Methodology and sources
For each tax year we work out your tax twice: once with the thresholds that actually applied (frozen), and once with thresholds that kept rising with inflation as the law normally requires. The difference is what the freeze has cost you.
Figures last checked 14 October 2026.
The comparison
- Actual: the real thresholds for each year (tables below).
- If indexed: the personal allowance and basic rate limit raised each April by the previous September's CPI, rounded up to the next £10 and £100, as the Income Tax Act 2007 s57 and s21 require. We start from 2021/22, the last year they rose.
Prices have risen by about a quarter. September CPI compounded from September 2021 to September 2025 is 1.101 × 1.067 × 1.017 × 1.038 = +24.0%.
Income tax
allowance = PA if adjusted net income > £100,000: allowance = max(0, PA − floor((ANI − £100,000) ÷ 2)) taxable = max(0, pay − allowance) basic = min(taxable, BRL) × 20% higher = min(max(0, taxable − BRL), ART − BRL) × 40% additional = max(0, taxable − ART) × 45% extra tax = tax(actual) − tax(if indexed)
Choices that keep the comparison fair:
- The £100,000 taper start is the same in both, because it has never been indexed (it has been fixed since 2010).
- The additional rate threshold (ART) uses the actual figure in both: £150,000 to 2022/23, then £125,140. The 2023 cut was a separate policy, not part of the freeze, so it is excluded by default. You can include it with the "Also count the 45p threshold cut" option, which sets the indexed side to £150,000.
- A tax code like 1100L changes the allowance by the same amount (code × 10 − £12,570) on both sides. Other codes are ignored and 1257L is assumed.
- Pensions: relief at source extends the basic rate band and ART by the gross contribution and reduces adjusted net income. Salary sacrifice reduces pay for income tax, NI and student loans. Net pay reduces pay for income tax only.
Actual thresholds (England, Wales and Northern Ireland)
| Tax year | Personal allowance | Basic rate limit | 40% starts | 45% starts (taxable) |
|---|---|---|---|---|
| 2021/22 | £12,570 | £37,700 | £50,270 | £150,000 |
| 2022/23 | £12,570 | £37,700 | £50,270 | £150,000 |
| 2023/24 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2024/25 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2025/26 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2026/27 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2027/28 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2028/29 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2029/30 | £12,570 | £37,700 | £50,270 | £125,140 |
| 2030/31 | £12,570 | £37,700 | £50,270 | £125,140 |
Indexed thresholds (what the law would have given)
| Tax year | Sept CPI used | Personal allowance | Basic rate limit | 40% starts |
|---|---|---|---|---|
| 2021/22 | actual | £12,570 | £37,700 | £50,270 |
| 2022/23 | 3.1% | £12,960 | £38,900 | £51,860 |
| 2023/24 | 10.1% | £14,270 | £42,900 | £57,170 |
| 2024/25 | 6.7% | £15,230 | £45,800 | £61,030 |
| 2025/26 | 1.7% | £15,490 | £46,600 | £62,090 |
| 2026/27 | 3.8% | £16,080 | £48,400 | £64,480 |
| 2027/28 (est.) | 3.1% | £16,580 | £50,000 | £66,580 |
| 2028/29 (est.) | 2.0% | £16,920 | £51,000 | £67,920 |
| 2029/30 (est.) | 2.0% | £17,260 | £52,100 | £69,360 |
| 2030/31 (est.) | 2.0% | £17,610 | £53,200 | £70,810 |
Sense check: the OBR estimates that by 2030-31 an indexed personal allowance would be about £4,900 higher and the higher-rate threshold about £20,100 higher. Ours gives +£5,040 and +£20,540, consistent once recent higher inflation is allowed for.
Inflation figures
| Month | CPI 12-month rate | Status |
|---|---|---|
| Sep 2020 | 0.5% | ONS actual |
| Sep 2021 | 3.1% | ONS actual |
| Sep 2022 | 10.1% | ONS actual |
| Sep 2023 | 6.7% | ONS actual |
| Sep 2024 | 1.7% | ONS actual |
| Sep 2025 | 3.8% | ONS actual |
| Sep 2026 | 3.1% | Estimate. Placeholder: the August 2026 outturn. ONS publishes September 2026 CPI on 21 October 2026. |
| Sep 2027 | 2.0% | Estimate. OBR March 2026 forecast |
| Sep 2028 | 2.0% | Estimate. OBR March 2026 forecast |
| Sep 2029 | 2.0% | Estimate. OBR March 2026 forecast |
Projection to 2031 is an estimate. It assumes your pay stays the same in cash terms and uses OBR's 2% inflation forecast for 2027 onwards.
