Written by Ward Goodman
December 11, 2025
The Autumn Budget 2025 delivered a broad package of tax, savings and investment reforms aimed at stabilising the economy and strengthening long‑term financial resilience. Below is a clear breakdown of the key announcements and what they could mean for savers, investors and UK households.
Economic Overview
The Autumn Budget set out the government’s plan for stabilising the economy while honouring key fiscal commitments. The OBR’s latest projections show modest but steady growth over the coming years, with inflation expected to fall faster than initially predicted. This economic backdrop forms the basis of the Budget’s major tax and investment decisions.
Key points include:
- Economic growth revised upward to 1.5% for this year, with growth expected to reach 1.4% in 2026 and remain at 1.5% across each of the following four years
- Inflation forecast to drop to 2.5% in 2026
- Expanded fiscal headroom, meaning the government now has a larger financial buffer to meet its fiscal targets – allowing it to adapt to economic pressures or invest in key areas without needing to raise major taxes
Personal Taxation
The Budget delivered several measures that will affect households over the coming years. One of the most significant steps is the continued freeze of Income Tax thresholds until April 2031, meaning more people are likely to drift into higher tax bands over time. Property income will also be subject to its own dedicated tax bands from 2027, marking a notable shift for landlords.
Highlights include:
- Income Tax personal allowance (£12,570) and higher‑rate threshold (£50,270) frozen until 2031
- Savings Income Tax rates to rise from April 2027, increasing by two percentage points across all bands, although current allowances remain
- Dedicated tax rates for property income from 2027, set at 22% (basic rate), 42% (higher rate) and 47% (additional rate)
- Inheritance Tax thresholds are frozen for an additional year to 2031, with the nil‑rate band (£325,000) and residence nil‑rate band (£175,000) remaining unchanged. You can use our Inheritance Tax Calculator to work out any potential liability more accurately.
Savings & ISA Changes
Changes to savings allowances were among the most talked-about updates. Beginning in 2027, the Cash ISA limit will fall to £12,000, though the overall ISA allowance remains £20,000. This effectively encourages a greater shift toward Stocks & Shares ISAs for savers who want to maximise their annual tax-free potential.
Other updates include the Help to Save scheme becoming permanent and upcoming consultations to simplify Lifetime ISA rules. These changes collectively indicate a push towards long-term saving and clearer, more accessible products.
Impact on Savers
- Lower Cash ISA limits may encourage savers to explore Stocks & Shares ISAs for long‑term tax efficiency.
- Frozen tax thresholds combined with wage growth may push more people into higher tax brackets.
- Rising dividend tax rates will affect investors holding shares outside tax‑efficient wrappers.
Pension & Wage Changes
The State Pension Triple Lock continues to play a central role in supporting retirees, with payments set to rise again in April 2026 – increasing by 4.8%. This means the full new State Pension will rise to £241.30 per week, while the full basic State Pension will increase to £184.90 per week.
Meanwhile, salary sacrifice arrangements will undergo notable changes in 2029, with the amount that can be sacrificed without paying National Insurance contributions capped at £2,000 per employee. This represents a significant shift for higher earners and those who regularly use salary sacrifice for pension contributions, making it important to plan ahead and understand how this cap may influence your overall retirement strategy.
Wage growth also remains a priority. The National Living Wage will increase by 4.1% to £12.71 per hour, while the Minimum Wage for 18 to 20‑year‑olds will rise by 8.5% to £10.85 per hour. For 16 to 17‑year‑olds and apprentices, the rate will increase by 6.0% to £8.00 per hour. These changes provide a meaningful boost to workers, helping offset recent inflationary pressures.
Investment Reliefs & Business Measures
For investors, the Budget introduces both expanded opportunities and some adjustments. Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS) – both government‑backed schemes that encourage investment into early‑stage and high‑growth UK companies – will see their investment limits increased. These schemes offer tax incentives to investors willing to support innovative businesses. However, VCT Income Tax relief will reduce to 20% under the new proposals. The government also aims to strengthen the UK as a competitive marketplace for listings through new tax incentives.
On the business side, a strong emphasis has been placed on supporting scale-ups, improving access to global talent, and encouraging investment via the British Business Bank.
Housing, Infrastructure & Public Services
Beyond taxation, the Budget outlines significant pledges for housing delivery, transport networks and public services. Funding to local authorities will help accelerate new housing developments, while long-term infrastructure commitments such as the Lower Thames Crossing remain central to the UK’s growth plans.
Education and healthcare also receive meaningful investment, with new school initiatives and substantial digital upgrades for the NHS.
Other Notable Announcements
Alongside the major tax and savings updates, the Budget also introduced several additional measures designed to shape household finances, transport costs, and broader cost‑of‑living pressures.
- A new High‑Value Council Tax Surcharge will apply to residential properties in England worth over £2m from 2028/29, starting at £2,500 per year and rising to £7,500 for homes valued above £5m. This is intended to generate additional revenue from those with higher‑value assets.
- The introduction of an Electric Vehicle Excise Duty from April 2028, set at 3p per mile for electric cars and 1.5p per mile for plug‑in hybrids. This marks a shift from purchase‑based taxation to usage‑based taxation for low‑emission vehicles.
- Tobacco Duty will rise by RPI inflation plus two percentage points, while Alcohol Duty will increase in line with RPI from February 2026. This is expected to raise revenue while supporting ongoing public‑health strategies.
- A freeze on all regulated rail fares across England for the 2026 period, providing temporary relief for commuters.
- A package of measures designed to reduce average household energy bills by £150 starting from April 2026, helping ease cost‑of‑living pressures during what remains a challenging period for many households.
What This Means for Savers and Investors
These updates collectively paint a picture of gradual economic stabilisation paired with structural reforms. For savers, the reduced Cash ISA allowance means reviewing how best to use the full ISA envelope. Investors, meanwhile, may benefit from expanded reliefs and new opportunities in UK growth companies.
However, frozen tax thresholds and rising dividend tax rates may increase liabilities over time, making early planning essential.
Opportunities:
- Higher expected economic stability may support long‑term investment growth.
- Increased EIS/VCT limits offer more avenues for tax‑advantaged investing.
- ISA flexibility remains strong for those planning tax‑efficient portfolios.
Considerations:
- Frozen thresholds may gradually raise tax liabilities as incomes increase.
- Reduced Cash ISA limit may require a reassessment of savings strategies.
- Changes to dividend and property tax rates will affect investors with unwrapped assets.
Get Expert Guidance from Ward Goodman
If you would like tailored guidance on how the Autumn Budget changes may impact your personal financial plan, our advisers are here to help. We can review your savings, investments and tax strategy to ensure you are making the most of available allowances.
Alongside this blog, Ward Goodman has created a free comprehensive Autumn Budget Guide, offering a deeper breakdown of every measure announced. Please download it via our free resources page, to explore the full detail behind the tax, savings and investment changes.
Contact our team today to arrange a conversation about your financial goals.
