Highlights of the Autumn Budget 2025

26 Nov

Delivered on the 26th of November, the statement outlines measures to tackle inflationary pressures, drive long-term growth, and address cost-of-living challenges. From tax reforms and savings adjustments to property levies and pension changes, we’ve highlighted the main changes essential for effective financial planning.

Personal Taxation

Income Tax Threshold Freeze Extended to 2030
Personal tax and National Insurance thresholds will remain frozen for an additional three years, pulling more earners into higher tax bands over time. This “fiscal drag” is expected to raise £8bn annually by 2029.
Dividend & Savings Tax Changes
Dividend and savings income tax rates will rise by 2 percentage points, reducing net returns for investors.

Savings & Investments

Cash ISA Allowance Cut
Annual cash ISA limit drops from £20,000 to £12,000 from April 2026.
Stamp Duty Holiday for Newly Listed Shares
A three-year exemption from stamp duty on purchases of newly listed UK shares aims to boost domestic equity markets.

Property & Homeownership

Mansion Tax Introduced
Properties worth over £2m face an annual surcharge of £2,500–£7,500, depending on value.
Inheritance Tax Reform Under Review
Possible removal of the £175,000 property allowance and shortening of the taper rule from seven years to three.

Pensions

Salary Sacrifice Cap
From April 2029, National Insurance will apply to salary-sacrificed pension contributions above £2,000 per year, reducing tax efficiency for higher earners.

Transport & Lifestyle

Mileage-Based Tax for EVs
A 3p per mile charge on electric vehicles from April 2028 will raise £1.4bn.
Sugar Tax Extended
Packaged milk drinks now included, with compliance required by 2028.

Social & Cost-of-Living Measures

Two-Child Benefit Cap Scrapped
Effective April 2026, expected to cost £2.3bn but reduce child poverty.
Minimum Wage Increase
From April 2026, the National Living Wage rises to £12.71/hour for over-21s.

This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.

catherine alexander