The 2025 Autumn Budget: what it could mean for you
The Government has published its Autumn Budget, setting out plans that will shape the cost of living, wages, and household bills over the coming years. We know many people are still feeling the pressure of rising prices, so it's important to understand what these changes could mean for your day-to-day finances.
To help you understand these changes, we've pulled together the key announcements that are most likely to affect you or your family:
Income tax freeze
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From 6 April 2025, income tax thresholds and national insurance thresholds will stay the same until 2031. This means that as wages rise, more of your earnings will fall into higher tax bands. You could see less take-home pay over time, even if your salary goes up.
Wages
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The National Minimum Wage for 18 to 20 year olds will go up to £10.85 per hour, while the National Living Wage will go up to £12.71 per hour.
Welfare
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The two-child limit in Universal Credit will end in April 2026. This means families with more than two children may get more financial support, which could help with the cost of living.
Energy
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From April 2026, the ECO insulation levy and other older energy charges will be removed from bills. These costs will be paid through general taxation instead. The Government believes this will reduce the average household energy bill by around £150 a year for all households.
Pension contributions
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From April 2029, only the first £2,000 you put into your pension through salary sacrifice will be exempt from National Insurance. Anything above this amount, per year, will be taxed in the usual way.
Motability Scheme
- The Government has announced some tax changes that influence how they run the Motability Scheme. These include VAT on Advance Payments and Insurance Premium Tax. Both of these will be include on Motability Scheme leases from July 2026. This means anyone due to renew a lease from July 2026 may face increased costs for car payments or insurance.
Unsure what these changes could mean for you? We're here to support you.
You can contact our Financial Inclusion team on 0330 355 1000 or fill in a Contact Us form online . You can also get advice from your dedicated Neighbourhood Officer if you prefer.
