However, Ms Reeves is currently considering whether to extend the freeze for a further two years to plug a £40 billion deficit in the public finances.

This policy is known as the fiscal drag because, although it does not increase income tax rates, it pushes workers to pay more taxes, with wage increases pushing them into higher brackets. high. The tax-free personal allowance does not increase each year in line with inflation.

Jeremy Cox, of Coventry Building Society, said: “A double whammy: a fiscal brake and higher interest rates has led to an increase in the number of people paying tax on savings income and the amounts that they have to pay.

“Savers generally earn higher interest rates on their savings funds than a few years ago. And, while tax-free cash Isas have grown in popularity, those with money in non-Isa savings are depleting their personal savings allowances more quickly.

Savers are not the only ones to be affected by the continued freeze in tax thresholds: a range of middle-income professionals, including police officers, accountants and civil engineers, are expected to be affected. driven into the 40% tax bracket as incomes steadily increase.