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Count other investment income in capital income, and test it in every income measure - #2746

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juaristi22 merged 3 commits into
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capital-income-other-investment-income
Oct 29, 2026
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juaristi22 merged 3 commits into
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capital-income-other-investment-income

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Fixes #2745

This follows #2736, which is in the merge queue. The branch is built on #2736's head (22ae4d3), so the diff shows #2736's two commits too until it lands. After that, only this PR's commit (9ec12db) remains.

What and why

  • capital_income is "Income from savings or dividends". It adds bank interest, ISA interest and dividends, but it left out other_investment_income: interest on National Savings products, gilts and other securities, and from trusts. Income tax charges that column as savings income. capital_income now adds it next to savings_interest_income, as Count other investment income in market and HBAI income #2736 does for market and HBAI income.
  • No reader moves. No formula reads capital_income. So income tax, benefits, household net income, HBAI income and every costing are unchanged. Only the capital_income output moves, and only on datasets that carry the column; the enhanced FRS doesn't.
  • ISA contract test. The case test_unmarked_legacy_conversion_preserves_cash_and_supplied_exemptions[signed-and-T-differs-from-I] sets £500 of other investment income. It expected capital income to equal the legacy gross interest alone. It now expects the gross interest plus the £500.

Tests

  • YAML other_investment_income_in_household_income.yaml: both cases now also check capital_income, household_gross_income and household_net_income.
  • Property test test_other_investment_income_household_income_properties.py: Hypothesis, 25 examples plus one pinned example, about 10 seconds locally.
    • It covers 21 working-age adults in 2027, at seven pay levels from £0 to £200,000. Two of the levels are in Scotland.
    • Each adult is simulated three times: with no interest, with bank interest, and with the same amount as other investment income.
    • The two kinds of interest give equal income tax and equal market, capital, household market, gross, net and HBAI income (before the reset to zero).
    • Market and capital income rise by the interest.
    • Household net income and HBAI income rise by the interest less its tax, and never fall.
  • Before and after: on Count other investment income in market and HBAI income #2736's head (22ae4d3), the first YAML case fails (capital_income@2026: [0.] differs from 2000.0) and the property test fails at capital_income. Both pass here.
  • Local runs on this branch, with uv run --frozen:
    • policyengine-core test on the YAML above, gov/hmrc/isa/isa_income.yaml and gov/hmrc/income_tax/charges/winter_fuel_payment_charge.yaml, the other files that check capital_income: 50 passed.
    • pytest on the property test, test_isa_income_contract.py and test_isa_accounting.py: 66 passed.
    • ruff format --check . and ruff check ., with the locked ruff 0.17.2: clean.

Reproducer: policyengine_uk/tests/test_other_investment_income_household_income_properties.py::test_other_investment_income_counts_like_bank_interest; policyengine_uk/tests/policy/baseline/household/income/other_investment_income_in_household_income.yaml::Other investment income counts in market, capital, net and HBAI income

axiom: n/a: capital_income is a statistical income measure with no legal provision to encode, and no tax or benefit rule changes

🤖 Generated with Claude Code

PavelMakarchuk and others added 3 commits October 28, 2026 22:06
Income tax charges other_investment_income as savings income
(taxable_savings_interest_income), but market_income,
household_market_income and hbai_household_net_income left it out, so
household net income carried the tax without the income. Add it to all
three lists, with a YAML test that pins it against the same amount of
bank interest.

Fixes #2733.

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
The HBAI validation page's investment income row now names
other_investment_income, which hbai_household_net_income counts since
the previous commit (Max's review of #2736, point 4).

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
… income measure

capital_income ("Income from savings or dividends") added bank interest,
ISA interest and dividends but not other_investment_income, the National
Savings, gilt and other securities interest that income tax charges as
savings income. It now adds it next to savings_interest_income, as market
and HBAI income do. No formula reads capital_income, so tax, benefits and
the other income measures are unchanged. The legacy ISA contract case that
sets other investment income now expects it in capital income.

The YAML cases also check capital, gross and household net income, where
the market income gap showed. A property test simulates each case with
no interest, with bank interest and with the same amount as other
investment income: tax and every household income measure treat the two
alike, market and capital income rise by the interest, and net and HBAI
income rise by the interest less its tax.

Fixes #2745.

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
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Aggregate impact on certified data: pass

Base 2d437ebba6 against head 69abf6a213, both on enhanced_frs_2024_25.h5 (policyengine-uk-data 1.58.1, sha256 056e80fd8e91), fiscal years 2025-26 to 2031-32. Each year is a full microsimulation run on each side.

Checks: 0 broken by this change, 1 failing on both sides, 0 fixed. Moves flagged for review: 0 (thresholds in report_spec.yaml; a flag does not fail the job).

