What the tax threshold freeze costs
The Personal Allowance has been £12,570 since tax year 2021-22, and it is set to stay there until 5 April 2031. This chart shows how much more Income Tax and employee National Insurance each salary pays in 2026/27 than it would if the thresholds had risen with consumer prices since 2021.
| Salary | With frozen thresholds | If thresholds had risen with prices | Extra paid a year |
|---|---|---|---|
| £20,000 | £2,078.60 | £1,235.08 | £843.52 |
| £30,000 | £4,878.60 | £4,035.08 | £843.52 |
| £40,000 | £7,678.60 | £6,835.08 | £843.52 |
| £50,000 | £10,478.60 | £9,635.08 | £843.52 |
| £60,000 | £14,639.00 | £12,435.08 | £2,203.92 |
| £80,000 | £23,039.00 | £20,507.20 | £2,531.80 |
| £100,000 | £31,439.00 | £28,907.20 | £2,531.80 |
If the thresholds had risen with prices, the Personal Allowance would be £15,589 and the higher rate would start at £62,342. The figures use the site’s take-home calculator with a standard tax code, no pension and no student loan. They show the effect of the freeze, not a forecast. The income tax rates page explains the bands.
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<img src="https://moneyworkedout.co.uk/assets/charts/threshold-freeze-cost.svg" width="960" height="560" alt="Bars show the extra Income Tax and employee National Insurance paid each year at salaries from £15,000 to £100,000 because thresholds are frozen.">
<figcaption>Chart by <a href="https://moneyworkedout.co.uk/charts/threshold-freeze-cost/">Money Worked Out</a>.</figcaption>
</figure>Sources and chart notes
- Freeze start and end: HMRC Income Tax liabilities statistics and HMRC, maintaining thresholds until 5 April 2031.
- Consumer Prices Index, yearly averages: ONS series D7BT.
- Income Tax and NI rates: GOV.UK rates and thresholds for employers.
- The comparison raises the Personal Allowance, basic rate limit, NI primary threshold and upper earnings limit by the price rise, rounded to the pound; the £100,000 taper and additional rate are unchanged.
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