Autumn Budget 2025: What to expect from Rachel Reeves’ second budget

When is the Autumn Budget? 

As we head into the final months of the year, attention is turning towards one of the key economic milestones, the Autumn Budget. Scheduled for 26th November this year, the Budget is an essential part of the financial calendar, not just for policymakers and economists, but for households, businesses and advisers to understand the direction of travel.

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While every Budget matters, the stakes feel especially high this year. The economic outlook remains uncertain, government borrowing costs have rocketed, and a growing number of taxpayers are already feeling the pain from continued frozen allowances and the changes announced in last year's Budget.

So, what exactly is the Autumn Budget for, and why is it such an important event? 

Understanding the Budget’s role 

The Autumn Budget is the government’s main opportunity each year to set out its plans for taxation, public spending and economic strategy. It’s when the Chancellor outlines how the government will raise and allocate money in the year ahead, usually supported by economic forecasts from the Office for Budget Responsibility (OBR).

These forecasts cover everything from inflation and interest rates to borrowing, debt levels, and projected economic growth, all of which shape the decisions being made in the Budget itself.

The Autumn Budget is often accompanied by a Spending Review, which sets departmental budgets for the medium term, though not necessarily every year. In contrast, the Spring Statement, usually delivered in March, tends to be lighter, more of an economic update than a full fiscal event, though it can include policy changes when needed.

In recent years, the Autumn Budget has become the main fiscal moment of the year. The Spring Statement, while still useful, is generally more reflective in tone. Some recent commentary has suggested that the government may be considering a move to just one formal fiscal event per year, but as of now, the current two-event framework remains firmly in place. 

Raising revenue by stealth 

One of the most effective tools for raising revenue in recent times has been the simple decision to freeze tax thresholds and allowances, rather than increase them in line with inflation. This is often referred to as “fiscal drag” or stealth tax.

The concept is straightforward. When income tax thresholds stay fixed, but wages rise, even modestly, more people are pulled into higher tax bands. Likewise, with allowances reduced for capital gains or frozen for inheritance tax, for example, more estates and investments gains become taxable over time.

These quiet changes can bring in billions in additional revenue without altering headline tax rates, and they’ve become a central part of the government’s fiscal approach. The freeze on the personal allowance and higher-rate income tax threshold began in 2021 and is currently extended to at least 2028, with rumours this could be further extended in the coming Budget.  

For financial planning, this makes the Autumn Budget a critical event. It’s not just about new taxes or reliefs being introduced or withdrawn; it’s about understanding how existing policies evolve by, some cases, staying exactly the same.

How will the Autumn Budget affect me?

With the Autumn Budget fast approaching, attention is turning to what the Chancellor might announce this time around.

While nothing is confirmed, early speculation includes: 

• An extension of existing tax band freezes, particularly income tax and inheritance tax thresholds
• Restrictions on pension tax reliefs or changes to contribution limits
• Restrictions on the tax-free cash available from pensions, though it is important to remember when the tax-free lump sum has been reduced before, protections were put in place to ensure individuals who had already built up savings in their pensions were not disadvantaged.
• Property tax reforms, potentially around stamp duty or council tax
• ISA reforms, possible reduction in the Cash ISA allowance 

This is purely speculation at this point so it’s advisable not to make rash decisions before knowing exactly what the outcome will be. However, given the current economic environment, including sluggish growth and high debt interest costs, the government has limited room to manoeuvre, so sadly it’s wise to be prepared. Potentially, if there were financial decisions you were planning to make anyway, that could possibly be impacted by the Budget, now could be the time to make them. 

How we can help 

Whether you're a business owner, investor, retiree or employee, the Autumn Budget can affect you in ways both obvious and subtle. Whether through active policy changes or passive revenue generation via fiscal drag.

We’re following developments closely now and in the run-up to November’s announcement. We’ll be keeping these pages updated with the latest news, including on the day of the Budget with a full run down of all the announcements

In the meantime, if you’re concerned in anyway how the Budget may affect your finances, why not get in touch and see if we can help. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice.

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