Overview
- Extending the freeze to April 2030 would raise about £8.3 billion in 2029–30, according to the Institute for Fiscal Studies.
- The IFS projects around 42.1 million people paying income tax by 2030, with roughly one in four workers in England and Wales paying the 40% rate and about 10.1 million in higher‑rate bands by 2029–30.
- HMRC estimates 39.1 million people will pay income tax in 2025–26, up from 33 million in 2021–22, illustrating how the existing freeze has already expanded the tax base.
- Pensioners are increasingly drawn into tax as the state pension nears the £12,570 allowance, with LCP forecasting about 200,000 more retirees entering the tax net next year and AJ Bell highlighting potential bills up to £992 for low‑income savers.
- Officials are weighing related measures such as freezing the savings allowance, which the CEBR estimates could raise up to £6.4 billion by 2027–28, ahead of the 26 November Budget.