Fiscal drag calculator
Fiscal drag is the stealth tax rise nobody votes on: tax thresholds stay frozen while wages chase inflation, so every pay rise pulls more of your income into tax. Prices have risen 29.8% since April 2021 (ONS CPI) while the £12,570 personal allowance and £50,270 higher-rate threshold have not moved a pound, and the freeze is scheduled to run to 2031. This calculator puts a number on what that costs you.
Default: 29.8%. ONS CPI, Apr 2021 to July 2026
Extra income tax you pay this year because thresholds are frozen
£749.17 a year
£62.43 a month. With CPI-uprated thresholds your personal allowance would be £16,316 instead of £12,570, and higher-rate tax would start at £65,250 instead of £50,270.
Side by side
| Frozen (actual) | CPI-uprated | |
|---|---|---|
| Personal allowance | £12,570 | £16,316 |
| Higher rate starts at | £50,270 | £65,250 |
| Income tax on £45,000 | £6,486.00 | £5,736.83 |
| The freeze costs you | £749.17 a year (1.7% of salary) | |
England bands, income tax only. National Insurance thresholds have moved since 2021, so they are excluded rather than guessed. Full take-home here →
What is fiscal drag?
When thresholds rise with inflation, a cost-of-living pay rise leaves your real tax burden unchanged. When they are frozen, the same pay rise silently pushes more income above the allowance and more into higher bands, tax rises without any rate rising. It is why record numbers now pay higher-rate tax at salaries that were solidly basic-rate in 2021, and why successive Chancellors have extended the freeze rather than raise headline rates, it raises billions without any rate changing. The tool above compares your actual income tax with what it would be if the April 2021 thresholds had been uprated with CPI, the default uses the published ONS index and the assumption is editable, because the counterfactual is a scenario, not a fact.
What you can do about it
The thresholds are outside your control; your taxable income is not. Pension contributions, especially salary sacrifice: remove pay from the frozen bands entirely, and around the untouched £100,000 taper and the £60,000 Child Benefit line, frozen since their introduction, the drag is at its most expensive.
2026/27 rates; CPI index 110.1 (Apr 2021) → 142.9 (July 2026), ONS series D7BT, checked 2026-08-28. Method on the about page.