What does the Autumn Budget mean for your money? Metro’s money expert explains what you need to know

Rachel Reeves has delivered her second Budget as chancellor – and overcame a shambolic start after the Office for Budget Responsibility (OBR) leaked its forecast early.

From boosting the EV charging rollout and the scrapping of the two-child benefit cap to household energy bill cuts, Reeves announced a wave of measures that will impact your wallet.

We answer your main questions here.

I’m a worker on an average salary; will I pay more tax?

Income tax rates haven’t risen, as many feared. However, the Chancellor has frozen income tax thresholds for a further two years until the end of the 2030-31 financial year, which means that as average wages rise with inflation, more people will be dragged into the higher rate tax bands, paying 40% tax on more of their salary.

Eventually, we’ll all end up paying more tax when thresholds are frozen, and according to the OBR there will be nearly a million more higher rate taxpayers at the end of the freeze.

What about my salary, could I earn more?

If you’re on the minimum wage, you could earn more cash per hour. From April the minimum wage for over 21s will rise by 4.1% to £12.71 an hour, while the minimum wage for 18-20 year olds will rise to £10.85 an hour, an 8.5% increase.

I don’t own a ‘mansion’, but my house is quite big. Will I pay more council tax?

If your house is worth over £2m you will pay more, but not until 2028. The new ‘Mansion Tax’ will be charged in four bands. The lowest band will pay £2,500, up to £7,500 for properties worth over £5m.

Can I still put £20,000 a year into a cash ISA?

At the moment, you can put £20,000 a year into a tax-free cash ISA or a stocks and shares ISA, or a combination of both.

You’ll be able to do the same next tax year, but from April 2027 you’ll have a smaller allowance for cash savings but keep the full £20,000 allowance in total. You’ll be able to put £12,000 a year into a cash ISA, and have a further £8,000 allowance for stocks and shares.

The exception is if you are over 65, when you’ll retain a £20,000 a yer cash ISA allowance.

Did the Chancellor take away the tax perks for my pension savings?

Despite speculation, the Chancellor did not do away with or cut the popular tax-free lump sum that everyone can take from their pension. She also kept the ability to receive all of the tax you’ve paid on your pension contributions, no matter your tax rate.

However, if you pay into your pension via a salary sacrifice scheme, whereby your money is taken out of your salary before national insurance is paid on it, you will only make those NI savings for the first £2,000 of your contributions from 2029.

If you live abroad and are hoping to top up your state pension national insurance record by buying additional voluntary contributions, this will no longer be available to you.

Will I pay more on savings and share dividends?

From April next year, you’ll pay more tax on savings interest, meaning that it’s even more important to shelter your cash in an ISA. You’ll pay 22% tax on cash savings over your savings allowance if you’re a basic rate taxpayer, 42% if you’re a higher rate taxpayer and 47% if you’re an additional rate taxpayer.

If you receive share dividends, you’ll pay two percentage points more in dividend tax on dividends paid outside an ISA, with basic rate taxpayers paying 10.75 and higher rate taxpayers paying 35.75 per cent.

You can still receive £500 in dividends tax free each year, while basic rate taxpayers can receive £1000 in interest from savings without paying tax, higher rate taxpayers receive £500 and additional rate taxpayers nothing at all.

I’m a motorist – will I pay more?

If you drive a petrol car, the good news is that fuel duty has been frozen for a further five months, meaning the cost of petrol will stay the same. However, in September next year, the 5p temporary fuel price cut will be removed, pushing up prices, and from April 2027, fuel duty will increase in line with RPI inflation.

If you drive an electric vehicle, you’ll face a new pay-per-mile tax, which experts believe will cost the average driver £255 a year at 3p per mile. The tax will come in from April 2028. The charge will increase in line with inflation.

What about my household bills?

The Chancellor said that energy bills will fall by an average of £150 a year thanks to changes to major green levies that will see the government paying more from tax receipts for renewable energy infrastructure, rather than the levies coming from household bills.

What is happening with my student loan repayments?

If you have a Plan 2 Student Loan, which was taken out after 2012 and before 2023, you’ll end up paying more. Interest rates were meant to fall and the earnings at which you were meant to start paying the loan back were meant to rise alongside interest rates and inflation. These rates will now be frozen for three years beginning 2027-28, with interest rates at 7.9% and repayments starting at a salary of over £28,470.

I’m a landlord, what might change for me?

The Chancellor raised the level of tax paid on property income by two percentage points, so that landlords will pay more on the rents they receive. Basic rate taxpayers will pay 22% on property income, while higher and additional rate taxpayers will pay 42% and 47% respectively.