The fiscal drag calculator
Fiscal drag: the tax rise nobody voted for
No rate has gone up. And yet almost everyone is paying more income tax than they were a few years ago. The trick is to freeze the thresholds — the personal allowance and the point where 40% begins — and let rising pay do the rest. It’s called fiscal drag, and it may be the largest tax rise of the decade.
Normally the personal allowance and the higher-rate threshold rise a little each year to keep pace with prices. Since April 2021 they haven’t moved, and the Autumn 2025 Budget extended the freeze to 2030/31. When your pay rises with inflation but the thresholds stand still, two things happen: more of your income sits above the tax-free allowance, and more of it crosses into the 40% band. You feel no rate change — you just keep a little less each year, and it adds up. Move the sliders to see the total it has quietly cost you since 2021.
Total stealth tax you’ve paid since the freeze began
£1,178
Extra income tax, from no announced rate rise at all — £400 in this year alone.
Each year the freeze bites a little harder — pay drifts up, thresholds don’t, and more of your income crosses the line. Had they kept pace, the personal allowance would be about £14,572 today and the higher-rate threshold about £58,277, instead of £12,570 and £50,270.
Why it’s the perfect tax rise
No rate goes up. No headline is written. You simply pay more each year as your pay creeps up and the thresholds don’t — and because it’s invisible, it’s politically painless. The Office for Budget Responsibility expects the freeze to create millions of new higher-rate taxpayers by the time it ends in 2030. It is one of the biggest tax rises of the decade, and it was never announced as one.
Why governments love it
A visible tax rise costs political capital. Fiscal drag costs none: there is nothing to announce, nothing to vote on, and the extra revenue arrives automatically, year after year, growing as pay grows. It is also quietly regressive in reach — it pulls in people who never considered themselves “higher earners”, because the £50,270 line that once marked a good salary now catches nurses, teachers and experienced tradespeople who’d have stayed below an inflation-linked threshold.
The only defence is the same as everywhere else in the tax code: the reliefs that reduce the income the thresholds are measured against. A pension contribution, in particular, can pull you back below the higher-rate line — which is worth far more now that the line has stopped moving toward you.
How these figures are calculated
For each year since the freeze began in April 2021, we compare the income tax you paid under the frozen thresholds (£12,570 personal allowance, £50,270 higher-rate threshold) against what you would have paid if those thresholds had risen with inflation, at the rate you choose. We add every year’s difference together to get the total. It assumes your pay kept pace with inflation, so in earlier years both your salary and the counterfactual thresholds were lower. Salary is capped at £100,000 so the personal-allowance taper doesn’t complicate the comparison, and the figures cover income tax only — National Insurance and the additional-rate threshold are set aside to keep the story to the two headline frozen thresholds. Guidance, not advice.
The freeze is fixed. What you're measured on isn't.
Kept finds the reliefs that lower your taxable income — the only lever left once the thresholds stop moving — and shows what each keeps for you over the years the freeze runs.
See your own positionSources
- Personal allowance and higher-rate threshold frozen to 2030/31: Autumn Budget 2025, GOV.UK.
- Fiscal drag and additional higher-rate taxpayers: Office for Budget Responsibility.
- Income tax rates and thresholds, 2026/27: GOV.UK.