Tax increase to cost households extra £4,200 by 2025 Analysis suggests that the average household will pay £4,200 more in personal taxes over the course of the parliament. The Resolution Foundation has calculated that an increase in personal taxes since 2019 will have cost the average household almost £4,200 in total by 2025. The think-tank has also warned that tax burden is set to rise to its highest in 70 years. The report says higher inflation and higher personal taxes under this parliament will reduce middle-class incomes by £740 a year. While the richest fifth of households will lose £2,060, the poorest families will benefit from reforms to the welfare system and have an extra £420 a year. The Resolution Foundation warns that “Britain's economy remains stuck in a deep funk - with people supported into work but getting poorer, and paying more tax but seeing public services cut." Paul Johnson, director of the Institute for Fiscal Studies (IFS) think-tank, says that while inflation may be coming down, “prices remain much higher than two years ago. Earnings haven’t caught up.” He added that the freezing of income tax and National Insurance contribution allowances and thresholds will cost most basic-rate taxpayers £500 next year and cost higher-rate payers £1,000. Office for Budget Responsibility projections indicate that real household disposable income will be no higher in 2027 than it was in 2019 and “barely” higher than in 2017.