Wed, 26 Nov 2025

Wed, 26 Nov 2025 Isas, cars and pensions: How the Budget affects you

The Budget delivered by Chancellor Rachel Reeves will affect you and your finances. Here's how.

* Income tax thresholds will remain frozen until 2031, meaning pay rises could drag you into a higher tax bracket.
* VAT remains unchanged, so it may hit low-income earners harder.
* Electric vehicle drivers will be charged per mile from 2028, with rates increasing each year in line with inflation (3p/mile for EVs, 1.5p/mile for plug-in hybrids).
* The 5p cut in fuel duty on petrol and diesel is extended until September 2026.
* Council tax surcharge: properties valued at £2m or more in England will face a levy from April 2028 (rising to £7,500 for properties over £5m).
* Levies on energy bills are being cut, lowering bills by £150/year.
* Regulated rail fares in England are frozen until March 2027.
* Bus fare cap remains at £3/single journey until March 2027.
* Cash Isa limit reduced to £12,000/year for under-65s (pensioners can save up to £20,000).
* Help to Save scheme extended from 2028.
* Savings income tax rates increased by 2% in April 2027 (22%, 42%, and 47% respectively).
* Universal credit: two-child cap scrapped in April 2026, benefiting many thousands of parents with three or more children.
* Salary sacrifice pension scheme limit reduced to £2,000/year from April 2029.
* Higher tax burden on landlords expected to lead to higher rents for tenants.
* Lifetime Isa replaced by new savings product concentrating on first-home saving rather than retirement.
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