The Government is committed to ensuring individuals keep more of what they earn and making the UK a more attractive place to live and work, whilst also ensuring the UK’s economic stability.

The Government has nearly doubled the Personal Allowance (PA) since 2010 (more than 20% higher in real terms), ensuring some of the lowest earners do not pay income tax. Thanks to the PA, almost a quarter of individuals with taxable income will not pay any income tax in 2024-25.

Due to the significant real term increases to the PA, it is estimated there will be 1.8 million people taken out of income tax by 2024-25, compared to the threshold rising in line with inflation from 2010-11.

Thanks to the combined impact of National Insurance contributions (NICs) cuts at Autumn Statement and Spring Budget, and above inflation increases to thresholds since 2010, an average worker in 2024-25 will pay over £1,500 less in personal taxes than they otherwise would have done.

The Government must ensure the UK’s economic stability and provide confidence in the commitment to fiscal discipline. It made the difficult but necessary decision to maintain income tax thresholds, including the PA, at current levels until April 2028 to ensure the tax system supports strong public finances.

The Government keeps all aspects of the tax system under review, and any decisions on future changes, including on the PA, would be taken by the Chancellor in the context of the wider public finances and at the relevant fiscal event.

HM Treasury