This year’s UK budget lands with a mix of steadying intentions and lingering frustrations.
While the government has introduced a handful of measures aimed at easing pressure on households and shoring up public services, it stops short of offering the bold economic reset many were hoping for.
With higher taxes continuing to bite and only limited support for growth, the budget feels more like a cautious attempt at stability than a transformative plan for the future.
From frozen tax thresholds to major changes in pensions, ISAs, and business allowances, here’s a breakdown of the most important updates you need to know.
Personal Tax: Threshold Freezes Extended
One of the headline announcements is the continued freeze on personal tax and National Insurance Contribution (NIC) thresholds.
These thresholds will now remain fixed until the 2030–31 tax year.
This means more people will gradually move into higher tax bands through fiscal drag as wages increase over time.
Pension Contributions: New NIC Charges Coming in 2029
Significant changes are coming for salary-sacrifice pension contributions.
From April 2029, pension contributions made through salary sacrifice above £2,000 will be subject to:
- Employer NIC, and
- Employee NIC
This marks a major shift from the current NIC-efficient system and could affect both take-home pay and employer pension strategies.
ISA Reform: New Cash Limit
ISAs will see a structural change to what can be sheltered tax-free each year.
- Only £12,000 of the annual ISA allowance may be placed into a cash ISA.
- The remaining £8,000 (assuming the current £20,000 total allowance) must go into stocks & shares ISAs.
This change aims to encourage longer-term investment over cash saving.
Dividend, Property & Savings Income Tax Rates Rising
From April 2027, tax rates on dividends, savings, and property income will increase by 2% across the board.
This will affect investors, landlords, and savers who rely on non-wage income streams.
Corporation Tax & Business Investment Allowances
Businesses will see mixed changes to reliefs and incentives:
Writing Down Allowances (WDA)
- The rate is being reduced from 18% to 14%, effective April 2026.
New First Year Allowance (FYA)
- A 40% first-year allowance will be introduced for qualifying plant and machinery purchased from January 2026.
These changes are designed to rebalance long-term investment incentives.
Electric Vehicle Mileage Duty: A New Charge from 2028
Electric vehicle owners will face a new mileage-based tax starting 2028–29.
- Battery electric and plug-in hybrid vehicles will be charged 3p per mile.
This reflects the government’s shift toward replacing declining fuel duty revenue as EV adoption grows.
Capital Gains Tax: Reduced Relief for Employee Ownership Transfers
Changes to CGT will affect business owners transferring companies into employee ownership trust structures.
- Relief on qualifying disposals will fall from 100% to 50%.
This reduces the tax advantage previously offered to EOT transitions.
Stamp Duty: Boost for UK Listings
To encourage companies to list in the UK, a temporary three-year Stamp Duty Reserve Tax (SDRT) relief has been introduced for businesses choosing London markets.
Class 2 NIC for Non-Residents Abolished
Non-resident individuals will no longer be able to pay Class 2 voluntary NIC, closing a door that previously allowed some to maintain UK state pension entitlement via contributions made from abroad.
Expansion of VCT & EIS Schemes
Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) programmes will be expanded, though full details are still to come.
This signals continued support for startup funding and early-stage investment incentives.
Final Thoughts & How SAS Can Help
This year’s Budget delivers substantial change across the personal finance landscape—especially for savers, investors, and businesses. Many policies have long lead times, giving individuals and companies time to adjust their planning.
At SAS, we help you navigate these changes with clarity and confidence. Our team can assess how the new tax, savings, and investment measures impact you or your business, and develop practical strategies to keep your plans as tax-efficient as possible. Whether it’s managing ISA changes, planning pension contributions, reviewing dividend or property income, or optimising business investment decisions, we provide tailored guidance to support your next steps.
