Autumn Budget 2025: What It Means for Your Money

A Clear Look at the Key Changes

The Autumn Budget, presented by Rachel Reeves on 26th November, brought a mix of reassurance and changes for different groups across the UK. With so much media speculation leading up to the announcement, it can be hard to separate fact from noise. Here’s a clear summary of the key points and what they could mean for you.

What’s Staying the Same

Some areas remain unchanged, which may come as a relief:

• Pensions: Tax-free cash, annual allowance, and tax relief remain unchanged. Salary sacrifice schemes are still available, but from April 2029, contributions above £2,000 a year may be subject to National Insurance.
• State Pension: Rising by 4.8%, the New State Pension will reach £241.30 per week.
• ISAs: The £20,000 annual ISA limit remains in place until 2031. From April 2027 the maximum into Cash ISA’s will lower to £12000 but can be topped up to £20000 using a Stocks and Shares ISA. Over 65s will retain £20000 Cash ISA allowance.
• Income Tax & Allowances: Main rates, personal savings allowance, dividend allowance, and child benefit rules are unchanged.
• Inheritance Tax: Thresholds remain frozen, meaning larger estates could face higher tax over time.

Key Changes to Be Aware Of

Working People

• Income Tax: The freeze on personal tax thresholds continues, meaning pay rises could push more income into higher tax bands.
• Fuel Duty: From late 2026, fuel duty will rise and increase with inflation from April 2027, potentially raising the cost of driving.
• Student Loans: The Plan 2 repayment threshold will be frozen from April 2027 for three years, so some graduates may repay sooner and pay more each month.
• Energy Bills: Households can expect savings of around £150 per year from April 2026, with additional support for low-income and vulnerable households via the Warm Home Discount.

Parents

• Universal Credit: The two-child limit will be removed from April 2026, restoring additional child payments for third and subsequent children.
• Student Loan Repayments: Parents supporting students may also see slightly higher repayments due to the frozen repayment threshold.

Employers

• Business Rates: Smaller retail, hospitality, and leisure properties under £500,000 will benefit from lower business rates from April 2026. Larger properties may see slight increases, with transitional relief capping rises through 2029. Businesses installing EV charging points get 100% rates relief.
• Pension Contributions: Employer National Insurance will apply to salary sacrifice contributions over £2,000 from April 2029.

Savers and Homebuyers

• Lifetime ISA: The scheme will be scrapped for new savers, with a replacement plan expected in early 2026. Existing holders may see changes, including potential increases to the property price limit.
• High-Value Properties: Homebuyers with properties over £2 million will pay a new Council Tax charge between £2,500–£7,500 from 2028.

Pre-Retirement Workforce

• Tax Thresholds: Those approaching retirement may feel the impact of frozen thresholds and the salary sacrifice cap.
• State Pension: The increase of 4.8% will help keep incomes in line with rising costs, benefiting low-income pensioners receiving Pension Credit.

Key Takeaways

While media speculation before the Budget may have caused concern, many headline areas, pensions, ISAs, and income tax allowances, remain unchanged for now. However, longer-term changes, particularly around salary sacrifice, frozen tax thresholds, and energy costs, may affect household budgets and retirement planning.

Need Support?

Employers & HR Teams

If you want to support your team with a financial wellbeing benefit, especially in times like these, we can help them understand the changes in more depth. We offer special webinars and tailored sessions and a financial plan to help your employees make sense of their finances. Get in touch today!

Individuals:
If you’re feeling confused by these changes or simply want to understand more, we can put you in touch with a coach or adviser who can provide guidance and help you plan effectively. Contact us today!

Written by Ione Morton, Marketing Executive