Autumn Budget 2025 highlights After months of speculation, and an accidental early peak courtesy of the Office for Budget Responsibility (OBR), Chancellor Rachel Reeves finally delivered her Budget. I wanted to share a brief update on the key points that might be of interest, and will follow this up in the next few days with a view on what some of the changes could mean for you.
Key points to note
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Income tax and national insurance (NI) thresholds freeze: extended for another three years from 2028 until April 2031 which means more people will pay higher rates as their pay rises over time
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Salary sacrifice for pensions: salary sacrifice pension contributions above the new cap of £2,000, will be taxed in the same way as other employee pension contributions from April 2029
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Minimum wage increase: to £12.71 per hour for anyone over 21
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Cash ISA allowance reduces: to £12k a year, within the overall annual ISA limit of £20k. The remaining allowance of £8k must be used in investment ISAs. Over 65s however, retain the full cash ISA annual allowance of £20k
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Tax on dividend income: will increase by two percentage points for the ordinary and upper rate from April 2026
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Tax on savings income: will also increase by two percentage points across all bands from April 2027
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Changes to tax on property income: new separate tax rates will be introduced from 2027-28. The property basic rate will be 22%, the property higher rate will be 42%, and the property additional rate will be 47%. The bands will apply across England, Wales and NI, the rates will apply in England and NI. We have to wait and see what the devolved governments do on property income tax rates
- New high value council tax surcharge: sometimes called a ‘mansion tax’ – £2,500 a year on properties over £2m in England, increasing to £7,500 for properties over £5m from 2028
Electric vehicles: new excise duty introduced on electric vehicles from April 2028 at 3p per mile for electric cars and 1.5p per mile for plug-in hybrids
- 5p fuel duty cut: frozen until the end of August 2026
Tax rules can change and the impact of taxation, and any tax relief, depends on your personal circumstances and where you live.
Here to help I appreciate that some of the changes announced could be quite significant, so if you have any questions please get in touch – I’m here to help.
Best wishes Paul Huggins Adviser Huggins Wealth Management Ltd