The Autumn 2025 Budget risked becoming a “winter Budget”, arriving at the latest possible opportunity on 26 November after a prolonged and rumour-filled run-up.
This marked the Chancellor’s second Budget. Her first, delivered on 30 October 2024, followed early announcements of a series of revenue-raising measures designed to address a widely publicised £22 billion fiscal gap. This year’s Budget moved four weeks closer to Christmas and came against the backdrop of two notable summer U-turns — on winter fuel payments and disability benefit reform — together implying a need to raise approximately £6 billion in additional revenue.
Months of Speculation, Limited Surprises
The extended lead time meant nearly three months of speculation once summer ended. A steady stream of leaked policy ideas and media rumours heightened expectations, but when Budget day finally arrived, the 70-minute statement proved to be something of an anti-climax.
Rather than dramatic announcements, the Chancellor opted for a series of targeted measures, aiming to strike a balance between funding public spending commitments and limiting excessive borrowing.
Key Measures from the Autumn Budget 2025
Income Tax and Allowances
One of the most significant announcements was a three-year extension to the freeze on income tax bands and personal allowances. The Institute for Fiscal Studies (IFS) had previously calculated that even a two-year freeze would result in nearly one in four taxpayers paying a marginal tax rate of 40% or more by 2029/30.
Pension Contributions and Salary Sacrifice
From 2029/30, a £2,000 cap will apply to the amount of salary that can be tax-efficiently sacrificed for pension contributions. Any amount above this threshold will be subject to National Insurance contributions — at 15% for employers and up to 8% for employees.
Changes to ISA Allowances
From 6 April 2027, the maximum annual subscription to a Cash ISA will reduce to £12,000 for individuals under the age of 65. The overall adult ISA limit remains at £20,000, while the Junior ISA limit stays at £9,000.
The Lifetime ISA allowance remains unchanged at £4,000, although the government has confirmed it will consult on a new first-time buyer ISA as a potential replacement.
Support for Families
The Budget also confirmed the abolition of the two-child limit for Universal Credit and Child Tax Credit. This measure is expected to reduce child poverty by around 450,000 children by 2029/30.
Dividend, Property and Savings Taxation
Dividend tax rates will increase by two percentage points from 6 April 2026. Basic rate taxpayers will pay 10.75%, higher rate taxpayers 35.75%, while the additional rate remains unchanged at 39.35%.
In addition, a two-percentage-point increase across all tax bands will apply to property and savings income from 2027/28.
Electric Vehicle Road Charges
From April 2028, electric vehicle drivers will face a new road charge of three pence per mile, reflecting the government’s intention to broaden the motoring tax base as fuel duty receipts decline.
A Budget Focused on Stability Rather Than Headlines
Overall, the Autumn Budget 2025 avoided major headline-grabbing reforms. Instead, it charted a careful path between rising spending demands and the need to fund those commitments through a combination of modest tax rises and continued borrowing.
While the changes may appear incremental, their cumulative impact could be significant — particularly for higher earners, investors and those planning for retirement.
Speak to Chartwell Wealth Management
Understanding how Budget changes affect your personal finances, investments or long-term plans is crucial. The measures announced may create both challenges and opportunities, depending on your individual circumstances.
If you would like tailored advice on how the Autumn 2025 Budget could impact you — or guidance on tax-efficient investing, pensions or financial planning — please contact Chartwell Wealth Management. Our team would be pleased to help you navigate the evolving financial landscape with confidence.
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