Autumn Budget 2025

The Chancellor’s Autumn Budget delivered a package of tax rises, wage increases and targeted household support, alongside a major change to pension saving rules.

Pension & Tax Changes

• Salary sacrifice for pension contributions capped at £2,000 from April 2029.
  Contributions above this will incur employer and employee National Insurance for the first time.

• Dividend tax rates to rise by 2 percentage points from 2026-27, taking the basic rate to 10.75% and higher rate to 35.75%.

• Savings income tax rates will rise by 2 percentage points from 2027-28.

• New tax bands for property income from 2027–28: 22% (basic), 42% (higher), and 47% (additional).

• ISA changes: Cash ISA limit cut to £12,000 from 2027, though the overall £20,000 ISA allowance remains.

Wages & Employment

• National Living Wage to rise 4.1% to £12.71 from April 2026.

• Minimum wage increases across all younger bands, with 18–20-year-olds seeing an 8.5% uplift.

• Income tax thresholds frozen until 2031, bringing more workers into higher tax brackets over time.

Household Support

• Two-child benefit cap scrapped, providing additional support to affected families.

• Help to Save scheme expanded and made permanent, offering greater assistance to low-income savers.

• Council tax expected to rise by around 5% in April, adding pressure to household budgets.

Property & Housing

• Government confirms a higher council-tax banding for expensive homes, widely referred to as a “mansion tax”, affecting under 1% of UK households.

• No new measures to support first-time buyers or stimulate housing transactions.

Business & SME Measures

• Apprenticeships for under-25s will be fully funded for SMEs.

• No increase to Insurance Premium Tax, despite pre-Budget speculation.

• Stronger focus on tax compliance and enforcement, including tougher debt-collection activity.

Transport & EVs

• EV mileage tax coming in 2028: 3p per mile for electric vehicles, 1.5p for plug-in hybrids.

• Only a five-month continuation of the fuel-duty freeze before staged rises begin from 2026.

Whistleblowing & Fraud Enforcement

• HMRC will offer rewards of up to 30% of additional tax recovered for whistleblowers reporting high-value tax fraud.

Read more in our Knowledge Hub.