Budget 2025: Income tax rate will not rise, signals minister - but millions of families 'face £1,600 hit'

Key Announcement

Chief Secretary to the Prime Minister Darren Jones has signaled that the government rules out any increase in the income tax rate, staying true to manifesto pledges. This comes just before the Budget 2025 reveal. Yet, families could still see higher tax bills through other measures.

Tax Threshold Freeze

The freeze on income tax thresholds might extend for two more years, pushing millions into higher bands as wages rise. A typical family with one earner at £60,000 and another at £40,000 faces an extra £1,281 in income tax and National Insurance over 2029-30. Limits on pension salary sacrifice schemes could add £304 more in costs.

Other Budget Measures

Chancellor Rachel Reeves eyes a "mansion tax" on properties over £2 million, hitting London hardest. Plans include scrapping the two-child benefit cap to aid 260,000 kids at £3 billion cost, while holding fuel duty steady. National Living Wage rises 4.1% to £12.71/hour from April.

“There is a threshold and there is a rate, we had very clear commitment not increase the headline rate of income tax.”

Author's summary: UK minister Darren Jones confirms no income tax rate hike in Budget 2025 per manifesto, but threshold freezes and pension tweaks may cost middle-class families up to £1,600 extra over two years amid fiscal gap fixes. (148 characters)

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London Evening Standard on MSN London Evening Standard on MSN — 2025-11-26

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