Chancellor Rachel Reeves has unveiled a comprehensive Budget filled with significant announcements affecting taxes, spending, and pensions. Here’s how these changes may impact you directly.

Starting in April, minimum wage rates will increase across the UK. For apprentices under 19 or those over 19 in their first year, the hourly rate will rise from £6.40 to £7.55. Although these increases are smaller in percentage compared to previous years, they coincide with a slower rate of price inflation. In addition to higher wages, employers will face increased National Insurance contributions for more employees. While employee National Insurance rates will remain unchanged, businesses warn that these added costs could hinder job growth and wage increases, leading some to potentially raise prices.

The cap on single bus fares in many parts of England will jump to £3 by 2025, up from £2. In London and Greater Manchester, fares will stay at £1.75 and £2 respectively due to different funding arrangements.

Fuel duty has remained frozen since 2011, with an extension of the existing 5p-per-litre cut. Concerning inheritance tax (IHT), currently set at 40% for estates exceeding £325,000, changes are on the horizon. Starting April 2027, inherited pensions will count towards this threshold, likely increasing the number of estates subjected to IHT as pension savings remain unspent at the time of death. Additionally, from April 2026, some agricultural and family business exemptions will be revised to ensure taxes apply to assets exceeding £1 million.

Capital gains tax (CGT), which applies to profits from asset sales like second homes or investments, will see an increase as well. For basic rate taxpayers, CGT will rise from 10% to 18%, while higher-rate taxpayers will see a jump from 20% to 24%. The existing property rates remain unchanged.

A notable Labour policy is set to take effect on January 1, 2025, imposing VAT at the standard rate of 20% on private school fees. The additional cost for parents will depend on individual school decisions regarding fee structures.

The Chancellor confirmed that benefits will see a rise of 1.7% in April due to inflation adjustments. Universal credit recipients—the most common benefit claimed—will experience an increase in their allowances based on individual circumstances.

The state pension is also set to increase by 4.1% in April but millions of pensioners will unfortunately miss out on winter fuel payments due to government cuts. Income tax thresholds will be frozen until adjustments commence in line with inflation from 2028; hence any pay raises could push individuals into higher tax brackets sooner than expected.

Scotland maintains its own income tax system while VAT remains unaffected by these announcements. Finally, those who evade taxes may face steeper penalties when settling debts. The government’s growth forecasts for the UK economy have also been revised upwards for the next two years as part of this extensive Budget presentation by the Chancellor in Parliament.