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Surprise HMRC bills as pension rises hit Personal Allowance

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The issue comes down to the frozen personal allowance, which remains stuck at £12,570. As the state pension increases each year, it takes up more of that tax free limit.

That leaves less room for any extra income. Even a small private pension or part time earnings could now push some retirees over the threshold and into paying tax for the first time.

Experts warn this “stealth tax” effect is catching more people than expected, as rising incomes collide with frozen thresholds.

Tim Grimsditch, Managing Director at Unbiased, said the increase in the state pension is creating a problem for many people.

“For millions of retirees, the latest increase in the state pension is a double-edged sword.

“While the ‘triple lock’ is doing its job by protecting the value of pensions against inflation, the government’s decision to keep the personal tax allowance frozen at £12,570 is creating a ‘stealth tax’ trap.

“As the state pension rises to meet the cost of living, it is consuming more and more of that tax-free buffer. For many, this means that even a modest private pension or a small amount of part-time work could now result in an unexpected tax bill.

“If you’re unsure, seek help from a professional financial adviser who can help clarify your position, reduce uncertainty, and plan with greater confidence.”

At the same time, savers and workers are being warned they could miss out on up to £1,500 by not using key tax-free allowances before the deadline.

Here are four allowances to check now.

ISA allowance

You can save up to £20,000 per year in an ISA without paying tax on interest, dividends or capital gains.

  • Covers Cash ISAs, Stocks and Shares ISAs or a mix
  • Returns are completely tax free
  • Allowance resets on April 6

For example, £20,000 saved at 5 percent interest could earn £1,000 tax free.

Capital Gains Tax allowance

You can make up to £3,000 in profit from selling assets tax free.

  • Applies to shares, crypto and second properties
  • Not applicable to your main home
  • Tax applies above the threshold

Rates above the allowance are 18 percent for basic rate taxpayers and 24 percent for higher rate taxpayers.

Dividend allowance

If you own shares, you can earn up to £500 in dividends tax free each year.

  • Applies to income from investments
  • Tax rates depend on your income band
  • Allowance has been reduced significantly in recent years

Even small portfolios can exceed this limit, leading to unexpected tax.

Personal savings allowance

You can earn interest on savings tax free depending on your income.

  • Basic rate taxpayers get £1,000
  • Higher rate taxpayers get £500
  • Additional rate taxpayers get no allowance

However, rising interest rates mean more people are now exceeding these limits.

Why more people are paying tax on savings

Frozen thresholds and higher interest rates are pulling more savers into paying tax, a process known as fiscal drag.

For example, £20,000 saved at 4.58 percent earns around £916 in interest each year.

This exceeds the £500 allowance for higher rate taxpayers.

Similar savings in an ISA would be tax free.

Research shows over a third of people have never heard of the personal savings allowance, while billions have been paid in tax unnecessarily over the past decade.


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What to do before April 5

With the tax year ending soon, acting now could protect your savings and reduce your tax bill.

  1. Use your full ISA allowance before it resets
  2. Review savings and investments for unused allowances
  3. Consider moving savings into tax efficient accounts
  4. Check if rising income could push you into paying more tax

Financial experts say taking action now can help avoid unexpected bills and make your money work harder.





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Oxford News

Major US clothing brand opens in Bicester Village with unique ceremony

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Contemporary clothing label Vuori has launched a store at Bicester Village this week, its first store outside of London.

To mark the opening of the store, Bicester Village welcomed guests to an exclusive Pilates session before the shops even opened their doors.

READ MORE: Thames Water leakage targets are ‘not realistic’ says boss after pay rise

A Californian athleisure brand is opening its first ever discount store at Bicester Village this week, expanding on its three London storesA Californian athleisure brand has opened its first ever discount store at Bicester Village this week, expanding on its three London stores (Image: Vuori)

Headquartered in San Diego and founded more than a decade ago, the brand has built a reputation for premium, performance-led leisurewear.

The new Bicester Village store will offer a carefully curated selection of bestsellers, including its Halo pants, the Vuori All The Feels collection and pieces from its popular Tom Holland golf collaboration.

Alongside those ranges, prices will be exclusive to the outlet, making it Vuori’s first UK discount boutique location and offering shoppers in Oxfordshire a chance to snap up the brand’s signature styles at lower prices than in its standard stores.





