How does freezing tax thresholds affect your own tax bill?

The chancellor, Rachel Reeves , has announced that income tax thresholds will be frozen until the 2030-31 tax year.

Freezing tax thresholds results in “fiscal drag” – a phenomenon where people are dragged into higher tax bands when they get pay rises.

Until 2021, the UK income tax thresholds were typically increased each year in line with inflation. When the then chancellor, Rishi Sunak, delivered his budget that year he announced that thresholds would be frozen from April 2022 until 2026 .

The Conservative government extended that freeze until 2028, and now Reeves has announced it will continue until 2030.

Here we explain how the changes work, and you can use our tool to find out how much more tax you will pay over the next five years as a result of the freeze. We have used the