What to expect from the 2025 Autumn Budget

The ISA shake-up: Will your tax-free savings take a hit?

Individual Savings Accounts (ISAs) have long been the cornerstone of tax-efficient saving for millions of Britons. Right now, you can save up to £20,000 per tax year into an ISA (or multiple) without paying tax on the interest you earn. While in a normal savings account you might hold with your high street bank, you could pay tax on your interest if you go over your Personal Savings Allowance (PSA).

But that could be about to change.

In the Spring Statement, the government has already confirmed it's conducting a thorough review of ISAs. The Chancellor stated she wants to examine whether the system is "getting the balance right" between cash and equities. Translation: they want you investing in stocks, not parking money in Cash ISAs.

Currently, you can save up to £20,000 annually across all ISA types. However, the government may slash the Cash ISA allocation to push savers toward riskier investments that theoretically deliver better returns and boost economic growth.

What this means for you: If you're someone who prefers the safety of Cash ISAs, now’s the time to make the most of your tax year’s allowance before any changes. The government's push toward investment could force you to either accept lower annual contribution limits for Cash ISAs or venture into stock market territory you're not comfortable with. 

Want to get into investing but unsure where to start? Check out our guide on How to start investing.

Property taxes: The comprehensive overhaul

Property taxation could face the most radical changes in the Budget, with reports suggesting the government may replace stamp duty with an annual property levy or introduce new, higher council tax bands targeting expensive homes.

Right now, if you buy a home over £300,000 as a first-time buyer, or £500,000 if you’re moving up (or down) the ladder, you’ll likely pay Stamp Duty. This can be a huge upfront cost, as you have to pay this tax when you purchase a home. In fact, the tax bill on an average-priced home in England is now £5,268.

But under proposals reportedly being considered as part of the Autumn Budget, things could look very different.

For one, there could be no more Stamp Duty upfront for buyers purchasing homes for more than £500,000. Instead, home sellers could be expected to pay instead, forking out an annual property tax for any portion of the home’s value over £500,000 at a rate of around 0.54%.

What this means for you: This could be game-changing for those purchasing in more expensive locations, like London & the South-East. However, although in theory this means lower upfront costs for first-time buyers, home sellers could hike up asking prices to cover the tax. 

For those remortgaging, higher property taxes could affect affordability calculations and monthly budgets, potentially reducing your borrowing capacity.

As ever, nothing is set in stone yet, but if this change does come in, this could reshape how people buy and sell homes across the UK, especially in places like London where 59% of homes for sale are over £500,000, vs just 8% in the North East.

Inheritance tax: Potential for an increase?

Few taxes generate as much emotion as inheritance tax, and it's firmly in the Chancellor's crosshairs. Both Reeves and her Budget adviser and pensions minister Torsten Bell have previously called for major changes to death duty relief that could affect 30,000 families annually.

There’s speculation that in the Autumn Budget, the residence nil-rate band – which allows couples to pass on an extra £350,000 of property tax-free on top of the standard allowances – faces potential abolition. This would effectively reduce the inheritance tax-free threshold for couples from £1 million back to £650,000 when passing property to children.

Reeves has previously described the residence nil-rate band as "a tax break for a wealthy elite" and urged its removal. While Bell's think tank work suggested it should be scrapped entirely as part of broader inheritance tax simplification.

But the changes don't stop there. The government is also examining the seven-year gift rule, under which presents to family members become inheritance tax-free if the giver survives seven years. Proposals include extending this period to ten years or introducing lifetime caps on tax-free gifts.

What this means for you: If you're planning to leave property to your children, your inheritance tax bill could increase significantly. A family home worth £800,000 that currently passes tax-free could face a 40% levy on £150,000 – a bill of £60,000. 

While it’s a good idea to review your estate planning arrangements ahead of the budget, don't rush into gifting decisions without professional advice. Remember, you might need that money later in life, and hasty moves based on speculation can prove costly. There are also other ways you could unlock money from your estate and reduce your inheritance tax liability.

You might like: How can a parent help a child buy a house?

Capital gains tax: Rate rises and new targets

Capital Gains Tax (CGT) already saw increases in the last Budget, with rates rising from 10% to 18% for basic-rate taxpayers and from 20% to 24% for higher earners. But further changes could be on the horizon.

The annual exemption allowance has been decimated in recent years – falling from £12,300 in 2022/23 to just £3,000 today. While there's little room to cut this further, the Chancellor could target rates again

More concerning for homeowners is speculation about extending CGT to primary residences. The Financial Times reports Reeves is considering a "mansion tax" that would remove the CGT exemption from high-value family homes above a certain threshold.

What this means for you: If you're sitting on significant investment gains or own a valuable property, your tax bill when selling could increase substantially. Even family homes that have always been CGT-exempt might not remain safe.

National insurance: The landlord levy

Private landlords are squarely in the Chancellor's sights, with reports suggesting National Insurance could be extended to rental income for the first time. Options apparently being considered include bringing landlords under Class 1 NICs (like employees) or extending Class 4 NICs (self-employed) to property income. 

This will make renting out properties less affordable for landlords, which could result in rental costs increasing if landlords start factoring in additional taxes into affordability assessments and pass costs to tenants – precisely the opposite of what the government wants during a housing crisis.

What this means for you: If you're renting, you could see your rent increase if your landlord chooses to pass on the additional costs to you. If you are sick of renting and want to see how you could make home happen, create a free, personalised Tembo plan to see all your mortgage options from across the market - without applying. Get started here.

The wealth tax wild card

Within Labour ranks, calls grow louder for a wealth tax targeting the UK's richest individuals. This could take the form of an annual charge on assets exceeding certain thresholds, though there's no party consensus yet.

Critics warn such measures could prompt wealthy individuals to relocate, but pressure mounts as the government seeks revenue without breaking manifesto commitments on income tax, National Insurance, and VAT.

What this means for you: Unless you're among the very wealthiest, direct impact would be minimal. However, broader economic effects could affect everyone.

The bottom line: Prepare, don't panic

While speculation runs rampant, it's crucial to remember that nothing is confirmed until Budget Day. Making hasty financial decisions based on rumours can prove extremely costly – just ask those who accessed pension funds early based on 2024's unfounded speculation.

However, the direction of travel seems clear: the government needs revenue, and it's looking at “unearned wealth” to find it. Property, investments, inheritance, and savings all fall into this category. 

We’ll be reporting on the latest announcements, so keep your eyes peeled!