Autumn Budget 2025: What it Means for Hourly Workers
Chancellor of the Exchequer, Rachel Reeves, announced her financial update last week, and here’s what it actually means for you, your payslip, and your bills.
1. Tax thresholds frozen until 2028
Even though tax rates aren’t rising, the thresholds are frozen:
- As wages go up, more of your pay may get taxed.
- Some workers may be pulled into higher tax bands over time.
👉 Think of it as a stealth tax: your payslip might feel tighter even if your hourly rate increases.
2. National Minimum Wage is going up
From April:
- 18–20 year olds: £10 → £10.85
- National Living Wage: £12.21 → £12.71
📈 A solid boost for lots of wac users, especially those in hospitality, retail and care – but expect some employers to tighten hours in response.
3. £150 off your energy bill next year
The ECO home-insulation scheme is being scrapped, but the government says £150 will automatically come off bills.
👉 Helpful short-term, but fewer home insulation schemes could mean higher bills long-term.
4. ISA changes (mostly for savers)
From 2027, you can only put £12,000 a year into a cash ISA (down from £20,000).
Stocks & shares ISA stays at £20k.
👉 Most wac users won’t feel this unless they’re heavy savers.
5. The two-child benefit cap is gone
Universal Credit and tax credit families will now receive support for all children.
👉 Big news for low-income families – worth up to £5,450 extra per year for some households.
6. Fuel duty stays frozen (for now)
Good news for drivers: fuel duty won’t rise until at least Sept 2026.
👉 After that, it’s expected to increase with inflation.
7. New tax on electric vehicles
EVs will pay road duty:
- 3p per mile (electric)
- 1.5p per mile (plug-in hybrids)
👉 Won’t hit many wac users yet, but worth knowing.
8. Sugary milkshakes now taxed
Milkshakes & canned lattes join the sugar tax.
👉 Prices may rise on some drinks.
9. NHS & school funding increases
More money for nurses, GP appointments, school libraries and playgrounds.
👉 No direct change to payslips, but part of the government’s “end of austerity” message.
📌 TL;DR The stuff affecting most wac users
- Minimum wage up (🌟 biggest win for hourly workers)
- Tax thresholds frozen (take-home pay could tighten over time)
- £150 energy bill discount coming next year
- Two-child UC limit scrapped (big help for families)
- Milkshake prices may go up (sorry 🙃)