Wed, 26 Nov 2025

Wed, 26 Nov 2025 How the chancellor just took a chunk out of your future pay

The point at which you start to pay tax, and the point where you tip into paying a higher rate of tax have been frozen for three more years.

* About a million people who currently don't earn enough to pay income tax will be drawn into paying tax as soon as their earnings inch above £12,570.
* Anyone getting a pay rise will see more of it taxed due to the frozen thresholds.
* People living on the state pension or working part-time minimum wage jobs will also be affected.
* National Insurance Contributions (Nics) threshold is also being frozen.
* As wages rise, a bigger proportion will end up above tax thresholds and be taxed, with people earning £49,000 potentially paying more in higher rate tax by 2031.
* By 2031, almost one in four taxpayers could pay some of their tax at the higher rate.
* The policy is expected to raise £56bn in total by 2031, including £12bn from the three-year extension announced.
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