Workflow run and full report

Notes

  • In the years a figure from fewer than 10 records is suppressed (spending.disabled_students_allowance), every total containing it, and the decile incomes, are rebuilt from their other components, so no published total includes it. Those totals are marked †. A change is withheld where the two sides leave out different figures and can't be lined up.

Moves flagged for review

None.

Spending by benefit and service

Measure 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Disabled Students' Allowance suppressed suppressed suppressed suppressed suppressed suppressed suppressed

Caseloads

Measure 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Disabled Students' Allowance suppressed suppressed suppressed suppressed suppressed suppressed suppressed

Standard reform costings (change in gov_balance)

Measure 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Raise additional rate by 3pp 0 0 0 0 0 suppressed suppressed

Standard reforms: change in each reform's target

Measure 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Raise additional rate by 3pp: change in income_tax 0 0 0 0 0 suppressed suppressed

Household net income by decile

No household's net income changes in any year.

No change in any year: receipts by tax head; government balance, each component counted once; model totals; household income totals; population; poverty rates; people in poverty; inequality; mean household net income in each side's own deciles.

Checks failing on both base and head (1)
  • VAT excluding private school fees is never negative (sign:vat): 2025-26: 76 units below zero, a weighted £-53,888,684 in total; 2026-27: 76 units below zero, a weighted £-55,774,885 in total; 2027-28: 76 units below zero, a weighted £-57,687,092 in total
Counted-once check

Each of 91 components was raised by £1 per unit in 2026-27, and every head of its totals was read household by household: its own head must rise by exactly £1, no other tax head may move, no other benefit may rise, and the model's own total must move by what its heads moved. A head that breaks a rule is measured again twice: with every other head held at its baseline value, and with every other head held at its value after the first £1 while the component rises again. It fails where either still shows the response. 0 failed; 0 were skipped.

  • widowed_parents_allowance: pension_credit responds only through other heads in fewer than 10 households (other heads that moved there: carers_allowance; gov_spending; not a failure)
  • widowed_parents_allowance: pension_credit responds only through other heads in fewer than 10 households (other heads that moved there: carers_allowance; household_benefits; not a failure)
Provenance
Side Commit Runtime Environment hash Partition hash Time
base main 2d437ebba6 uk 2.164.2 (files 4bf0e41411c0), core 3.33.12, py 3.13.18 aarch64 8e65bd5371ba 1eac2ca06b91 2005.2s
head #2746 merged into main 69abf6a213 uk 2.164.2 (files db016dc3f222), core 3.33.12, py 3.13.18 aarch64 8e65bd5371ba 1eac2ca06b91 1974.21s

Dataset: hf://policyengine/policyengine-uk-data-private/enhanced_frs_2024_25.h5@2526edbbb687a3b54dbb11272e5389e4b62d2ac2, sha256 056e80fd8e9151d78f432a25cde863340baee81304c6216a37fb575ce8563784 (verified on both sides), policyengine-uk-data 1.58.1.

