How much extra income tax you’ll pay by 2027 due to frozen thresholds

Think tank says millions of workers will be dragged into higher rate of income tax by 2027

New research published by a think tank says that one in five workers will be paying the higher rate of income tax of 40 per cent or above by 2027.

The Institute for Fiscal Studies (IFS) estimates 7.8 million workers will be dragged into the higher band due to frozen thresholds, with middle-income earners paying a rate aimed at the wealthy.

The standard personal allowance - the amount at which a worker begins to pay tax - is £12,570. Income tax thresholds usually rise in line with inflation but were frozen by Rishi Sunak when he was chancellor in 2021.