Insights
By: Tom Lloyd-Read
UK Autumn Budget 2025
Government Balances Welfare Reform with Stealth Tax Measures
The UK Budget is a serious business in which the Chancellor of the Exchequer sets out the nation's finances and outlines the Government's proposals for changes to taxation. This year, however, to many it seemed as much about choreography and perception as it was about pounds and pence.
The Treasury’s strategy of floating potential measures in advance, both through official channels and media leaks, meant that little of yesterday’s Budget announcements were genuinely surprising. Yet what the Chancellor surely did not anticipate was the embarrassment of having key policy decisions inadvertently revealed by the Office for Budget Responsibility ahead of schedule. That slip didn’t derail the substance of the Budget, but it did puncture somewhat the theatre of the day.
The removal of the two-child benefit cap may have been billed as the headline moment, but it came at a cost of £26 billion in tax rises, chief among them the extension of the tax and National Insurance threshold freeze for another three years.
The Chancellor insists this preserves her pledge to not “raise taxes on working people,” yet that claim strains under scrutiny. As wages rise, millions will be dragged into paying tax for the first time, and countless more will be pushed into higher-rate bands.
Recent rumours had indicated that the Chancellor might take the politically challenging, yet economically rational, step of breaking her manifesto pledge by raising headline income tax rates. Instead, she chose the politically easier method of raising taxes on interest, dividends, and rental income.
Meanwhile, the financial structural challenges remain for the UK. With stagnant productivity, regional inequality, and an economy still limping from shocks past and present - though having to compete in the global market – the backdrop is inhospitable, to say the least.
At times, yesterday’s Budget felt like a deliberate show of control and fairness. In reality, questions remain about who really benefits and who really pays.
As ever, the Budget publications contained a wide range of detailed proposals and much to digest. Our Budget summary highlights the key aspects likely to affect our clients.
Should you have any questions or concerns, please get in touch with the UK Wealth Planning team.
Download 'UK Autumn Budget Summary November 2025'