Savers left out in cold

OF ALL the stealth tax increases Britons have faced, the most punishing is the decision to freeze income tax thresholds.

- By Harvey Jones

Rishi Sunak introduced the freeze in his 2021 Spring Budget, holding the £12,570 personal allowance and £50,270 higher-rate threshold for four years from 2022/23 to the end of the 2025/26 tax year.

He also froze National Insurance (NI) thresholds.

In his 2022 Autumn Statement, Chancellor Jeremy Hunt extended the freeze to the end of the 2027/28 tax year.

Labour’s Rachel Reeves stuck to that timetable in her maiden Budget last October, although there’s speculation that she may extend it by another two years to 2030 in her upcoming Spring Statement on March 26.

Freezing thresholds, rather than raising them with inflation, stealthily drags millions more people into higher tax brackets as wages rise.

Incredibly, both Conservative and Labour governments have backed the freeze, while making manifesto pledges not to increase income tax or NI.