At the same time, the £12,570 personal allowance for income tax will stay frozen until at least 2026. It means more could be dragged into higher tax brackets as their wages rise but the tax break fails to keep pace, known as “fiscal drag”. The Government will rake in £20bn in five years from the stealth tax. 

Workers can pay more into their pensions to reduce how much tax they pay and escape the higher rates. Pension contributions attract relief at the same rate you pay income tax. Employees can also use salary sacrifice schemes as work to buy things such as bicycles for their commute or childcare vouchers. 

There are a number of different schemes and a number of them are exempt from tax, such as electric car leasing, although some only offer a break on National Insurance and others, such as season ticket loans, have lost their tax-free status altogether under rule changes over the years. 

Bigger energy bills 

The energy price cap is anticipated to rise yet again in April, having already risen 12pc this year to £1,277. This is following a surge in the price of wholesale gas prices caused by shortages in supply and heightened demand as countries attempt to recover from the pandemic.

Some estimate the rise will be around £400, which would take the average annual costs for someone on a default tariff from the current £1,677 – and it will be even higher for those on prepayment meters. Other estimates have said the increase could take the cap to £2,000.

Consumers are advised to stick to default tariffs that are protected by the cap, even though the cap is rising. This is because fixed deals have now become far more expensive, as providers losing money on protective tariffs have upped prices elsewhere to stave off collapse.