Receipts by tax head: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Final charge on cash interest in non-cash ISAs £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Lifetime ISA withdrawal charge £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Income tax £294.46bn £315.23bn £334.00bn £349.45bn £365.10bn £383.16bn £397.71bn
National Insurance (employee and self-employed) £51.70bn £54.14bn £56.13bn £57.73bn £59.76bn £61.64bn £63.51bn
National Insurance (employer) £148.71bn £155.37bn £160.88bn £165.09bn £172.06bn £177.36bn £182.57bn
Employer NI change borne by capital £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Employer NI change borne by consumers £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Capital gains tax £12.60bn £13.15bn £13.60bn £14.11bn £14.67bn £15.24bn £15.80bn
Student loan repayments £7.82bn £8.13bn £8.39bn £8.58bn £8.79bn £9.04bn £9.29bn
VAT excluding private school fees £249.37bn £256.88bn £266.66bn £272.70bn £278.97bn £285.24bn £291.59bn
Change in VAT from its baseline £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
VAT on private school fees £1.95bn £2.01bn £2.09bn £2.14bn £2.21bn £2.27bn £2.31bn
Change in private school VAT from its baseline £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Fuel duties £24.71bn £24.59bn £26.54bn £26.58bn £26.26bn £25.53bn £24.40bn
Alcohol duties £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Tobacco duties £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Vehicle excise duties £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Betting and gaming duties £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
TV licence fee £4.26bn £4.40bn £4.41bn £4.42bn £4.43bn £4.44bn £4.45bn
Council tax £49.21bn £52.16bn £54.89bn £57.95bn £61.16bn £64.47bn £67.91bn
High value council tax surcharge £0.00bn £0.00bn £0.00bn £0.48bn £0.49bn £0.50bn £0.51bn
Northern Ireland domestic rates £0.55bn £0.58bn £0.60bn £0.63bn £0.66bn £0.69bn £0.72bn
Business rates £34.68bn £36.20bn £38.00bn £39.46bn £42.27bn £43.25bn £44.29bn
Stamp duty land tax on the household's own purchases £6.88bn £7.32bn £7.66bn £8.06bn £8.47bn £8.91bn £9.35bn
Stamp duty land tax paid by companies £4.72bn £4.57bn £5.29bn £6.03bn £6.37bn £6.92bn £7.45bn
Land transaction tax (Wales) £0.07bn £0.08bn £0.08bn £0.09bn £0.10bn £0.10bn £0.11bn
Land and buildings transaction tax (Scotland) £0.31bn £0.32bn £0.33bn £0.35bn £0.36bn £0.38bn £0.40bn
Unspecified tax change borne by capital £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Unspecified tax change borne by consumers £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Wealth tax £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Wealth tax excluding the main residence £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Land value tax £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Carbon tax £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Spending by benefit and service: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Lifetime ISA bonus £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
State Pension £121.68bn £125.92bn £126.73bn £129.50bn £132.99bn £136.66bn £140.43bn
Pension Credit £6.66bn £7.03bn £7.30bn £7.51bn £7.65bn £7.84bn £8.03bn
Winter Fuel Payment £1.86bn £1.85bn £1.79bn £1.77bn £1.78bn £1.78bn £1.78bn
Pension Age Winter Heating Payment (Scotland) £0.19bn £0.20bn £0.20bn £0.21bn £0.21bn £0.22bn £0.22bn
Universal Credit £75.48bn £80.52bn £83.04bn £85.11bn £86.31bn £87.90bn £88.58bn
Housing Benefit £8.56bn £8.89bn £9.24bn £9.48bn £9.72bn £9.99bn £10.27bn
Council Tax Reduction £2.07bn £2.20bn £2.31bn £2.45bn £2.58bn £2.72bn £2.86bn
Employment and Support Allowance (income-related) £0.79bn £0.82bn £0.84bn £0.86bn £0.88bn £0.90bn £0.92bn
Employment and Support Allowance (contribution-based) £5.20bn £5.37bn £5.56bn £5.69bn £5.82bn £5.95bn £6.09bn
Jobseeker's Allowance (income-based) £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Jobseeker's Allowance (contribution-based) £0.29bn £0.30bn £0.31bn £0.31bn £0.32bn £0.33bn £0.34bn
Income Support £0.11bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Working Tax Credit £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Child Tax Credit £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Incapacity Benefit £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Personal Independence Payment £26.95bn £28.03bn £29.05bn £30.09bn £30.75bn £31.51bn £32.21bn
Disability Living Allowance £7.49bn £7.79bn £8.07bn £8.36bn £8.55bn £8.76bn £8.95bn
Attendance Allowance £8.68bn £9.03bn £9.36bn £9.69bn £9.90bn £10.15bn £10.38bn
Carer's Allowance £4.48bn £4.66bn £4.83bn £5.00bn £5.11bn £5.23bn £5.35bn
Carer Support Payment (Scotland) £0.31bn £0.32bn £0.33bn £0.34bn £0.35bn £0.36bn £0.37bn
Carer's Allowance Supplement (Scotland) £0.00bn £0.04bn £0.04bn £0.05bn £0.05bn £0.05bn £0.05bn
Severe Disablement Allowance £0.03bn £0.03bn £0.03bn £0.03bn £0.03bn £0.03bn £0.03bn
Industrial Injuries Disablement Benefit £0.50bn £0.52bn £0.54bn £0.55bn £0.56bn £0.58bn £0.59bn