September 2026 uses a 3.1% placeholder (the August 2026 figure) until ONS publishes the real number on 21 October 2026. The Bank of England expects inflation near 3.75% in late 2026, so these estimates are on the cautious side.
The projection
covers income tax only.
National Insurance (optional)
NI = main rate × (min(pay, UEL) − PT) + upper rate × max(0, pay − UEL) extra NI = NI(actual) − NI(if indexed)
- Annual calculation. For 2022/23 and 2023/24, when rates changed mid-year, we use HMRC's annual directors' figures.
- If indexed: same rates. The primary threshold (PT) is £12,570 raised by September CPI from 2023/24 (rounded up to £10). For 2021/22 and 2022/23 it equals the actual PT, because the PT was raised in July 2022 rather than frozen. The upper earnings limit (UEL) follows the indexed 40% threshold.
- Because the UEL is frozen too, people earning above £50,270 pay slightly less NI than they would with indexation. We show this as a negative figure.
| Tax year | PT | UEL | Main rate | Upper rate | PT if indexed |
|---|---|---|---|---|---|
| 2021/22 | £9,568 | £50,270 | 12% | 2% | £9,568 |
| 2022/23 | £11,908 | £50,270 | 12.73% | 2.73% | £11,908 |
| 2023/24 | £12,570 | £50,270 | 11.50% | 2% | £13,840 |
| 2024/25 | £12,570 | £50,270 | 8% | 2% | £14,770 |
| 2025/26 | £12,570 | £50,270 | 8% | 2% | £15,030 |
| 2026/27 | £12,570 | £50,270 | 8% | 2% | £15,610 |
2022/23: PT £9,880 to 5 July, then £12,570; rates 13.25%/3.25% to 5 November, then 12%/2%. 2023/24: 12% to 5 January 2024, then 10%.
Plan 2 student loan (optional)
repayment = 9% × max(0, pay − threshold) extra = repayment(actual threshold) − repayment(indexed threshold)
The Plan 2 threshold was held at £27,295 for four years, then rose to £28,470 (2025/26) and £29,385 (2026/27). It is now frozen at £29,385 until April 2030. Our comparison starts from the 2022/23 uprating that was overridden (£28,550), then raises it by September CPI, rounded up to £5. This is cautious: the government's own uprating basis is RPI, which is higher.
| Tax year | Actual threshold | If indexed (CPI) |
|---|---|---|
| 2021/22 | £27,295 | £27,295 |
| 2022/23 | £27,295 | £28,550 |
| 2023/24 | £27,295 | £31,435 |
| 2024/25 | £27,295 | £33,545 |
| 2025/26 | £28,470 | £34,120 |
| 2026/27 | £29,385 | £35,420 |
Rounding and simplifications
- We calculate at full precision and round each figure on screen to the nearest £1. Totals are the sum of the rounded figures, so what you see adds up.
- Annual calculation: payslips work month by month, so your actual deductions may differ slightly.
- Not covered yet: Scotland, student loan Plans 1, 4 and 5, postgraduate loans, savings and dividend income, Marriage Allowance, self-employed NI and the salary sacrifice NI cap from 2029.
- The thresholds were also frozen in 2019/20 to 2020/21 at £12,500 and £50,000. That followed an earlier policy uplift and is outside our scope.
Sources
Indexation law (Rooker-Wise to today)
- Income Tax Act 2007, s57 (personal allowance indexation)
- Income Tax Act 2007, s21 (basic rate limit indexation)
- Finance Act 1977, Part III as enacted (s22)
- BBC Parliament: the Rooker-Wise amendment
The freezes
- Income Tax (Indexation) Order 2021 (2021/22 thresholds)
- Finance Act 2021, s5
- Budget speech, 3 March 2021
- Finance Act 2023, s5
- Finance Act 2026, s10
- HMRC: maintaining income tax and NICs thresholds until 5 April 2031
- House of Commons Library: Autumn Budget 2025 briefing
Scale of fiscal drag
Inflation (CPI)
- ONS series D7G7: CPI annual rate
- ONS: Consumer price inflation, September 2025
- ONS: Consumer price inflation, August 2026
National Insurance
- HMRC: rates and thresholds for employers 2022 to 2023
- HMRC National Insurance Manual NIM01615
- HMRC National Insurance Manual NIM01625
- HMRC: rates and allowances, National Insurance contributions