Autumn Budget 2025: What You Need to Know

The Autumn Budget 2025 has been announced, and it includes key updates that could affect your income, savings, pensions, and property. Whether you are planning for retirement, running a business, or just getting started with investing, here’s a simple breakdown of what’s changing, and what it could mean for you.

1. Tax Changes: More Tax Over Time

The government is keeping income tax bands frozen until 2031. That means as your income increases, you could end up paying more tax, even if rates stay the same.
Also:

• Dividend tax will increase by 2% from April 2026
• A new yearly charge will apply to homes worth over £2 million from 2028
• Tax relief on salary-sacrifice pension contributions will be capped from 2029

What this means?
If you earn more or take dividends from your business, you might face a higher tax bill. Now is a good time to review how you take income and build retirement savings.

2. Pensions and Family Support: More Help, But Watch the Tax

• State Pension will rise by 4.8% in April 2026
• The two-child limit on child benefits is being removed
• Minimum wage will rise to £12.71/hour

What this means?
Retirees will see higher pension income, but may be taxed on more of it. Families with more than two children will get extra support again. And workers on lower incomes will benefit from a pay rise.

3. Saving and Investing: Changes to ISAs

• From 2027, Cash ISAs will be limited to £12,000 per year for savers under age 66
• Stocks & Shares ISA stays at £20,000
• The government plans to modernise investment schemes like EIS and VCT

What this means?
If you rely mostly on Cash ISAs, your limit is going down. Younger savers may want to explore investing to get more value from their allowance.

4. Business Owners: Income and Hiring Support

• Higher dividend tax will affect how you draw income from your business
• Free apprenticeships will be offered for under-25s
• Business rates relief will continue for certain sectors

What this means?
Business owners should review how they pay themselves, and check if they can benefit from apprenticeship support or tax relief.

5. Property: New Charges for Expensive Homes

• From 2028, homes worth over £2 million will face a new yearly charge
• No changes to stamp duty were announced
• Landlords may see lower returns due to rising taxes

What this means?
If your home or investment property is worth over £2 million, you will need to budget for a new annual cost. Landlords should review profitability and future plans.

6. Cost of Living: Some Relief for Households

• Fuel duty and rail fares remain frozen
• Prescription charges stay at £9.90
• More families will qualify for child benefit

What this means?
These freezes help with everyday costs. If you have a larger family, or take regular medication, you’ll benefit directly.

Final Thought

The Autumn Budget does not bring dramatic tax hikes, but it does introduce gradual changes that can affect your overall financial position over time.
Need help navigating these updates?

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