Here is a roundup of all the key points, including tax changes from the Autumn Budget 2025.
Personal Taxation & Savings
Income tax & NI thresholds
Personal tax thresholds and the National Insurance contributions secondary threshold will remain frozen at their current levels for a further 3 years, until April 2031.
Cash ISA allowance to be reduced
- New cash ISA allowance limit: From 6 April 2027, the maximum amount you can pay into a Cash ISA each tax year will be reduced from £20,000 to £12,000, but there will be an age exemption.
- Age Exemption: This reduction applies only to savers under the age of 65. Individuals aged 65 and over will retain the full £20,000 allowance for Cash ISAs, protecting their ability to hold larger sums in cash tax-free.
- The overall annual ISA subscription limit will remain at £20,000: This means that while under-65s are capped at £12,000 in cash, they can still use the remaining £8,000 of their allowance, but it must be invested in other ISA types, such as Stocks and Shares ISAs. The overall ISA £20,000 limit, along with the limits for Junior ISAs (£9,000) and Lifetime ISAs (£4,000), will be frozen at these levels until 5 April 2031.
Lifetime ISA to be replaced
The government will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first-time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA.
Help to Save scheme to be made permanent and expanded
The Help to Save scheme is a government-backed savings account for people on certain benefits (currently Working Tax Credit or Universal Credit with some earnings). The scheme offers a generous 50% bonus on savings, which can potentially add up to £1,200 in tax-free cash over four years. In the Budget the government announced that it will make the Help to Save scheme permanent and, from April 2028, will expand eligibility to include all Universal Credit claimants who receive the child element, the caring element or both.
Increased income tax rates on savings & investment income
The government is introducing new specific tax rates starting April 2026 and April 2027:
- Dividends: Tax rates will increase by 2 percentage points from April 2026.
- Savings: Tax rates will increase by 2 percentage points from April 2027.
- Property: Separate tax rates will be created for property income from April 2027: 22% (basic), 42% (higher), and 47% (additional). This will negatively impact landlords.
Inheritance Tax: Transferable relief allowance
While the main reforms to Agricultural and Business Property Relief were previously announced, the Budget adds a new provision allowing the £1 million allowance for 100% relief to be transferable between spouses and civil partners, preventing the allowance from being "wasted" on the first death. The allowance has been increased to £2.5 million in a statement issued on the 23 December 2025.
Property
New mansion tax
A new annual surcharge will be levied on residential properties in England worth over £2 million starting from 1 April 2028, following a revaluation of homes in bands F, G and H. This effectively acts as a "mansion tax", but is officially called the High Value Council Tax Surcharge. The new surcharge will be between £2,500 and £7,500 a year.
Wages, Benefits & Pensions
The government revealed a number of changes to wage, benefits and pension, most of which had been leaked ahead of the official announcement.
Scrapping of the Two-Child Limit in Universal Credit
The government announced it will remove the two-child limit on the Child Element of Universal Credit from April 2026.
Employer National Insurance on salary sacrifice
From 6 April 2029, the government will cap the National Insurance relief on salary sacrifice pension contributions. Employer and employee NICs will be charged on any contributions made via salary sacrifice that exceed £2,000 per year, targeting a relief that disproportionately benefits higher earners.
State Pension & Pension Credit
The government confirmed its commitment to the Triple Lock for the duration of this Parliament, ensuring pensions rise by the highest of inflation, earnings growth, or 2.5%.
- State Pension Increase: From April 2026, the State Pension will increase by 4.8% (in line with average earnings growth).
- New State Pension: The full rate will rise to approximately £241.30 per week (up from £230.25).
- Basic State Pension: The full rate will rise to approximately £184.90 per week (up from £176.45).
- Pension Credit: The Standard Minimum Guarantee for Pension Credit will also increase by 4.8% from April 2026.
National Living Wage & Minimum Wage
From 1 April 2026, statutory wage rates will increase, with larger percentage hikes for younger workers to narrow the gap with the main rate.
- National Living Wage (21+): Increases by 4.1% to £12.71 per hour.
- 18-20 Year Old Rate: Increases by 8.5% to £10.85 per hour.
- 16-17 Year Old Rate: Increases by 6.0% to £8.00 per hour.
- Apprentice Rate: Increases by 6.0% to £8.00 per hour.
Cars & transport
New Electric Vehicle Excise Duty (eVED) mileage charge
The government has announced the specific mechanism for taxing electric vehicles: a new mileage-based charge for electric and plug-in hybrid vehicles starting from April 2028. Drivers will pay a per-mile fee (set at roughly half the rate of fuel duty) alongside their annual Vehicle Excise Duty.
Fuel Duty reversal plan
The existing 5p cut is extended until August 2026, but the government has set a fixed timeline to reverse it. Rates will rise by 1p in September 2026, 2p in December 2026, and 2p in March 2027, gradually returning fuel duty to pre-2022 levels.
Rail fares freeze
Regulated rail fares in England will be frozen for one year starting March 2026, marking the first such freeze in 30 years to support commuters.
Motability tax relief reform
Tax reliefs for the Motability scheme are being tightened to target essential needs. From July 2026, VAT will apply to "top-up" payments for expensive vehicles, and Insurance Premium Tax will apply to insurance contracts within the scheme.
Bills
To help tackle the cost of living and bring down inflation, the Chancellor revealed a package of measures designed to cut household energy bills by an average of around £150 from April 2026. This saving will be achieved by removing the Energy Company Obligation cost from bills entirely and by the Exchequer funding 75% of the domestic cost of the legacy Renewables Obligation for three years, effectively shifting these "green levy" costs from bill-payers to general taxation.
Business taxes
Removal of customs relief for low-value imports
To protect high street retailers from unfair competition, the customs duty relief for goods valued at £135 or less will be scrapped by March 2029. This ensures overseas online sellers can no longer import low-value goods tax-free.
Gambling Duty hikes
Remote Gaming Duty will increase to 40% from April 2026, and a new Remote Betting Rate of 25% will be introduced in April 2027.
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