Budget summary: this year’s changes explained

Hi, I'm Clare Moffat, Pensions & tax expert at Royal London. The Chancellor spoke for more than an hour delivering the Autumn Budget, but in 60 seconds here's what's changing and how it could affect you.

First - frozen tax thresholds.

Income tax and National Insurance thresholds are now frozen until 2031. 

Wages have gone up since 2021, but the thresholds haven’t - which means more of your pay will be taxed, or you might even slip into a higher tax band.

If you’re working, paying into a pension can help pull you back into a lower tax band.

For pensioners, the triple lock means more State Pension. But if you’ve got even a small workplace pension on top, it could now push you over the personal allowance, meaning you’ll pay tax - or you’ll pay more of it.

Next - Cash ISAs.

From 2027, the limit for paying into a cash ISA drops to £12,000, but most people won’t feel this - only 16% max out on their ISA anyway. 

Over-65s can still save the full £20,000, which is good if you’re over 65 and you want to pay more into cash ISAs.

You can still pay £20,000 into Stocks and Shares ISAs though.

Finally - salary sacrifice.

This is a way for employees to exchange some of their salary in return for their employer making all the pension contribution on their behalf. It’s a way for you and your employer to save National Insurance, but not all employers offer this feature.

What’s changing from 2029 is that the amount of salary you can sacrifice and make National Insurance savings on will be capped at £2,000. Around a quarter of employees are offered this and use it, so for anyone earning more than an average salary, they might see less going into their pension.