Armed Forces Compensation Scheme £0.61bn £0.63bn £0.65bn £0.66bn £0.68bn £0.69bn £0.71bn
War Widow's or Widower's Pension £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Child Benefit £16.19bn £16.82bn £17.39bn £18.00bn £18.39bn £18.84bn £19.25bn
Scottish Child Payment £0.49bn £0.52bn £0.53bn £0.56bn £0.57bn £0.57bn £0.57bn
Two Child Limit Payment (Scotland, counterfactual) £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Healthy Start vouchers £0.05bn £0.05bn £0.05bn £0.05bn £0.05bn £0.05bn £0.05bn
Maternity Allowance £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Statutory Maternity Pay £3.30bn £3.41bn £3.54bn £3.62bn £3.70bn £3.78bn £3.87bn
Statutory Paternity Pay £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Statutory Sick Pay £1.12bn £1.16bn £1.20bn £1.23bn £1.26bn £1.29bn £1.32bn
Sure Start Maternity Grant £0.01bn £0.01bn £0.01bn £0.01bn £0.01bn £0.01bn £0.01bn
Bereavement Support Payment £0.67bn £0.69bn £0.71bn £0.73bn £0.75bn £0.76bn £0.78bn
Widowed Parent's Allowance £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Tax-Free Childcare £0.55bn £0.56bn £0.58bn £0.59bn £0.59bn £0.59bn £0.57bn
Extended childcare entitlement £2.99bn £3.50bn £3.62bn £3.75bn £3.83bn £3.92bn £4.01bn
Universal childcare entitlement £2.06bn £2.22bn £2.29bn £2.38bn £2.44bn £2.51bn £2.56bn
Targeted childcare entitlement £0.50bn £0.51bn £0.52bn £0.54bn £0.55bn £0.57bn £0.56bn
Childcare Offer for Wales £0.26bn £0.28bn £0.28bn £0.29bn £0.30bn £0.31bn £0.32bn
Care to Learn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Childcare Grant £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Parents' Learning Allowance £0.20bn £0.20bn £0.20bn £0.20bn £0.20bn £0.20bn £0.20bn
Adult Dependants' Grant £0.06bn £0.06bn £0.04bn £0.04bn £0.04bn £0.04bn £0.04bn
Travel Grant £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Disabled Students' Allowance suppressed suppressed suppressed suppressed suppressed suppressed suppressed
16 to 19 Bursary Fund £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
NHS spending £203.89bn £204.30bn £204.56bn £204.91bn £205.34bn £205.85bn £206.35bn
State education spending £0.02bn £0.02bn £0.02bn £0.02bn £0.02bn £0.02bn £0.02bn
Transport subsidy spending £25.05bn £25.10bn £25.14bn £25.18bn £25.23bn £25.30bn £25.36bn
Cost-of-living support payment £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Energy Bills Rebate £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Energy Price Guarantee subsidy £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Basic income £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Disability basic income £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Other public spending budget change £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Caseloads: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Lifetime ISA bonus 0k 0k 0k 0k 0k 0k 0k
State Pension 11,264k 11,145k 10,819k 10,700k 10,723k 10,750k 10,776k
Pension Credit 1,486k 1,480k 1,474k 1,455k 1,453k 1,455k 1,464k
Winter Fuel Payment 7,844k 7,783k 7,473k 7,375k 7,391k 7,409k 7,427k
Pension Age Winter Heating Payment (Scotland) 803k 802k 800k 797k 799k 801k 802k
Universal Credit 6,357k 6,349k 6,350k 6,318k 6,307k 6,299k 6,253k
Housing Benefit 1,249k 1,245k 1,246k 1,229k 1,229k 1,229k 1,232k
Council Tax Reduction 3,176k 3,195k 3,200k 3,215k 3,224k 3,235k 3,242k
Employment and Support Allowance (income-related) 71k 71k 71k 71k 71k 71k 71k
Employment and Support Allowance (contribution-based) 719k 720k 721k 722k 724k 726k 728k
Jobseeker's Allowance (income-based) 0k 0k 0k 0k 0k 0k 0k
Jobseeker's Allowance (contribution-based) 67k 67k 67k 67k 67k 68k 68k
Income Support 25k 0k 0k 0k 0k 0k 0k
Working Tax Credit 0k 0k 0k 0k 0k 0k 0k
Child Tax Credit 0k 0k 0k 0k 0k 0k 0k
Incapacity Benefit 0k 0k 0k 0k 0k 0k 0k
Personal Independence Payment 3,567k 3,575k 3,579k 3,585k 3,593k 3,602k 3,611k
Disability Living Allowance 1,291k 1,294k 1,296k 1,298k 1,300k 1,304k 1,307k
Attendance Allowance 1,695k 1,698k 1,700k 1,703k 1,707k 1,711k 1,715k
Carer's Allowance 1,034k 1,037k 1,038k 1,040k 1,042k 1,044k 1,046k
Carer Support Payment (Scotland) 71k 71k 71k 72k 72k 72k 72k
Carer's Allowance Supplement (Scotland) 0k 71k 71k 72k 72k 72k 72k
Severe Disablement Allowance 4k 4k 4k 4k 4k 4k 4k
Industrial Injuries Disablement Benefit 137k 137k 137k 138k 138k 138k 139k
Armed Forces Compensation Scheme 93k 93k 94k 94k 94k 94k 94k
War Widow's or Widower's Pension 0k 0k 0k 0k 0k 0k 0k
Child Benefit 8,123k 8,120k 8,120k 8,130k 8,145k 8,161k 8,178k
Scottish Child Payment 351k 352k 352k 355k 353k 351k 340k
Two Child Limit Payment (Scotland, counterfactual) 0k 0k 0k 0k 0k 0k 0k
Healthy Start vouchers 200k 200k 200k 201k 201k 201k 202k
Maternity Allowance 0k 0k 0k 0k 0k 0k 0k
Statutory Maternity Pay 333k 333k 334k 334k 335k 336k 337k
Statutory Paternity Pay 0k 0k 0k 0k 0k 0k 0k
Statutory Sick Pay 181k 182k 182k 182k 182k 183k 183k
Sure Start Maternity Grant 26k 26k 26k 26k 26k 26k 26k
Bereavement Support Payment 98k 98k 98k 98k 98k 99k 99k
