Overview
- Rachel Reeves extended the income tax and National Insurance threshold freeze by three years at the November Budget, keeping the 40% threshold at £50,270 until 2031.
- The Office for Budget Responsibility projects 4.2 million more people paying income tax by 2030, with 3.5 million moving into higher or additional-rate bands.
- CPS modelling indicates a current £50,000 earner will be about £505 worse off in real terms in 2030–31 despite pay rising by more than £6,000.
- The analysis estimates pensioners gain £306–£537 a year by 2030–31 under uprating, with the higher figure contingent on a signalled state‑pension tax exemption, and universal credit claimants gain about £290.
- The Treasury defends the freeze as funding priorities alongside wage rises and bill relief, and the measure is forecast to raise roughly £23 billion in 2030–31.