Chancellor Rachel Reeves has delivered the Labour government's first Autumn Budget, outlining a financial strategy that will see the most significant impacts delayed for years.
The budget, announced on Wednesday, November 26, introduces policies that largely won't come into effect until April 2026. However, according to a leading economic think tank, the real financial strain on households is being pushed back even further.
Delaying the Fiscal Pain
Ruth Curtice, the chief executive of the Resolution Foundation, has highlighted that the Chancellor has significantly increased her fiscal headroom but has chosen to "delay the pain".
Speaking on BBC Radio 4's Today programme, Curtice stated, "Borrowing is actually up every year until 29-30." She pointed out the political timing, noting, "So interestingly, delaying the pain until just before an election."
The most substantial tax rises, including the freeze on personal allowance thresholds, are scheduled to take effect in 2028. This measure represents a broad-based tax increase that will impact a large number of people.
Key Measures and Their Timeline
Alongside the personal allowance freeze, other significant policies are also set for a 2028 implementation. These include the proposed mansion tax and changes to salary sacrifice schemes.
Curtice confirmed this timeline, stating, "Those threshold freezes kick in in 2028. Some of the other measures also not coming in – for example the mansion tax and the salary sacrifice – until 2028, so that’s when most of the pain from this Budget will be felt."
Despite this future tightening, the Chancellor has taken immediate action to ease current cost of living pressures. The budget includes support for energy bills and the lifting of the two-child limit, measures expected to have a notable effect on inflation next year.
A Tough Decade for Living Standards
The Resolution Foundation's analysis presents a challenging outlook for the UK. Curtice warned that "This Parliament is set to be second only to the last parliament for (living) standards… This decade continues to look really, really tough."
While the Chancellor has pencilled in significant tax cuts for 2028, the preceding tax rises mean that the financial pinch for households will be most acute in the period leading up to the next general election.
The overall picture is one of a strategic delay, where the government is providing short-term relief while planning for a major fiscal adjustment that will define the end of the current parliamentary term.