Widowed Parent's Allowance 0k 0k 0k 0k 0k 0k 0k
Tax-Free Childcare 1,014k 1,025k 1,021k 1,022k 1,008k 1,005k 991k
Extended childcare entitlement 795k 800k 804k 806k 809k 814k 814k
Universal childcare entitlement 1,071k 1,072k 1,074k 1,076k 1,079k 1,089k 1,090k
Targeted childcare entitlement 165k 156k 154k 154k 155k 155k 150k
Childcare Offer for Wales 39k 39k 39k 39k 39k 39k 39k
Care to Learn 0k 0k 0k 0k 0k 0k 0k
Childcare Grant 0k 0k 0k 0k 0k 0k 0k
Parents' Learning Allowance 98k 98k 98k 99k 99k 99k 99k
Adult Dependants' Grant 18k 18k 12k 12k 12k 12k 12k
Travel Grant 0k 0k 0k 0k 0k 0k 0k
Disabled Students' Allowance suppressed suppressed suppressed suppressed suppressed suppressed suppressed
16 to 19 Bursary Fund 0k 0k 0k 0k 0k 0k 0k
Cost-of-living support payment 0k 0k 0k 0k 0k 0k 0k
Energy Bills Rebate 0k 0k 0k 0k 0k 0k 0k
Energy Price Guarantee subsidy 0k 0k 0k 0k 0k 0k 0k
Basic income 0k 0k 0k 0k 0k 0k 0k
Disability basic income 0k 0k 0k 0k 0k 0k 0k
Government balance, each component counted once: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Government receipts, each component once £892.00bn £935.14bn £979.55bn £1,013.85bn £1,052.14bn £1,089.13bn £1,122.37bn
Government spending £529.37bn † £543.55bn † £550.93bn † £559.76bn † £567.52bn † £576.28bn † £584.02bn †
Government balance, each receipt once £362.63bn † £391.59bn † £428.62bn † £454.08bn † £484.61bn † £512.85bn † £538.35bn †
Benefits in household_benefits but not in gov_spending £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn £0.00bn
Model totals: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
gov_tax £892.00bn £935.14bn £979.55bn £1,013.85bn £1,052.14bn £1,089.13bn £1,122.37bn
household_tax £491.97bn £520.87bn £549.93bn £573.92bn £598.90bn £624.26bn £645.90bn
pre_budget_change_household_tax £484.15bn £512.74bn £541.54bn £564.86bn £589.61bn £614.72bn £636.09bn
gov_spending £529.37bn † £543.55bn † £550.93bn † £559.76bn † £567.52bn † £576.28bn † £584.02bn †
household_benefits £529.37bn † £543.55bn † £550.93bn † £559.76bn † £567.52bn † £576.28bn † £584.02bn †
gov_balance £362.63bn † £391.59bn † £428.62bn † £454.08bn † £484.61bn † £512.85bn † £538.35bn †
Household income totals: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Household market income £1,637.96bn £1,702.77bn £1,757.35bn £1,806.41bn £1,855.97bn £1,912.43bn £1,970.44bn
Household net income £1,636.68bn † £1,685.25bn † £1,716.89bn † £1,749.83bn † £1,781.12bn † £1,819.78bn † £1,862.63bn †
Household net income (HBAI definition) £1,449.57bn £1,497.73bn £1,532.81bn £1,567.21bn £1,600.01bn £1,638.04bn £1,679.21bn
Population: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
People 69,245k 69,383k 69,473k 69,592k 69,738k 69,912k 70,080k
Benefit units 35,110k 35,181k 35,226k 35,286k 35,360k 35,449k 35,534k
Households 31,046k 31,108k 31,149k 31,201k 31,267k 31,345k 31,420k
Poverty rates: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Absolute poverty, before housing costs: everyone 16.3% 15.6% 16.4% 16.3% 16.5% 16.5% 16.6%
Absolute poverty, before housing costs: children 24.7% 22.3% 23.3% 22.9% 23.1% 23.2% 23.4%
Absolute poverty, before housing costs: working-age adults 14.1% 13.9% 14.7% 14.7% 14.8% 14.8% 14.9%
Absolute poverty, before housing costs: pensioners 13.7% 13.5% 14.0% 13.9% 14.0% 13.9% 13.9%
Absolute poverty, after housing costs: everyone 21.6% 21.1% 22.0% 22.5% 22.7% 23.0% 23.3%
Absolute poverty, after housing costs: children 33.3% 31.3% 32.2% 32.4% 32.5% 33.0% 33.9%
Absolute poverty, after housing costs: working-age adults 19.9% 19.9% 20.8% 21.5% 21.8% 22.0% 22.2%
Absolute poverty, after housing costs: pensioners 12.7% 12.6% 13.1% 13.2% 13.3% 13.4% 13.5%
Relative poverty, before housing costs: everyone 17.0% 16.3% 16.4% 16.3% 16.3% 16.3% 16.7%
Relative poverty, before housing costs: children 25.9% 23.4% 23.3% 22.9% 22.8% 22.9% 23.7%
Relative poverty, before housing costs: working-age adults 14.5% 14.3% 14.6% 14.7% 14.7% 14.7% 15.0%
Relative poverty, before housing costs: pensioners 14.5% 14.7% 13.9% 13.9% 13.8% 13.9% 14.0%
Relative poverty, after housing costs: everyone 21.4% 21.0% 21.2% 21.3% 21.3% 21.5% 21.7%
Relative poverty, after housing costs: children 33.1% 31.1% 31.1% 31.0% 31.1% 31.2% 31.7%
Relative poverty, after housing costs: working-age adults 19.9% 19.8% 20.2% 20.4% 20.5% 20.6% 20.8%
Relative poverty, after housing costs: pensioners 12.5% 12.4% 12.2% 11.7% 11.7% 11.8% 12.0%
People in poverty: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Absolute poverty, before housing costs: everyone 11,278k 10,837k 11,403k 11,358k 11,478k 11,506k 11,643k
Absolute poverty, before housing costs: children 3,688k 3,332k 3,496k 3,437k 3,477k 3,499k 3,545k
Absolute poverty, before housing costs: working-age adults 5,965k 5,921k 6,308k 6,354k 6,417k 6,426k 6,517k
Absolute poverty, before housing costs: pensioners 1,624k 1,584k 1,599k 1,568k 1,583k 1,580k 1,581k
Absolute poverty, after housing costs: everyone 14,944k 14,662k 15,296k 15,679k 15,862k 16,047k 16,331k
