Rachel Reeves delivered her first Budget earlier today, here is how the announcements made will affect your life.
DWP benefits set to rise by 1.7% in April 2025
Universal Credit is set to rise by 1.7 percent in new plans unveiled by the Chancellor during this afternoon’s Autumn Budget.
A number of other Department for Work and Pensions (DWP) benefits, such as Attendance Allowance and PIP will also rise by the same figure.
Benefits are usually uprated every April based on inflation statistics from the previous September. This year, the Consumer Price Index (CPI) inflation rate increased by 1.7 percent.
State pensioners will gain up to £470
State pensioners are to receive a 4.1 percent boost to their payments from April next year, with the full new state pension increasing by more than £470 a year.
Chancellor Rachel Reeves has confirmed in her Autumn Budget today (April 30) that payments will go up in line with the triple lock, with the full new state pension going up from £221.20 a week to £230.30 a week, an increase of £473.60 a year.
National Insurance contributions rise by 1.2% for employers
National Insurance (NI) contributions for employers are set to rise by 1.2%.
Employers currently pay NI at 13.8% on all workers’ earnings over £175 per week. Chancellor Rachel Reeves has announced that this rate will increase to 15% when the new tax year begins in April 2025.
Rachel Reeves raises Carer’s Allowance weekly limit
The Chancellor has announced a significant raise in the weekly limit of Carer’s Allowance.
The Chancellor announced that the weekly earning limit for Carer’s Allowance will be increased to the equivalent of 16 hours at the national living wage per week.
Currently, Carer’s Allowance, which is claimed by around 1.4million people in the UK – is worth £81.90 a week.
Capital Gains Tax increased
The rate of Capital gains tax will rise and more closely align with income tax rates.
The rates will rise for Basic-rate taxpayers from 10 to 18 percent on most assests and 20 to 24 percent for residential property, maintaining higher rates at 18 and 24 percent.
Inheritance tax freeze extended until 2030
Inheritance tax thresholds will remain frozen until 2030, Chancellor Rachel Reeves has confirmed in her Autumn Budget.
Under the current rules, an individual can pass on up to £325,000 in assets with no inheritance tax to pay.
Any unused allowance can be passed to a spouse or civil partner when you a die, meaning there is an effective £650,000 tax-free threshold when the second partner dies.
Beer duty in pubs slashed
Rachel Reeves has announced the Government will cut draught duty by 1.7%, which means “a penny off a pint in the pub”.
The Chancellor told the Commons: “I can confirm that alcohol duty rates on non-draught products will increase in line with RPI from February next year, but nearly two-thirds of alcoholic drinks sold in pubs are served on draught.
“So today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7%, which means a penny off a pint in the pub.”
Rachel Reeves maintains Tory freeze on income tax thresholds
The Chancellor has announced that the Government will be maintaining the freeze on Income tax thresholds until 2028.
This move will see people pulled into paying higher rates through a process known as “fiscal drag”
Charlene Young, pensions and savings expert at AJ Bell previously described the decision to continue the tax threshold freeze as “tantamount to raising tax by the back door”.
Stamp duty change
Second-home buyers face a stamp duty land tax surcharge rise of two percentage points – to 5% – starting from Thursday.
Chancellor Rachel Reeves pledged during her Budget: “This will support over 130,000 additional transactions from people buying their first home, or moving home, over the next five years.”
Winter fuel payment axe for millions confirmed
The Winter Fuel Payment will remain means-tested, meaning 10,000,000 pensioners face losing the vital benefit, after Chancellor Rachel Reeves failed to U-turn on the policy in her Autumn Budget.
The Winter Fuel Payment, distributed by the Department for Work and Pensions (DWP), helps pensioners with heating bills during the winter, providing between £100 and £300 to those who meet the criteria.
