What does the ‘Autumn Budget’ mean for you?

The Chancellor’s second Autumn Statement was highly anticipated. Economic growth remains sluggish, and the fiscal landscape continues to present challenges. National Insurance contributions increased last year, the minimum wage is rising, and the Employment Rights Bill is progressing through Parliament—all factors affecting the business environment and labour market.

An unusual moment preceded the formal announcement when the Office for Budget Responsibility (OBR) accidentally leaked their growth forecast an hour early. The OBR’s expected growth downgrade proved smaller than many had anticipated, providing slightly more fiscal headroom than expected.

The Chancellor faces significant economic headwinds this year. Fiscal rules limit borrowing capacity, while manifesto commitments not to increase income tax, National Insurance, or VAT constrain revenue-raising options. Earlier attempts to reduce benefits also faced parliamentary resistance.

This has left the government navigating between maintaining manifesto promises and raising revenue through alternative measures affecting individuals, businesses, and investors.

Key Measures

Personal tax thresholds will remain frozen until the end of the 2030-31 tax year—a three-year extension of the current freeze. While income tax rates remain unchanged, the continued freeze means fiscal drag will result in higher tax bills for income earners, forecast to raise £8bn according to the OBR.

The profile of spending and tax increases has been adjusted, with more measures weighted towards later years. This represents a shift from the typical political approach of avoiding tax rises close to elections.

We will issue a more detailed update with all the financial planning implications in due course.

In the meantime, we summarise the key headlines below:

Taxes

Income tax rates will not change and the annual allowance will remain frozen at £12,570 to 2030-31, an extension of three more years since last year’s Autumn Statement. This will raise a further £8bn in tax revenue.
The inheritance tax nil rate band will also be frozen for an extra year to 2030-31.
There will be an additional 2% tax applied to dividends, property and savings income. This will raise £2.1bn in tax revenue.
Capital Gains Tax relief on disposals to employee ownership trusts will be reduced from 100% relief to 50% relief. This will raise £900m in tax revenue.
A council tax surcharge will be applied to properties worth over £2m. The surcharge will be £2,500 per annum for properties over £2m, and £7,500 per annum for properties over £5m. This will raise £400m in tax revenue.

Pensions and savings

The £20,000 cash ISA limit will be changed to require a minimum of £8,000 to be invested in stocks and shares. This effectively reduced the cash ISA limit to £12,000. Cash ISA savers who are over 65, however, will be allowed to continue with the existing £20,000 limit.
Lifetime ISAs will be consulted on and could be replaced or removed.
Interest from cash savings or dividends on investments will be hit by the 2% tax increase mentioned above.
From 2029, salary-sacrificed pension contributions over £2,000 will be liable to National Insurance Contributions. This will raise a further £4.7bn.
The state pension will rise by £440 a year, and more for people on the new state pension.
Enterprise Investment Schemes and Seed Enterprise Investment Schemes will continue.

Living costs

Fuel duty cut kept for another year.
The two-child benefit cap within Universal Credit will be removed from April 2026.
A new vehicle excise duty will be introduced for electric vehicles.
The Soft Drinks Industry Levy or ‘sugar tax’ will be expanded to include milk drinks such as milkshakes and lattes.
The previous government’s Energy Company Obligation system will be axed which Reeves claims will save £150 per annum off average energy bills.
Alcohol duty will increase in line with inflation.

Businesses

The Writing Down Allowance rate for corporation tax will be reduced from 18% to 14% from April 2026. This will raise £1.5bn in tax revenue.
There will be relief for UK stock market listings, with a three-year exemption from stamp duty. There will be a consultation on attracting more entrepreneurs.
There will be a 40% first-year allowance to permit businesses to write off more of their upfront investment costs.
The Energy Profits Levy on oil and gas companies will continue through to 2030.
Corporation tax will stay capped at 25%.
The minimum wage for over-21s will increase by 50p per hour from April, to £12.71, a rise of 4.1%. Workers aged 18 to 20 will get a bigger increase of 8.5%, to £10.85 an hour, and 16 and 17-year-olds will get a 6% increase to £8 an hour.

Economy

Rachel Reeves made much of the OBR’s improved forecast of 1.5% growth for 2025. However, the longer-term picture is less positive. In 2026, the economy is now expected to expand by 1.4%, below a previous forecast of 1.9%. For 2027, GDP is estimated to expand by 1.6% against March’s estimate of 1.8%. In 2028, GDP is forecast to rise by 1.5%. against 1.7% in March. In 2029, the economy will expand by 1.5%, not 1.8% as thought in March.
The OBR estimates the measures outlined by the chancellor will increase headroom against its borrowing to £22 billion in 2029 to 2030, £12 billion more than it forecast in March.
A further £4.9bn in savings will be found and re-invested in services through cuts made to 2031, such as the removal of police and crime commissioners.
There is always a little choppiness in financial markets during a budget, but this is unlikely to last given there were no plans announced to significantly increase borrowing.

Over the coming days, we’ll be analysing what the Chancellor has announced and what it means for you.

We’ll share our conclusions in a detailed report, so keep an eye on your inbox.