Overview
- Rachel Reeves has told the OBR she is considering personal tax increases, with multiple outlets reporting a potential 2p rise in income tax paired with a 2p National Insurance cut focused on earnings up to £50,270.
- Sources cited by the Observer say the tax swap is close to finalisation and could shift the burden toward pensioners and landlords who do not benefit from NI cuts, though Treasury figures stress the Budget is not yet locked.
- Analyses suggest pensioners would be among those hardest hit, with LCP estimating an average state pensioner could pay about £380 more a year and AJ Bell calculating additional‑rate pensioners could face increases of up to roughly £2,503.
- The government is also reported to be preparing a £2,000 cap on tax‑free salary‑sacrifice pension contributions, despite HMRC research warning employers oppose changes that could raise costs and discourage saving.
- A previously announced measure will bring unspent pensions into inheritance tax from April 2027, and separate reporting points to property‑tax options under consideration such as a new top council tax band, with the Treasury declining to comment outside fiscal events.