2025 Autumn Budget summary: what does it mean for me?

The Autumn Budget is an update from the UK Government about the state of the economy, which often includes information about spending and tax decisions. The announcements set the Government’s intentions for the coming months and years, with references made to the latest forecasts from the Office for Budget Responsibility (OBR).

The Autumn Budget was delivered by Chancellor Rachel Reeves at 12:30pm on Wednesday 26 November 2025. Find the Autumn Budget summary below and learn what it means for you.

The two-child limit previously meant that for those who receive Universal Credit, they wouldn’t get any extra benefits if they have more than two children born after April 2017.

Rachel Reeves has announced that ​‘the biggest barrier to equal opportunity is child poverty’ and the two-child limit will be removed from April 2026. Reeves said this will be the ​‘biggest reduction in child poverty’ and will lift 450,000 children out of poverty, which comes after the introduction of free school meals to half a million more children. 

The welfare system will be reformed so that it will increase the number of assessments for work capability. Changes to Universal Credit aim to get around 15,000 people back into work.

There’ll be changes to the Motability scheme, which helps disabled people lease a brand-new vehicle while receiving disability benefits. It was announced that the Government will cut ​‘premium’ cars such as BMW and Mercedes from the scheme, as well as limiting mileage in line with commercial leases, aiming to offer cost-effective options instead.

As announced in a previous budget, to keep up with rising costs, Universal Credit will rise at an above-inflation level from April 2026, increasing by around £295 a year.

To support public services and the economy, the Government is asking for broader contributions but is holding the line on increasing Income Tax, National Insurance (NICs), and VAT.

The National Living Wage, which is the legal minimum for people aged 21 and over, will rise by 50p to £12.71.

The National Minimum Wage for workers aged 18–20 will rise by 85p to £10.85, and under-18s and apprentices’ wages will increase by 45p to £8 an hour.

There’ll be funding to make training for under 25s free for small and medium enterprises. 

The Government will also be funding the new Youth Guarantee over three years to give young people the support and opportunities they deserve, supporting every young person a place in college or work.

In April 2026, the State Pension will be uprated by 4.8%, so pensioners will receive up to an extra £575 a year.

It was announced that an extra £5m will be given for secondary school libraries, and £18m to upgrade up to 200 school playgrounds in England.

For those who are on Plan 2 of student loan repayments will benefit from the Government freezing the repayment and interest rate thresholds. This will last for three years and start from 2027–28. This will mean people will end up paying more in the long term.

There’ll be 2,000 new schools joining the breakfast club scheme over 2026–27, and the Government will be expanding free school meals eligibility to all pupils in England with a parent receiving Universal Credit, lifting 100,000 children out of poverty.

It was announced that labour will freeze prescription fees in England for another year, keeping the cost under £10. For those with three-month and twelve-month prescription prepayment certificates (PPC), they will also remain frozen at £32.05 and £114.50. The freeze of costs will also apply to other items, such as NHS wigs and fabric supports.

There will be £300m of investment in tech in an aim to improve patient services, as well as 250 new Neighbourhood health centres.

The energy company obligation (ECO) scheme, introduced by the Conservatives, costs families £1.7bn a year. Rachel Reeves said ​‘it is a failed scheme and so I am scrapping it’ as it costs families more than it has saved. This is said to take an average of £150 off the annual energy bill for households as a result.

Regulated rail fares will be frozen in England this year in the hope to save commuters ​‘hundreds of pounds off season tickets and easing pressure on household budgets.’ This is the first rail fare freeze in 30 years.

Those with electric vehicles will face a pay-per-mile tax, a new tax that will charge 3p per mile and will start from 2028–29, which will rise in line with inflation. It’ll cost the average driver around £255 a year when the tax starts. The charge for plug in hybrids will be 1.5p.

The amount you can save tax-free in cash ISA will be reduced from £20,000 to £12,000, £8,000 of it can be used exclusively for investment. Over 65s will retain the full cash allowance of £20,000.

The Help to Save scheme builds financial resilience for those who need extra support to save, and allows you to put away up to £2,400 over four years. This is then boosted with a Government bonus of 50%. It was announced in the Budget that this will be expanded to more households to ​‘enable more low‑income households to build strong savings habits and improve their financial security.’

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