Average household will pay almost £600,000 in income tax over its lifetime

Embargoed: 19:00 Sunday, 2nd November 2025

• The average household contributes £571,740 in income tax over a lifetime.
  
  
• This is part of an average total lifetime tax bill of almost £1.3 million.
  
  
• It would take the total lifetime tax contributions of 2,149,846 households to pay off the national debt.
  
  

New research from the TaxPayers’ Alliance (TPA) has revealed that the average household will pay almost £600,000 in income tax over a lifetime. This is part of a lifetime tax contribution for the average household of £1,277,580. These figures are from 2022-23, the latest available, meaning they do not take into account recent tax changes such as the national insurance cuts in 2024 under the last Conservative government, or Labour’s first budget in October 2024, which saw £40 billion of tax increases.

The lifetime tax bill includes a range of direct taxes such as income tax and national insurance contributions as well as indirect taxes like value added tax (VAT), fuel duty, alcohol duty and television licences. The largest tax bill is for income tax, which at £571,740 is more than the average cost of a property in every region of the UK, including in London where the average house price is £564,000. It has been widely reported that the chancellor is considering increasing income tax in the upcoming budget. Following income tax the second largest bill is for VAT at £194,505 for the average household.

The average lifetime tax bill increased by £21,915 in nominal terms between 2021-22 and 2022-23. Households in the bottom 20 per cent by income have seen the greatest percentage increase in their lifetime tax bills, increasing by £79,110 or 17.1 per cent in just one year from £462,480 in 2021-22 to £541,590 in 2022-23. Across all households, the average lifetime tax contribution has almost doubled in real terms since 1977, with the average household now needing to work for 19.3 years just to pay their lifetime tax bill. In this research, a ‘lifetime’ is defined as 45 working years from the age of 21 through to the state pension age of 66 and 15 years of retirement. 

With the tax burden forecast to increase even under current tax plans, the TaxPayers’ Alliance is calling on Rachel Reeves to rule out all further tax rises in the upcoming budget.

CLICK HERE TO READ THE FULL RESEARCH

Key findings:

• An average household during their lifetime - 45 working years and 15 years in retirement - will pay £1,277,580 in direct and indirect taxes (in 2022-23 prices), an increase of £21,915 (1.7 per cent) from 2021-22 in nominal terms.
• After adjusting for inflation, the average lifetime tax fell 5 per cent from £1,344,632 in 2021-22 to £1,277,580 in 2022-23, as inflation in 2022-23 outpaced growth in nominal household taxes. By 2024-25, the average lifetime tax is expected to have grown in real terms once again.
• The average lifetime tax has almost doubled in real terms from the amount paid in 1977, the first-year data is available. In 1977, the average household paid an inflation-adjusted lifetime tax of just over £644,340, by 2022-23 this had increased by 98 per cent to £1,277,580.
• The average household gross income in 2022-23 was £66,060. This means the average household would have to devote 19.3 years’ worth of gross income to pay their lifetime tax bill.
• Households in the bottom 20 per cent by income face the heaviest burden relative to income, paying £541,590 in taxes over a lifetime. The average gross income of those in the bottom 20 per cent of households was £23,278 in 2022-23. Accordingly, it would take 23.3 years to pay off their tax bill. 
• Between 2021-22 and 2022-23, the bottom 20 per cent of households saw their lifetime tax burden increase by £79,110 (17.1 per cent) from £462,480 to £541,590. This was the largest percentage increase of any income group and nearly 4 times the 4.7 per cent increase faced by the average household.
• The top 20 per cent of households in the UK will pay £2,880,870 in taxes over a lifetime. The average gross income for these households was £141,494. For the highest earners, paying off their lifetime tax would take over 20 years..
• An average household over a lifetime will pay £571,740 in income tax; £194,505 of VAT; £179,070 of employee’s national insurance contributions; £99,690 of council tax; and £45,330 of employers’ national insurance contributions.
• It would take 2,149,846 average household lifetime taxes to pay off the national debt and 1,063,938 to cover unfunded public sector pension liabilities. 
• The nominal value of the Chagos agreement payments would require 36,797 lifetime taxes, while annual asylum system costs in 2023-24 cost 4,210 lifetime taxes.

CLICK HERE TO READ THE FULL RESEARCH

John O’Connell, chief executive of the TaxPayers' Alliance, said:

"These figures are a damning indictment of consecutive governments failing to get spending under control while demanding taxpayers hand over more and more to fund an ever expanding state.

“Most households are now tax-millionaires but rather than look at ways to reduce the tax burden the chancellor is widely expected to launch another devastating raid on household budgets.

“Rachel Reeves should be ruling out tax rises and focus her fiscal policy on significant spending cuts to reduce the pressures on hard-working taxpayers.”

TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contact:

Elliot Keck
Campaigns Director, TaxPayers' Alliance
[email protected]
24-hour media hotline: 07795 084 113 (no texts)

Notes to editors:

1. Founded in 2004 by Matthew Elliott and Andrew Allum, the TaxPayers' Alliance (TPA) campaigns to reform taxes and public services, cut waste and speak up for British taxpayers. Find out more at www.taxpayersalliance.com.
   
   
2. TaxPayers' Alliance's research council.
   
   
3. The previous release of lifetime tax can be found here.
   
   
4. A full methodology can be found in the research paper.