The number of higher-rate taxpayers is projected to surge by 2.5m in 2025-26 due to the freeze on tax thresholds.
The Office for Budget Responsibility (OBR) predicts that 7m will pay 40pc tax in the coming tax year - 2.5m or 55pc more compared to if income tax thresholds had never been frozen.
The watchdog forecasts that 3.5m workers will start paying income tax in the 2025-26 tax year because of the freeze that began in 2021. Meanwhile, 2.5m will be dragged into the higher tax band which applies to earnings over £50,270.
On top of this, 400,000 will enter the additional-rate threshold, paying 45pc on earnings above £125,140.
Sarah Coles, of stockbroker Hargreaves Lansdown, said: "Gone are the days when being a higher-rate taxpayer was the preserve of the very wealthy - now around a fifth of taxpayers pay higher or additional rates.
"Between us, we're paying billions more in tax than we did this time last year, and it's only going to get worse, because those tax thresholds have been frozen until April 2028. It means the idea of generating a tax-free income has become even more attractive."
Rachel Reeves has committed to uprating personal tax thresholds in line with inflation from 2028-29. However, in the Budget she missed an opportunity to stop fiscal drag in its tracks.
Had she chosen to increase the bands with inflation from March 2021, the personal allowance would be rising from £12,570 to £15,540 in April while the higher rate band would hit £62,340, according to the OBR.
Instead millions are being pushed up into higher rates as wages rise, forking out £27.6bn extra in tax between 2021 and 2025.
The Chancellor today sought to reassure MPs after a week of soaring borrowing costs.
She said in her first appearance in the House of Commons since her trip to China that she was committed to the fiscal rules she had set out in October 2024.
She added: "We have set out the fiscal rules that we will balance day to day spending with tax receipts and we will get debt down as a share of GDP within the forecast period, and we will continue at all times to meet those fiscal rules."
A spokesman for HM Treasury said: "We are committed to keeping taxes low for working people, which is why we protected payslips from tax rises and are not extending the freeze on personal tax thresholds past 2027-28."