Absolute poverty, after housing costs: children 4,975k 4,689k 4,832k 4,863k 4,898k 4,986k 5,125k
Absolute poverty, after housing costs: working-age adults 8,463k 8,491k 8,965k 9,325k 9,464k 9,549k 9,669k
Absolute poverty, after housing costs: pensioners 1,506k 1,482k 1,500k 1,491k 1,500k 1,513k 1,537k
Relative poverty, before housing costs: everyone 11,750k 11,332k 11,389k 11,348k 11,358k 11,410k 11,702k
Relative poverty, before housing costs: children 3,872k 3,504k 3,496k 3,434k 3,431k 3,451k 3,577k
Relative poverty, before housing costs: working-age adults 6,159k 6,103k 6,301k 6,349k 6,363k 6,388k 6,540k
Relative poverty, before housing costs: pensioners 1,720k 1,724k 1,592k 1,565k 1,563k 1,571k 1,585k
Relative poverty, after housing costs: everyone 14,849k 14,583k 14,728k 14,809k 14,885k 15,005k 15,219k
Relative poverty, after housing costs: children 4,942k 4,664k 4,660k 4,663k 4,681k 4,702k 4,798k
Relative poverty, after housing costs: working-age adults 8,426k 8,460k 8,679k 8,821k 8,877k 8,964k 9,056k
Relative poverty, after housing costs: pensioners 1,482k 1,459k 1,389k 1,325k 1,327k 1,340k 1,366k
Inequality: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Gini coefficient, equivalised HBAI income before housing costs 0.3080 0.3057 0.3063 0.3062 0.3068 0.3073 0.3089
Mean household net income in each side's own deciles: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Decile 1: mean household_net_income per household £17,681 † £17,895 † £17,904 † £18,146 † £18,308 † £18,581 † £18,739 †
Decile 2: mean household_net_income per household £27,939 † £28,874 † £28,683 † £29,083 † £29,354 † £29,679 † £30,165 †
Decile 3: mean household_net_income per household £34,320 † £35,455 † £36,108 † £36,626 † £37,218 † £37,722 † £38,220 †
Decile 4: mean household_net_income per household £38,933 † £40,603 † £41,873 † £42,783 † £43,423 † £43,928 † £44,548 †
Decile 5: mean household_net_income per household £43,240 † £45,443 † £45,787 † £46,995 † £47,729 † £48,921 † £50,229 †
Decile 6: mean household_net_income per household £47,900 † £49,126 † £50,887 † £51,727 † £52,600 † £54,202 † £55,195 †
Decile 7: mean household_net_income per household £55,684 † £56,509 † £57,443 † £57,966 † £59,083 † £59,211 † £60,667 †
Decile 8: mean household_net_income per household £68,789 † £70,704 † £71,779 † £73,356 † £73,945 † £75,356 † £77,241 †
Decile 9: mean household_net_income per household £78,890 † £80,992 † £82,907 † £84,246 † £85,584 † £87,169 † £89,597 †
Decile 10: mean household_net_income per household £117,005 † £120,262 † £122,221 † £124,681 † £126,775 † £129,108 † £131,486 †
Standard reform costings (change in gov_balance): head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Raise basic rate by 1pp £6.41bn £6.66bn £6.64bn £6.88bn £7.04bn £7.26bn £7.48bn
Raise higher rate by 1pp £3.61bn £3.87bn £4.00bn £4.23bn £4.43bn £4.70bn £4.83bn
Raise personal allowance by ~800GBP/year £-3.80bn £-3.92bn £-3.98bn £-4.10bn £-4.17bn £-4.21bn £-1.96bn
Raise child benefit by 25GBP/week per additional child £-1.99bn £-1.75bn £-1.55bn £-1.39bn £-1.30bn £-1.17bn £-1.06bn
Reduce Universal Credit taper rate to 20% £-20.37bn £-20.88bn £-21.32bn £-21.52bn £-21.86bn £-22.25bn £-22.42bn
Raise Class 1 main employee NICs rate to 10% £10.89bn £11.30bn £11.73bn £12.03bn £12.30bn £12.61bn £13.00bn
Raise VAT standard rate by 2pp £24.89bn £25.71bn £26.63bn £27.24bn £27.87bn £28.50bn £29.14bn
Raise additional rate by 3pp £2.90bn £3.15bn £3.22bn £3.42bn £3.61bn suppressed suppressed
Raise the Universal Credit standard allowance by 10% £-3.06bn £-3.18bn £-3.25bn £-3.34bn £-3.44bn £-3.48bn £-3.50bn
Raise the State Pension by 10% £-7.78bn £-8.01bn £-7.99bn £-8.14bn £-8.42bn £-8.55bn £-8.89bn
Standard reforms: change in each reform's target: head levels
Measure (head) 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32
Raise basic rate by 1pp: change in income_tax £6.55bn £6.86bn £6.80bn £7.01bn £7.21bn £7.44bn £7.66bn
Raise higher rate by 1pp: change in income_tax £3.61bn £3.92bn £4.01bn £4.23bn £4.45bn £4.72bn £4.84bn
Raise personal allowance by ~800GBP/year: change in income_tax £-3.93bn £-4.07bn £-4.16bn £-4.25bn £-4.32bn £-4.38bn £-1.75bn
Raise child benefit by 25GBP/week per additional child: change in child_benefit £2.33bn £2.14bn £1.94bn £1.76bn £1.65bn £1.52bn £1.40bn
Reduce Universal Credit taper rate to 20%: change in universal_credit £20.34bn £20.87bn £21.30bn £21.52bn £21.81bn £22.20bn £22.41bn
Raise Class 1 main employee NICs rate to 10%: change in national_insurance £11.15bn £11.63bn £12.00bn £12.29bn £12.61bn £12.94bn £13.31bn
Raise VAT standard rate by 2pp: change in vat £24.69bn £25.51bn £26.42bn £27.03bn £27.65bn £28.28bn £28.91bn
Raise additional rate by 3pp: change in income_tax £2.90bn £3.15bn £3.22bn £3.42bn £3.62bn suppressed suppressed
Raise the Universal Credit standard allowance by 10%: change in universal_credit £3.06bn £3.18bn £3.28bn £3.38bn £3.44bn £3.50bn £3.53bn
Raise the State Pension by 10%: change in state_pension £10.68bn £11.17bn £11.28bn £11.60bn £12.04bn £12.47bn £12.97bn

