What the Budget means for you and your money

Chancellor Rachel Reeves is announcing her budget, but details were already published by the official forecaster.

It is full of policies that will directly impact you and your finances.

Here are the key measures and how they will impact you and your money.

The amount of income on which we pay different rates of income tax is called tax limits -There will be no increase in line with rising prices.

Instead they will remain frozen until 2031. This is three years more than previously planned, and one year more than the pre-budget estimate.

This means that any type of salary increase may pull you into a higher tax bracket, or your income may be taxed at a higher proportion than expected.

A longer pause could mean more than a million people paying income tax and create hundreds of thousands of new higher rate taxpayers.

Scotland has its own income tax rates.

You may not earn enough to pay income tax, so the VAT paid when purchasing goods and services, may impact you more and is left unchanged.

The government subsidizes the purchase of new electric vehicles – or EVs – but they will also tax EV and hybrid car drivers for road use.

EV drivers will be charged a per mile fee, in addition to other road taxes new road pricing From April 2028.

The number of miles driven by drivers is difficult to calculate.

Elsewhere on the streets, fuel charge This has been stopped since 2011 and will continue.

The Chancellor confirmed an April rise for those minimum wage,

This means:

• Eligible workers aged 21 and over on the National Living Wage will receive £12.71 an hour, up from £12.21, an increase of 4.1%.
• If you’re aged 18, 19 or 20, the national minimum wage will increase by £10 to £10.85 an hour, an 8.5% increase.
• For those aged 16 or 17, the minimum wage will rise from £7.55 to £8 an hour, an increase of 6%.

The separate apprenticeship rate that applies to eligible people under the age of 19 – or those over the age of 19 in the first year of an apprenticeship – will also increase from £7.55 to £8 an hour.

The burden of these increases falls on employers, who may need to cut other costs or raise prices as a result.

With the minimum wage gap between younger and older workers narrowing, there have been suggestions that bosses may be more inclined to hire older people who are more likely to stay. This may affect the job prospects of young workers.

Anyone who lives in a home worth £2million or more in England will face a council tax surcharge from April 2028.

There will be four price bands with the surcharge increasing from £2,500 for a property priced in the £2m to £2.5m band, to £7,500 for a property priced in the highest band priced at £5m or more.

While known as the mansion tax, it can also capture homes in expensive areas, and will be levied on around 100,000 properties, mainly in London and South East England.

The move will require assessments of homes in the top council tax bands – F, G and H – for the first time since 1991.

If you’re in England and Wales, Scotland and Northern Ireland you can see your council tax band here.

regulated train fare In England they will be frozen until March 2027 – the first time they have been left unchanged for 30 years.

These fares include season tickets covering most passenger routes, some off-peak return tickets on long distance journeys and flexible tickets for travel in and around major cities.

The pause only relates to travel in England, and also only applies to services operated by England-based train operating companies.

Train operators are free to set prices for irregular fares.

A bus fare cap of £3 for a single journey covering most bus journeys in England is already in place until March 2027.

Currently, parents can only claim Universal Credit or tax credits for their first two children.

A total of 1.6 million children living in large families are not able to claim these means-tested benefits as a result.

This is what the Chancellor says baby hat It will be finished in April next year.

According to the Institute for Fiscal Studies, an independent economic think tank, about 630,000 children will be lifted out of poverty in the coming years.

One third of private sector employees and one tenth of public sector employees use it salary sacrifice plan For their pension savings.

These employees give up a portion of their salary in exchange for their employer paying an amount equal to their pension. The benefit for both employer and employee is that they save on National Insurance.

A cap of £2,000 per year on the amount that can be put into a pension through this salary sacrifice arrangement will come into effect from April 2029.

Employees will still get income tax relief on their pension contributions, but some argue the move will reduce pension savings incentives.

Some? benefitsWhich includes all core disability benefits, such as Personal Independence Payment, Attendance Allowance and Disability Living Allowance, as well as Carer’s Allowance, which will increase by 3.8% in April in line with rising prices.

There will be a number of changes to Universal Credit in April, following earlier announcements by the Government.

state pension There will be a corresponding increase of 4.8% in average wages in April, which means:

• The new flat-rate state pension – for those reaching state pension age after April 2016 – will increase by £241.30 per week or £12,547.60 per year, an increase of £574.60
• The old basic state pension – for those who reached state pension age before April 2016 – will increase by £184.90 per week or £9,614.80 per year, an increase of £439.40

In general, you need 35 years of qualifying contributions to receive the full state pension.

This brings state pensions closer to being subject to income tax – a source of some debate. It would also reignite the discussion on the “fairness” of the so-called triple lock.

A series of other measures in the budget had already become clear or were announced in recent days. They include:

• UK fizzy drinks tax to be extended to milk-based products in 2028 Pre-packed milkshakes and coffee Which contain high amount of sugar. This may lead to price increases, or component changes.
• price of one NHS prescriptions in England Will be frozen at £9.90 for the second year in a row in April
• Disabled people who have a car mobility plan Now “premium” vehicles like BMW, Mercedes, Audi, Alfa Romeo and Lexus will not be allowed.
• Mayors of England could be given charging powers night stay chargesWhich is sometimes also called ‘tourist tax’. Under the plans that will be discussed, mayors will decide what the level of fees will be and how to spend the money in their area.