Autumn Budget 2025: What we know so far

The Autumn Budget is usually the largest fiscal event of the year, laying out the government’s taxation and spending priorities for the coming year.

Chancellor Rachel Reeves will deliver her second Budget at around lunchtime on 26 November, after Prime Minister’s Questions.

The economic backdrop to this Budget is dreary to say the least. Labour, who were elected on a platform of boosting the economy, have found economic growth to be more elusive than they perhaps first hoped.

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The UK economy grew by a paltry 0.1% in the three months to September, while unemployment rose to 5%, the highest level since 2021, and inflation came in at 3.6% in October.

Amid this, Reeves is under pressure to pump more investment into public services at a time when the government is running a significant deficit.

Estimates by the Institute for Fiscal Studies (IFS), an influential think tank, says the chancellor will have to fill a £22 billion hole in the public finances at the Budget just to keep the £10 billion of fiscal headroom she had in March, and to stick to her own fiscal rules.

As the chancellor’s rules stop her from increasing borrowing to meet day-to-day government spending, this budget shortfall will need to be filled by either cutting expenditure or raising taxes.

Attempts to reduce welfare spending were scuppered in June after a rebellion of Labour backbenchers embarrassed the prime minister by voting down the policy, indicating how unpopular spending cuts are within the parliamentary party.

It seems likely, then, that the chancellor will lean more heavily on taxation to raise the necessary funds.

With the Budget less than a week away, we look at what has already been announced, and what could be announced on Wednesday.

What Budget announcements have been confirmed?

Very few policies have been officially announced to be included in the Budget, but there are some.

• Prescriptions will be kept under £10
  The chancellor announced on 21 November that the freeze on NHS prescription charges in England will continue into 2026, meaning the cost of a single prescription will be kept at £9.90. The Treasury says the policy will save patients around £12 million next year.

What could be announced in the Budget?

A number of policies have been rumoured.

While none of the below policies have been officially confirmed, they could possibly be announced in the Budget.

• Further tax threshold freezes
  Instead of raising income tax or national insurance, leaks now suggest the chancellor will freeze income tax thresholds again to raise more money – this is called fiscal drag. Thresholds were already frozen by the previous Conservative government until the 2027/28 tax year, but reports suggest this will be extended by Reeves.
• Property tax hikes
  The chancellor is reportedly considering introducing a new tax on around 2.4 million high-value homes in council tax bands F, G, and H, according to the Telegraph. This is expected to be framed as a ‘mansion tax’.
• Reduced cash ISA allowance
  Rumours that the chancellor will reduce the proportion of your overall £20,000 ISA allowance that you can save in cash first emerged in February, and have rumbled on throughout 2025. The rationale is that Brits would instead divert that money into stocks and shares instead. Recent leaks suggest that Reeves will reduce the cash ISA limit to £12,000, but earlier rumours suggested it could be cut to as low as £4,000.
• Electric vehicle tax
  Reports suggest electric vehicles will be subject to a new tax that serves the same purpose as fuel duty for petrol and diesel vehicles. The levy could mean EV drivers are charged 3p per mile, according to the Telegraph.
• Salary sacrifice
  Pension contributions made through salary sacrifice are set to be targeted in the Budget, according to reports. The chancellor is expected to impose limits on how much you can stash away in your pension through the scheme before incurring national insurance payments to £2,000 a year, the Times reports.

What else could be announced?

The following policies look likely to be announced, but are less certain than the ones listed above.

• Private dentistry crackdown
  On 18 November, Reeves asked the UK competition watchdog to investigate the cost of private dental treatment amid surging prices. She said she wants to see “urgent action taken to help reduce prices”. We could see some measures to combat this in the Budget.
• Hiking dividend tax
  The Treasury is reportedly considering an increase to dividend tax to bring it more in line with income tax, possibly raising it from the current level of 8.75% to closer to the basic rate of income tax, which is 20%.
• Scrapping the two-child benefit cap
  The government is reportedly considering scrapping the two-child benefit cap. The policy means parents can only claim Universal Credit or tax credits for their first two children. Reversing the cap is a policy that has mass appeal among the parliamentary Labour party as estimates by IFS suggest scrapping the limit will take 630,000 children out of absolute poverty immediately.
• Cutting VAT on energy bills
  Rumours suggest Reeves will cut the amount of VAT due on energy bills from 5% to 0%. If this were to be implemented, energy consultancy Cornwall Insight says it could save the average household around £80 a year.
• Income tax rises
  In the previous weeks, it seemed the Treasury was suggesting income tax will rise in the Budget. They are now distancing themselves from an income tax hike, but the option is still available on Budget day.

What is confirmed not to be announced?

Amid all the leaks and rumours, there are some policies that the government has confirmed will not be implemented.

• Cut to overall ISA limit
  While a cut to the amount of cash you can save in an ISA is quite likely to be announced, the chancellor confirmed back in March that the overall £20,000 cash ISA limit will be left alone.
• Scrapping the state pension ‘triple lock’
  The government has confirmed that it is committed to the ‘triple lock’, which guarantees the state pension will rise in line with the highest of inflation, average earnings growth, or 2.5%. While questions over the long-term sustainability of the policy exist, the government has repeatedly confirmed that it will be kept in place.