Nearly four in five Brits are bracing themselves for further tax rises this year, with voters fearing that more money going into government coffers will damage growth.
Keir Starmer has kicked off the year with pitches on improving the cost of living for millions of people across the country.
Extra welfare payments for some families with more than three children will hit bank accounts from April while energy bills are expected to rise at a slower rate due to changes in subsidy pricing.
But City AM/Freshwater Strategy polling has shown that 77 per cent of Brits are expecting taxes to be hiked again this year compared to just 18 per cent of respondents who said they did not expect tax rises.
Just under three quarters of people (71 per cent) are pessimistic about the cost of living, despite the PM’s new year push on the issue, compared to 16 per cent who thought the cost of living would improve. Two thirds of voters (66 per cent) said they were downbeat about household finances and taxes. Just 15 per cent said they were optimistic about the issue.
The cost of living is the top electoral issue for voters, the polling also showed, above other matters including defence, reducing immigration and improving healthcare.
Cutting taxes and government charges was the seventh most important issue for voters.
Tory voters are most likely to believe taxes will rise this year, followed by Reform and Liberal Democrat supporters.
Around three fifths of Labour voters (59 per cent) believe taxes will rise.
Tax burden harming UK economy
The polling also lifted the lid on voters’ fears of further economic damage being done as a result of a higher tax burden on businesses and households. Some 84 per cent of voters aid they were concerned about tax rises harming the UK economy, with 37 per cent saying they were “very concerned”.
The readings may reflect negatively on Rachel Reeves’ record as Chancellor, with her approval ratings only beating Starmer’s in the list of figures surveyed.
Approval ratings for health secretary Wes Streeting, who has been touted as a possible successor to Starmer, score more than 30 points above Starmer and Reeves at -11.
Streeting’s score is the second highest rating for a Labour figure after deputy leader Lucy Powell, whom 36 per cent of voters have never heard of.
Tax fears rattle voters
Reeves has been referred to as the UK’s largest tax-raising Chancellor in the period since WWII after hiking receipts by as much as £75bn across her two Budgets.
City analysts have been partially comforted by her efforts to build a larger headroom now worth £21.7bn, though concerns around shortfalls in defence spending and the financial impact of reduced immigration has prompted some researchers to suggest further tax announcements could be made.
Recent polling has shown voters disapprove of the Chancellor’s last Budget, which included an extension on “stealth taxes” that will drag thousands of High Earners Not Rich Yet individuals (Henrys) into paying higher rates.
Labour strategists will be carefully reading into the successes of communication operations around the cost of living ahead of crucial May elections.
Labour MPs are expected to pounce on any large defeat and demand a change of leadership.
Polling showed that a majority of voters believe it is “unlikely” that Starmer will still be Prime Minister by the end of the year.
Method note: Freshwater Strategy interviewed n=1,250 eligible voters in the UK, aged 18+ online, between 9 – 11 January 2026. Margin of Error +/- 2.8%. Data are weighted to be representative of UK voters. Freshwater Strategy are members of the British Polling Council and abide by their rules.