What a shambles? The Autumn Budget Commentary 2025

Synopsis

In this blog we take a look at the Autumn 2025 Budget and take you through some of the key points in Rachel Reeves' speech. We also offer an interesting return comparison for a Cash ISA, a Stocks and Shares ISA and Gold. 

The Autumn UK Budget started off in a bit of a shambles after the Office for Budget Responsibilities (OBR, the body that monitors the UK government’s spending plans and performance) seemingly released its official forecast ahead of the official budget in error. In essence, the budget was delivered 35 minutes early but not by Rachel Reeves! 

 The Prime Minister was the brunt of a lot of questions after it happened, including a suggestion that the build-up to the Budget was the ‘most chaotic’ in living memory, and whether he had an explanation for the ‘complete shambles’. Tit for tat, he recounted the comment referring to Liz Truss’ mini-Budget being a ‘shambles’.  

Outside of Westminster, the OBR report seemed to confirm the removal of the two-child benefit cap, a new tax for electric vehicles and a new ‘mansion tax’. We waited for the official Budget at 12.30 to confirm specifics, and there are some other changes that could impact investment choices considerably.  

Rachel Reeves started by confirming a single message; her Budget was for a ‘fairer, stronger and more secure Britain’ focusing on stability, investments and reform.  
That translated to stability through better debt management, investments within the UK and reform of taxes.  Much was made of investments for business and growth in the UK, a more stable economy and perhaps most key, the message that the very wealthiest must contribute the most.  

Let’s take a closer look at some of the key points made: 

• The biggest impact was on income tax. Reeves has chosen to freeze personal tax thresholds until 2031, estimated to generate £8.3bn by the end of the current Parliament reign. This was coupled with no NI or VAT increases either. The overall value of this decision is estimated to be in the region of £26bn.
• Under 65s will see a change to their tax-free ISA allowance. With the overall £20,000 limit remaining in place, this will now be split between Cash ISAs and Stocks & Shares ISAs, with limits of £12,000 and £8,000 respectively. Over 65s will see no change and keep the £20,000 cash ISA allowance.  
• The Salary Sacrifice Scheme allowance has been cut to £2,000. This was put forward as an effort to stop people avoiding tax on big bonuses by paying into the Salary Sacrifice. Originally, the scheme was introduced as a tax efficient route for workers to enhance their retirement savings. However, the change means contributions will be subject to NI from employer and employee. That is likely to raise about £4.7bn in 2029/30 and £2.6bn in 2030/31.  To put that into perspective, a UK salary of £35,000; if a person is paying 6%, they would be over the threshold of £100, so that portion would be subject to NI payments.  
• The new state pension saw an increase too, as well as the living and national minimum wage.   
• Fuel Duty is to come to an end with duty to be updated in line with inflation. However, this end would not come until September 2026. As a part of this, Reeves has brought in new rules to mandate petrol forecourts though, as historically many of them have not passed the fuel duty savings to drivers at all.  
• here was a focus on energy pricing and the need to invest in renewable energy more. She also suggested the removal of legacy costs from bills, with the average household seeing a cut in their bills of up to £150 from April 2026.  
• Reeves also stated that inflation is coming down faster than expected and that it will be a full 0.4% lower next year.  
• Borrowing for the UK will fall as a share of GDP in every year of the forecast, and we will meet our stability rule a year early.  
• Reeves also spoke of the UK’s financial debt, hitting £2.6bn for the year, or 83% of the GDP. 
• Another interesting change was for those claiming pensions who do not reside in the UK, with a statement that she would abolish access to class 2 NI contributions, including those who paid in via a Conservative initiative.  
• One introduction under the news spotlight is the so-called ‘mansion tax’. Reeves stated that from 2028 she would introduce a high-value council tax surcharge in England. If you have a property worth £2 million, you will have to pay an additional £2,500 a year, and for those with properties worth 5 million pounds or higher, they will pay an additional £7,500 a year. However, she balanced this with a suggestion that the impact would affect less than 1% of property owners in the UK.  
• Also in the spotlight, as alluded to earlier in the day, tax on electric vehicles will be changing. This means that drivers will be taxed on how much they drive. The figures given were of an excise duty of 3p per mile on electric cars and 1.5p per mile for plug-in hybrids.   
• Conservative leader Badenoch called the Budget a ‘total humiliation’ and said Reeves is hiking taxes to pay for welfare.   
• The OBR suggests the Government’s tax take will reach an all-time high of 38% of GDP in 2030/31, while growth forecasts were downgraded after this year. 

Overall, the budget was perhaps less of a surprise than was expected – largely due to the key points being leaked, but that’s another story. Moreover, there will be implications for those who invest and how they manage their future wealth. Especially for under 65s who will now need to consider diversification into the stock market to take full advantage of their ISA allowance. 

What can you do to improve your future wealth preservation?

So, what can you do to counteract tax? Well outside of paying more into your pension and relying on Stocks & Shares ISA or even Cash ISAs, investment in CGT-exempt bullion might be a more attractive prospect than it has ever been.  
Capital gains tax (CGT) coupled with an increase in the value of precious metals, means that you can invest in CGT-exempt bullion like Britannias and avoid any capital gains; off-setting the increasing tax burden.  

CGT-exempt coins like gold Britannias are VAT-free, meaning that you can build your wealth and investments, whilst diversifying into the ‘safe-haven’ of gold, with the knowledge that when you come to sell, you will not pay a penny of tax.   

A comparison of a Cash ISA, Stocks & Shares ISA and Gold Investment

Someone who put £20,000 in a cash ISA on the 6th April 2017, and left it untouched, would now have about £23,549. In real terms, this means they would have effectively lost money; prices have risen by over a third in that period, meaning the pot would need to have grown to £27,000 just to keep up with inflation. 

A Stocks & Shares ISA could have generated far stronger returns. £20,000 invested in a global tracker fund in April 2017 would now be worth roughly £50,700. This equates to an annual growth rate of 12%. Please note that past performance is not a reliable indicator of future returns. 

However, perhaps most interesting of all, had you invested £20,000 into gold on the 6th April 2017, based on an average of £976.84 per ounce, you would have 20.47 troy ounces. Today, that same amount of gold would now have an intrinsic gold value of £64,318.00, showing that the precious metal outshines even the strongest Stocks & Shares ISA.