UK Prime Minister Keir Starmer Declines to Rule Out Extending Income Tax Threshold Freeze

During Prime Minister's Questions on November 19, 2025, UK Prime Minister Keir Starmer faced inquiries from Conservative leader Kemi Badenoch regarding the potential extension of the freeze on income tax thresholds. Badenoch pressed Starmer to confirm whether the government would maintain its previous commitment to end the freeze by April 2028. In response, Starmer stated, "The budget is one week today and we will lay out our plans," without providing a definitive answer.

Chancellor Rachel Reeves is set to present the budget on November 26, amid reports that the government is considering extending the freeze on income tax thresholds by two years to 2030. This measure could generate approximately £8 billion annually by increasing the number of taxpayers entering higher tax brackets due to wage inflation.

The potential extension has raised concerns about its impact on working individuals, as it would effectively increase tax burdens without altering tax rates. The Institute for Fiscal Studies estimates that extending the freeze could lead to the number of higher-rate income tax payers in the UK exceeding 10 million for the first time.

In her previous budget speech, Chancellor Reeves had pledged not to extend the freeze beyond April 2028, emphasizing the government's commitment to protecting working people. However, the current fiscal challenges have prompted reconsideration of this stance.

The upcoming budget is expected to address these issues, with further details to be announced by Chancellor Reeves on November 26.