Income tax thresholds stay frozen, the Chancellor, John Healey, has confirmed in his Budget statement. This confirms earlier reports that he would not make major changes to them.
"I've kept the Labour manifesto promise not to raise tax on working people"
That is Healey's wording according to a transcript published by MoneyWeek. It has not yet been checked against the official Hansard record. Healey told MPs the money in the Budget was raised from 'those who can afford to pay'.
According to MoneyWeek and City AM, Healey said tax on employment income and dividends is unchanged. Pension experts quoted by MoneyWeek point out that the thresholds remain frozen.
Healey's claim covers tax rates. It does not cover the effect of frozen thresholds. As wages rise, more income is pulled into tax or into higher bands, which The Telegraph described before the statement as a 'stealth raid' of fiscal drag.
The personal allowance has been frozen at £12,570 since 2022. Rachel Reeves's November 2025 Budget extended the freeze on the allowance and the thresholds until 2031. Some reports say Healey has extended the freeze further. That has not been independently checked.