Budget 2025 Reflections – What it means for you

After months of speculation, UK Chancellor Rachel Reeves delivered the Autumn Budget on 26 November, unveiling a £26 billion package of tax increases alongside targeted spending measures. Her goal was to respond to the UK’s ongoing economic pressures – stubborn inflation, rising unemployment and high interest rates – while maintaining stability and credibility with financial markets.

Reeves positioned the measures as a pragmatic step toward stabilising the economy and fostering long-term growth. With today’s Budget, the chancellor has chosen to raise taxes over increasing borrowing or cutting spending, with taxes forecast to rise to an all-time high of 38% of GDP by the end of this parliament.

What was particularly noticeable was how many of the measures the media were speculating about prior to the announcement – such as a cap on gifting and the abolition of taper relief on inheritance tax – didn’t come to pass. This highlights the importance of wealth planning based on facts rather than speculation.

Below, we set out the key announcements in a clear and practical way, focusing on what they mean for you as a client and the financial planning opportunities we can work with you to consider.

1. Income Tax: Thresholds Frozen Until 2031

Although the main rates of Income Tax, National Insurance and VAT remain unchanged, the thresholds at which people start paying these taxes will now be frozen until 2030/31. By then, thresholds will have been frozen for almost a decade.

What this means for you