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.
Calculator
Fiscal drag calculator
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 by Hadi. Method on the about page.
Where the thresholds would be if they had kept up
A percentage is abstract. The gap is not: these are the thresholds actually in force against the ones CPI would have produced had the freeze never happened.
Both thresholds have been frozen since April 2021. Had they risen with CPI, the personal allowance would be £16,315 rather than £12,570, and the higher-rate threshold £65,246 rather than £50,270.
How to use the fiscal drag calculator
- 1
Enter your salary.
- 2
Read the tax you pay now against the tax you would pay if thresholds had risen with inflation.
- 3
See the difference in pounds a year, which is the cost of the freeze.
- 4
Check how it grows over the years the freeze runs.
When should you use the fiscal drag calculator?
Use it when you want to know what frozen thresholds cost you, which is a real amount that is never announced as a tax rise.
Your pay rose but your take-home did not
Frozen thresholds mean a rise moves you towards a higher band rather than keeping pace.
You want to know what the freeze costs you
The figure is real money and it is not announced as a tax rise.
You are near a threshold
Fiscal drag pulls people over the higher-rate line without any change in policy.
You are planning several years ahead
The cost compounds every year the thresholds stay still.
Where to go next
- Pay rise calculatorTo what a rise is worth against the freeze.Open
- Income tax calculatorTo the tax you pay on today's thresholds.Open
- Salary percentile calculatorTo where your salary sits in the distribution.Open
All 51 calculators share one tested engine, so a figure from the fiscal drag calculator agrees with every other page here. See the full calculator index or the pay and tax guides.