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This week, Chancellor Rachel Reeves announced new plans for how the country’s money will be spent and managed.

We’ve broken down some of the key announcements and how it could affect your finances.

Rises in National Minimum Wage and State Pension

National Minimum Wage – the minimum pay per hour almost all workers are entitled to – will rise by 6.7% from April 2025.

  • If you’re 21 or older, it will rise from £11.44 to £12.21 an hour.
  • If you’re between 18 and 20, it’ll rise from £8.60 to £10 an hour.
  • For apprentices, it will rise from £6.40 to £7.55 an hour.

From April 2025, State Pension payments will increase by £9.05 a week.   

Extra Support for Carers

  • Carer’s Allowance, the main benefit available to carers, will increase from £81.90 per week to £83.29, a 1.7% increase.

National Insurance

  • From April 2025, businesses will have to pay 15% in National Insurance on the money they pay their employees, if their salaries are more than £5,000.
  • This is a change from the previous rate of 13.8%, which only kicked in when salaries were over £9,100.

Employment Allowance

  • The Employment Allowance (which helps small businesses reduce the amount they pay in National Insurance contributions) will increase from £5,000 to £10,500, and the £100,000 cap will be removed.
  • From 2028/2029, personal tax thresholds (which is the amount of money people can earn before paying certain taxes) will go up in line with inflation.

Inheritance Tax

  • The freeze on the Inheritance Tax threshold will be extended for a further two years, and unspent pension pots will be subject to tax from 2027.

Capital Gains Tax rate increase

  • Basic rate Capital Gains Tax on profits made from selling shares will increase from 10% to 18%, with the higher rate rising from 20% to 24%.

Stamp Duty Land Tax (SDLT)

  • The SDLT for second homes, buy-to-let residential properties, and companies purchasing residential property will go up from 3% to 5% from 31 October 2024.

Tobacco duty rises

The tax on cigarettes and tobacco is going up, making it more expensive.

  • Starting in 2026, there’ll be a new tax on all vaping e-liquids, instead of different taxes for different products.
  • There will also be a special one-time increase in the tax on tobacco products to encourage smokers to quit. The idea is that making tobacco more expensive might help people decide to stop smoking.
  • For adults who drink, the tax on beer served on tap at pubs will be a little bit lower, making it a penny cheaper per pint. On the other hand, the tax on drinks that come in bottles or cans will go up in line with the Retail Price Index (RPI) from February 2025.

Transport

  • The cap on bus fares in England will rise from £2 to £3, which will make bus rides a little more expensive from January 2025. cap on single bus fares in England to rise to £3 from January 2025.
  • The government is keeping a cut on petrol and diesel due to end in April 2025 for another year.
  • More funding will go towards improving train lines and people taking private jets will have to pay a higher tax.

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