Autumn Budget 2024: Martin Lewis's analysis on what it means for you – including minimum wage rises, changes to benefits and more

The Chancellor Rachel Reeves has today announced a host of changes to benefits, transport and more in her Autumn Budget. MoneySavingExpert.com founder Martin Lewis has shared his instant reaction and explained what the changes mean for you, and we've added more detail on them below.


A round-up of today's announcements
Follow the links for more info:
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Income and National Insurance thresholds remain frozen until 2028.
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The Carer's Allowance earnings limit will increase by over £45 a week.
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Government rejects Martin's calls to end Child Benefit unfairness.
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Stamp Duty rates for second homes rising from TOMORROW (31 Oct).
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More people will be able to get unbeatable 50% bonus using Help to Save.
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Rail fares to increase by 4.6% and most Railcards to go up by £5.
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A cap on bus fares is extended but will rise to £3 from 2025.
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Private school fees subject to 20% VAT from on 1 January 2025.
Pensions subject to Inheritance Tax from April 2027 – but most still won't pay it
Pensions will be subject to Inheritance Tax (IHT) from April 2027 – though the vast majority of estates will still not pay it despite the changes.
The measures mean that an estimated extra 10,000 estates will be liable for IHT in the 2027-28 tax year, while an estimated 40,000 estates will be liable for more IHT as a result. See our IHT news story for full details.
Employers will pay more National Insurance – but it could have a knock-on impact on employee benefits
Currently, employers pay National Insurance (NI) at 13.8% on a worker's earnings above £9,100 a year. Employers do not pay NI on pension contributions.
Under the Chancellor’s new plans announced today, the rate at which employers pay NI will increase by 1.2 percentage points to 15%, and the threshold at which they’ll start paying that rate will drop by £4,100 to £5,000 a year.
NI contributions are the UK's second-largest source of revenue behind Income Tax, according to the Government. It says this increase will therefore boost funding towards services, such as the NHS.
However, some have warned that the rise in contributions will increase employer costs and reduce the savings they can make, therefore removing the incentive to offer additional pension contributions or other employee benefits.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "Employers may try to recoup these (NI savings) and this could be through pruning back the benefits that they offer to their staff. We could see lower wage increases which affect people's day to day spending. We could also see employers less likely to boost the contributions they pay to their employee pensions beyond auto-enrolment minimums."
In addition, those working for umbrella companies, which is a system typically used by recruitment agencies to pay temporary workers, will see the impact of this rise even more. This is because umbrella company workers pay for their employer's NI contributions out of their own wages, meaning they'll take this cost on as a personal tax rise.
Income Tax and National Insurance thresholds remain frozen until 2028
National Insurance thresholds across the UK and Income Tax thresholds in England, Wales and Northern Ireland – which determine when you start paying each tax – will remain frozen until April 2028 (as announced by the previous Conservative Government last year). There had been speculation that the new Labour Government would extend this 'freeze' further to 2030, but it has today confirmed this won’t be the case.
Although the rate you pay in tax and National Insurance won't change until 2028, by freezing the tax thresholds, it means that workers can lose out in a process known in economic jargon as "fiscal drag". Here's MoneySavingExpert.com founder Martin Lewis to explain what this means in practice: "What freezing the threshold does is that it means no matter what you earn, as your earnings increase, a bigger proportion of your earnings goes on tax. And that's how the Chancellor makes money from it."
The Scottish Government sets its own thresholds for Income Tax. It's said it won't make any decisions on its tax thresholds for next year until its Budget is announced on 4 December.
ISA deposit thresholds frozen until 2030
An Individual Savings Account (ISA) is a type of savings account where you don't pay tax on the interest you make. You can currently save up to £20,000 a year in a cash ISA, £9,000 in a Junior ISA and £4,000 in a Lifetime ISA. These allowances have now been frozen until 5 April 2030.
The amount you can save into a Child Trust Fund – which is £9,000 a year – has also been frozen for the same period.
The national minimum wage will rise by 6.7%
From 1 April 2025, the national minimum wage paid to workers aged 21 and over will rise by an inflation-busting 6.7%, from £11.44 an hour to £12.21 an hour. This will impact over three million workers, according to the Government.
The rate will also rise for those aged between 18 and 21 by a record-breaking 16.3%. This is part of the Government's plan to make the minimum wage the same for everyone regardless of age, which it says it's doing by raising the rates by a larger percentage for 18- to 20-year-olds in order to "narrow the gap" over time.
Age range | Current hourly rates | New hourly rates (from 1 April 2025) |
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Apprentices | £6.40 | £7.55 (+17.9%) |
Under 18s | £6.40 | £7.55 (+17.9%) |
Between 18-20 | £8.60 | £10 (+16.3%) |
Aged 21+ | £11.44 | £12.21 (+6.7%) |
These rates apply to everyone, even if you're not paid hourly.
