The Chancellor’s latest UK Budget brings a wide range of financial, tax, and welfare changes that will affect individuals, families, and businesses over the coming years. From shifts in tax thresholds to new property levies and reforms to pensions, these updates will shape how far incomes stretch and how people plan for the future. Below is a clear breakdown of the key changes to help you understand what’s coming and how it may impact you or your organisation.
Income Tax & National Insurance
The government has extended the freeze on Income Tax and National Insurance thresholds until 2030–31. This means as wages rise over the coming years, more people will be pulled into higher tax bands increasing overall tax paid without raising headline rates.
Pensions & Savings Reforms
A major change affects salary-sacrifice pension schemes. From 2029, contributions above £2,000 per year via salary sacrifice will attract National Insurance, reducing the tax advantages for higher earners. Additional adjustments to savings and ISA rules will also reduce some of their tax-efficient benefits.
Property & Wealth Taxes
A new annual levy on high-value homes [“mansion tax”] begins April 2028. Properties over £2 million will face charges starting from £2,500 to £7,500 depending on value. Dividend, savings, and property income tax rates will rise by 2 percentage points from April 2026.
Welfare & Family Support
The government will abolish the two-child benefit cap from April 2026, expanding financial support to larger families. This is expected to significantly reduce child poverty and increase benefit entitlements for eligible households.
Cost-of-Living & Everyday Expenses
Fuel duty remains frozen, and regulated rail fares are also frozen, offering short-term relief to commuters. Energy bills are expected to fall due to reductions in energy-related levies, supporting households facing rising living costs.
This Budget marks one of the most significant resets in recent years, combining cost-of-living support with long-term revenue-raising measures. As these changes begin to roll out, it’s important to review your financial plans, tax position, and benefits to stay ahead.
Chancellor’s latest UK Budget 2025
Income Tax & National Insurance
The government has extended the freeze on Income Tax and National Insurance thresholds until 2030–31.
This means as wages rise over the coming years, more people will be pulled into higher tax bands increasing overall tax paid without raising headline rates.
Pensions & Savings Reforms
A major change affects salary-sacrifice pension schemes.
From 2029, contributions above £2,000 per year via salary sacrifice will attract National Insurance, reducing the tax advantages for higher earners.
Additional adjustments to savings and ISA rules will also reduce some of their tax-efficient benefits.
Property & Wealth Taxes
A new annual levy on high-value homes [“mansion tax”] begins April 2028.
Properties over £2 million will face charges starting from £2,500 to £7,500 depending on value.
Dividend, savings, and property income tax rates will rise by 2 percentage points from April 2026.
Welfare & Family Support
The government will abolish the two-child benefit cap from April 2026, expanding financial support to larger families.
This is expected to significantly reduce child poverty and increase benefit entitlements for eligible households.
Cost-of-Living & Everyday Expenses
Fuel duty remains frozen, and regulated rail fares are also frozen, offering short-term relief to commuters.
Energy bills are expected to fall due to reductions in energy-related levies, supporting households facing rising living costs.
This Budget marks one of the most significant resets in recent years, combining cost-of-living support with long-term revenue-raising measures. As these changes begin to roll out, it’s important to review your financial plans, tax position, and benefits to stay ahead.
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