How much income tax bands freeze has cost you as workers to pay 11% MORE this year
Bills are estimated to have risen by 11% for 2024/25 compared to the previous year, Government figures show, as the tax bands fail to keep up with rising wages.
Analysis suggests someone earning £50,000 at the start of the freeze will have paid nearly £15,000 in extra tax thanks to frozen personal allowance and higher rate thresholds.
Collectively the nation’s income tax bill will hit £260.3 billion for 2024/25.
The personal allowance - the amount of income you can make before paying tax - has remained at £12,570 since 2021/22.
That's despite the average salary rising from £31,285 to £37,430 (up 19.6%) between April 2021 and April 2024, according to Office for National Statistics figures.
And it's also despite inflation rising 15.4% between April 2021 and February 2025, according to ONS data recorded from the Consumer Prices Index (CPI).
Income tax bands are set to remain frozen until April 2028 as the Government tries to balance the books and get what Chancellor Rachel Reeves calls "fiscal headroom".
Laura Suter, director of personal finance at stockbrokers AJ Bell, which carried out the research, said: “Labour promised not to increase rates of income tax in its general election manifesto and, if you stick to the letter of the law, they haven’t. But people are paying more in taxes, thanks to them continuing the Conservatives’ deep freeze on income tax bands."
See below a table showing how much extra you will have paid in tax by 2028 depending on your salary.
What is income tax
Income tax is a tax you pay to the Government on the money you earn. In the UK, it applies to most types of income, such as wages from a job, profits if you’re self-employed, pensions, and income from savings or property rentals.
Before you qualify to pay income tax, you use your personal allowance. Everyone gets a personal allowance, which is the amount you can earn each year before you start paying income tax. For most people, that’s £12,570 (in the 2025/26 tax year). Anything you earn above that is taxed in bands – so the more you earn, the higher the rate of tax on the extra income.
Income tax is usually taken automatically from your wages through PAYE (Pay As You Earn), but if you’re self-employed or have other income, you might need to file a Self Assessment tax return.
The money collected through income tax helps fund public services like schools, transport and defence. So it plays a big part in keeping the country running.
Income tax bands UK
Income tax bands determine how much tax you pay on your earnings over the personal allowance, which is £12,570 for most people in the 2025/26 tax year.
The more you earn, the more tax you’ll pay on the portion of income that falls into higher bands.
These are split into three main brackets: basic, higher, and additional rate.
Each band has its own tax rate. You only pay the higher rate on the part of your income that falls within that band – not your entire salary.
Scotland has different income tax bands and rates from the rest of the UK.
UK (England, Wales, Northern Ireland) income tax bands
| Income tax band | Taxable income | Tax rate (England, Wales, NI) |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Scotland income tax bands
| Income tax band | Taxable income | Tax rate (Scotland) |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 to £14,876 | 19% |
| Basic rate | £14,877 to £26,561 | 20% |
| Intermediate rate | £26,562 to £43,662 | 21% |
| Higher rate | £43,663 to £75,000 | 42% |
| Advanced rate | £75,001 to £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
Income tax calculator - how much extra you're paying
Had the personal allowance risen in line with inflation, it would be at £16,385 by the time the band freeze ends in 2028.
However, it remains stuck at £12,570 – almost £4,000 less.
At the same time the higher-rate threshold would have risen to just over £65,500 by the 2027/28 tax year, more than £15,000 higher than the frozen band.
What the income tax bands should have been without the freeze.
| Year | Inflation rate | Personal allowance | Higher rate threshold |
|---|---|---|---|
| 2021/22 | – | £12,570 | £50,270 |
| 2022/23 | 3.1% | £12,960 | £51,828 |
| 2023/24 | 9.1% | £14,139 | £56,545 |
| 2024/25 | 7.3% | £15,171 | £60,673 |
| 2025/26 | 2.5% | £15,550 | £62,189 |
| 2026/27 | 3.2% | £16,048 | £64,179 |
| 2027/28 | 2.1% | £16,385 | £65,527 |
How much more income tax people on different salaries will have paid by the time the tax band freeze comes to an end:
| Salary at start of 2021/22 tax year | Total tax due with frozen allowances (2021/22 to 2027/28) | Total tax due with inflation-linked allowances (2021/22 to 2027/28) | Extra tax due under income tax threshold freeze |
|---|---|---|---|
| £15,000 | £7,917 | £4,950 | £2,967 |
| £25,000 | £24,926 | £21,960 | £2,967 |
| £35,000 | £41,936 | £38,970 | £2,967 |
| £50,000 | £82,176 | £67,345 | £14,831 |
| £70,000 | £150,161 | £135,330 | £14,831 |
Ms Suter adds: "Nothing can make up for the lost years where income tax bands have seen no inflationary uplift.
“The freeze means higher tax bills for anyone who earns more than the personal allowance. A basic-rate taxpayer will pay almost £3,000 more in tax over the period of the freeze, assuming average wage increases during that time.
“That’s because had thresholds increased with inflation, more of their money would have been protected by the tax-free allowance. But with frozen tax bands they are dragged into paying 20% tax on more of that money.
“Someone with an income of £50,000 is hit even harder, because previously their wage increases would have remained under the higher-rate band. But the frozen allowances mean that pay growth results in them being taxed at 40% on a decent wedge of their income.
“It means they will pay almost £15,000 more in tax over the entire duration of the freeze.”
How to reduce your income tax bill
There are several legal and practical ways to reduce your income tax bill in the UK. Here are some of the most common:
1. Contribute to a pension
Pension contributions are tax-free up to certain limits.
Contributions reduce your taxable income, which can lower the amount of income tax you owe — and even move you into a lower tax band.
2. Use your Marriage Allowance
If you’re married or in a civil partnership and one of you earns less than the Personal Allowance, the lower earner can transfer up to £1,260 of their allowance to their partner.
This can save up to £252 a year in tax.
3. Claim allowable expenses (if self-employed)
If you’re self-employed, there are lots of allowable business expenses you can put against your tax bill.
These reduce your profit, which reduces your tax bill.
4. Charitable donations (Gift Aid)
If you donate to charity through Gift Aid, you can claim tax relief on those donations — and higher-rate taxpayers can claim back the difference between the basic rate and their higher rate.
We explain more in this article: Millions of taxpayers who donate to charity entitled to tax refund
5. Use salary sacrifice schemes
Some employers offer salary sacrifice schemes (e.g. for pensions, cycle-to-work, electric cars). These programmes take the cost off your salary at source, rather than after it has been taxed.
This means your take-home salary is less and therefore lowers your taxable income.
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