What is the Budget and when is it announced?
Chancellor Rachel Reeves is set to deliver her next Budget at the end of November – but what exactly does the fiscal event involve?


Daniel Hilton
The Autumn Budget will take place on 26 November, the Treasury has confirmed amid speculation that the chancellor’s flagship fiscal event could spell tax rises.
Whatever your wealth, the Budget will have significant implications for your personal finances.
For example, last year’s event saw a 6.7% increase to the minimum wage, as well as £40 billion worth of tax rises to balance the books and fund public services. This included the much-disliked National Insurance hike for employers.
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The precise policies that will be implemented this year remain up in the air, but the broad announcements we should expect are those around taxation and spending.
This year’s budget date is much later than usual, with Budgets typically taking place in late October or early November. This has led to some criticism.
Rebecca Williams, divisional lead of financial planning at Rathbones, said: “With the Budget now set for 26 November, it feels like a rather late fiscal event.
“But with public finances stretched thin, the delay underlines that ministers are in full-on thinking mode ahead of what is shaping up to be one of the most consequential Budgets in a generation.
“It seems inevitable that some form of tax rises – stealth or otherwise – will be unveiled as the government looks to balance the books.”
What is the Budget?
The Budget is an opportunity for the chancellor to set out the government’s plans for spending, taxation and the economy.
It typically takes place once a year, but previous chancellors have sometimes deviated from this schedule with two events. Reeves has committed to returning to just one annual Budget.
As well as announcing tax and spending policies, a key role for the chancellor is balancing the books at each Budget. Reeves’s fiscal rules prevent her from borrowing money to pay for day-to-day spending, and require her to have debt falling as a share of the economy by 2030.
Despite criticism that the self-imposed fiscal rules restrain the chancellor too much, Reeves reaffirmed on 3 September that they remain “non-negotiable”.
When chancellors balance the books, they give themselves some financial leeway – a sort of margin for error known as ‘fiscal headroom’. This is essentially the amount by which they can increase spending or cut taxes without breaking their fiscal rules.
Earlier this year in the spring, Reeves had a fiscal buffer of £9.9 billion, but analysts believe this has now morphed into a black hole due to weak economic growth, high borrowing costs and failed spending cuts. This means further tax rises look likely this autumn.
Economic forecasts are also published at each fiscal event, giving a sense of what we can expect over the next five years. One of Reeves’s main missions is to deliver growth, so she will be judged against this objective.
Who is responsible for the Budget?
As chancellor, Reeves has ultimate responsibility for the Budget and announces the main measures in a speech before parliament.
Other ministers that have a say over the Budget include Reeves’s second-in-charge, the chief secretary to the Treasury. This is now James Murray, but had been Darren Jones until he moved over to Number 10 on 1 September.
Pensions Minister Torsten Bell, who was the director of the Resolution Foundation think tank before becoming an MP, is also understood to be taking a key role in this year’s budget.
The rest of the Treasury is also closely involved in the process and publishes a report alongside each Budget statement, providing further detail on the rationale and costing behind each measure.
The Office for Budget Responsibility (OBR), the UK’s fiscal watchdog, plays a role too, as the chancellor’s Budget decisions are partly informed by data and analysis provided by them. The OBR publishes its economic and fiscal outlook on the same day as the Budget is delivered.
After the Budget statement, MPs may be required to approve immediate changes to some taxes, such as alcohol and tobacco duties. A four-day Commons debate usually follows, after which MPs are asked to agree ‘ways and means’ resolutions to approve further tax proposals.
The last step is the Finance Bill, which gives permanent legal power to the measures introduced in the Budget. The Finance Bill often acts as a motion of confidence in the government – if it cannot pass key measures in the bill, it could be at risk of collapse.
What happens on Budget day?
The Budget will take place on Wednesday 26 November, with the chancellor delivering her statement at around 12.30pm, after Prime Minister’s Questions.
The shadow chancellor – currently Conservative MP Mel Stride – follows afterwards with his response to the policies announced.
Another key moment on Budget day is the photo opportunity before the statement to parliament. The chancellor famously poses in front of 11 Downing Street with the little red box.
What could be announced in the 2025 Autumn Budget?
Weak economic growth and high borrowing costs could mean more painful decisions this Autumn. Research provider Pantheon Macroeconomics thinks the £9.9 billion fiscal buffer Reeves had back in March could now have morphed into a £20 billion “black hole”.
Unless the economic backdrop improves drastically, this leaves Reeves with two options – to raise taxes or cut spending. Spending cuts have proved difficult so far, with the government forced into U-turns on both benefit cuts and Winter Fuel Payments.
“The Budget could bring any number of potential tax hikes. Each one will have a major impact on anyone affected, and some could hit millions of people,” said Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown.
The latest rumours have focused on property taxes, as well as potential inheritance tax reforms. Some also think Reeves could extend the freeze on income tax thresholds to boost the government’s coffers, leaving taxpayers exposed to fiscal drag.
As Coles points out, second-guessing which policies will come up isn’t always helpful, as it leads to knee-jerk reactions. However, there are some sensible steps households may already be considering as part of their ongoing financial planning.
Boosting your ISA and pension contributions is almost always a good idea, if you can afford it, as these wrappers are tax efficient.
“A stocks and shares ISA will protect you from any potential tweaks to things like capital gains tax and dividend tax, while if you’re making income from savings interest, you can use a cash ISA to protect as much as possible from income tax,” Coles said.
She also suggests checking whether your employer operates a salary sacrifice scheme. This allows you to swap a portion of your salary for an equivalent benefit, like a pension contribution. It helps both you and your employer pay less tax.
Most people underestimate how much they will need for retirement, so you are unlikely to regret putting more money into your pension pot.
Salary sacrifice can also be a good option for higher earners once they start to lose certain means-tested payments like Child Benefit, as it could help reduce your salary below the threshold without actually leaving you worse off overall.
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Katie has a background in investment writing and is interested in everything to do with personal finance, politics, and investing. She enjoys translating complex topics into easy-to-understand stories to help people make the most of their money.
Katie believes investing shouldn’t be complicated, and that demystifying it can help normal people improve their lives.
Before joining the MoneyWeek team, Katie worked as an investment writer at Invesco, a global asset management firm. She joined the company as a graduate in 2019. While there, she wrote about the global economy, bond markets, alternative investments and UK equities.
Katie loves writing and studied English at the University of Cambridge. Outside of work, she enjoys going to the theatre, reading novels, travelling and trying new restaurants with friends.
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