LIVERPOOL, Oct 1 – Martin Lewis has urged the government to end what he called a “stealth tax raid” on workers, warning that the freeze on income tax thresholds is dragging millions into higher tax bands.
The consumer rights advocate made the comments at the Labour conference, as speculation mounts that Chancellor Rachel Reeves could extend the freeze until 2030 in her November Budget.
Lewis calls out fiscal drag
The Money Saving Expert founder said the freeze was designed to quietly increase the government’s tax take.
“[Stealth tax] is a deliberate thing to take extra tax from the public through stealth. It would be great for the public to get rid of [it],” Mr Lewis told delegates.
He added that fiscal drag where wage rises push more people into higher brackets was among the public’s top concerns.
Income tax thresholds frozen
Thresholds for higher-rate income tax, currently £50,270, have been frozen since 2021. The policy is set to remain in place until April 2028.
With inflation boosting salaries, the freeze has already brought more than 500,000 extra taxpayers into the 40p bracket over the past year, HMRC estimates show.
Reeves weighs extension
Ms Reeves has declined to rule out prolonging the freeze beyond 2028, despite pledging in her maiden Budget not to extend it.
She told BBC Breakfast: “We are at risk of writing a Budget live on air.” In her speech to Labour’s conference, she said future decisions would be “made all the harder by harsh global headwinds and the long-term damage done to our economy.”
Forecasts suggest pushing the freeze to 2030 would raise around £10.4 billion annually.
Rising tax burden
The freeze has already added tens of billions to Treasury revenues as more earners cross thresholds without any rise in take-home pay.
According to research from the House of Commons Library, commissioned by the Liberal Democrats, more than a million taxpayers would be £285 worse off annually if the freeze were extended.
Regional impacts
The financial strain is uneven across the country. Around 170,000 Londoners would each pay £350 more in tax by 2030, while 200,000 taxpayers in the South East would lose an average of £320, the study found.
Public discontent is growing, with critics arguing the measure disproportionately penalises middle-income earners who do not consider themselves wealthy.
Treasury response
A Treasury spokesman insisted the government was committed to protecting wages.
“At the 2025 Budget and the Spring Statement, the Chancellor announced that we would not extend the tax threshold freeze inherited from the previous government,” the spokesperson said.
“We are also protecting payslips for working people by keeping our promise to not raise the basic, higher or additional rates of Income Tax, employee National Insurance or VAT.”
Martin Lewis’s call to scrap the threshold freeze underlines mounting pressure on Chancellor Rachel Reeves ahead of her November Budget. While the Treasury insists workers are protected, rising inflation means more households are paying higher tax than ever before.
Forecasts suggest that any extension of the freeze could raise billions but would also leave millions of families worse off. With fiscal drag already reshaping the tax landscape, the debate over stealth taxation is set to dominate the weeks leading up to the Budget.
Amid this uncertainty, tools like Pie the UK’s first personal tax app are helping workers track real-time tax figures, simplify their returns, and stay ahead of hidden tax changes.