This is the first time that the Low Pay Commission, which advises the Government on what to set the minimum wage to, has been told by the Government to factor the cost of living into its recommendation.
However, the minimum wage rate is still lower than the 'real living wage', a voluntary employers' pay scheme based on the cost of living. Earlier this month, the Living Wage Foundation, which sets the rates, increased its hourly pay rates by 5% to £12.60 an hour and to £13.85 for those in London. The foundation says this will benefit over half a million workers and must be implemented by employers by 1 May 2025 at the latest.
State Pension confirmed to rise by 4.1%
The Chancellor confirmed that both the old (basic) and new State Pension are set to rise by 4.1% on 6 April 2025, under what's known as the 'triple lock' guarantee.
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Those on the full New State Pension will see their weekly pension rise from £221.20 to £230.25.
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Those on the Old State Pension will see a weekly rise from £169.50 to £176.45.
However, most pensioners (three in four) are on the Old State Pension, meaning they'll receive a smaller rise.
The Guarantee Element of Pension Credit – a top-up benefit for low-income pensioners – will also increase by 4.1% from April 2025, meaning an annual increase of £465 for single pensioners, and £710 for couples.
Benefits to rise by 1.7% with other changes announced
Benefits, including Universal Credit and Child Benefit, will increase by 1.7% from April 2025. Other changes to benefits include:
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Universal Credit monthly debt deductions to be reduced. If you owe money for debts including rent, council tax, utility bills and advances in benefit payments, you can have deductions automatically taken from your monthly Universal Credit standard allowance. Currently, the cap on these deductions is up to 25%. Under new plans announced today, this cap will be lowered to up to 15% from April 2025. The Government says this could boost a claimant's income by an average of £420 a year.
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Reform to work capability assessments to continue. This means around half a million Universal Credit claimants will no longer be classed as having "limited capability for work", so they will be required to undertake more work-related activities to get their monthly Universal Credit payment.
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Plans to accelerate the move of Employment and Support Allowance claimants onto Universal Credit. The Government now aims to complete the move of all working age legacy benefit claimants onto Universal Credit by 2026.
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An increase in the interest rate charged on Government debt. From 6 April 2025, HMRC will increase the interest rate on unpaid tax by 1.5 percentage points. The amount of interest is currently set at the Bank of England base rate plus 2.5%. This means the rate will rise from 7.5% to 9%.
Carer's Allowance earnings limit to increase by £45 a week
From 7 April 2025, unpaid carers will be able to make £196 a week without losing their entitlement to Carer's Allowance. The current limit is £151, making this the largest increase since the benefit was introduced in 1976. The change will enable over 60,000 more carers to receive support, according to the Government.
The Chancellor also acknowledged ongoing issues with the Carer's Allowance cliff-edge, which sees the entire benefit clawed back if carers earn a single penny over the limit. Earlier this month, the Government launched a review into Carer's Allowance overpayments, but it's unclear if the cliff-edge will be removed. For full details, see our Carer's Allowance earnings limit news story.
Government rejects Martin's calls to end Child Benefit unfairness
Martin has been campaigning extensively for reforms to the Child Benefit system. Currently, parents have to start repaying Child Benefit once they start earning above £60,000 a year (called the High Income Child Benefit Charge), and you're able to earn up to £80,000 a year before you lose your Child Benefit entitlement entirely.
For a two parent household, this means you could have a household income of almost £120,000 (£59,999 each) and keep all of your Child Benefit. The unfairness comes for single parents and single income households who have to start repaying their Child Benefit on a significantly lower income.
These thresholds were increased in the 2024 Spring Budget, when Jeremy Hunt was Chancellor, and the Conservative Government committed to launching a consultation on whether to change Child Benefit eligibility to being based on household income, rather than on individual income, by April 2026.
Today, the new Labour administration refused to take that any further, stating that it would cost £1.4 billion to change the way the higher income child benefit charges are calculated. This leaves thousands of families with only one earner, or single-parent families, still facing a cliff-edge.
The Chancellor did, however, announce plans to make paying the Child Benefit Charge easier, by pre-populating Self-Assessment tax returns with Child Benefit data, and allowing employed individuals to pay the Charge through their tax code from 2025.
Here's what Martin had to say on the issue:
Stamp Duty rates hiked for those buying a second home
Stamp Duty rates are increasing for those buying a second home/ additional property in England or Northern Ireland. They're currently three percentage points higher than standard Stamp Duty rates. But from tomorrow (31 October), Stamp Duty on additional properties will be five percentage points above standard rates. Full details in the table below.
