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A Budget packed with announcements ranging from taxes and spending to wages and pensions has been announced by Chancellor Rachel Reeves.
Much of what she said could directly affect you and your finances, so here's what it means for you.
If you are poorly paid, your salary should increase
The minimum wage, paid by employers, will increase across the UK in April. This means:
The national living wage, for employees aged 21 and over, will rise from £11.44 an hour to £12.21. If you are 18, 19 or 20, the national minimum wage will increase from £8.60 an hour to £10. at 16 or 17, the minimum wage will increase from £6.40 an hour to £7.55
The separate apprenticeship rate which applies to eligible under-19s – or those over 19 in the first year of an apprenticeship – will also increase from £6.40 an hour to £7 £.55.
The increases are lower, in percentage terms, than in the previous two years. However, prices are now increasing at a slower rate.
But bosses say your job prospects could be affected
As well as the additional cost of paying staff the minimum wage, many employers will need to pay a higher National Insurance (NI) contribution covering more of the people they employ.
The NI paid by employees will not change.
But companies say your chances of getting a job or a pay raise could be reduced because of the added financial burden employers face.
Some might raise prices to cover the cost.
Commuting to work by bus can cost you more
The single bus fare cap on many routes in England will be raised to £3 in 2025, up from £2.
Single bus fares in London with Transport for London will remain at £1.75 and Greater Manchester at £2, due to a different funding system in these cities.
Fuel taxes have been frozen since 2011 and this will continue. A reduction in fuel duty of 5p per liter has also been extended.
Other important tax changes could affect you
Inheritance tax (IHT), which currently stands at 40%, is generally paid on the value of a deceased person's assets above a threshold of £325,000.
Currently money saved in a pension is not taken into account, but from April 2027 inherited pensions will be included.
This is likely to bring more estates into the scope of inheritance taxes, due to retirement savings not being spent before a person's death.
Until now, various exemptions made it possible to ignore certain types of property, such as agricultural assets and family businesses, in inheritance matters. However, from April 2026, the rules will ensure some tax is paid on assets above £1m.
Capital gains tax (CGT) is levied on profits made from the sale of assets that have appreciated in value, such as second homes or investments.
The Chancellor announced that the CGT levy rate would increase from 10% to 18% for basic rate taxpayers, and from 20% to 24% for those paying the highest rate. This will match existing rates for properties which will remain the same.
Private tuition fees will increase
A highly controversial Labor policy has been officially announced, under which VAT at the standard rate of 20% will be added to private tuition fees from January 1, 2025.
The additional amount that parents of children in private school will have to pay depends on the decision of each school. It is also very unlikely that they will now be able to avoid the extra costs by paying in advance.
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Your benefits and state pension are affected
The Chancellor confirmed that benefit amounts will increase by 1.7% in April, in line with inflation.
The most common benefit, claimed by seven million people (38% of whom are in work), is Universal Credit. The increase would mean the standard allowance, for a single person aged under 25, would have to increase by £5.30 a month to around £317. For a couple aged over 25, the rise is likely to be £10.50 to £628 per month.
The total amount received in Universal Credit depends heavily on your circumstances.
The Chancellor said there would be a wide-ranging review of health and disability benefits.
Caregivers will be able to earn more in their jobs before losing their benefits.
The state pension will rise in line with average earnings, up 4.1% in April. This means
The new full, flat-rate state pension (for those who reached state pension age after April 2016) is set to increase to £230.30 per week. This will take it to £11,975 a year, an increase of £473 on today. The old full basic state pension (for those who reached state pension age before April 2016) is set to increase to £176.45 per week. This will take it to £9,175 a year, an increase of £361 on today.
But he previously announced that millions of pensioners would lose their winter fuel payment, worth up to £300, following a government cut.
No additional pressure on the income tax you pay
The freezing of income thresholds to which different income tax rates are applied continues as planned.
There had been speculation about an extension, but the chancellor ruled out the possibility, saying thresholds would increase based on prices from 2028.
Until then, any form of salary increase could land you in a higher tax bracket or see a greater proportion of your income taxed than would otherwise be expected.
Scotland has its own income tax rates.
You may not earn enough to pay income tax. VAT, paid when purchasing goods and services, can therefore hit you harder and remains unchanged.
Anyone who avoids paying tax faces a higher interest rate when they pay it back.
