Chancellor delivers autumn budget 2025 with £26.6bn of tax rises by 2030/31

Rachel Reeves, the Chancellor of the Exchequer, delivered her second budget in the House of Commons on 26 November 2025¹. The budget's tax policy decisions were forecast to raise £26.6bn by 2030/31¹.

The largest revenue-raising measure is a freeze on personal tax thresholds for income tax and national insurance contributions (NICs) for employees and the self-employed for a further three years, from April 2028 until April 2031¹. This is expected to raise over £23bn in total by 2030/31: £3.4bn in 2028/29, £7.8bn in 2029/30 and £12.4bn in 2030/31¹. Maintaining the secondary threshold for employer NICs over the same period is expected to raise an additional £1.8bn¹.

Other measures include capping NICs relief on salary sacrifice into pension schemes to the first £2,000 of pension contributions per person from 2029, expected to raise £4.7bn in 2029/30 and £2.6bn in 2030/31; the government said 74% of basic rate taxpayers, and their employers, currently using salary sacrifice would be unaffected¹. Dividend tax rises by two percentage points at the ordinary and upper rate from April 2026, raising around £5.2bn to 2030/31¹. Tax on property income and savings income rises by two percentage points at the basic, higher and additional rates from April 2027, raising around £1.5bn each to 2030/31¹. Capital gains tax relief on qualifying disposals to employee ownership trusts falls from 100% to 50% from 26 November 2025, raising £3.7bn by 2030/31¹.

On spending, the two-child limit in the child element of universal credit is removed from April 2026, costing around £2.4bn in 2026/27 rising to £3.2bn in 2030/31; the government estimates this will lift 450,000 children out of poverty¹. The national living wage rises 4.1% to £12.71 per hour for eligible workers aged 21 and over¹. A cash limit of £12,000 applies within the overall £20,000 annual ISA limit, and does not apply to savers over 65¹.

The Office for Budget Responsibility published its Economic and fiscal outlook after the chancellor concluded her statement¹. It had inadvertently made the document available via its website before Ms Reeves' statement; the OBR apologised for the "technical error" and said it had "initiated an investigation into how this happened"¹.

Why it matters for households

The threshold freeze means more people are expected to pay tax, or pay at higher rates, as wages rise, from April 2028 to April 2031¹. The dividend tax rise takes effect from April 2026, and the property and savings income rises from April 2027¹. The ISA cash limit of £12,000 sits within the existing £20,000 annual allowance and does not apply to savers over 65¹. The salary sacrifice cap applies from 2029, with the government saying 74% of basic rate taxpayers using it would be unaffected¹. On the spending side, the two-child limit ends from April 2026, and the national living wage rises to £12.71 per hour¹. Further detail on how these measures operate is set out in the tax guidance.

What happens next

The House of Lords is scheduled to debate a government motion on the autumn budget on 4 December 2025, moved by Lord Livermore, a minister serving as financial secretary to the Treasury¹. The OBR's investigation into the early publication of its forecast is to be overseen by Baroness Hogg, chair of the OBR's oversight board¹.