Chancellor Rachel Reeves has announced her Budget, and here’s how it will affect you and your money.
INCOME TAX
Income tax thresholds and National Insurance equivalents are being frozen until 2031. That is three years longer than previously planned and means any kind of pay rise could drag you into a higher tax bracket, or you could end up paying income tax for the first time.
CARS
Electric vehicle and hybrid cars will be taxed for using the road from 2028.
EV drivers will be charged a levy per mile.
But fuel duty is frozen until September 2026.
MINIMUM WAGE/NATIONAL LIVING WAGE
From April for those on minimum wages, workers aged 21 and over on the National Living Wage will receive £12.71 an hour, up from £12.21
If you are aged 18, 19 or 20, the National Minimum Wage will increase to £10.85 an hour, and for those aged 16 and 17, the minimum wage will rise to £8 an hour, up from £7.55.
For those over 19 in the first year of an apprenticeship, pay will increase to £8 an hour.
RAIL TRAVEL
Regulated rail fares in England are frozen until March 2027
BUS TRAVEL
The bus fare cap of £3 for a single journey remains in place until March 2027.
SAVINGS
The amount of money that can be saved tax-free each year in a cash Isa will be reduced from £20,000 to £12,000 a year for the under 65s. Over-65s will still be able to save up to £20,000.
TWO CHILD BENEFIT CAP
The two-child cap will be scrapped in April 2026.
BENEFITS & STATE PENSION
Most benefits and the state pension will rise in April 2026, including the personal independence payment, attendance allowance and disability living allowance, and carer's allowance will rise by 3.8%.
State pension in April will rise by 4.8%, so for those who reached state pension age after April 2016 - will increase to £241.30 a week, an annual rise of £574.60, while the old basic state pension - for those who reached state pension age before April 2016 - will go up to £184.90 a week, a rise of £439.40
SUGAR TAX
The UK tax on fizzy drinks will be extended to milk-based products in 2028.
PRESCRIPTIONS
The cost of a single NHS prescription in England will be frozen at £9.90.
MOTABILITY
‘Luxury’ vehicles will no longer be allowed under the scheme.
ENERGY BILLS
The eco energy scheme is being scrapped, which the Chancellor says will cut £150 from the average household energy bill from April.
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