The Chancellor, Rachel Reeves, delivered her Autumn Budget statement in the House of Commons, after the main fiscal changes had been accidently released in advance by the Office for Budget Responsibility (OBR). The measures announced will raise taxes by £26 Billion.
Pensioners will be paying more tax through to 2031 due the continuation of the freeze in personal tax thresholds which will remain at the 2021 level of £12,570 at which 20% tax becomes payable. Had the personal allowance risen in line with inflation since 2021 it would now be £15,655. Meaning that each year much more of pension increases will be taken in tax.
The Chancellor also confirmed that State Pensions will increase by 4.8% from April 2026, reflecting the annual increase in average earnings to July, in line with the triple-lock. This means the highest rate of State Pension will rise to £12,548 (£241 a week). The basic rate of State Pension (pre-April 2016) will rise to £9,615 a year (£185 per week).
The Chancellor confirmed that there will be no change to the cash ISA tax-free allowance of £20,000 for the over 65’s. For under 65’s £8,000 of the £20,000 limit must be used in Stocks and Shares ISAs.
