Chancellor Rachel Reeves has delivered her highly anticipated Autumn Budget statement, outlining a sweeping set of financial reforms that will impact households and businesses across the United Kingdom.
Despite a momentary disruption caused by the Office for Budget Responsibility publishing its forecast early, the Chancellor detailed a comprehensive fiscal plan. The measures range from significant tax adjustments to new investments in public services and the scrapping of a controversial benefits policy.
Taxes, Savings, and Personal Finance
A series of changes will directly affect how Britons save and manage their money. A major shift for savers sees the Cash ISA rule change, which now mandates that £8,000 of the annual £20,000 tax-free allowance must be invested in stocks and shares. This effectively caps the cash ISA allowance at £12,000 for most, with an exemption for those over 65.
In a move that will pull more people into paying tax, the income tax threshold freeze is being extended for an additional three years, now remaining in place until the 2030-31 financial year.
Motorists are also facing new charges, particularly those who have switched to electric vehicles. A new pay-per-mile tax on EVs will be introduced in April 2028, starting at 3p per mile and rising with inflation.
Benefits, Business, and Public Services
One of the most significant social policy announcements was the decision to scrap the two-child benefit cap entirely. The Office for Budget Responsibility estimates this measure will cost the Treasury around £3 billion by 2029-30.
The NHS is set for a major cash injection, with the Chancellor aiming to find £4.9 billion in efficiencies from scrapping Police and Crime Commissioners and cutting local government costs. This money will be reinvested to hire more nurses and GPs and fund 250 new neighbourhood health centres.
Businesses saw a mixed package. The retail, hospitality, and leisure sectors will receive a substantial £4.3 billion support package over three years, ensuring permanent lower tax rates for over 750,000 properties. However, a reduction in the corporation tax writing down allowance is expected to raise £1.5 billion from businesses.
Other Key Announcements and Reforms
Other notable measures from the Budget include a new mansion tax surcharge on properties worth over £2 million, projected to raise £0.4 billion. There will also be a tax increase on passive income, with rates on dividends, property, and savings income rising by 2 percentage points to generate £2.1 billion.
In a boost for local decision-making, £13 billion of flexible funding is being devolved to seven regional mayors across England for investment in skills and infrastructure. The devolved nations will also receive funding, with £820 million for Scotland, £505 million for Wales, and £370 million for Northern Ireland.
The government confirmed an extension of the fuel duty freeze until next September, and small businesses will get funding to provide free apprenticeship training for under-25s. The Budget also brings changes to the Motability scheme, restricting it from being used to purchase luxury cars.
