Farage promises £20k tax-free threshold - but at what cost?
Nigel Farage has pledged to raise the personal tax-free allowance to £20,000, a move the Institute for Fiscal Studies says could cost up to £80bn annually.
Speaking in London, Reform UK leader Nigel Farage laid out the party’s most ambitious tax policy yet: a significant uplift to the income tax threshold from £12,570 to £20,000.
The proposal, he said, would “encourage people to get off benefits and to go back to work.”
But according to the IFS’s Be the Chancellor tool, even a £3,000 increase in the threshold would cost £31.4bn annually — pushing Farage’s proposal well into the tens of billions.
To pay for it, Reform UK is pinning its hopes on slashing government programmes it deems wasteful.
Among the cuts on the table: Net Zero policies, DEI initiatives, and asylum accommodation. “If we win the next election, we will scrap net zero… we will scrap the DEI agenda which is costing the taxpayer up to £7bn a year,” Farage said.
Reform UK estimates that scrapping Net Zero would save £45bn per year. Ending DEI funding would save £7bn, and axing asylum accommodation would remove a further £4bn in costs.
But even combined, these savings fall short of the upper estimate for funding the proposed tax cut.
Instead, Reform is also banking on broader structural changes. The party has already established a so-called Department of Government Efficiency (DOGE), modelled after Elon Musk’s cost-cutting drive at Twitter.
“If we find [waste] at local government level, we’ll find it at national government level too,” Farage said, pledging to publish local council savings within a year.
Reform UK now controls five councils and has already moved to eliminate DEI and climate-related roles in these authorities.
On welfare, Farage signalled support for lifting the two-child benefit cap, “not because we support benefits culture,” he said, “but because it is the right thing to do.”
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However, he admitted this was “not a silver bullet” for ending poverty.
Pressed on pensions, Farage declined to commit to maintaining the triple lock, saying the party had “not considered it yet” but would “between now and the next election.”
With its eye on government, Reform is steadily building out a fiscal platform defined by deep spending cuts and headline-grabbing tax pledges.
