What the 2025 Autumn Budget means for you

From April 2026 the National Minimum Wage and National Living Wage will rise for employees of all ages. See the table below for the new rates.

The amount of Income Tax you pay has been frozen since 2021. The Chancellor announced that the freeze on thresholds at which you pay tax has been extended again to the 2030/31 tax year.  

The freeze on thresholds will bring more people into the tax system and could mean you have to pay more tax as your income increases. 

Read more about How Income Tax and the Personal Allowance works. 

Households claiming Universal Credit with more than two children will be able to claim an extra amount for their third or further children. This change is set to come into effect in April 2026. 

This means if you’re already claiming Universal Credit or make a new claim and have more than two children living with you, you could be newly entitled to an extra amount under the ‘child element’ of Universal Credit.

Read more about Universal Credit in our guide.

Help to Save is an account where the government pays a 50% bonus on your savings. The account can give a maximum bonus of £1,200 if you save into it for four years. At the moment, you can open an account if you claim Universal Credit and are working. 

The government announced that the scheme will be widened from 2028 to include people on Universal Credit who can’t work because they are carers.

The new rules will allow people claiming Universal Credit to join the scheme if they have children in full-time non-advanced education (not university) or are a carer providing more than 35 hours a week of care for someone with a disability. 

This means 1.5 million more people will be able to open a Help to Save account. The scheme was supposed to end in 2027 but has now been made permanent. 

Find out more about the scheme in our guide Help to Save explained.

From April 2027 ISA savings limits will change. The annual allowance of £20,000 will stay the same but if you’re aged under 65, you will only be able to pay a maximum of £12,000 a year into a Cash ISA. 

The other £8,000 can be invested into a Stocks and Shares ISA. 

People aged 65 and over will still be able to add the full £20,000 to a Cash ISA. 

If you want to use more of your allowance for investments, you can, and any money already added to a Cash or Stocks and Shares ISA won’t be affected. 

When you save into an ISA instead of a normal savings account, all the interest that your money makes is tax free. Outside of an ISA you can earn up to £1,000 a year in interest without paying tax if you earn under £50,270 a year, or £500 in interest if you earn more than that. All interest is taxable if you earn more than £125,140 per year. 

Read more about tax free savings in our guide.

Rachel Reeves’ announcement contained quite a few changes to help with the cost of living. 

From April 2026 the government is cutting some of the duties we pay on our gas and electricity bills. This should save the average household in England, Scotland and Wales £150 a year.

The cost of prescriptions won’t change for the 2026/27 tax year and will stay at £9.90. This only applies in England, as prescriptions are free in Northern Ireland, Scotland and Wales. 

Emergency contraception, known as the morning after pill, will now be available for free.

The 5p cut in fuel duty will be extended until September 2026 for petrol and diesel. After then, duty will be gradually introduced bringing it to 2022 levels by April 2027. 

Forecourts will have to show real time prices to increase competition in fuel costs, which will be added to a ‘Fuel Finder’ making it easier for drivers to find the best prices.

Usually, the cost of train tickets rises every year in March. The Chancellor has announced that for 2026/27 they have been frozen at current prices. 

This applies to all regulated train fares, including season tickets, as well as peak and off-peak return tickets. Train companies can still decide to raise the price of advance and first-class tickets.

If you own an electric car or van or were thinking of buying one, there were a number of changes announced in today’s budget that you should pay attention to. 

From April 2028 drivers will be taxed based on how far they drive, payable at 3p per mile for electric and 1.5p for hybrid. This will be called electric Vehicle Excise Duty or e-VED. The charges won’t apply to other vehicles, including lorries, vans, coaches or motorbikes.

The average driver will pay an annual charge each year of around £240 or £20 a month, about half the cost of fuel duty for petrol and diesel cars.

The Electric Car Grant that was launched in July this year has been extended to the 2029/30 tax year. 

Find out more about how you can access it in our blog How to save money on an electric car.

If you own a car worth £40,000 or over, you have to pay more car tax. From April 2026 the threshold will increase to £50,000 for electric vehicles, saving a million EV drivers £440 a year. 

Read more in our Car Tax bands explained blog.

Currently, Income Tax and National Insurance are calculated after any pension contributions are made by salary sacrifice. From April 2029, if you pay into a pension using salary sacrifice, you’ll pay National Insurance on anything over £2,000.

For example, if you pay £2,400 into your pension by salary sacrifice, National Insurance will be calculated and paid on £400 of your contributions.

Read more about salary sacrifice.

From April 2027 there will be a 2% increase on the amount of basic and higher rate owed on property, dividend and savings income. 

This change is intended to make the tax charged on this income more comparable to what’s owed for income earned through employment.