The Autumn Budget 2025, what does it mean for you?

Rachel Reeves delivered her second budget on the 26 November 2025 however, its main measures were revealed when the Office for Budget Responsibility, the fiscal watchdog, accidentally published its forecasts on its website ahead of the speech. As expected, Reeves will freeze income tax and national insurance thresholds for another three years from 2028, continuing a freeze implemented by the previous government. This will bring more people into higher tax bands. Do keep an eye out for our long form PDF download that will be sent in the next few days.

Summary of the main points:

• The freeze in personal tax thresholds will be extended from April 2028 until April 2031, raising £8.3bn by the end of the decade. The policy moves more people into the tax system or higher tax brackets each year as their pay increases.

• Salary sacrifice pension contributions will be capped at £2,000 a year before national insurance applies, raising £4.7 billion by the end of the decade.

• A council tax surcharge will be applied to homes worth more than £2m from April 2028.

• The two child benefit cap will be scrapped, adding about £3.5bn to the welfare bill. The current cap limits the number of children for whom low income families can claim welfare benefits.

• The allowance for investment into cash ISAs will be cut from £20,000 to £12,000 for people under the age of 65 as of April 2027.  Those over 65 will retain the existing allowance.

Income tax

• The chancellor has extended the freeze on income tax thresholds for another three years beyond 2028.

• It will mean income tax thresholds do not increase with inflation, meaning more people will fall into higher bands when they receive pay rises.

• Tax thresholds will stay the same for 2028/29, 2029/30 and 2030/31.

Pay per mile tax on EVs

• Electric vehicle drivers will pay a new per mile tax charge from 2028/29 at 3p per mile.

• The charge will increase in line with inflation

Fuel duty

• Fuel duty has been frozen at the current rate of 52.95 pence per litre of petrol or diesel for a further five months.

• From April 2027, fuel duty will increase annually in line with the RPI measure for inflation.

Pension salary sacrifice

• From April 2029 pension contributions made under the salary sacrifice scheme will only be allowed up to £2,000 per year.  Salary sacrificed contributions above that limit will be subject to both employer and employee national insurance

Property

• The owners of properties worth £2m or more will be liable to a council tax surcharge from April 2028.

• There will be four bands, with properties worth £2m to 2.5m incurring a surcharge of £2,500 and the charge rising to £7,500 for those worth £5m or more.

• Property income tax will also rise by two percentage points from April 2027, to 22pc, 42pc and 47pc for the basic higher and additional rates.

Savings and dividends

• The basic and higher rates of tax on dividends is rising by 2% to 10.75% and 35.75% per cent respectively from April 2026.

• Savings income tax will rise by two percentage points from April 2027, to 22%, 42% and 47% for the basic higher and additional rates.

Energy bills

• R​eeves is also planning to cut an estimated average of £76 from annual domestic energy bills by moving the most expensive green levy from bills to direct taxation.

• The Renewables Obligation, which funded the first generation of wind farms, costs the average consumer about £102 a year but from now till 2029 the Treasury will fund 75pc of the costs.

Capital gains tax

• If a business owner sells their company to an employee ownership trust, they had received receive 100% capital gains tax relief.   This has been cut to 50% relief with immediate effect.

Corporation tax

• The main rate for capital allowances will be reduced from 18% to 14% from April 2026, while there will also be a new 40% first year allowance for companies from January 2026.

Gambling

• Remote gaming duty will climb from 21% to 40% in April 2026, while bingo duty will be scrapped.

• The government will also introduce a new rate of general betting duty for remote betting, set at 25% from April 2027.

• Self service betting terminals, spread betting, pool bets and horseracing are spared from the new levy.

• Casino gaming duty bands will be frozen in 2026/27, before rising in line with RPI in the following years.

Welfare spending

• The two child benefit cap will be removed and there is an extension of the winter fuel payment scheme costing £1.7bn.

• Costs are also being driven higher by the Government’s u turn on tightening the eligibility for Personal Independence Payments (PIP), an increase in disability caseloads, and inflation linked increases in working age benefits and the state pension triple lock.

Student loans

• The government has frozen the repayment and interest rate thresholds for Plan 2 student loan repayments for three years beginning in 2027/28.

• The move, which freezes interest rates at 7.9% instead of falling alongside interest rates and inflation, will raise £400m a year.

Tax collection crackdown

• New measures have been announced to close the tax gap - the difference between the amount of tax that should be collected in theory versus actual returns.

• HMRC will also hire more debt collectors to pursue money the Exchequer is owed

Economic forecasts

• The economy is expected to grow by an average of 1.5% a year until the end of the decade; a downgrade of 0.3 percentage points compared to March due to weaker than expected productivity.

• Borrowing is expected to fall from 4.5% of GDP in 2025/26 to 1.9% by 2030/31.

• Debt is set to be 96% of GDP by end of the decade – up from 95pc currently.

• This is 2 percentage points higher than anticipated in March and twice the debt level of the average rich country, according to the OBR.

• Debt interest will be £14b a year higher by the end of the decade.

Funding for apprenticeships for SMEs

• Funding to make training for under 25 apprenticeships completely free for small and medium sized enterprises has been announced.

• The government also confirmed funding for a new youth guarantee, providing £823m over the next three years.

If you have any concerns or questions regarding the budget, please do get in touch with your Swindells partner who will be able to advise you further.