.
It will mean 780,000 more basic-rate, 920,000 more higher-rate, and 4,000 more additional-rate taxpayers by 2029/30 than was forecasted by the OBR in March 2025.
In light of the change, experts recommended using a free online tax calculator for individuals to ensure they fully understand what will be coming out of their payslip every month this year.
Also important is that workers make sure their 2026/27 tax code is correct. This is the series of letters and numbers on a payslip that tells an employer or pension provider what tax to deduct.
Mr Lewis writes: “Millions of codes are wrong each year, so it’s crucial to check yours – it’s your responsibility, not your employer’s, not HMRC’s.”
Double check your payslip
An increase to the minimum wage for all workers came into effect from 6 April, meaning this should be reflected in payslips this year.
Under increases announced by the government, workers aged 18 to 20 will see an 85p rise to £10.85, an increase of 8.5 per cent. Meanwhile, under-18s and apprentices will get 45p more, up six per cent to £8 an hour.
At the same time, the national living wage for all workers aged over 21 will rise by 4.1 per cent from £12.21 an hour to £12.71.
It is a legal right for workers to be paid at the correct rate. The new levels apply to the first full pay cycle after 6 April, meaning those paid weekly will soon be able to double check that they are seeing an increase.
Mr Lewis writes: “100,000s are underpaid each year, including many at big firms. Common reasons include not being paid for all your working time (eg, overtime and opening/closing up) and having to pay for the likes of uniforms or tools, which pushes you below the minimum.”
Could you top up your income?
The new tax year is the perfect time for those on a low income to check that they are receiving all the support they can to bolster their finances.
One of the crucial changes that began this month is the end of the two-child benefit cap. This means that parents with more than two children will be able to claim universal credit for all of them, unlike in previous years.
The move will increase the benefits for 560,000 families by an average of £5,310, the Office for Budget Responsibility (OBR) has calculated in its fiscal outlook.
Most means-tested benefits also increased by 3.8 per cent from 6 April, while the universal credit standard allowance rose by 6.2 per cent.
At a time when wage growth is slower than this – at 3.8 per cent from November to January – many people who are unaware that they qualify for certain benefits may now do so, especially if their wages haven’t gone up for some time.
There are now around 24 million people in the country claiming some combination of Department for Work and Pensions (DWP) administered benefits, which include those drawing a state pension, representing around one in three people.
Yet research by Policy in Practice shows that £24bn worth of benefits goes unclaimed every year – they offer a quick calculator to work out entitlement.
For the latest cost of living and benefit advice, readers can visit the Independent’s regularly updated guide