Reform UK leader Nigel Farage unveils party’s economic rescue plan in London (Image: Getty)

The document also set out plans to cut household energy bills by removing a series of government charges that are currently added to them. Changes would be funded by cuts including stopping non-British citizens claiming benefits, reducing foreign aid and scrapping subsidies for net-zero projects.

Mr Jenrick predicted there would be no significant cuts in the Budget to be delivered by Chancellor John Healey on Wednesday. He said: “The sums still won’t add up and it’s you who will pay. That is why I fear the worst. Every hard choice is put off until tomorrow.”

But Reform UK leader Nigel Farage insisted the Tories were actually copying Reform. “Reform was there way before the Conservatives,” he said.

Mr Jenrick called her “Kensington Kemi”, saying she had policies to help wealthy Londoners but not working people across the country.

Aid agencies urged Reform to rethink plans to cut foreign aid. A spokesperson for Bond, which represents non-governmental organisations, said: “Slashing the UK aid budget to just £1billion would leave the UK powerless against some of the biggest threats we face, like extreme poverty, inequality, and insecurity driven by conflict and climate crisis.

“It would also leave us unable to play our part in helping countries facing disasters, like the recent flooding in Nepal and the upcoming El Niño, or to protect us all from the spread of diseases like Ebola.”

Nigel Farage Explains How Anyone Earning Above £20,000 Will Be £486 Richer If He Is PM

Nigel Farage has promised a tax cut that could leave millions of British taxpayers with an extra £486 a year if Reform UK enters government.

The Reform UK leader is promoting a plan to raise the income tax personal allowance from £12,570 to £15,000, arguing that working people should be allowed to keep more of the money they earn.

The proposal forms part of Reform’s wider economic programme, which aims to reduce taxes, lower household energy bills and cut government spending.

Farage and the party’s Treasury spokesman, Robert Jenrick, say the changes would help families facing persistent pressure from food prices, housing costs, energy bills and other everyday expenses.

Under the proposed tax change, eligible basic-rate taxpayers could save £486 annually, equivalent to £40.50 a month. Reform says the measure would benefit most taxpayers and take millions of people out of income tax altogether. <Cite refs={[“turn392706search0″,”turn392706search1”]}/>

However, the announcement has also raised questions about how the party would pay for its commitments, whether its proposed spending reductions are achievable and how the changes would affect public services.

How the £486 tax saving would work

The calculation behind Farage’s promise is relatively straightforward.

At present, the standard personal allowance in England, Wales and Northern Ireland is £12,570. This is the amount most people can earn before they begin paying income tax.

Reform wants to increase that threshold to £15,000.

The difference between the two figures is £2,430. For someone paying the basic income tax rate of 20% on that additional amount, the resulting annual tax reduction would be £486.

That works out at approximately £40.50 each month.

For a worker earning £20,000 a year, the proposal would reduce the amount of income subject to basic-rate income tax from £7,430 to £5,000.

On a simplified calculation, annual income tax would fall from £1,486 to £1,000, producing the promised £486 saving.

The precise result would depend on an individual’s circumstances and the final legislation. Scottish income tax arrangements are different, so the policy’s effects across Scotland would also need to be clarified.

Importantly, this would be a reduction in income tax rather than a direct cash payment from the Government.

Who would benefit from Farage’s plan?

Reform is presenting the proposal as a tax cut for ordinary workers, particularly those who feel that their wages have failed to keep pace with the cost of living.

People earning £20,000 or more could receive the full £486 benefit if they pay enough basic-rate income tax and qualify for the standard allowance.

But the headline does not mean every person earning above £20,000 would automatically receive exactly the same amount.

Someone with income below the proposed £15,000 threshold may receive a smaller saving because they do not currently pay enough income tax to benefit from the entire increase.

Higher earners may also be affected by existing rules that gradually withdraw the personal allowance once adjusted net income exceeds £100,000.

The overall impact can differ for people with multiple sources of income or other tax adjustments. National Insurance is separate from income tax, so increasing the personal allowance would not automatically reduce National Insurance contributions.

Nevertheless, Reform believes the measure offers a clear financial benefit to a broad group of taxpayers.

For households watching every expense, an additional £40.50 a month could help cover part of a food bill, fuel costs or other essential spending.

Why Reform wants to raise the personal allowance

The party’s proposal is closely linked to the long-running freeze on the personal allowance.

The standard threshold has remained at £12,570 since 2021. When wages increase but tax thresholds remain unchanged, workers can end up paying tax on a larger proportion of their income.

This is commonly known as fiscal drag.

It can increase the amount of tax people pay without the Government formally raising the headline tax rate. Workers who receive a pay rise may find that some of the additional income is absorbed by taxation, while rising prices can reduce what their remaining money buys.

Reform argues that increasing the personal allowance would help reverse some of this pressure.

The party says its first Budget in government would introduce the £15,000 threshold, with the change taking effect at the beginning of the following tax year. Its longer-term ambition is to move towards a £20,000 personal allowance, although that is a separate goal rather than an immediate commitment. <Cite refs={[“turn392706search1″,”turn392706search3”]}/>

Farage hopes the policy will appeal to people who believe successive governments have placed too much of the financial burden on working households.

For Reform, the political message is simple: people should be able to retain more of their earnings rather than seeing their tax bills rise as their pay increases.

Reform promises major government spending cuts

The central challenge is how Reform would finance the tax reduction while maintaining control of public finances.

The party has said it wants to cut government spending substantially, targeting areas including welfare, foreign aid and programmes associated with net-zero policies.

Farage and Jenrick have argued that savings from these areas would provide the money needed to fund tax reductions and other commitments.

However, projected savings are not the same as money already secured.

Changes to welfare eligibility can require new rules, administrative systems and transitional arrangements. Some public programmes also involve existing contracts or legal obligations, meaning they cannot necessarily be ended without cost.

The timing matters, too. A government seeking to make large reductions within a single year would need to demonstrate exactly which budgets would be affected, how quickly the savings could be delivered and what additional costs might arise.

Reform’s supporters argue that the state has become too expensive and that substantial changes are necessary to make lower taxes possible.

Critics question whether the proposed reductions could be delivered at the scale and speed the party describes without affecting services or people who rely on public support.

The credibility of Farage’s tax pledge will therefore depend not only on the proposed allowance but also on the details of the spending plan behind it.

Energy bills are another target

Reform is also promising to reduce household energy costs by removing certain government-imposed policy charges from energy bills.

The party argues that families and businesses should not have to pay excessive costs arising from policies it considers ineffective or too expensive.

It says the proposed changes would put additional money back into consumers’ pockets and help make British businesses more competitive.

However, removing charges from bills does not necessarily make the underlying costs disappear. Depending on the measure involved, the expense could be transferred to general taxation, paid through another mechanism or avoided by ending a programme altogether.

The details would determine who ultimately pays and how much consumers actually save.

Reform’s wider energy proposals include reducing support for some net-zero initiatives and prioritising energy security and domestic production. These plans are likely to generate debate over their effects on investment, environmental targets and long-term energy costs.

For households, the important question will be whether the promised savings appear on their bills and remain sustainable over time.

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