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The Budget

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The Budget

What’s the Autumn Budget and what does it mean for you? 

The Autumn Budget is an important yearly event that lays out how the UK government plans to tax, spend, borrow and invest. These decisions affect the finances of individuals, households and businesses.

We’re here to explain what these changes could mean for you.

This article isn’t advice or any form of recommendation. We don’t offer tax advice – if you need help, please get in touch with an independent tax adviser. 

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Latest changes

Find out how the Chancellor’s plans for National Insurance, the minimum wage, Capital Gains Tax and more could affect you.

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Chancellor chat

It’s almost impossible for Chancellors to avoid financial terms when they speak. Here’s a guide to some of the most commonly used terms.

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Money matters

The Budget’s the big one but other major Government updates impact your household budget too. Discover tips and advice on how you can take control with our money management guides. 

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  • Your income and tax

    Your income and tax

    Here’s a summary of the headlines:

    • No change to the existing income tax, personal National Insurance contributions and VAT rates – the current thresholds will stay the same until 2028/29, when they’ll be unfrozen and will rise in accordance with inflation. For more information on tax rates and allowances, read our guide
    • Minimum and living wage increases – the National Living Wage for over 21s will increase by 6.7% to £12.21 an hour. The National Minimum Wage for young people aged 18 to 20 will also go up by 16.3% to £10 an hour. The minimum wage for under 18s and apprentices will increase by 17.9% from £6.40 to £7.55 an hour
    • Employers’ National Insurance contributions are going up – although most employees may not notice an immediate change in their pay, larger businesses will be impacted as they contribute more to fund public services. 
  • Your benefits

    Your benefits

    Here’s a summary of the headlines:  

    • Change to the Carer’s Allowance – the Chancellor announced a change to the weekly earnings limit. Previously, carers could earn up to £151 a week while still claiming the allowance (after deductions for tax, National Insurance and expenses). This has increased by £45 a week, which means a carer can now earn up to £10,000 a year and still claim the allowance
    • Pensions – the new state pension will rise by 4.1% in April 2025, increasing weekly payments from £221.20 to £230.30 for full recipients. This means a pensioner next year will have an extra £470 – up to £275 more than if the pension had gone up by inflation alone. In addition, the pension credit standard minimum guarantee will also rise by 4.1%, from around £11,400 per year to around £11,850 per year for a single pensioner.
  • Your investments

    Your investments

    Here’s a summary of the headlines:  

    • Capital Gains Tax (CGT) – from 30 October 2024, the lower rate is going up from 10% to 18%, and the higher rate from 20% to 24%. The CGT rates on residential property (at 18% and 24% respectively) will stay the same. For individuals, the annual tax-free CGT allowance remains at £3,000, meaning any gains over this amount from shares, funds or investment trusts will be taxed. Investments held in Individual Savings Accounts (ISAs), Self-Invested Personal Pensions (SIPPs) and their junior equivalents will continue to be exempt from CGT and income tax
    • Inheritance Tax (IHT) – the main change is that inherited pensions will be liable to IHT from April 2027. Previously, pensions that were part of an estate where the deceased died before the age of 75 didn’t attract IHT. The IHT bands and thresholds will stay the same now until 2030. For more information on inheritance tax and the thresholds, read our guide
    • ISAs – annual ISA allowances will remain the same until 2030, being £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds. The British ISA announced in the last Spring Budget is no longer going ahead. Read our guide to ISAs.
  • Your spending and bills

    Your spending and bills

    Here’s a summary of the headlines:

    • Fuel duty – the 5p duty cut introduced previously will remain until 22 March 2026  
    • Air Passenger Duty – to meet carbon reduction commitments, £2 will be added to the price of a one-way short-haul economy flight, and £12 for long-haul destinations 
    • Tobacco  the duty on hand-rolling tobacco will go up by the Retail Price Index (RPI) plus 2% for the remainder of this parliament. There’ll be an extra 10% charged on hand-rolling tobacco 
    • Vaping  there’ll be a new vape products duty from 1 October 2026. This will be a flat rate of 2.2% per 10ml vape liquid (accompanied by an increase of 1% to incentivise the switch from tobacco)
    • Alcohol – the duty on all drinks served on draught will be cut by 1.7%
    • Bus fares – England’s current £2 bus fare cap will be extended to December 2024, with a new £3 cap being introduced in January 2025 and lasting until December 2025
    • Independent education – 20% VAT will be charged on education and boarding services provided by private schools from 1 January 2025.

     

  • Your property

    Your property

    There was only one substantial change in the Budget that affected property. For second homes, the Stamp Duty land tax surcharge will go up from 3% to 5% from 31 October 2024. This is on top of the current Stamp Duty land tax.

    Learn more about mortgages.

The Budget

Usually held once a year in the spring or autumn, the Chancellor outlines plans for the nation’s finances – and what it means for your money.

Some years can see more than one Budget – e.g. after an election, a change of Government or drastic economic circumstances. 

Autumn (or Spring) Statement

Although historically seen as having less impact on household finances than a Budget, it’s still considered to be a major seasonal update on the Government’s finances.

Think of it as a check-in, months after a Budget, to let the country know how it’s all going.  

Spending Review

These tend to take place every two to four years and set out what the Government expects to spend on public services (and where) over the next few years. 

Other announcements

Governments typically aim to deliver one Budget and seasonal statement a year. But major events – both political and economic – can put pressure on Chancellors to deliver extra financial updates. Previous examples include the mini-Budget in September 2022.

What does the financial language mean?

As custodian of the nation’s purse strings, it’s almost impossible for any Chancellor to avoid using lots of financial terms when they speak.

You’ll often hear the same words and phrases over and over again, and if you’re unsure of their meaning, it’s easy to lose track.

Here’s a guide to some of the most commonly used terms.

We don’t offer financial, legal or tax advice. Tax laws can change and how they can affect you depends on your situation. If you need help, please get professional advice. You’re responsible for managing your own taxes, money and legal matters – this includes making any filings and payments and following applicable laws and regulations.

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