A Guide to the Autumn Budget 2025

Chancellor Rachel Reeves has delivered her 2025 Autumn Budget, the first major fiscal statement of the year for this Labour government. We wanted to provide you with an overview of the most notable announcements made in yesterday’s speech.

Personal taxation

• National Insurance (NI) and income tax thresholds will remain frozen for an additional three years beyond 2028, gradually pushing more people into higher tax brackets.
• The annual cash limit for under-65s using cash ISAs will be restricted to £12,000. The remainder of the £20,000 allowance must be used for investment products.
• Basic and higher income tax rates applied to property, savings and dividend income will rise by two percentage points.

Wages, benefits and pensions

• From April, the cap preventing households on Universal Credit or Child Tax Credit from receiving support for a third or subsequent child will be removed.
• The statutory minimum wage for workers aged 21 and over will rise by 4.1%, from £12.21 to £12.71 an hour.
• The minimum wage for those aged 18 to 20 will increase by 8.5%, from £10 to £10.85 an hour, as part of a move toward a single adult rate.
• The basic state pension and the newer state pension will increase by 4.8% in April, exceeding current inflation, in line with the triple-lock commitment.
• From 2029, employees using salary-sacrifice pension schemes will start paying NI on contributions above £2,000 a year.
• The Help to Save scheme, which offers bonuses to eligible Universal Credit claimants, will be extended and expanded beyond 2027.

Housing and property

• Homes in England valued at more than £2 million will be subject to a council tax surcharge of between £2,500 and £7,500, linked to a revaluation of properties in bands F, G and H.

Transport

• Fuel duty will remain frozen for five months after April, then increase gradually from September 2026.
• A mileage-based tax for electric and plug-in hybrid vehicles will be introduced from 2028.
• Regulated rail fares in England will be frozen next year, marking the first full freeze since 1996 (although some previous rises were below inflation).
• Premium car models will no longer be available through the Motability scheme, which provides cheaper vehicle leases to eligible disability-benefit recipients.

Drinking and smoking

• From 2028, the tax on sugary drinks will be extended to include pre-packaged milkshakes and lattes, reversing the exemption put in place when the levy was first introduced in 2018.

UK growth, inflation and public finances

• The Office for Budget Responsibility expects the UK economy to grow by 1.5% this year, up from its 1% forecast in March.
• Inflation is forecast to average 3.5% this year, fall to 2.5% next year and return to the 2% target in 2027.

Other measures

• English regional mayors will gain the power to introduce a tax on overnight accommodation in hotels and holiday lets, similar to existing or proposed measures in Scotland and Wales.
• The NHS prescription charge in England will remain at £9.90 for another year; prescriptions continue to be free in Scotland, Wales and Northern Ireland.

Next Steps for Your Property Goals

With the new council tax surcharge affecting high-value homes and the broader economic outlook provided by the OBR, your existing property and future borrowing plans may be affected. If you would like to discuss how these budget changes or the wider economic landscape impact your current mortgage, a potential remortgage, or your plans for a new home purchase, we encourage you to book a call with our expert team today for a personalised, no-obligation, no broker fee discussion.