UK Autumn Budget 2025: What can we expect?

On 26 November, the Chancellor of the Exchequer, Rachel Reeves, will present her UK Autumn Budget, which will outline the government’s economic plans for the future. While ministers and political editors have put forward an abundance of predictions for what exactly will be announced, Rachel Reeves has been naturally secretive about the contents of her Budget, attempting to fill the £20bn-£30bn UK fiscal hole in the country’s finances uncovered by the Office for Budget Responsibility. Reeves has set two clear rules regarding what this Budget aims to achieve: by the end of her parliament, she aims to eliminate the need to borrow for day-to-day public spending and to reduce government debt. These goals demonstrate Reeves’ non-negotiables, alluding to a need for spending cuts and tax rises. While it’s important to attempt to predict what announcements Rachel Reeves is likely to make based on these goals, Sky News’ Deputy Political Editor Sam Coates upholds that maintaining “maximum cynicism” in the build-up to the Budget is vital.

On 4 November 2025, Reeves announced in her pre-budget speech that income tax would potentially need to rise, a move which would break the 50-year tax taboo and her own personal pledge

When Rachel Reeves came into power alongside a Labour government, the manifesto upon which the party was elected upon in 2024 promised no tax rises for the working class. Yet, on 4 November 2025, Reeves announced in her pre-budget speech that income tax would potentially need to rise, a move which would break the 50-year tax taboo and her own personal pledge. Despite the recognition that such an action would represent a momentous betrayal of her policies, Reeves argued that she must, and does, put national interest ahead of her political affiliations and individual successes. In this speech, Reeves emphasised to the public and the journalists present that any tax rises announced on 26 November will be done so in an attempt to lower taxes in the future. That being said, given Reeves’ aforementioned track record and seeming ability to disregard her previous promises, can we truly trust what she says?

Over a month ahead of Reeves’ Budget, the Secretary of State for Education, Bridget Phillipson, announced on 20 October that university tuition fees will increase in line with inflation from next year. The increase in tuition can be seen as indicative of the types of changes Reeves is set to make. With student debt viewed by many as the ‘graduate tax’, it seems that the entirety of the Labour government is creating a political and economic climate, whereby ‘ordinary people’ are left with less money. Based on this announcement, it would seem natural for Reeves to find other ways to raise funds, taxes presenting as a more obvious option.

Despite the aforementioned controversy surrounding income tax (which takes a share of an individual’s earnings), income is undoubtedly one of the main taxes that Reeves is being urged to increase by advisers. Such an increase may not need to be radical to be impactful: the Resolution Foundation, a British independent think tank, has reported that even the slightest increase in income tax, of just 2 pence, could raise upwards of £6bn. This option should massively appeal to Reeves; although it does technically break her manifesto pledges, it would have minimal negative impact on working people while raising a substantial amount of funds.

Alongside this, advisers are pressuring Reeves to increase the taxes that impact the wealthiest of society, linking to her recent comments that “those with the broadest shoulders should pay their fair share”. By increasing the taxes that the wealthier members of society pay, Reeves could avoid raising income tax, according to David Sheppard, Whitehall Editor of the Financial Times. As Reeves naturally aims to preserve her manifesto and uphold her party’s values, it seems likely that changes to National Insurance, rises in landlord’s tax, and the imposition of a ‘mansion’ tax will be first on the list in her Autumn Budget.

Currently, certain types of accountants, doctors, and lawyers do not pay National Insurance tax, as they are classified as limited liability partnerships (LLPs) which deems them self-employed. The Times has reported that taxing these high-earning professionals in this way could generate £2bn. Think tanks are recommending that landlords should not only be made to pay National Insurance tax, but those who earn above £50,270 a year from rental income should also be subject to an extra 8% taxation. It is thought that this change could potentially raise £3bn. This is not the only way that property is set to be targeted by the Budget. A new system that imposes a single annual tax upon the highest value houses is under review, according to Fidelity International, and would replace the current stamp duty and council tax setup. The option can be seen as particularly appealing to Reeves; it would contribute to her goal of increasing taxation on the wealthy in this Budget, containing the potential to raise notable revenue, according to the Financial Times.

The systems people use to save money are also set to be targeted by Reeves’ Budget on 26 November. Going against her promise in July 2025 that cash Individual Savings Accounts (ISAs) were safe from immediate reforms, the Financial Times reported in October 2025 that Reeves may use the Budget to cut the tax-free limit of cash ISAs from £20,000 to £10,000 in an attempt to encourage people to put their money into a Stocks & Shares ISA instead. While this move would aim to fuel the domestic stock market, the desired outcome may not materialise; many value the cash ISA for its certainty, whereas a Stocks & Shares ISA comes with risk.

Despite the majority of speculation focusing on tax hikes, on 15 October, Reeves told Sky News that her Budget will also explore the possibility of spending cuts. However, there is little speculation regarding the extent of cuts Reeves is set to make, despite leading bond market figures asserting that tax rises alone will not be able to fill the fiscal hole in the UK. A cut to spending would significantly contrast with Reeves’ Autumn Budget in 2024, which was characterised by an increase in public spending of an average of £69.5bn, reflecting the Labour Party’s values in its attempt to enhance the welfare state.

If the speculation that Reeves is going to increase income tax actualises on 26 November, the Conservatives will be placing immense pressure on Reeves to resign, due to the contradiction between this move and her manifesto

Amid the speculation in the build-up to the Autumn Budget, Reeves never missed an opportunity to place blame on the previous UK government, run by the Conservative Party. From her speech earlier this month to interviews about the Budget, Reeves consistently claims that a combination of Brexit, austerity politics, and Liz Truss’ mini budget, coupled with a poorly organised government that covered up a £21.9bn overspend while in power, is predominantly responsible for the state of the country’s finances. If the speculation that Reeves is going to increase income tax actualises on 26 November, the Conservatives will be placing immense pressure on Reeves to resign, due to the contradiction between this move and her manifesto. The period leading up to the Budget is thus becoming extremely contentious and intense, as the credibility of the Labour Party and the stability of the Chancellor’s position come under threat.

Rachel Reeves has a difficult task at hand, and her decision to opt for such a late Autumn Budget emphasises the fragility of the situation. Indeed, the unconventional decision to give a pre-budget speech appears fascinating: did Reeves feel the need to placate the general public before 26 November, or was this her way of gaining insight into the potential reaction her Budget could receive? Either way, the Autumn Budget of 2025 is going to come under immense scrutiny, as the pressure on Rachel Reeves to fix the state of the UK economy grows.