Rachel Reeves has announced her financial update, with key changes to Winter Fuel Payment set for 2025. The chancellor's opening remarks were overshadowed by an accidental early publication of the Office for Budget Responsibility's (OBR) assessment, which shadow chancellor Mel Stride called 'outrageous'. Reeves described the leak as 'deeply disappointing' and a 'serious error'.
Reeves stated that the government is 'rebuilding our economy' through trade deals with the US, India, and the EU, planning reforms, visa system overhaul, and fiscal rule changes to boost public investment to a four-decade high. She reiterated the £22bn 'black hole' left by the Conservatives, claiming taxes on the wealthiest have helped close the gap and fund the NHS.
Income tax and national insurance thresholds will be frozen for another three years from 2028, continuing a freeze by the previous government. Reeves admitted this will 'affect working people' but said changes ensure the wealthiest contribute most. Headline rates of income tax, VAT, and national insurance will not rise, keeping Labour's manifesto pledge.
From April 2028, a high-value council tax surcharge ('mansion tax') will apply: £2,500 for properties worth over £2m, rising to £7,500 for those over £5m. From April 2029, a £2,000 cap will be placed on pension contributions shielded from national insurance via salary sacrifice, raising £4.7bn in extra NI contributions. From 6 April 2027, the annual Isa cash limit will drop from £20,000 to £12,000.
