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Reeves Sets Out 2025 Budget With Targeted Tax Rises and Cost‑of‑Living Reliefs

To meet strict fiscal rules, the chancellor targets a £20–30bn gap via threshold freezes, property charges, savings reforms, EV levies.

Overview

  • Reeves has ruled out raising main income tax rates but is expected to extend freezes on income tax and National Insurance thresholds beyond 2029.
  • High‑value property changes are expected, including revaluing council tax bands F–H and an additional charge on homes valued above £2 million.
  • Pension and savings moves under review include a £2,000 cap on salary‑sacrifice National Insurance relief and a cut to the ISA allowance from £20,000 to £12,000.
  • Transport measures being examined include a pay‑per‑mile levy for electric vehicles, with rail fares frozen and a further fuel‑duty freeze widely reported as likely; a VAT cut on household energy is not expected.
  • Cost‑of‑living steps include a confirmed minimum wage increase and a state pension uplift, with the removal of the two‑child benefit cap signalled, as business groups warn of hiring and cost pressures.