Reform UK's £20,000 tax-free allowance: what would you save?
Raising the income tax personal allowance from £12,570 to £20,000, and the higher-rate threshold from £50,270 to £70,000 — the party's most expensive tax pledge.
What's being proposed
Reform UK's flagship tax pledge is to raise the income tax personal allowance — the amount you can earn before paying any income tax — from £12,570 to £20,000. It would also lift the point at which the 40% higher rate starts from £50,270 to £70,000, while keeping the 20% and 40% rates themselves unchanged. The party says this would take around seven million of the lowest-paid out of income tax altogether. A separate pledge would increase the transferable Marriage Allowance so that a married person could, in effect, receive up to £25,000 tax-free.
Where it comes from
The policy comes from Reform's "Our Contract With You", its manifesto-equivalent, and is the single most expensive item in its tax plan. Independent estimates of the cost of the personal-allowance change alone run from roughly £50 billion to £80 billion a year. Leader Nigel Farage has more recently described the exact £20,000 figure as an "aspiration", saying he can't commit to a precise number given economic uncertainty, while maintaining it as the party's direction of travel.
How it would work
- The personal allowance rises from £12,570 to £20,000 — the first £20,000 of income becomes tax-free.
- The higher-rate (40%) threshold rises from £50,270 to £70,000.
- The basic (20%), higher (40%) and additional (45%) rates are unchanged.
- A wider Marriage Allowance would let a spouse transfer more of their allowance.
The case for and against
The party argues
- It takes millions of low earners out of income tax entirely and rewards work.
- It hands a meaningful cash boost to most working people during a cost-of-living squeeze.
- It reverses years of "fiscal drag" from frozen thresholds pulling people into tax.
Critics argue
- It is extremely expensive — tens of billions a year — and critics question how it would be funded.
- The IFS-style analysis finds most of the cash benefit flows to higher-income households; the IPPR estimated around 80% goes to the richest 20%.
- Roughly a third of adults earn below the current allowance and would gain nothing.
- Unfunded tax cuts of this scale, critics warn, risk public services or borrowing.
What would you save?
Enter your gross annual income to compare today's income tax with the tax you'd pay under Reform's proposed thresholds.
Your income
The thresholds
Income tax is modelled on 2025/26 UK rates (England, Wales & NI): personal allowance £12,570 (tapered above £100,000), 20% to £50,270, 40% to £125,140, 45% above. The proposal sets the allowance to £20,000 and the higher-rate threshold to £70,000, with the additional-rate threshold and the personal-allowance taper assumed unchanged. National Insurance, Scottish income tax rates, and the Marriage Allowance are not modelled. Not financial advice.
Sources & further reading
- Reform UK — "Our Contract With You" and tax policies.
- Chartered Institute of Taxation — analysis of Reform's tax plans.
- IPPR — distributional analysis of the threshold changes.
Figures are illustrative and based on the party's stated proposals; costings are contested and the exact figure has been described by the party as aspirational. Not financial advice.