Autumn Budget 2024: what are the major announcements that’ll impact your finances?

Labour’s first Autumn Budget in 14 years is finally here, with chancellor Rachel Reeves revealing what’s changing in a bid to fill a £22 billion financial ‘black hole.’ 

While it’s vital to be proactive with your money, you must make the right decisions and consider any tax implications, which is why getting expert financial advice is worth considering.  

What is the Autumn Budget? 

The Autumn Budget looks at the state of the economy and announces spending decisions. It tends to happen in October or November, with questions allowed from the shadow chancellor and MPs.  

Following the Budget, the Office for Budget Responsibility (OBR) will publish updated forecasts in its economic and fiscal outlook. 

During her speech, Reeves stated that the OBR claimed the previous government did not provide them with all the information necessary to make accurate comments on the Spring Budget. 

If they had all the information, Reeves stated the OBR's spending forecasts would be ‘materially different’ from what was promised. 

The OBR estimates CPI inflation will average 2.5% this year and 2.6% in 2025, while real gross domestic product (GDP) growth is expected to be 1.1% in 2024 and 2% in 2025.  

What are some of the significant changes in the Autumn Budget? 

With taxes expected to be hiked by £40 billion, there’s a lot to digest. 

We’ll now explore some of the biggest announcements in the Autumn Budget and how they’ll affect you.  

Pensions 

Here is what’s been announced that will impact your pensions. 

Triple lock 

The pension ‘triple lock’ will remain, which means the state pension will increase in line with inflation, average wages, or 2.5% every year. 

So, from April 2025, spending on the state pension is expected to rise 4.1% in 2025-26. 

Inheritance tax on pensions 

While you don’t pay inheritance tax (IHT) on pensions, this will change as inherited pensions will be brought into IHT from April 2027. 

This is a huge change for retirement planning as many people tend to access their pensions last, as they are currently not seen as part of your estate.  

If you’re concerned about the impact of IHT on your pension in the future, getting financial advice is recommended.  

Unbiased can quickly match you with a qualified financial adviser who can suggest the best course of action based on your circumstances.  

Capital gains tax 

Capital gains tax (GCT) for basic-rate taxpayers will rise from 10% to 18% and from 20% to 24% for higher-rate taxpayers from 30 October 2024.  

CGT rates on carried interest will rise to 32% from April 2025, but CGT rates on residential property will remain unchanged. 

You currently pay CGT on the profit of an asset, such as shares and property, when you sell it. 

While you have an annual CGT allowance, this had already been cut from a high of £12,300 in the 2020 tax year to £3,000 for the 2024/25 tax year. 

Before the Autumn Budget, if you exceeded your CGT allowance, you would have paid CGT at a rate of 10% or 18% on residential property (excluding your main home), shares, and carried interest if you’re a basic-rate taxpayer. 

If you’re a higher or additional rate taxpayer, you would have paid CGT at 20% on your assets, including shares, and 24% for property or 28% on carried interest. 

Despite the rise, CGT rates remain lower than income tax, which is 20%, 40% and 45% for basic, higher and additional rate taxpayers, respectively.  

Inheritance tax 

Reeves has extended the inheritance tax threshold freeze until April 2030.  

When you die, you have a ‘nil rate band’ of £325,000, which means you can pass on assets up to this amount without paying any IHT at 40%. You can pass on more assets, including property, tax-free if you pass yours on to your spouse or certain relatives. 

This means that some couples currently can pass on up to £1 million worth of assets to any children or grandchildren, free from IHT. 

As mentioned, Reeves says that inherited pensions will be brought into IHT from April 2027, which will affect 8% of estates each year. 

It was also announced that from April 2026, the first £1 million of combined business and agricultural assets will be exempt from IHT. However, for assets over £1 million, IHT will apply with 50% relief – at an ’effective rate’ of 20%. 

Business property relief will be cut to 50% for shares that are ‘not listed’ on recognised stock exchanges.  

National insurance for employers 

While any increases in national insurance for workers have been ruled out, the same doesn’t apply to employers. 

Reeves will increase employers' national insurance (NI) contributions from 13.8% to 15% from April 2025, while the threshold when businesses start paying NI will be cut from £9,100 to £5,000.   

However, the amount employers can claim back from their NI bill will rise from £5,000 to £10,500. 

It is estimated the above changes will raise as much as £25 billion per year.  

Income tax thresholds 

Contrary to media speculation, there will be no extension to the freeze in income tax and national insurance thresholds beyond 2028. 

So, this means that from April 2028, personal tax thresholds will rise in line with inflation, so people pay less tax and are less likely to be pushed into higher tax bands when their wages rise.  

Stamp duty 

Stamp duty for second homes, buy-to-let residential properties, and companies purchasing residential properties will rise from 3% to 5% from 31 October.  

While Reeves did not announce any specific policy changes, she did state she was committed to supporting first-time buyers.     

The 0% stamp duty threshold is set to fall from £425,000 to £300,000 in April 2025 for first-time buyers in England and Northern Ireland. 

Homebuyers will have to wait for confirmation, and many hope it will be extended.   

Since its introduction, the stamp duty breaks have saved the average homebuyer £2,500. 

Business rates 

From April 2025, eligible businesses will receive a 40% discount on business rates. 

While the £110,000 cap remains, the 40% discount is lower than the 75% discount expected to end in April 2025. 

The less generous discount means the business rates for many companies will double.  

Need help with your finances? 

The Autumn Budget can be overwhelming and stressful, but it’s important not to act rashly. 

Getting expert financial help can ensure you make the right decisions based on your unique circumstances. Unbiased can quickly match you with a qualified financial adviser who can help.