Purchase price | Main residence rate | Second or additional property – current rate | Second or additional property – rate from 31 Oct |
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Up to £250,000 | 0% | 3% | 5% |
£250,001 – £925,000 | 5% | 8% | 10% |
£925,001 – £1,500,000 | 10% | 13% | 15% |
£1,500,001+ | 12% | 15% | 17% |
(1) The £425,000 first-time buyer stamp duty threshold does not apply if the property you are buying costs more than £625,000 – if it does, the £250,000 threshold applies.
Stamp duty changing AGAIN in April 2025 – and that'll impact most homeowners
Although not referred to in Wednesday's Budget, there will be further changes to stamp duty in England and Northern Ireland from 1 April 2025. These changes will impact virtually all homeowners, including first-time buyers, home-movers and second-home buyers, because:
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The stamp duty threshold will drop from £250,000 to £125,000.
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First-time buyer stamp duty relief will drop from £425,000 to £300,000.
Full details in the table below:
Purchase price | Main residence rate | Second or additional property |
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Up to £125,000 (£300,000 for first-time buyers) (1) | 0% | 5% |
£125,001 – £250,000 | 2% | 7% |
£250,001 – £925,000 | 5% | 10% |
£925,001 – £1,500,000 | 10% | 15% |
£1,500,001 + | 12% | 17% |
(1) The £300,000 first-time buyer stamp duty threshold does not apply if the property you are buying costs more than £500,000 – if it does, the £125,000 threshold applies.
Right to Buy discount to be cut
Under the Right to Buy scheme, some council and housing association tenants in England are able to buy their homes at a discounted price. Currently, these discounts are capped at £102,400, or £136,400 if you live in London.
From 21 November 2024, the maximum discount will be cut to £38,000 (£16,000 in most parts of London) [we had previously mistakenly reported this the other way around]. To qualify for the current rates, a completed application form must have been received by your social landlord by 21 November, though you can complete on the purchase after this date.
This only applies to homes in England. In Scotland and Wales, the Right to Buy scheme was abolished in 2016 and 2019 respectively. In Northern Ireland, Right to Buy is still available for social housing tenants who've been in their home for a minimum of five years; the discount starts at 20% of the home's market value and increases by 2% each year to the lowest of 60% market value or £24,000.
£500 million for 5,000 affordable social homes
Under the 'Affordable Homes Programme', £500 million in funding will be put towards 5,000 new affordable social homes.
In addition, the Government will consult on a new five-year social housing rent settlement, which would cap the rent social housing providers in England can charge their tenants. This cap would increase with the Consumer Prices Index (CPI) rate of inflation, plus an additional 1%, each year. The cap on social rent rises in England is currently set at 7.7%. The consultation launched on 30 October and will close on 23 December. We've asked the Government when any changes may come into force.
We've also asked the devolved governments for their plans:
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Northern Ireland: Currently has a social rent cap of 7.7%, the same as in England.
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Scotland: There's no social rent cap, but there is an agreement in place to keep rises below inflation. This will remain in place for 2025/26.
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Wales: For 2025/26, the Welsh Government will cap its social housing rent at the previous September's CPI, plus 1%. In September 2024, inflation stood at 1.7%, meaning social rent rises will be capped at 2.7%. The current cap is 6.7%.
More people will be able to get unbeatable 50% bonus using Help to Save
The Help to Save scheme gives low-income earners claiming Universal Credit or Working Tax Credit a savings boost. It pays a 50% bonus on the amount saved, up to a maximum of £1,200 over four years.
Eligibility will be expanded to all working people on Universal Credit from 6 April 2025 – about 3 million people in total will be able to take advantage of the scheme.
Right now, you can only open a Help to Save account if you get Universal Credit and take home £793.17 a month or more (or if you are entitled to Working Tax Credit and receive Working or Child Tax Credit). But from next April, anyone who claims Universal Credit and earns at least £1 from work will be able to open one, up until 5 April 2027.
The Government has also published a consultation on other changes it hopes will "further improve" the scheme.
Rail fares to increase by 4.6% and most Railcards to go up by £5
Annual increases to 'regulated' rail fares in England are usually linked to the previous July's retail prices index (RPI) measure of inflation, which for 2024 stood at 3.6%. However, as part of the Autumn Budget, the Government has confirmed that regulated rail fares in England will rise by 4.6% from 2 March 2025, to "recover a shortfall in revenue" incurred since the pandemic.
Regulated rail fares include season, anytime day, off-peak, and super off-peak tickets. Unregulated fares include first class, advance, anytime and off-peak day tickets – the cost of these fares is set by train companies.
The Scottish and Welsh governments told us any changes to rail fares will be confirmed in the coming weeks. We're yet to hear what's happening, if anything, in Northern Ireland.
In addition, the price of most Railcards (excluding the Disabled Persons Railcard) will be increasing by £5 from the same date.
