Latest changes
Find out how the Chancellor’s plans for National Insurance, the minimum wage, Capital Gains Tax and more could affect you.
The Budget
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.
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.
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.
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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.
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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.
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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.
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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.
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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.
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Governments borrow money to pay for their plans and fund its many obligations to the country, for example for public services or huge infrastructure projects. How does it do it? By selling bonds, known as ‘gilts’, to financial bodies such as pension funds or insurance companies. These bonds will be paid back by the Government in the future but – in the meantime - pay out interest to the holders.
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Often confused with the national debt (see below), the deficit is when the Government spends more than it receives in tax and other revenues – and then has to borrow to cover the difference.
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It’s a type of tax paid on specific goods, services or transactions. Examples include stamp duty on a home, fuel duty on petrol or diesel, and alcohol duty on beer or wine.
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Policy is the giveaway word here: it’s simply the Government’s strategy for using taxes and spending to try and influence how the economy performs. The typical aims of a fiscal policy include keeping prices and wages stable, encouraging ways to boost employment, keeping inflation low and long-term economic growth.
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In essence, this general term simply means any sort of major financial update. However, it’s also been used by Governments to describe particular events – the Mini-Budget was initially called a fiscal statement until it was rebranded.
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In a nutshell, this is an estimate of the size and health of a country’s economy over a period of time - over three months (a quarter), say, or a whole year.
There are three ways to measure it, according to the Bank of England.
It’s worked out by either adding up the total value of: goods and services (‘output’) produced in the country; everyone’s income; or what everyone in the country has spent.
To measure GDP each quarter, the Office for National Statistics collects data from thousands of UK companies.
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At its simplest, it’s the rate at which prices rise for goods and services over time.
The rate is calculated by the Office for National Statistics, which checks the prices of over 700 popular purchases (such as a loaf of bread or a new car).
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Levies are another form of tax paid to the Government. For example, the Apprenticeship Levy must be paid by all UK employers with an annual wage bill of over £3 million.
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When Chancellors talk about ‘the markets’, they tend to mean the financial markets where buyers and sellers trade securities such as bonds, stocks and other investments. What happens in the markets can affect the UK’s economy, and vice-versa.
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This is the total amount of money the Government has borrowed on behalf of the nation, mostly through the sale of gilts on financial markets. As of September 2022, it stood at roughly £2.4 trillion, or 98% of GDP.
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Paid by employees, employers and the self-employed, it helps to pay for some state benefits including the state pension and maternity allowance.
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A public body set up to give independent economic forecasts and analysis of the country’s public finances, it scrutinises the Government’s fiscal plans.
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This is what the Government departments spend money on - providing services to the public such as health care or education.
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Also known as His Majesty’s Treasury, this Government department is headed by the Chancellor. It controls public spending, sets the UK’s economic policy and aims to promote economic growth.
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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