Hot issue: Tax threshold

Should the frozen tax-free allowance finally go up?

The £12,570 tax-free allowance has been frozen since 2021 and is due to stay there until April 2031. The Budget is on 28 October and the Prime Minister says the allowance will be looked at, with no promise. A petition to lift it has passed 250,000 names.

1.7 millionextra people paying income tax or the 40p rate by 2029/30 because the freeze was extended to 2031 (OBR, via Budget 2025)

Give your answerFree. No account needed. Then see how Britain split.

The options

Closest to what the government is doing now
Keep the freeze to 2031, the money is needed

Leave the thresholds where they are. It raises billions a year for public services without raising tax rates.

Backed by: Labour
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End the freeze early and let thresholds rise with prices

Go back to raising the allowance and the 40p line in line with inflation every year, so tax stops creeping up by stealth.

Backed by: ConservativesGreensPlaid Cymru
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Lift the tax-free allowance by £1,000 now

A one-off rise to about £13,570, as the petition asks, paid for by savings or taxes elsewhere.

No party's stated position matches this option exactly.
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Raise tax-free pay to £15,000 and the 40p line to £56,000

Takes about 2.5 million low earners out of income tax and 760,000 people out of the 40p rate, paid for by growth from closer trade with the EU.

Backed by: Liberal Democrats
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Raise tax-free pay to £15,000, then £20,000

A big jump that takes millions out of income tax altogether, costing around £18bn a year at first, funded by cuts elsewhere.

Backed by: Reform UK
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What happens next

If the freeze stays until 2031
More people pay income tax or the 40p rate as pay rises. The extension alone adds about 1.7 million by 2029/30 and raises around £8bn that year.
The OBR, Budget 2025
If thresholds rise with prices again
Stealth rises stop, but the Treasury loses billions a year, which has to come from other taxes, spending cuts or more borrowing.
The Treasury and independent forecasters point out
If the allowance goes up by £1,000
Every £100 on the allowance is worth £20 a year to a basic-rate taxpayer, so about £200 each. People earning under £12,570 gain nothing.
Simple tax arithmetic; anti-poverty groups note the gap
If the allowance jumps to £15,000
Millions of low earners stop paying income tax. Reform costs its plan at £17.7bn in year one, rising to £21bn. How it is paid for decides who gains overall.
Reform's own costing; other parties dispute the funding
If big tax cuts are not paid for
Lenders may demand higher interest. Ten-year government borrowing costs were about 5.4% in early October 2026, and the 2022 mini-budget showed how fast markets react.
Bond market analysts warn
If the cuts are funded by trimming benefits or services
The gain for workers is partly offset by losses for people who rely on those services, often the same low-income households the cut was meant to help.
Critics of large tax cuts argue

The arguments

The case for lifting the allowance

Nobody voted for higher income tax, yet the freeze has quietly pulled millions into paying it. Lifting the allowance restores honesty about who pays what.
When pay only keeps up with prices, a freeze taxes inflation. A low earner can end up paying more tax while being no better off.
Lower tax on work makes extra hours or a pay rise more worthwhile, which supporters say can lift jobs and growth.
A higher allowance is simple, easy to understand and reaches almost every taxpayer, unlike complex targeted schemes.

The case for keeping the freeze

The freeze raises billions without raising tax rates. Undoing it means finding the money elsewhere while debt and borrowing costs are high.
A higher allowance does nothing for the lowest paid, who already earn below it, and gives the same cash gain to someone on £90,000 as on £20,000.
Public services, defence and an ageing population all need funding. Cutting income tax now may mean deeper cuts or higher taxes later.
Markets watch UK borrowing closely. Large unfunded tax cuts risk higher interest rates on mortgages and on government debt.

The trade-offs

More take-home pay for workers versus billions less for services or more borrowing.
A simple, visible tax cut versus a targeted one that helps the lowest earners more.
Being open about tax rises versus the political ease of raising money by standing still.

Questions to ask yourself

If the allowance goes up, which tax should rise, or which service should shrink, to pay for it?
Should someone on £90,000 get the same tax cut in pounds as someone on £20,000?
Is a freeze that raises tax without a vote more or less fair than simply raising the rate?

Sources

britbrief.co.uk /business/consumers/burnham-urged-to-unfreeze-personal-allowance-bef…
finance.yahoo.com /news/stealth-rise-income-tax-affect-151911488.html
expressandstar.com /uk-news/robert-jenrick-pledges-tax-cut-amid-row-over-reform-donatio…
votes.parliament.uk /votes/commons/division/2201
itv.com /news/2026-09-22/ed-davey-says-lib-dems-will-cut-income-tax-to-tackl…

Facts as of October 2026. Party positions reflect each party's current stated policy and may change.

Britain is split. Now you decide.

Pick your side on tax threshold, guess how the country answered, then see where you really line up with the parties.

Give your answer

Should the frozen tax-free allowance finally go up?

The options

Keep the freeze to 2031, the money is needed

End the freeze early and let thresholds rise with prices

Lift the tax-free allowance by £1,000 now

Raise tax-free pay to £15,000 and the 40p line to £56,000

Raise tax-free pay to £15,000, then £20,000