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Income tax thresholds, which have been frozen under successive chancellors, will stay at current levels until April 2031 as planned. But after that they are expected to start to rise again with inflation.

John Healey may not have mentioned the end of this policy in his Budget speech - after all, it is still some way off - but according to the documents released by the Office for Budget Responsibility (OBR) the freeze, which has been shaving additional tax off people's take-home pay for the past five years, is scheduled to end.

The proportion of your income that is taken in tax will continue to go up over the next four years in line with decisions made in previous Budgets.

But then the personal allowance - the point at which you start to pay tax - and other thresholds, where you tip into paying a higher rate of tax, will rise again with inflation, meaning you keep more of what you earn.

Freezing thresholds is often dubbed a stealth tax because, unlike raising the headline rates, it is not as obvious on your payslip.

It has been a useful way for chancellors from Rishi Sunak onwards to raise more money to help pay for things like defence, the NHS, schools and support for the sick, disabled and the elderly.

The amount of extra money brought in by freezing tax thresholds has risen steadily every year, and is due to reach £58bn by 2030-31, more than the UK government spends on transport and not far off current defence spending.

Who is affected by frozen thresholds?

They hit you hardest if your income is close to one of the tax thresholds, but anyone who gets a pay rise is affected, as long as you earn enough to pay tax. Only people earning under £12,570 - the personal allowance threshold - pay no income tax.

By 2031 an extra 6.8 million people will be paying tax who wouldn't have if the personal allowance had not been frozen, the OBR calculates.

The state pension is currently just below the personal allowance threshold, and pensioners looked set to be drawn into paying tax from next April, when the basic state pension rises to £13,036.

However, the chancellor is putting in place a new separate Pension Tax Allowance, which will ensure that low-income pensioners, with income up to the value of the full new state pension, will not pay income tax.

The personal allowance threshold is set for the whole UK, so people in Scotland will also be affected, although other tax bands there vary, external.

National Insurance Contributions (Nics) are levied according to the same thresholds.

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How does it work?

Wages usually go up year-on-year to cover the rising cost of living. Normally tax thresholds would also be raised in line with rising prices. Currently that isn't happening - the thresholds have been "frozen" at 2021 levels.

So, as your pay rises, a bigger proportion of it ends up above the threshold where you start to pay tax.

If the personal allowance had risen with inflation over the last five years, you would now be able to take home the first £16,070 of your salary without paying any income tax. Instead you pay 20% on anything you earn above £12,570.

Will I pay the higher rate?

As incomes rise, frozen thresholds also mean more and more people are dragged into the higher, 40%, tax bracket.

An extra 5.4 million will be higher rate taxpayers by 2031, thanks to the freeze, according to the OBR.

If thresholds had risen with inflation you would have had to be earning £64,470 this year before you tipped into the higher tax bracket.

As it is, with thresholds frozen at 2021 levels, you pay the higher rate on anything you earn over £50,271.

If you were already earning more than the threshold and you get a pay rise, a bigger proportion of your earnings will be taxed at the higher rate.

Almost one in four taxpayers will pay some of their tax at the higher rate by 2031, according to the government's official forecaster.

The same principle - that rising income can push you into a new tax bracket - applies to the additional, 45%, rate that is charged on a person's income over £125,140.

Will I be better off after 2031?

Wages have risen sharply to keep up with inflation in recent years, making the impact of the first five years of this policy quite noticeable, and that is set to continue.

The Institute for Fiscal Studies (IFS) says if Healey had unfrozen the personal allowance this week, instead of keeping it in place until 2031, basic rate taxpayers would have saved up to £198 in tax a year.

Higher rate taxpayers would save £395 a year.

However, for people in the middle of the earnings range, a cut to Nics introduced in 2024 has offset the higher income tax bill.

How much of a difference "unfreezing" thresholds will make in four years' time depends on how fast wages are going up at that point.

There is no fundamental principle at stake, no point that is the "right" level for tax thresholds. Before the financial crisis the personal allowance was much smaller than today, and it was allowed to grow until the pandemic hit. Even in 2031 you'll be able to take home a bigger proportion of your earnings before income tax than you could back in 2008.