Bus fare cap extended, but it's rising from £2 to £3
Since January 2023, single fare bus journeys in England have been capped at £2, excluding London where fares are capped at £1.75 and Manchester where a separate £2 cap also applies.
The £2 cap was originally planned to run between January and March 2023, but was later extended until 30 June, then again until 31 October 2023 and later until the end of 2024. The cap has now been extended until the end of 2025 but will increase from £2 to £3 from 1 January 2025. The cap in Manchester will remain at £2 until the end of 2025.
Elsewhere across the UK:
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Northern Ireland: Fares were increased by 8% in July 2024.
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Scotland: Has no planned changes following the Budget announcement on fares in England. The Scottish Government added that fares in many parts of the country are already below £3 and that it also provides free bus travel to Scottish residents who are over 60, disabled or under 22.
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Wales: The Welsh Government told us it will set out its spending decisions, including on bus fares, in its Draft Budget in the coming weeks.
We’ve asked the Northern Irish Government, plus Transport for London, for their plans for 2025 and we will update this story when we know more.
Cigarettes, vapes, booze, flights – new taxes and tax cuts
A host of other tax changes were also announced. We've rounded 'em up below:
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The average cost of a packet of 20 cigarettes will be increasing by 54p from 6pm today (30 October 2024). The price of a 30g packet of hand-rolling tobacco will be increasing by £2.32. There will also be a 'one-off' increase in tobacco duty on 1 October 2026 of £2.20 which the Government says will "maintain the current financial incentive to choose vaping over smoking".
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Vaping products will also be taxed more from 1 October 2026 at a rate of £2.20 per 10ml of vaping liquid.
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The price of a draught pint will be cut by 1.7% from 1 February 2025. This will mean a reduction by an average of 1p per pint. Duty on non-draught products will increase by the Retail Prices Index (RPI) measure of inflation from 1 February 2025.
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Fuel duty frozen again. This UK-wide tax on petrol and diesel will remain at 52.95p a litre as the temporary 5p cut has been extended again and will expire on 22 March 2026. For help cutting your fuel costs, see our Cheap petrol and diesel guide.
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Air Passenger Duty (APD) will rise in 2026/27. This is a charge paid by airlines, but often passed on to passengers through the fares they pay. APD rates will rise by £2 for short-haul flights (currently £13) and by £12 for long haul flights (currently £92 though rising to £94 from April 2025), while rates for premium economy, business class and first-class seats will increase even further.
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The price of soft drinks will be increasing. Soft drinks will be going up in price over the next five years from 1 April 2025 in line with inflation between 2018 and 2024. This means that, on average, the price of a 300ml can of soft drink will increase by up to 3p by 2030.
Capital Gains Tax rates to increase
Capital Gains Tax (CGT) is one of the least common taxes on income, and for many it won't apply. However, if you sell or give away an asset – which could be a house, shares in a company or other possessions – you could have to pay CGT. It doesn't apply for main homes, cars or lottery/pools winnings, among other things.
Each year, individuals have an "annual exempt amount" – for 2024/25 it’s £3,000. Above this, you pay CGT on all gains.
Today, the Government has confirmed that it will be raising the rate at which you pay CGT on shares and other assets above £3,000 from 10% to 18% (the lower rate) and from 20% to 24% (the higher rate) from 30 October 2024. Which rate you pay depends on the size of the gains and your income tax rate. The rate at which you pay CGT on residential property – for example second homes or buy-to-let properties – will remain the same.
Private school fees subject to 20% VAT from 1 January 2025
Currently, private schools are eligible for some tax breaks and they don't have to charge VAT on tuition or boarding fees. These tax breaks are being removed from 1 January 2025, and VAT will apply to to all payments that relate to the January 2025 term onwards, unless you made the payment before 29 July 2024, in which case it won’t incur the 20% VAT.
If you have children at private school, the impact on the actual fees will depend on how the school decides to reflect the VAT increase in the amount it charges.
What DIDN’T happen in today's Budget
Ahead of the Budget, Martin wrote to the Chancellor and we also told HM Treasury our campaign asks. None of these were included in today's announcement. Here's a round-up of what we asked for and what DIDN'T happen:
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Cancelling the Lifetime ISA withdrawal penalty for first-time buyers purchasing homes above the scheme’s £450,000 property price cap and/or raising the limit.
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Renaming the Tax-Free Childcare scheme to help 800,000 families missing out.
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Making the new Winter Fuel Payment eligibility criteria less restrictive.
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Compensation for the WASPI (Women Against State Pension Inequality) women. There was no mention of any redress for WASPI women, who say they were treated unfairly when the state pension age rose from 60 to 65.
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Increasing the English student living loan to keep up with the cost of living.