The Autumn Budget 2025 brings a mix of freezes, phased changes and targeted reforms across the UK tax and savings landscape. While some headline rates remain untouched, other adjustments, especially those affecting income brackets, investments and property, will influence financial planning over the coming years.
Below, we’ve summarised the key announcements and what they may mean for individuals, households, and business owners.
Income Tax Rates: No Changes
The government has confirmed that both income tax rates and thresholds remain unchanged for the year ahead.
However, this freeze ties into the significant policy below.
Personal Tax Thresholds Frozen Until 2030/31
The freeze on personal tax thresholds has been extended for another three years, meaning they will remain static until the start of the 2030/31 tax year.
Current thresholds:
- Personal Allowance: £12,570
- Basic Rate: £12,571 – £50,270
- Higher Rate: £50,271 – £125,140
- Additional Rate: £125,140+
Impact:
With earnings likely to rise over time, more individuals will be drawn into paying higher rates, a phenomenon known as fiscal drag.
National Insurance: No Changes
There are no changes to National Insurance thresholds or rates.
Employees, employers and the self-employed will continue to pay NI at the same levels as in the current tax year.
VAT: No Changes to Threshold or Rate
The VAT regime remains stable for another year:
- No change to the compulsory VAT registration threshold
- No increase in the standard VAT rate
This will be reassuring to small businesses who may have anticipated adjustments following recent economic fluctuations.
State Pension Increases
Both the New and Old State Pensions will rise in line with government commitments:
- New State Pension: £230.25 → £241.30
- Old State Pension: £176.45 → £184.90
These changes help pensioners meet rising living costs.
National Minimum Wage Increases
From the next financial year:
- Ages 18–20: £10 → £10.85
- National Living Wage: £12.21 → £12.71
This uplift boosts take-home pay for younger workers and lower-income earners. Employers should budget accordingly for rising payroll costs.
ISA Allowance Reforms (From April 2027)
A major structural change to ISA allocation has been announced:
- Annual ISA limit remains £20,000, but…
- £8,000 of this will be reserved exclusively for investment ISAs
- Only £12,000 can go into a cash ISA
Exception:
Individuals aged 65 or over will still be allowed to put the full £20,000 into a cash ISA.
This reform may encourage long-term investing over cash savings.
Electric Vehicle Mileage Charge (From April 2028)
A new 3p per mile charge will apply to electric and plug-in hybrid vehicles.
As EV adoption grows, this marks the start of a new tax framework intended to replace fuel-based revenue.
Corporation Tax: No Changes
The headline rate of corporation tax remains unchanged.
Businesses can continue to plan with stability in this area.
Tax Increase on Dividends, Rental Income & Savings Income
A phased rise affects individuals with investment and property income:
- April 2026:
Dividend tax increases by 2% for basic and higher-rate taxpayers. - April 2027:
Taxes on rental income and savings income increase by 2% for all taxpayers.
Investors, landlords and higher-yield savers should prepare for reduced net returns.
What This Means for You
The Autumn Budget 2025 brings fewer immediate shocks but introduces long-term shifts that could influence your financial position:
- Tax thresholds frozen until 2030/31 may pull more earners into higher bands
- Dividend and rental income taxation rises could reduce returns for investors
- ISA reforms may change how savers allocate capital
- Minimum wage increases affect both employees and employers
- Stability in NI, VAT and corporation tax provides consistency for budgeting
At Albon Financial, our role is to help you navigate these changes confidently and strategically.
Plan Ahead With Expert Guidance
Whether you want to optimise your tax planning, review your investment approach, or understand how these reforms affect your business, we’re here to help.
If you would like to discuss your own financial goals or arrange a review, please get in touch with the team at Albon Financial Planning.
Risk Warnings
The value of investments can fall as well as rise and you may not get back the amount originally invested
A pension is a long term investment the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
ISA
An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested
Tax
Taxation is not regulated by the Financial Conduct Authority.
Regulatory and Companies House Statement
Albon Financial Planning Ltd is an appointed representative of 2plan wealth management Ltd which is authorised and regulated by the Financial Conduct Authority. Albon Financial Planning Ltd is entered on the FCA register (www.FCA.org.uk) under no. 1018192. Registered office: Office 89, 86 Bancroft, Hitchin, Herts. SG5 1NQ. Registered in England and Wales Number: 15645059.