Autumn Budget unveiled £40bn of tax rises and froze IHT thresholds until 2030

Rachel Reeves' Autumn Budget included £40bn of tax rises and a freeze on inheritance tax (IHT) thresholds until 2030, according to Which?¹. The Budget also clamped down on IHT reliefs for farms and businesses¹. The Chancellor is due to give a Spring Forecast statement in the House of Commons on 26 March, alongside a forecast from the Office for Budget Responsibility (OBR)¹.

The government says the Spring Forecast will simply offer an update on the state of the nation's finances, and the official Treasury line is that there will only be one "major fiscal event" each year, the Autumn Budget¹. On paper it is not another Budget and should not feature major economic changes¹. Speculation has nonetheless grown that Reeves could use the event to announce new measures¹.

Reported speculation about possible changes includes extending the planned freeze on income tax thresholds beyond 2028. Thresholds were frozen by the previous government in 2021-2022, and the Chancellor said in the Autumn Budget that they would rise in line with inflation from April 2028¹. Extending the freeze could raise as much as £4bn a year, according to the Institute for Fiscal Studies¹. Other reported speculation covers IHT gifting rules, where gifts are currently IHT-free if the donor lives at least seven years after making them, with some outlets suggesting the period could extend to 10 or even 15 years¹. There has also been speculation that the investment industry is lobbying to push savers towards stocks and shares Isas, with potential changes including reducing the annual tax-free allowance on cash Isas, possibly to £4,000, or adjusting the personal savings allowance¹. Isas currently allow people to save up to £20,000 a year without paying tax on the interest¹. The lifetime Isa could also be reformed; the Treasury Committee has launched a review into whether Lisas are fit for purpose, weighing potential recommendations including raising the property purchase price limit and ending the early withdrawal penalty¹.

Why it matters for households

The IHT threshold freeze runs until 2030, so the point at which estates start paying inheritance tax stays where it is while asset values may rise¹. The Budget's clampdown on IHT reliefs for farms and businesses affects those relying on those reliefs¹. The income tax threshold freeze already in place is due to end in April 2028, when thresholds would rise in line with inflation; any extension would change when earners move into higher bands¹. For savers, the cash Isa allowance and the personal savings allowance are the figures that would move if the reported speculation became policy, and the lifetime Isa's 25% government bonus and property purchase limit are the terms under review by the Treasury Committee¹. None of these reported changes has been announced.

What happens next

The Spring Forecast statement is due in the House of Commons on 26 March, alongside the OBR forecast¹. The Treasury Committee's review of lifetime Isas is ongoing¹.