Middle-class families are facing a £1,600 hit in Wednesday’s budget if Rachel Reeves goes ahead with plans to freeze income tax thresholds and rein in salary sacrifice pension saving.

The chancellor is expected to extend the freeze on the income thresholds at which you start to pay the basic and higher rates of tax from 2028 until 2030.

A longer freeze on the basic-rate threshold of £12,570 and the higher-rate threshold of £50,270 is expected to be the biggest money raiser among a “smorgasbord” of tax rises in the autumn budget, aimed at filling a multibillion-pound hole in the public finances. The chancellor’s announcement could also include a tax raid on owners of properties worth more than £2 million, an increase in the rate of dividend tax and a levy on milk-based sugary drinks.

If the income thresholds were frozen for an extra two years then a family with one adult earning £60,000 a year and another on £40,000 would pay £1,281 more in income tax and national insurance from April 2028 to April 2030 than they would have if the thresholds had gone up 3 per cent each year in line with inflation. The calculation by the wealth manager Quilter assumed they each had wage rises of 5 per cent a year.

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A £2,000-a-year cap on how much can be paid into pensions free of national insurance contributions through salary sacrifice arrangements would cost the couple another £304 in national insurance, Quilter said, assuming they each sacrificed 8 per cent of their salary to go into their pension. National insurance is paid at 8 per cent on employee income between £12,570 and £50,270 and 2 per cent on income above that.

Gary Smith from the wealth manager Evelyn Partners said that limiting salary sacrifice schemes, which are often used by higher earners to top up their pension savings and avoid damaging tax cliff edges, would “in effect be a stealth tax on remuneration”.

He said: “In the wider sense of trying to encourage private pension saving it is a pretty disastrous step in the wrong direction because it will discourage those who are doing the right thing by building up their private pension savings.”

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The thresholds at which people pay the 20 per cent basic and 40 per cent higher rates of tax have been frozen since 2021. The government’s Office for Budget Responsibility estimates that this freeze will be raising an extra £48 billion a year by 2029-30 thanks to what has become known as “fiscal drag”. It more than outweighs the £22.7 billion official estimated cost to the Treasury of the cut to employee national insurance, which went from 12 per cent to 8 per cent in 2024 under the Conservative government.

The freeze is already expected to have dragged four million people into paying tax by April 2027, according to the OBR.

The accountancy firm Moore Kingston Smith said that the basic rate tax threshold would now be £15,490 and the higher-rate threshold would be £61,920 if they had moved up in line with inflation since 2021. The freeze was supposed to end in April 2028.

Christine Hill from the accountancy firm PwC UK said the continued impact of fiscal drag was the elephant in the room. She said: “The freeze on personal tax thresholds naturally means that many working people are paying more tax, sooner than they otherwise would. An extension to the freeze to 2030 is likely to raise more than £10 billion over the two additional years.”