Autumn 2025 Budget Summary

On Wednesday 26 November 2025, Chancellor of the Exchequer Rachel Reeves delivered the Autumn Budget to Parliament, unveiling fiscal measures worth up to £26 billion designed to strengthen public finances and fund core government priorities.

The Budget introduced key changes affecting income tax thresholds, property income taxation, savings, and pension salary sacrifice schemes. Here is an overview of the headline announcements.

Income Tax Threshold Freeze Extended

The Chancellor announced that the freeze on personal tax thresholds will be extended by three additional years, remaining frozen until April 2031:

• Personal Allowance: Frozen at £12,570.
• Basic Rate Band: Remains at £37,700, keeping the higher rate 40% threshold at £50,270 for individuals with the standard personal allowance.
• Additional Rate Threshold: Maintained at £125,140.
• National Insurance Alignments: The NICs Upper Earnings Limit and Upper Profits Limit remain aligned to the higher rate threshold of £50,270 until April 2031.

New Tax Rates on Property & Savings Income

To rebalance the tax system, the Chancellor announced distinct tax rates for unearned income:

• Property Income Rates: Separate income tax rates will apply to rental property income from 2027/28: 22% for basic rate taxpayers, 42% for higher rate taxpayers, and 47% for additional rate taxpayers. The £1,000 property allowance remains available.
• Dividends and Savings Income: Marginal increases were outlined for taxation of dividend receipts and savings interest above available tax-free allowances.

Pension Salary Sacrifice & High-Value Property

The Budget introduced targeted measures on remuneration planning and high-value residential property:

• Salary Sacrifice Pension Contributions: Both employee and employer National Insurance contributions will apply to salary sacrifice pension contributions exceeding £2,000 per year.
• High-Value Home Levy: A dedicated annual tax is introduced on residential properties valued at £2 million or more.

Social Measures & Cost of Living

Alongside tax increases, the Chancellor detailed targeted public support including targeted action on household energy bills, a freeze on rail fares, and reforms to the two-child benefit cap.