Over a million more dragged into 40% rate by 2026 Someone who takes home £40,000 a year today will exceed the threshold for 40% income tax within the next four years if wage growth continues at its present rate of 7.4% a year, new figures have shown. More modest wage growth of 3% a year will still result in someone who earns £45,000 a year paying the 40% rate by 2024, according to AJ Bell. More than a million people will be dragged into the higher rate bracket because both the £12,570 personal allowance and the £50,270 higher-rate tax threshold have been frozen until 2026. The number of people who pay the higher rate has roughly trebled in three decades as middle earners have seen more of their income taken by the state. The Sunday Telegraph explains how increasing pension savings can enable workers to escape the 40% tax altogether.