The Autumn Budget is just a couple of weeks away, and with it will come a whole host of changes that could affect your personal finances
In just a couple of weeks, Chancellor Rachel Reeves will present her Autumn Budget, bringing with it a raft of economic shifts that could impact your wallet. On November 26, the Labour government is set to announce various alterations to income tax and other monetary matters, potentially leaving you worse off financially.
The Labour government is already facing mounting pressure regarding possible modifications, with reported rifts emerging at senior levels over a potential violation of key manifesto commitments. Labour’s deputy leader, Lucy Powell, has already cautioned that the government must honour its manifesto promise not to increase income tax, VAT, or national insurance.
Nevertheless, Ms Reeves has previously emphasised that there exists a ‘black hole’ in the country’s finances that requires addressing somehow. She has acknowledged that the choices confronting her in this situation are extraordinarily challenging and could result in some harsh measures being implemented.
During a prior Downing Street address, Ms Reeves declared: “As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control. If we are to build the future of Britain together, we will all have to contribute to that effort.
“Each of us must do our bit for the security of our country and the brightness of its future.”
Read on for a comprehensive rundown of potential changes that could be unveiled in just a few weeks….
Income tax increases
Rumours about potential tax increases to help plug the nation’s financial holes have been rife, and while the government hasn’t confirmed that taxes will go up, it’s not ruling it out. In a previous address from Downing Street, Ms Reeves highlighted that both global and local issues have led to the ‘difficult decisions’ she’ll make in the upcoming budget.
A report from The Times has disclosed that Ms Reeves informed the Office of Budget Responsibility (OBR) that a hike in personal taxation will be one of the key announcements she’s gearing up to make. In the 2024 election, Labour vowed not to raise taxes on national insurance, VAT, or income tax.
It remains unclear who will bear the brunt of any increase in personal tax, but The Times has suggested that the chancellor is contemplating a 2p rise in income tax and a 2p reduction in national insurance.
ISA review
There’s been a bit of a kerfuffle over whether the chancellor might consider slashing the annual allowance for Individual Savings Accounts (ISA). At present, adults can squirrel away up to £20,000 a year into various ISAs and enjoy tax perks.
However, according to a Financial Times report, there’s speculation that the chancellor could reduce this allowance by a substantial £10,000 a year, effectively halving the amount people can save. That said, it’s also been suggested that this cut could be less severe, with a reduction of £8,000 instead.
Fuel duty rise
Since 2011, fuel duty has remained static at 57.95p per litre, accompanied by a 5p per litre discount that has been in place since 2022. This discount got an extra year’s lease on life in the 2024 Autumn Budget.
However, there’s chatter that this discount could be discontinued as it’s set to expire in March 2026. This would essentially bump up fuel prices by 5p per litre.
Still, it’s not yet set in stone that the discount will be totally axed, and the government might opt for a slight trim of a few pence instead.
New charges for electric vehicle drivers
Electric vehicle (EV) drivers could be hit with a new tax in the Budget, following comments from a government spokesperson to the BBC about wanting to introduce a ‘fairer system for all drivers’. This would effectively lump EV drivers in with those who drive petrol and diesel vehicles.
The Daily Telegraph also reported that the Budget might introduce a new pay-per-mile charge for electric vehicles, starting from 2028. Speculation is rife that EV drivers could be slapped with a 3p per mile charge, on top of other road taxes.
Hybrid drivers could face a similar charge but at a reduced rate. This comes despite the government’s ongoing push for motorists to switch to EVs, having already invested £4bn, including grants to reduce the upfront costs of eligible vehicles by up to £3,750.
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