Budget 2025: What you need to know about Rachel Reeves' speech and the Office of Budget Responsibility's economic forecasts

Details of tax changes revealed early by regulator

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Economic Development

David Lynch, PA Political Correspondent

Alistair HoughtonBusiness Live Editor

12:53, 26 NOV 2025

Rachel Reeves addressing the House of Commons ahead of her Budget announcement — Rachel Reeves addressing the House of Commons ahead of her Budget speech (Image: Parliamentlive.tv)

Here's everything we know so far about what's in Rachel Reeves' second Budget today, as she aims to boost the public finances through a series of tax rises. The details have been revealed ahead of time and analysed by the PA news agency as The Office for Budget Responsibility published its analysis early.

Economic growth: The OBR has increased its forecast for economic growth this year from 1% to 1.5% but downgraded its forecasts for the following four years.
Income tax thresholds: The Chancellor will extend a freeze of income tax thresholds until 2030, a move previously described as a “stealth” tax rise. This will drag more people into paying the tax for the first time, and others into paying a higher rate as wages rise.
The OBR said the freeze in tax thresholds would result in 780,000 more basic-rate, 920,000 more higher-rate and 4,000 more additional-rate income tax payers in 2029/30, and estimated it will raise around £7.6 billion in 2029/30.
Pensions and salary sacrifices: Ms Reeves will limit the amount of money people can put into their private pension pot, through a scheme called a salary sacrifice, before it incurs tax. Anything above the new £2,000 cap will incur national insurance contributions from 2029, a move which has been estimated to raise £4.7 billion in 2029/30 and £2.6 billion in 2030/31. At the moment, there is no limit.
Property taxes: A council tax surcharge will be introduced on properties worth more than £2 million, in a so-called “mansion tax”. The OBR said: “There will be four price bands with the surcharge rising from £2,500 for a property valued in the lowest £2 million to £2.5 million band, to £7,500 for a property valued in the highest band of £5 million or more, all uprated by CPI inflation each year." It is set to raise £0.4 billion in 2029/30.
Electric vehicles tax: Drivers of electric vehicles (EVs) will have to pay 3p per mile they drive under a new tax introduced by the Chancellor. The move is in part to make up for falling revenues from fuel duty, as more motorists move towards using EVs.
Two-child benefit cap scrapped: The two-child cap prevents parents from claiming universal credit or tax credits for more than their first two children. The cap, introduced by the Conservative government in 2017, has been widely criticised by Labour MPs and anti-poverty advocate groups, who have said lifting it is one of the main levers ministers could take to alleviate poverty. The move is estimated to cost £3 billion by 2029/30, according to the OBR.
Travel costs frozen: A cut to fuel duty will be extended as a means of holding down the price of petrol at the pump. The tax has been held at 57.95p since 2011, but the effective rate paid by drivers since 2022 has been 52.95p as a result of a “temporary” 5p cut.
Rail fares have also been frozen for a year
READ THE FULL STORY: Budget 2025 LIVE – See how you'll fare in Rachel Reeves' autumn spending plan