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Explained

Brief

The tax-free allowance has not moved since 2021

Prices have kept rising since. Put in a salary to see what that means for your income tax this year.

15 Sept 2026 · Report explained: HM Revenue & Customs, Maintaining the Personal Allowance and basic rate limit until 5 April 2031, released 26 November 2025

Ink is the publisher's own figure, as printed.
Pencil is our working, always shown beside it.

What would normally happen

By law, the personal allowance and the basic-rate band go up every April in line with prices: by the rise in the consumer prices index over the year to the previous September. That rule is in the Income Tax Act 2007.

Parliament can turn the rule off, and it has for every year since April 2022. So when this page compares the freeze with thresholds that “rose with prices”, it is comparing it with what the law would otherwise have done.

How we got here

The personal allowance is the amount you can earn each year before paying any income tax. In 2000-01 it was £4,385.

From 2010-11, people earning over £100,000 began to lose it: £1 for every £2 above that line. Governments then raised it quickly. It reached £10,000 in 2014-15 and £12,500 in 2019-20, each a year sooner than promised, according to the government.

In 2021 it was set at £12,570. It has stayed there since, and is due to stay there until April 2031.

The personal allowance since 2000 Pounds a year, by tax year
datamap.uk Explained£0£2,000£4,000£6,000£8,000£10,000£12,000£14,0002000-012005-062010-112015-162020-212025-262030-31Withdrawn above £100,000Reaches £10,000Reaches £12,500Personal allowance, asset by HMRC

Source: HM Revenue & Customs (4 documents) · as published

What people disagree about

Supporters say keeping thresholds where they are raises money for public services without changing any tax rate.

Critics say it raises the tax paid by people whose pay has only kept up with prices, and brings more low earners into paying income tax.

The figures below can show how big the gap is. They cannot say whether the money raised was worth it.

The personal allowance, and where prices would have taken it Pounds a year, by tax year
datamap.uk Explained£12,000£13,000£14,000£15,000£16,000£17,0002020-212022-232024-252026-272028-292030-31This year: 2026-27Personal allowance, asset by HMRCOur estimate: if ithad risen with prices

Source: HM Revenue & Customs (4 documents); Office for National Statistics, CPI ANNUAL RATE 00: ALL ITEMS 2015=100 (series D7G7, dataset MM23), CSV download; legislation.gov.uk, Income Tax Act 2007, sections 57 and 21 · calculated by datamap.uk

The official estimate

The Office for Budget Responsibility, which checks the government’s sums, looks further ahead than our chart. It says that if thresholds had risen with prices, by 2030-31 the personal allowance would be £4,900 higher and the higher-rate threshold £20,100 higher.

In November 2025 it expected all the income tax freezes together to raise £56 billion in 2030-31, and 5.2 million more people to be paying income tax.

In March 2026 it said updated modelling of pensioners raises the number brought into paying tax by 600,000 in 2026-27 and 1 million in 2030-31. Its updated estimates of the money raised are in detailed tables on its website, which this page has not read.

Office for Budget Responsibility, Economic and fiscal outlook – November 2025 (CP 1439), Box 3.3 · a forecast, as published · Office for Budget Responsibility, Economic and fiscal outlook – March 2026 (web-accessible PDF on GOV.UK), Chapter 3, paragraph 3.11 (printed p.47)

What the freeze raises

The flip side of the gap is money. If thresholds had risen with prices, people would pay less income tax and the government would collect less. The Office for Budget Responsibility forecasts how much the freezes raise each year.

Income tax raised by freezing thresholds, compared with raising them with prices £ billion a year · forecast by the Office for Budget Responsibility, November 2025
datamap.uk ExplainedIncome tax raised by freezes announced before November 2025£0bn£10bn£20bn£30bn£40bn£50bn£3.0bn£13.8bn£24.4bn£28.4bn£35.2bn£39.8bn£41.5bn£42.6bn£43.9bn2022-232023-242024-252025-262026-272027-282028-292029-302030-31

Source: Office for Budget Responsibility, Economic and fiscal outlook – November 2025, Chapter 3 Policy measures, Box 3.3: Implications of personal tax threshold freezes, Table A · as published

The extension announced in November 2025 adds more on top: £3.1bn in 2028-29, £7.3bn in 2029-30 and £11.6bn in 2030-31.

Counting National Insurance as well, the OBR puts everything the freezes raise at £66.6bn in 2030-31. These are forecasts, and they count only freezes from 2022-23 onwards.

Office for Budget Responsibility, Economic and fiscal outlook – November 2025, Chapter 3 Policy measures, Box 3.3: Implications of personal tax threshold freezes, Table A · as published

Where you stand

£35,000

Our estimate

On £35,000 a year, frozen thresholds mean £700 to £750 more income tax in 2026-27 than if they had risen with prices.

England, Wales and Northern Ireland rates · salary only · no other allowances · rounded to £50

How we worked this out

Without a freeze, the Income Tax Act raises thresholds each April by the previous September’s price rise, rounding the allowance up to the next £10 and the basic-rate band up to the next £100. The right column applies that rule from 2021-22, the last year thresholds rose. The left column uses HMRC’s actual thresholds for 2026-27. Both use the 20% and 40% rates.

Income tax on £35,000 in 2026-27, two ways
Thresholds as set by HMRCOur estimate: risen with prices
Tax-free allowance£12,570£16,080
Pay taxed at 20%£22,430 → £4,486£18,920 → £3,784
Pay taxed at 40%£0 → £0£0 → £0
Income tax£4,486£3,784

Difference: £4,486 − £3,784 = £702, shown as £700 to £750 so it isn’t read as an exact bill.

Anyone earning between £16,080 and £50,270 gets the same answer. For all of them, the difference is the £3,510 gap in the allowance, taxed at 20%.

Our estimate, year by year
Tax yearPrice rise the September beforeAllowanceHigher-rate threshold
2022-233.1%£12,960£51,860
2023-2410.1%£14,270£57,170
2024-256.7%£15,230£61,030
2025-261.7%£15,490£62,090
2026-273.8%£16,080£64,480

Price rises: ONS consumer prices index, 12-month rate (series D7G7) · thresholds and rates: HMRC

An illustration, not tax advice. For your own bill, use HMRC’s income tax calculator. Scotland sets its own bands above the allowance, so the figure there differs.

What this doesn’t tell you

  • It leaves out National Insurance, pension contributions and any income other than a salary.
  • Scotland sets its own income tax bands above the allowance, so a Scottish taxpayer’s figure differs.
  • “Risen with prices” is one comparison. Thresholds could have risen with earnings instead, which would give a different answer. That comparison is not shown yet.
  • Our estimate stops at 2026-27, the last year a published September price rise can set.
  • It is an illustration for a typical case, not your tax bill.

Sources and method

Drafted with the help of AI, checked against the publishers' own files, and read by a person before it goes up.

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