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Heavy rock legend switches bands after car crash on way to hotel

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The Deep Purple star was once the owner of The Springs Resort & Golf Club in North Stoke near Wallingford – now part of the Talacre-based Darwin Escapes portfolio

The rock singer’s guitar-shaped swimming pool is no more, but resort manager Ben Scholes said in 2024 renovations and new facilities – including the 1893 spa and Ridgeway Restaurant – have proved incredibly popular with visitors from across the UK and beyond.

READ MORE: Rock legend open to AI in music

Ian Gillan has other strong Oxfordshire connections – one night early in 1983 a meeting at a different hotel in the county led to him joining heavy rock contemporaries Black Sabbath.

He told Mojo magazine’s Hello Goodbye column that he joined Black Sabbath after getting a call from Tony Iommi suggesting a drink somewhere between Birmingham and Reading.

Ian Gillan said: “We decided upon The Bear at Woodstock. I was driving an orange two-litre Fiat Mirafiori, which got rear-ended by a guy who was chasing me and didn’t see me stop at a junction.

“I pulled up outside The Bear with a wreck of a car.

“I can’t remember anything else until the next day when I had a call from my manager Phil Banfield.

“He said something along the lines of ‘Ian if you are going to be making major career decisions you should be talking to me first’.

“Apparently we had a few drinks and they (Black Sabbath) offered me the gig and I, who had nothing else on at the time, agreed.”

Ian Gillan in 2010 (Image: Aleksey Chalabyan Xelgen)

Ian Gillan told Mojo Black Sabbath then went straight to the Manor Studio in Shipton-on-Cherwell to record the Born Again album.

The singer added that during the recording sessions he was camping in the grounds in a small tent.

“I like camping and cooking my breakfast over an open fire. After breakfast I would go into the studio to hear what they had put down and then start work on the lyrics,” he told the magazine.

The singer left Black Sabbath after about a year, as it was agreed he should make one album and tour for a year.

He added: “I was incompatible, our backgrounds were chalk and cheese, musically and geographically.”

Ian Gillan rejoined Deep Purple in 1984 and remains a member of the band.





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Police have new weapon to stop e-scooters, as council introduces more

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Handheld spray devices will be given to officers, allowing them to spray a traceable forensic solution from up to 10 metres away.

The spray is designed to link an offender to the exact scene of an incident, helping police gather evidence.

Thames Valley police will also be using the tool, the BBC reported in April.

The Smart Tag technology can link individuals and vehicles to specific incidents through a unique, traceable code, relating to the pressurised canister it was sprayed from.

The crackdown comes amid Oxfordshire’s e-bike and e-scooter expansion planned.

The scheme, which currently focuses on city centre e-scooters, will broaden to include both e-bikes and e-scooters across a much wider region.

The central Oxfordshire area, covering Oxford, Botley, Kidlington, and possibly Abingdon and Wheatley, will be included in the expanded initiative.

READ MORE: Thames Water leakage targets are ‘not realistic’ says boss after pay rise

Lime bikes in OxfordLime bikes in Oxford (Image: Andy Ffrench)

E-bikes will also be introduced in the Science Vale area, around Didcot, Culham, and Harwell, as well as in Bicester.

Oxfordshire County Council (OCC) intends to appoint a single operator for both e-bikes and e-scooters throughout the county.

The expansion plan includes stricter parking controls, with hired scooters and bikes being parked only in mandatory parking locations pre-arranged by the council or the relevant landowner.

Many residents are wary of the plans, Lord Krebs speaking on the matter in the House of Lords said: “Where I live in Oxford, one of the problems with e-bikes and e-scooters is that all too often they’re dumped on the footpath, blocking the way particularly for mothers with prams and pushchairs and for elderly people and the sight impaired.”

Peter Hitchens, author and newspaper columnist, has consistently called for the licensing of e-scooters and e-bikes.

He said the e-scooters and e-bikes are an absolute “mess” and “everywhere” and said there has been an “experiment” for more than four years that nobody knows if it has succeeded or not.

Thames Valley Police, which covers Oxfordshire, Buckinghamshire and Berkshire, has already seized more than 100 illegal machines in recent operations and warned that privately owned e‑scooters used on public roads risk fines, penalty points and confiscation.

According to the report, Thames Valley officers use SmartTag to mark suspects and their vehicles during incidents, with anyone stopped later subject to UV checks to see if they carry the forensic code.

A briefing to the Thames Valley Police and Crime Panel states that the spray remains on skin, clothing and other surfaces for extended periods, strengthening the evidential link between offenders and specific crime scenes.





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