The Chancellor, Ms. Reeves, delivered a Budget focused on stability, long-term investment, welfare reform and cost-of-living support.
The Budget confirms that both fiscal rules are met:
Fiscal headroom stands at £21.7 billion, more than double that forecast earlier in the year.
Public investment is maintained, with major infrastructure and regional programmes continuing.
OBR growth forecast for 2025 upgraded from 1% → 1.5%.
Productivity forecast reduced to 1%, lowering future tax receipts by £16bn by 2030.
Borrowing falls each year, reaching £67.2bn by 2030/31.
Public sector debt expected to peak at 83.7% in 2028/29, falling to 82.2% by 2030/31.
Income tax & NIC thresholds frozen until 2031, increasing revenue through fiscal drag.
Pension salary-sacrifice reform (from 2029)
Capital Gains Tax: Employee Ownership Trust relief reduced from 100% → 50%.
Inheritance Tax: agricultural and business property relief becomes transferable between spouses.
ISA reform (from April 2027):
High-value property surcharge (from 2028):
Enterprise Management Incentive scheme expanded.
Reforms to Enterprise Investment Scheme and Venture Capital Trusts to support scaling businesses.
Introduction of UK Listings Relief: 3-year stamp duty exemption for newly listed UK companies.
Major infrastructure commitments reaffirmed, including:
Significant regional packages for:
England’s metro mayors receive £13bn in devolved funding.
Electric Vehicle Duty (from 2028):
£2bn EV grant extended to 2030; £200m for charging infrastructure.
Fuel duty 5p cut extended to September 2026.
New fuel-price transparency system (“Fuel Finder”) to reduce average bills.
Two-child limit on child benefit abolished from April, restoring support for all eligible children; expected to lift ~450,000 children out of poverty.
Youth Guarantee (backed by £820m): every 18–21-year-old offered:
Disability benefit reforms: return to face-to-face assessments.
Motability scheme updated to remove luxury vehicles.
Class 2 voluntary NI for UK nationals abroad restricted to those with 10 years of UK work/residence.
NHS, Education & Public Services
All NHS efficiency savings reinvested into frontline services.
£300m for NHS digital improvements.
250 Neighbourhood Health Centres, with 100 open by 2030.
Schools:
It was also announced all payments from the infected blood scandal scheme are exempt from inheritance tax (IHT).
Annual household energy bills will fall by £150 from April 2026 through removal of legacy policy costs (including the ECO scheme in its current form).
Rail fares frozen for the first time in 30 years.
Bus fare cap extended.
Prescription charges frozen.
State pension rises 4.8% under the triple lock.
For a more in-depth guide to this year's budget, then please click below:
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