See what the Autumn Budget means for you

The Government’s latest budget brings some changes that could affect your finances and living costs so we’ve brought together the key points for you to consider.

Income tax freeze

From 6 April 2025, income tax 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.

People will also pay more in National Insurance Contributions as the threshold for when you would start to pay National Insurance is also being frozen.

Two-child benefit

From April 2025, the two-child limit for means-tested benefits will be removed.

This means families with more than two children may get more financial support, which could help with the cost of living.

Work Capability Assessment (WCA)

The chancellor confirmed the Government's commitment to reforming the Work Capability Assessment (WCA), a test used for Universal Credit (UC) and Employment Support Allowance (ESA), by 2028.

The WCA will be replaced by a single assessment process similar to Personal Independence Payments. This new system will focus on how a disability affects daily living rather than a person’s capability to work.

This change is part of the Government's efforts to reduce welfare spending and encourage more people into paid work. It’s estimated that scrapping the WCA could see an increase of £390 a month in benefits for 320,000 disabled people, but a fall of £390 a month for 520,000 disabled claimants.

Energy bill changes

From April 2025, the ECO insulation levy and other older energy charges will be removed from bills. These costs will be paid through general taxation instead.

This could reduce the average household energy bill by about £150 a year for all households.

Pension salary sacrifice

From 2029, only the first £2,000 you put into your pension through salary sacrifice will be exempt from National Insurance. Anything above this amount will be taxed in the usual way.

If you use salary sacrifice to add extra money into your pension, this could mean you receive slightly less take-home pay.

Fuel duty freeze

The Government has frozen fuel duty again until at least September 2026.

This means petrol and diesel prices won’t rise because of extra tax for the next five months. After that, fuel duty will increase with inflation, ending 15 years of freezes.

If you drive regularly, this could help keep your running costs stable in the short term.

Motability vehicles

From next year, around £300 million of taxpayer support for people who use disability benefits for a Motability vehicle will be removed.

If you use Motability, this could increase your costs for car payments or insurance.

Wages

The minimum wage for 18- to 20-year-olds will go up from £10 to £10.85, while the living wage will go up from £12.21 to £12.71.

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