The Bank of England projects that the current freeze will raise £30billon by 2025-26. Think-tank the Institute for Fiscal Studies (IFS) said extending it by two years could raise a further £4-5billion.
The IFS study estimates 7.7million workers will be paying the 40p tax rate of income tax by 2025-26, compared with 4.6million if there was no freeze and thresholds rose with inflation.
Separate analysis by the Centre for Economics and Business Research suggests a further three million workers could be dragged into paying the basic and higher rate of tax during the potential two-year extension period covering 2026-27 and 2027-28.