The Autumn Budget 2025.
Comments Off on The Autumn Budget 2025.The Autumn Budget 2025.
This week’s 2025 UK Budget announcement from Chancellor Rachel Reeves sets out several significant changes that will shape the financial landscape for households across the country.
As a community-focused credit union, we’re looking closely at what these measures mean for our members and how we can continue to support them in the months ahead. Here are the key developments:
The controversial two-child benefit cap – which prevented parents from claiming universal credit or tax credits for more than their first two children – has been abolished, offering relief to many families with a move which is expected to lift around 450,000 children out of poverty. This is good news for our members with more than two children, as they will now benefit from increased financial support.
Income tax thresholds will be frozen until the 2030-31 tax year, meaning more people will have to pay the tax for the first time, while others will need to pay a higher rate as wages rise. For our members in employment, this may mean they find themselves paying more tax than before, resulting in less expendable income, as rising wages move them into a higher tax bracket. And those who are drawing a pension may find they have to pay more tax on their income.
There’ll be an increase of £440 per year for the basic state pension and an increase of £575 per year for the new state pension.
A new £2,000 cap has been placed on the amount people can put into private pension pots through salary sacrifice schemes, before it incurs tax. From 2029, anything above the new £2,000 limit will incur national insurance contributions.
The annual cash Isa limit will be reduced from £20,000 to £12,000 to encourage more people to invest their money in stocks and shares instead.
Drivers of electric vehicles (EVs) will have to pay 3p for every mile they drive under a new tax which has been introduced to make up for falling revenues from fuel duty, as more motorists move towards EVs. A cut to fuel duty, on the other hand, will be extended to keep down the price of petrol at the pump.
The levy on ‘remote gaming’ – which includes online gambling – will increase from 21% to 40% next year to “reflect the levels of harm they inflict”.
Rail fares have been frozen for a year – for the first time in 30 years – in a move that is expected to save millions of rail travellers hundreds of pounds off season tickets, peak and off-peak returns between major cities.
The Motability scheme, which helps disabled people with the cost of a car, will meanwhile no longer offer “luxury vehicles”.
At LCU, we believe we are ideally placed to help people plug any gaps in their finances caused by the Budget through our range of affordable loans and access to a variety of savings accounts, and we will continue to adapt our products and support services to ensure members can navigate these changes with confidence.
We’ll continue to monitor developments and keep our community informed as further details emerge.