Autumn Budget 2025: What It Means for You and Your Business

Rachel Reeves delivered the 2025 Autumn Statement on 26 November, outlining a cautious package of tax and spending measures. While Income Tax rates remain unchanged, frozen thresholds and targeted adjustments mean many individuals, business owners and landowners may notice some meaningful changes, alongside a few welcome boosts.

Key announcements

• Energy bills: Average household energy bills are expected to fall by around £150 a year from April 2026.

• Income Tax & National Insurance: Thresholds remain frozen, meaning more people may drift into higher tax bands as earnings rise; affecting both employees and employers.

• Tax on dividends, savings & property income: Rates on non-salary income are set to increase from April 2026 or 2027, impacting investors and landlords. Business owners also need to be mindful of the new 2% Income Tax increase on dividends if they pay themselves in this way rather than via a salary.

• Business & Agricultural Property Relief: The £1 million cap for 100% relief on qualifying business or agricultural property is now transferable between spouses or civil partners, which may prove to be a useful option for succession planning.

• Minimum wage increase: From April 2026, the National Living Wage for workers aged 21 and over will rise from £12.21 to £12.71, with increases for younger workers too.

• ISA changes: From 6 April 2027, the annual cash ISA allowance for under-65s will reduce from £20,000 to £12,000. The £20,000 limit will remain the same for Investment ISAs to encourage investment in stocks & shares.

• State Pension: A 4.8% increase is scheduled for April 2026.

• For high-net-worth individuals: A small number of measures, such as a planned council-tax surcharge for homes valued above £2 million. These will not affect most clients but are worth reviewing where relevant.

What this means for you

Individuals & Employees

The minimum wage increase is positive change, although frozen Income Tax thresholds may still result in higher tax bills. The fall in energy bills is likely to offer some relief, but those with investment or rental income may also see tax increases.

Business Owners

Higher payroll costs may require business planning measures take priority; particularly for smaller teams. Employers who draw dividends should also be mindful of upcoming Income Tax rate rises and business strategies may need reviewing.

Agricultural Clients & Landowners

Employers in these areas may feel pressures due to the increase in minimum wages. While the new transferability of the £1 million relief cap is helpful, larger, higher-value estates may mean owners still face tax exposure. It’s also worth mentioning that reduced cash ISA allowances may affect how rural businesses manage their reserves in the future.

Savers & Investors

The lower cash-ISA cap means it may become harder to shelter large cash holdings. Balancing between cash and investment-based ISAs may become more important, particularly ahead of higher taxes on savings and property income.

Your next steps

The 2025 Autumn Budget creates both challenges and opportunities. Now could be a good time to:

• Reassess financial strategies for your business;

• Review succession plans for your agricultural assets;

• Consider estate planning measures before the ISA changes take effect; and

• For high-value properties or significant pension arrangements, check whether the new measures will apply to you.

If you’d like tailored advice on how these changes affect your personal, business or agricultural affairs, please contact us via 01206 574431 or enquiries@tsplegal.com. We’re here to provide strategic legal advice to help you plan for the future. Alternatively, we’re happy to point you in the right direction if you're seeking guidance on your financial or pension planning.

The full speech delivered by the Chancellor is available here.