From inheritance tax and carers to smokers and pint drinkers, Big Issue has looked into the details to tell you exactly what this will mean for your bank balance.

The minimum wage increases

The big news from Reeves’ budget is an increase in the minimum wage. For over-21s, the national living wage increases from £11.44 to £12.21 an hour from April. It has already risen from £10.42 this year, and the 2025 rise will be a lower percentage increase than in the previous two years. For a 40-hour week, this increases from an annual salary of £23,795 to £25,396.

Elsewhere, 18-20 year olds get an increase from £8.60 to £10, while apprentices go from £6.40 to £7.55. Indeed, the Labor Party wants to bring the minimum wage to the same level for all adults – with a further increase for 18-20 year olds.

Caregivers will be able to work more

Caregivers can now earn more than £10,000 a year before their carer’s allowance is scrapped, as Reeves increased the weekly pay limit to 16 hours at the National Living Wage. At the Dispatch Box, Reeves said it was the biggest increase in the Carers Allowance since it was introduced in the 1970s.

‘Fiscal brake’ means income tax will increase by stealth

Reeves has been very vocal about his decision not to extend the freeze on income tax thresholds. “Extending the freeze on the thresholds would harm workers,” she said, announcing that there would be no extension of the freeze beyond 2028. From 2028/29, the tax thresholds for Individuals will be raised according to inflation.

But for the next five years, Reeves has decided to keep the thresholds unchanged. To recap, a common feature of recent budgets is a “stealth tax” increase while keeping the same income tax thresholds. Due to inflation, more people will start paying income taxes and annual wage increases will push workers into higher tax brackets. The measure brings tens of billions to the government. It has been frozen since April 2022 and, under the Conservatives, the freeze was set to extend until 2028. Reeves maintained the status quo for the next three years.

Gas taxes will not increase

“There will be no higher taxes at the gas pump next year,” Reeves said. Rather than increasing fuel tax of 7p a liter, it will remain frozen next year – continuing a conservative budgetary tradition.

Bus prices will rise from £2 to £3 for many

The increase in the ceiling bus fares from £2 to £3 has been criticized, alongside a freeze on fuel duty for drivers. The cap does not apply to all routes and was set to expire in December. It will now be extended until December 2025, but increased by 50%.

What you pay will depend on where you live. Greater Manchester Mayor Andy Burnham has pledged to maintain the £2 cap.

Pints ​​will be 1p cheaper

Promising “a penny on the pint at the pub”, Reeves announced a 1.7% reduction in tariffs. With the average pint in the UK Costing £4.79, it will take a few pints to feel the benefits.

Second homes and becoming an owner will cost more

Reeves was to end the freeze on stamp duty thresholds, a move which could have cost the average first-time buyer in London £6,000 and sparked outrage. This did not materialize.

But second homes will become more expensive, with Reeves announcing an increase in the higher stamp duty rate for second homes and rental properties from 3% to 5%.

Increases in employers’ national insurance contributions could be passed on to workers

One of Reeves’ greatest budget Increased national insurance contributions paid by employers have been a source of revenue. Successful businesses, she argued, depend on healthy schools. However, a “substantial part” of this sum will be passed on to wages, according to the OBR. Paul Johnson, director of the Institute for Fiscal Studies, estimated that “probably about three-quarters of the increase will be reflected in lower wages.”

Mortgage rates are not expected to fall as fast or as far as previously thought.

In Reeves’ budget, the OBR forecasts interest rates will fall – but at a slower pace than expected.

Bank rates – which strongly influence mortgage interest rates – are expected to fall to 3.5% from 2027. This is 0.5% more than forecast in March.

Wages are expected to rise faster than previously thought, but disposable income will stagnate

Profit growth will fall from 4.7% this year to 3.5% in 2025, the OBR forecasts. This figure is higher than the March forecast, the OBR said, and will then stand at an average of 2.25%.

However, disposable income will only increase by 0.5% over the next five years.

Inheritance taxes are changed

Reeves extends the freeze on the £325,000 income tax threshold until 2030 and changes some tax exemptions.

A increase in inheritance tax is deeply unpopular – 56% oppose it, while only 29% support it – and is often referred to as a “death tax”. But very few of them pay inheritance tax. Spouses and civil partners are exempt, and only 4% of families are subject to it, given the threshold is £325,000.

Reeves announced two changes: integrating inherited pensions into inheritance tax from April 2027 and introducing more business and agricultural assets – think farms – into the scheme.

Tobacco taxes will make tobacco and vaping more expensive

Smoking will become more expensive. Taxes on hand-rolling tobacco will increase by 10%, the government will introduce a flat tax on vaping liquid from October 2026, and “indexation” of tobacco taxes is back, meaning they will increase by inflation plus 2%. There will also be a one-off increase in tobacco taxes.

The flight is a little more taxed

Taxes on air passengers are increasing, an increase which Reeves says will add no more than £2 to the price of a short-haul economy flight. For the private jet travelers among youa 50% tax increase will add £450 to the likely cost.

Universal Credit deductions will be capped

Reeves will reduce the amount of benefits that can be received each month for automatic debt repayment, from 25% to 15% of the standard benefit. This means 1.2 million of the poorest households will keep more of their benefits, Reeves said, adding that it would lift children out of poverty, with an average gain of £420 a year.

Research shows Most Universal Credit claimants are in debt.

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