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Review of 9ec12db (this PR's own commit). #2736 merged at 11:05 today as a merge commit, so origin/main...9ec12db60 is now just this commit's 5 files. changelog.d/2733.fixed.md was consumed by the version bump, but its commits are ancestors of main, so merging this won't re-add it. No findings on #2736's part.

No musts, no shoulds. Three nits.

  1. nit: trust income is looser in the test docstring than in the variable. other_investment_income.py:8 says "interest from trusts or settlements", which is accurate, and the changelog says "trust interest". The property test docstring (test_other_investment_income_household_income_properties.py:3-5) and the PR body say income "from trusts" is charged as savings income exactly like bank interest. That isn't always true: discretionary trust payments are non-savings income (with the 45% credit), and interest-in-possession income keeps its character, so a dividend share is dividend income. The model charges the whole column as savings at taxable_savings_interest_income.py:17, but that predates this commit, so it isn't a finding against it. Suggest "trust interest" in the docstring.

  2. nit: one reader outside pe-uk. "No formula reads capital_income" is right for pe-uk: grepping main for capital_income outside tests/ finds only the definition. No adds/subtracts, parameter lists, docs or reports use it, and a code search of policyengine.py and policyengine-api finds nothing either. But policyengine-uk-data's imputations/wealth.py:41 and :81 use it as a QRF predictor, matched to WAS DVGIINVR8_aggr (gross investment income) and computed through a pe-uk Microsimulation (:333-336). On the FRS nothing moves: frs.py:1349 only sets savings_interest_income (account types 1, 3, 5, 27, 28), and only spi.py:229 sets other_investment_income (OTHERINV). If the FRS ever carries the column, the predictor gets closer to the WAS concept, not further. Worth one line in the PR body. Visible output change downstream: capital_income only, and only on SPI-based or user-supplied data. The aggregate impact run shows no change to any household income, tax or benefit total on enhanced FRS.

