Autumn Budget IPFA
The Autumn Budget 2025 introduced a number of updates that may affect how income, savings, pensions and property are taxed in the coming years. While some measures have been widely discussed, others are less visible but still important for households to understand. This blog provides a quick and easy guide to the key announcements so you can stay informed about what has changed and how these updates may relate to your personal financial situation.
Income Tax and National Insurance
The government confirmed that the personal allowance and the higher rate threshold for Income Tax will remain frozen until 2031. National Insurance thresholds will remain unchanged over the same period. Although tax rates have not increased, frozen thresholds can influence how much tax individuals pay as incomes change over time.
Impact
Individuals may see changes in their tax position, particularly if earnings rise in the coming years. The effect will vary depending on income levels, pay increases and personal circumstances.
Changes to Pension Taxation
The Budget included updates to the tax treatment of pensions. New limits will apply to salary sacrifice arrangements, and from April 2027 certain pension assets may fall within the scope of Inheritance Tax. These updates form part of the government’s wider programme of pension reform.
Impact
The way pension benefits are taxed may change for some individuals, depending on the type of pension arrangements they hold. The level of impact will vary from person to person.
Capital Gains Tax Changes
From April 2026, the rate applied to qualifying gains under Business Asset Disposal Relief will increase from 14 percent to 18 percent. This applies to gains from the disposal of qualifying business assets, shares and certain types of business property.
Impact
Individuals selling qualifying business assets may experience a different tax rate from April 2026. The effect depends on the type of asset sold and the timing of the disposal.
Property Tax Changes
A new High Value Council Tax Surcharge will apply to residential properties worth more than two million pounds. The Budget also outlined tightening of certain reliefs for individuals who own multiple properties or large rental portfolios.
Impact
Property owners with higher value homes may see an increase in annual costs. Those with second homes or rental properties may also experience changes depending on how local authorities apply valuation criteria.
State Pension Triple Lock
The government confirmed that the State Pension triple lock will continue. This means payments will rise in line with the highest of wage growth, inflation or 2.5 percent.
Impact
State Pension income will increase under the triple lock formula. The exact uplift will depend on the data used at the time of calculation.
National Insurance and Landlords
The Budget did not introduce National Insurance on rental income. However, the government highlighted the intention to continue reviewing how different forms of income are treated within the tax system.
Impact
There is no immediate change for landlords, although impacts may arise in future depending on policy developments.
Broader Pension System Reforms
Alongside tax changes, the Budget confirmed ongoing reforms to pension scheme reporting, consolidation and transparency. These measures aim to strengthen the governance of pension schemes and update regulatory oversight.
Impact
Pension schemes may adjust how information is presented to members. The effect on individuals will depend on their specific scheme.
Corporation Tax
Corporation Tax will remain at 25 percent for the remainder of the Parliament. The government highlighted this as part of its long term plan for a stable business tax environment.
Impact
The continuation of the current rate may influence business planning, although the financial effect will vary depending on profitability and operating costs.
New Taxes and Levies
The Budget introduced increases to online gambling taxes, extended the soft drinks industry levy and confirmed a future per mile charge for electric vehicles. These updates reflect changes in consumer behaviour and the government’s revenue strategy.
Impact
Individuals and businesses in affected sectors may see changes to operating or personal costs based on usage and activity levels.
ISA Allowance Changes
The total annual ISA allowance remains £20,000 and will stay frozen until April 2031. However, from April 2027, only those aged 65 and over will be able to place the full £20,000 into a Cash ISA.
For individuals under 65, the Cash ISA allowance will be limited to £12,000. The remaining £8,000 of the annual allowance must be invested in a Stocks and Shares ISA.
How it impacts Impact
This reduction may influence how individuals structure their savings and investments, depending on personal circumstances. Those approaching retirement may experience different impacts depending on existing arrangements.
Dividend Income Tax Increase
The tax rate applied to dividend income will increase by two percentage points from April 2026. The basic rate will rise to 10.75 percent and the higher rate to 35.75 percent. The additional rate will remain at 39.35 percent.
Impact
Individuals receiving dividend income may experience changes to their net returns once the new rates apply. The effect will vary depending on the level of dividend income received.
Savings Income Tax Increase
From April 2027, the tax rate applied to savings income will increase by two percentage points. This applies to interest from savings accounts, fixed income products and other interest-bearing investments.
Impact
Those who receive interest on savings may see a change in their net income. The impact will depend on the amount of interest received and each person’s tax position.
Energy Bill Cost Adjustments
The government confirmed that certain legacy energy policy costs will be removed from household bills from April next year. This is expected to reduce average domestic energy costs.
Impact
Lower energy costs may influence household budgeting, especially for those on fixed or lower incomes.
Minimum Pension Age Reminder
The government reiterated the previously legislated increase of the Normal Minimum Pension Age to fifty seven in 2028.
Impact
Individuals planning to access their pensions around this time may find their earliest access age changes depending on their personal circumstances and scheme rules.
Minimum Wage Update
The National Living Wage will increase to twelve pounds seventy one per hour from April 2026. Rates for younger workers will also rise.
Impact
Individuals earning the minimum wage will receive higher pay, while employers may experience higher payroll costs depending on the size and makeup of their workforce.
Final thoughts
The Autumn Budget 2025 introduced a wide range of tax, pension and savings updates that may influence household finances over the coming years. The effect of each change will depend on individual circumstances, income levels and financial arrangements. For those who wish to understand how these measures relate to their personal financial position, professional advice may be helpful.
The tax treatment is dependent on individual circumstances and may be subject to change in future.
The value of units can fall as well as rise, and you may not get back all of your original investment.
A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Approved by In Partnership FRN 192638 December 2025