Frozen tax thresholds and allowances have seen millions of households dragged into paying higher rates and more tax.

In July, Sir Keir Starmer refused to rule out extending the freeze on tax thresholds ahead of the Autumn Budget on 26 November, with many worried about how it will impact their finances .

Below, we take a look at what happens when the thresholds are frozen, who it impacts and how it can have a knock-on effect on savings and pensions.

Which tax thresholds are frozen?

There are tax thresholds which determine when people start paying income tax and NI – and how much they pay.

The freeze on income tax thresholds and NI is due to end in April 2028, but speculation is mounting that this could be extended.

The basic rate of income tax is 20 per cent, but anyone earning £

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