  3. nit: the net income property is a bound. The PR body says net and HBAI income "rise by the interest less its tax". Lines 129-137 check 0 <= change <= interest, which allows for benefit responses and is the right test, but the wording claims more. "Rise by at most the interest, and never fall" would match.

Checked, no issue

  • Law: NS&I, gilt and other securities interest is savings income (ITTOIA 2005 Part 4 Ch 2; ITA 2007 s.18). pe-uk charges other_investment_income as savings at taxable_savings_interest_income.py:17, alongside savings_interest_income. The capital_income label "Income from savings or dividends" now matches what it sums.
  • Double counting: tax_free_savings_income adds only ISA interest (tax_free_savings_income.py:16). gross_taxable_inputs.py:35, _net_earnings.py:71, market_income.py:21, household_market_income.py:12 and hbai_household_net_income.py:12 add other_investment_income directly, not through capital_income. Nothing adds both. In the data, SPI keeps INCBBS and OTHERINV separate, and the legacy ISA conversion keeps other investment income out of N (docs/engineering/skills/dataset-sources.md:57).
  • YAML arithmetic, 2026-27: (40,000 - 12,570) x 20% = 5,486; (2,000 - 1,000 PSA) x 20% = 200; tax 5,686. The starting rate for savings is nil, because non-savings income above the personal allowance (27,430) is over £5,000. NI 27,430 x 8% = 2,194.40. 42,000 - 5,686 - 2,194.40 = 34,119.60 HBAI; less the £180 TV licence = 33,939.60. Without the interest it's 32,139.60, so +1,800. All correct.
  • Hypothesis test is deterministic: derandomize=True, database=None, max_examples=25, deadline=None, plus the pinned £2,000 example. The Scotland comment matches the code (indices 2 and 5 = £13,000 and £110,000).

What I ran (fresh shallow clone at 9ec12db, fresh uv sync --frozen --extra dev venv, deleted afterwards)

  • policyengine-core test on other_investment_income_in_household_income.yaml: 2 passed. On isa_income.yaml and winter_fuel_payment_charge.yaml, the other YAML files that check capital_income: 48 passed.
  • pytest on the property test: 1 passed, 25 examples in 2.6s, run twice, same result. test_isa_income_contract.py: 53 passed.
  • Mutation: with the new adds line removed, the property test fails at capital_income, the changed ISA contract case fails (100.0 == 100 + 500) and the first YAML case fails. So the tests catch the bug.

Not checked: the full test suite (CI covers it), ruff, the other pe-uk-data datasets beyond frs.py and spi.py, and the trust law beyond the general rule above.

CI at 9ec12db: all 20 checks pass, including Test / YAML, Python 1-6 and Aggregate impact. Mergeable, state CLEAN.

Verdict: ready to approve. #2736 has landed and CI is green, so nothing blocks it. The nits are wording only and don't need to hold it.

🤖 Generated with Claude Code

@juaristi22
juaristi22 added this pull request to the merge queue Oct 29, 2026
Merged via the queue into main with commit 1d4a0d4 Oct 29, 2026
20 checks passed
@juaristi22
juaristi22 deleted the capital-income-other-investment-income branch October 29, 2026 13:47
juaristi22 added a commit that referenced this pull request Oct 29, 2026
The test came from #2746 after this branch's CI ran. Its default band D
household in England now gets the £100 payment in 2026, so gross, net and
HBAI income each rise by 100.

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
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capital_income leaves out other_investment_income, and no test checks household net income for it

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