Excelergy Excelergy Retirement Planner 2026/27

Tax & rules 15 May 2026 7 min read

UK pensions and ISAs in 2026/27: what's new (and what's coming)

The 2026/27 UK tax year started on 6 April 2026. Most thresholds are frozen for the third year running, but the State Pension rose 4.8% under the triple lock, and three confirmed legislative changes are bearing down for 2027 and 2028. Here's what actually moved, what stayed put, and what's worth modelling now.

Educational content, not financial advice. This post explains UK pension and tax rules in general terms. Figures and rules are accurate at time of writing (UK 2026/27 tax year) but change. For decisions about your own pension or retirement plan, speak to a regulated financial adviser. See our full disclaimer.

What rose: State Pension up 4.8%

The new State Pension increased by 4.8% under the triple-lock mechanism - from £230.25/week to £241.30/week (annual full entitlement: £12,548). The triple lock guarantees the larger of CPI (September of the prior year), average wage growth (Q2 of the prior year), or 2.5%. For 2026/27 the binding constraint was September 2025 CPI.

Eligibility:

For people on the Basic State Pension (those who reached state pension age before 6 April 2016), the 2026/27 figure is £184.90/week. The Excelergy planner models the new State Pension only.

What stayed the same (or almost)

The fiscal-drag freeze continues. These figures haven't moved for 2026/27 and are confirmed frozen through to the end of 2027/28:

The freeze is a tax rise in real terms. As salaries and pensions grow with inflation, more income falls into higher tax bands. A worker on £45,000 paying 20% income tax in 2024 could be paying 40% by 2027/28 simply through wage drift, without any change to the band-edge thresholds. The Institute for Fiscal Studies estimates the freeze raises ~£40bn/year more than indexed bands would have.

For retirement planning, the freeze means your retirement net income from a fixed gross will be lower in real terms than it would have been with inflation-linked bands. The planner currently doesn't model band inflation; it applies today's bands across the whole simulation horizon. A future option to inflate bands would surface this effect - useful if you're planning more than 5-10 years out.

What's coming: three confirmed changes

From 6 April 2027 - Pension IHT inclusion

Unused pension funds and most death benefits from registered pension schemes will be brought into the value of a person's estate for Inheritance Tax purposes. Announced at the Autumn Budget 2024 to take effect from the 2027/28 tax year onwards.

Practical effect: the long-standing IHT efficiency of leaving a pension untouched (so the next generation can inherit it tax-free under the IHT framework) largely disappears. Pension and ISA wrappers become more equivalent for inheritance planning.

We covered this in our Pension first or ISA first? post; the “ISA first to preserve pension's IHT exemption” argument is materially weaker for retirement plans that mostly play out after April 2027.

From 6 April 2027 - Cash ISA cap drops for under-65s

The £20,000 total ISA allowance stays unchanged. But within that:

The Excelergy planner enforces this rule automatically. If you've set the Auto-cryst TFC destination to Cash ISA, the engine applies the £12,000 cap (under-65s, post-2027) and routes overflow to the Current Account with a warning. The total ISA allowance check still applies to monthly contributions during working years. See our crystallisation explainer for the mechanics.

From 6 April 2028 - Pension access age rises 55 to 57

The minimum age at which you can draw from a personal pension (SIPP or workplace defined-contribution scheme) rises from 55 to 57. Affects anyone reaching age 55 on or after 6 April 2028 - broadly, those born from 6 April 1971 onwards.

If you're under 50 today and planning early retirement at 55, the planner now warns you about this. You can still simulate retiring at 55, but in practice you'd need to bridge from 55 to 57 using ISA income, salary, or other non-pension assets - the planner's warning highlights this so you don't accidentally over-rely on pension drawdown during the bridge years.

Longer term: State Pension Age 66 to 67 to 68

The legislated State Pension Age (SPA) schedule is:

For a 49-year-old today, that means SPA 68. The planner now uses the legislated cohort default rather than a flat 67. Enter your current age and the engine warns you if the State Pension Age you've set is below the schedule value for your birth-year cohort.

What this means for your plan

Three practical takeaways:

  1. Refresh your State Pension input. If your scenario was built before April 2026, it likely has the £11,973/yr figure (the 2025/26 value). Bump it to £12,548, or to your personal entitlement projection from your gov.uk State Pension forecast - especially if you have fewer than 35 qualifying NI years.
  2. Check your State Pension Age. The planner now defaults intelligently from your current age. If you're between 46 and 49 today, your SPA is probably 68, not 67.
  3. Model the 6 April 2027 and 2028 changes if your retirement window touches them. The engine applies the Cash ISA cap and pension access age automatically - check the warnings panel when you Run Plan.

The tax-year badge in the top bar of every Excelergy page now opens a panel showing every figure the planner uses for the current year. Worth a click to confirm what's modelled vs what isn't.

Refresh your plan for 2026/27

Open Excelergy, check your State Pension input is updated to £12,548, and click the tax-year badge to confirm all the figures the planner is using. If your retirement window touches April 2027 or 2028, watch for the new warnings about the Cash ISA cap, the pension IHT change, and the access age rise.

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