Snapshot summary of 'Budget 2025' | Gresham Wealth Management

Rachel Reeves was under pressure to deliver positive news for savers, investors and business owners in ‘Budget 2025’. But did she deliver?

Over the coming days and weeks the Gresham team will be looking at what it all means for you and you should contact your usual adviser if you have any queries. In the meantime we’ve briefly summarised the key takeaways.

Changes to ISAs – the amount of money that can be saved tax-free each tax year in a cash ISA (Individual Savings Account) will be reduced from £20,000 to £12,000 a year for those under 65 from April 2027.

Tax thresholds – tax thresholds in England, Wales and Northern Ireland will stay frozen until 2031. This means any kind of pay rise could see people dragged into a higher tax bracket, or see a greater proportion of their income taxed.

Dividend tax increases – these will be implemented from April 2026, with basic and higher rates rising by 2%.

Savings and property income tax rates – these rise from April 2027, increasing the basic, higher and additional rates by 2%.

Cutting of VCT income tax relief – the Budget cuts VCT income tax relief for investors from 30% to 20%, reducing the upfront tax incentive.

‘Mansion Tax’ – anyone who lives in a home valued at £2m or more in England will face a council tax surcharge from April 2028. There will be four price bands with the surcharge rising from £2,500 for a property valued in the £2m to £2.5m band, to £7,500 for a property valued in the highest band of £5m or more.

Abolition of two-child benefits cap – the two-child cap on benefits will be scrapped in April next year. This means many thousands of parents with three or more children will receive more in universal credit and tax credits.

Salary sacrifice – from April 2029, only the first £2,000 of employee pension contributions through salary sacrifice each year will be exempt from National Insurance Contributions.

New 3p per mile tax for EV drivers – electric vehicle and hybrid car drivers will be taxed for using the road from 2028. EV drivers will be charged 3p per mile, on top of other road taxes, in new road pricing. Hybrid drivers will be charged 1.5p.

And finally…it might be a good time to take up bingo next year…because the bingo tax is being abolished from April…

Your usual adviser at Gresham will be able to guide you with any specific issues that the Budget raises for you.

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