🌧️➡️🌤️ Autumn Budget 2025: What It Could Mean for You
- Nov 26
- 4 min read
The Autumn Budget 2025 announced today by Chancellor Rachel Reeves (detailed in the leaked Office of Budget Responsibility [OBR] papers report attached), lands at a time when many young adults are juggling rising rents, higher living costs, and uncertainty around jobs. While the Budget isn't a radical reset, it does contain several changes that will affect students, renters, workers, and low-income households.
We went through it so you don't have to. Here’s what could actually matter for you as a young adult 👇
🎓 1. Student loans: repayment thresholds frozen (page 67)
What’s happening? From 2027–2028, the Government is freezing repayment and interest rate thresholds for Plan 2 student loans for three years.
What this means for you:
Threshold freezes = you’ll start repaying more of your loan sooner, because the earnings point at which you repay doesn’t rise with inflation.
The freeze also means a higher interest rate applies earlier.
For graduates with rising wages, this effectively acts like a stealth tax. It won't change your monthly payment formula (still 9% over the threshold), but more of your income will fall into the repayment zone.
🏠 2. Housing: higher mortgage rates & slower market (page 48–49)
Even if you’re not yet buying, this affects rents and housing availability.
❗ Mortgage rates rising
Average mortgage rates are forecast to rise from 3.7% in 2024 to around 5% in 2029.This keeps the cost of buying high, limiting first-time buyer affordability.
🏘️ Housing supply stagnant in the short term
New housing additions fall to 215,000 homes in 2026–2027, before rising sharply to 305,000 by 2029–30 thanks to planning reforms.Short-term squeeze = continued pressure on rents and availability.
📉 Slower house price growth
House prices are still rising (from £260k in 2024 to £305k by 2030) but increases in property taxation from 2027 will slow growth slightly.
What this means for you:
Renting remains competitive and expensive.
Getting on the ladder stays tough until supply picks up later in the decade.
💡 3. Energy bills: temporary relief (page 67)
The Government will refund energy suppliers for 75% of the domestic portion of the Renewables Obligation between 2026–2027 and 2028–2029. This cuts some of the costs passed on to households.
What this means for you:
Slight reduction in electricity bills for a few years.
After 2029–2030, the full cost goes back onto bills ... so this is temporary relief.
💼 4. Tax freezes: your take-home pay will be squeezed (page 70–71)
The Budget extends the freeze on the income tax personal allowance and higher-rate thresholds to 2030–2031.
What this means for you:
Pay rises won’t feel like pay rises.
More of your income is taxed over time ... a classic “fiscal drag” effect.
This impacts all workers, particularly younger workers whose earnings rise quickly in early career years.
🧒 5. Universal Credit changes: more support for families (page 66–68)
While many 18–30s aren’t yet parents, a sizeable number are (or will be)... and these changes matter.
🚼 Two-child limit removed (from April 2026)
The Budget removes the rule limiting Universal Credit support to the first two children.
Around 560,000 families gain by an average of £5,310/year by 2029–2030.
💸 Higher standard allowances and reversed cuts
The Government has reversed previous cuts to disability-related and winter payment benefits, raising welfare spending significantly.
What this means for you:
Increased support if you have children or health-related needs.
Better safety net for young parents and low-income households.
🚗 6. Electric car users: new mileage charge coming (page 75)
A mileage-based charge on electric cars starts in 2028, gradually raising revenue into the 2030s.Good to know if you're considering buying an EV.
🧾 7. Fuel duty still frozen (page 11)
Fuel duty remains frozen (again) until September 2026, offering stability for drivers. Though this mostly helps people with non-EV cars rather than those who rely on public transport.
What was announced in the budget that isn’t in the report…
🚕 8. 20% VAT on Uber, Bolt, etc. (ride-hailing platforms)
From January 2026, ride-hailing platforms (Uber, Bolt, FreeNow, etc.) must charge VAT at 20% on all fares.
This comes from a legal clarification that the platform is deemed to be the supplier for VAT purposes … similar to the rules already applied to food-delivery platforms, closing a pre-existing loophole.
What this means for you:
Fares will rise. Analysts estimate around 7–12% price increases, depending on platform fees.
Drivers are not the ones charging VAT … the platform adds the VAT to the fare.
Could push more people onto public transport or licensed taxis.
💼 9. Pension salary-sacrifice cap
The Government tightened the rules around pension salary-sacrifice,
The salary sacrifice pension perk is to be capped at £2,000 a year from April 2029 (which means that the National Insurance relief you get through salary-sacrificing into your pension will be capped at £2,000 a year).
🐖 10. CASH ISA limits are cut
From April 2027, The tax-efficient cash individual savings accounts (ISA) are being cut from £20,000 a year to £12,000 for under-65s, likely to encourage more people to invest using Stocks and Shares ISAs, where limits remain at £20,000.
What this means for you:
This limit does not apply to what you already have in a cash ISA, only what you put in from April 2027.
Building societies and banks have raised concerns that this change could impact amounts saved for deposits, which would impact the amount of money they could loan to mortgage borrowers… therefore tighter lending and potentially higher mortgage rates.
TLDR;
👍 from the budget:
Energy bill relief (temporary)
Removal of two-child limit helps young families
Housing supply finally increases ... but later in the decade
👎 from the budget:
Student loan threshold freeze = higher repayments
Income tax threshold freeze squeezes take-home pay
Less money available for future planning
Mortgage rates staying high keeps buying out of reach
No major policies tackling high rents or cost-of-living pressure
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