Autumn Budget 2025: what to expect and how it impacts savers

What to expect from the Autumn Budget 2025: at a glance

• What do I need to know? The Autumn Budget sets out the government’s latest plans for tax and spending. This year’s statement is expected to touch on a handful of areas that affect everyday finances, including savings, tax, pensions, and property.
• What does it mean for me? Any changes could influence how much tax you pay, the interest you earn, and how you plan for retirement or pass on wealth. Even modest adjustments can have a meaningful impact on your finances.
• Why does it matter? Learning about the changes now can help you prepare your finances without making rushed decisions.

On Wednesday 26 November 2025, Chancellor Rachel Reeves will deliver her second Autumn Budget. In her pre-Budget speech, she signalled it will include ‘hard choices’ to restore stability.

Anticipation is high. Many of the rules that shape how you save, invest, and pass on wealth are in the spotlight. Rumoured ISA changes, and fresh attention on pensions, property, and Inheritance Tax top the list.

For those with significant cash savings, investments, or property, this Budget carries weight. In this article, you’ll learn the key areas under discussion – and what they could mean for your money.

The economy, inflation, and interest rates

In her recent speech, the Chancellor acknowledged that the economy is under pressure, pointing to persistent inflation, global tariffs, fragile supply chains, and rising borrowing costs. She said these challenges have worsened since last year and warned that the tax decisions ahead will ‘shape our economy for years to come.’

Inflation has come down a long way from its peak three years ago but still sits well above the Bank of England’s 2% target. The base rate has been falling since August 2024. Lower rates influence borrowing, house prices, and the returns you can earn on your cash. While interest rates on savings accounts have dropped in response, the tax rules have not changed with them.

That gap has pushed the Personal Savings Allowance back into focus. The allowance has remained unchanged since it was introduced almost ten years ago. In that time, inflation and interest rates have shifted significantly. As a result, more savers now find their interest earnings tipping them over the threshold and triggering a tax bill. With pressure from industry groups and pre-Budget commentary highlighting the strain on savers, speculation is growing that the Chancellor may soon revisit the allowance.

Income Tax and National Insurance

Income Tax thresholds are frozen until 2028 and there’s talk that this freeze could be extended. When thresholds stay fixed while incomes rise, more of your earnings fall into taxable bands. This reduces your take-home pay and leaves you with less money to put towards your savings.

There has also been talk about tinkering with Income Tax and National Insurance (NI), for example, a slight rise to Income Tax or a cut in National Insurance for people earning under £50,270. These ideas are unconfirmed but form part of the wider conversation on fairness.

If you’re nearing retirement, it’s important to understand how frozen thresholds could affect your future income. Considering how these rules interact with pension withdrawals can help you plan ahead for a comfortable retirement.

Pension reform

Pensions are expected to be front and centre in this Autumn Budget. Reports suggest the Chancellor is considering adding National Insurance to salary-sacrifice pension contributions above £2,000 a year. Salary-sacrifice is widely used, so this change would reduce the current tax benefit and lower the take-home pay for those making higher contributions.

There has also been mounting speculation about the 25% tax-free pension lump sum. This allowance plays a central role in retirement planning, especially for those with larger pots. The possibility of reducing or capping it was widely discussed last year and is back in focus ahead of this Budget. A change to this allowance could influence when people choose to access their pension, which has added uncertainty for those nearing retirement.

HMRC has recently said that once you take tax-free cash, you cannot undo the decision. But the rumours have already influenced behaviour, with pension withdrawals rising over the past year by 35.9% according to the Financial Conduct Authority (FCA).

If you’re thinking about adjusting contributions or taking a lump sum, take time to understand the potential tax impact before you act. Speaking with a financial adviser can help you weigh your options. If you withdraw cash without an immediate use for it, keeping your lump sum in high-interest savings accounts can help preserve its value while you decide what comes next.

That’s where Flagstone comes in. Our platforms lets you quickly compare hundreds of savings products from 65+ banks – all with one login. Use our interest calculator to see how you could protect and grow your cash. 

Calculate now 

Cash ISA changes

Momentum is building behind a possible cut to the Cash ISA allowance – a move that could reshape how millions of people save. Earlier in the year, plans to reduce the allowance were dropped, but recent commentary now suggests the existing £20,000 limit could be reduced to £12,000 or lower.

The government believes the move could steer more people towards investing rather than holding large amounts of cash. The view is that this could deliver stronger long-term returns for individuals, while helping to support economic growth.

If you rely on the security of Cash ISAs, using your full allowance this year is one practical step while the rules remain in place.

Inheritance Tax under review

Inheritance Tax is shaping up to be one of the most closely watched areas in this Autumn Budget – not least because the rules are set to change around what you can pass on. From 6 April 2027, any unused pension funds, or death benefits left when someone passes away, will be counted as part of their estate. This means they will be subject to Inheritance Tax. For anyone with a larger pension pot, this has already prompted a rethink of future tax bills.

Now, attention is turning to wider reform. One rumoured idea is a cap on the value of lifetime gifts. If introduced, this could increase the tax bill for anyone looking to pass on wealth to younger generations.

The long-standing seven-year gift rule is also under review. Right now, gifts fall outside Inheritance Tax if you live for seven years after making them. One possible change is extending this period to ten years. That would mean gifts take longer to become tax-free, which could affect anyone planning to pass money or assets to family during their lifetime – especially those wanting to support children or grandchildren sooner rather than later.

There is also speculation about removing the residence nil-rate band. This rule currently lets couples pass on an extra £350,000 of property without paying Inheritance Tax. If it’s scrapped, the total amount couples can leave to their children tax-free would drop from £1m to £650,000.

Shifts in property tax

With property firmly in the spotlight, a handful of possible reforms are being talked about:

• A national property tax: replacing Stamp Duty altogether and introducing an annual charge based on a property’s value, instead of a one-off payment when you buy.
• Mansion tax: introducing a yearly charge for high-value homes, with properties over £2m facing an annual bill based on 1% of the value above that threshold.
• Council tax on high-value homes: doubling council tax for properties in bands G and H, which could mean much higher bills for owners of the most expensive homes.
• Rental income: the way rental income is taxed could change, which would affect landlords and anyone who receives income from a second property.

None of these are confirmed, but they reflect where the government may look to raise more revenue from property.

If you own a second home or receive rental income, even small adjustments could influence your plans. If property forms a part of your portfolio, a financial adviser can help you understand how any changes could affect your tax position.

Preparing for Budget day

It’s helpful to take stock of your current position before the announcement. This doesn’t mean making big changes – simply ensuring you have a clear view of your finances can help you assess the impact of the changes when they’re announced later this month.

Quick checklist

• Review your ISA and pension contributions for this tax year. Check how much of your allowance you’ve used and how much you have left under the current rules.
• If you’ve made gifts to family, keep a record of them. Make sure you know when they were given and how much they were worth in case gifting rules change.
• Review where your cash sits. Note how much you hold with each bank, the rates you’re earning, and whether any fixed terms are due to end soon.
• Keep your financial paperwork up-to-date. Bank statements and pension statements can be useful if new reporting requirements are introduced.

Key dates for the Autumn Budget 2025