Chancellor Rachel Reeves set out a Budget which will increase taxes by £40 billion as she promised to “fix the foundations” of the economy and repair the public finances.

In the first Labour Budget since 2010 – and the first ever delivered by a woman – Ms Reeves promised to “invest, invest, invest”.

But she said the “black hole” left by the Conservatives requires tens of billions of additional taxes.

These are the highlights from Ms Reeves Budget announcement, which lasted 77 minutes.

Budget pension changes

Rachel Reeves has promised an extra £470 for pensioners next year, as she maintained the Government’s commitment to the pension triple lock.

The triple lock guarantees an increase in pensions in line with average earnings, inflation or 2.5%, whichever is highest.

Making the announcement the Chancellor said: “This commitment means that while working-age benefits will be uprated in line with CPI at 1.7%, the basic and new state pension will be uprated by 4.1% in 2025-26.

“This means that over 12 million pensioners will gain up to £470 next year.”

She added: “The pension credit standard minimum guarantee will also rise by 4.1% from around £11,400 per year to around £11,850 for a single pensioner.”

Inheritance Tax changes

Ms Reeves confirmed changes to inheritance tax, including bringing pension pots within the with tax from April 2027.

Ms Reeves said: “Only 6% of estates will pay inheritance tax this year. I understand the strongly held desire to pass down savings to children and grandchildren, so I am taking a balanced approach in my package today.

“First, the previous government froze inheritance tax thresholds until 2028. I will extend that freeze for a further two years, until 2030.

“That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1 million when a tax-free allowance is passed to a surviving spouse or civil partner.”

On inheritance taxes applied to farms, the Chancellor said: “We will reform agricultural property relief and business property relief. From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax at all, but for assets over £1 million, inheritance tax will apply with 50% relief, at an effective rate of 20%.”

Universal Credit boost announced

Ms Reeves announced that Labour will be lowering the cap on deductions that can be taken from benefit payments by up to £420 a year.

It is estimated that the change will benefit around 1.2 million households across the country, including 700,000 families with children.

Making the announcement during today’s Budget, the Chancellor said: "I can today announce that we are introducing a new Fair Repayment Rate to reduce the level of debt repayments that can be taken from a household’s Universal Credit payment each month from 25% to 15% of their standard allowance.

"This means that 1.2 million of the poorest households will keep more of their award each month lifting children out of poverty and those who benefit will gain an average of £420 a year."

The Budget also saw an increase in Universal Credit payments announced.

Benefits including Universal Credit and Personal Independence Payments (PIP) will increase by 1.7 per cent next year, in line with inflation figures from September.

Alcohol Duty changes

Chancellor Rachel Reeves has announced that the price of a pint will drop by 1p following a fall in the draught duty.

Talking to the House of Commons to announce the Autumn Budget, Reeves confirmed that draught duty on alcoholic drinks will fall by 1.7%.

Reeves said: "Nearly two-thirds of alcoholic drinks sold in pubs are served on draught.

"So today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7%, which means a penny off a pint in the pub."

Fuel Duty frozen

Rachel Reeves said it would be the “wrong choice” to increase fuel duty next year, saying she would continue the freeze and maintain the temporary 5p cut for another year.

She told MPs she has to “take some very difficult decisions” on tax, and noted to retain the 5p cut and freeze fuel duty again would cost more than £3 billion next year.

The Chancellor said: “At a time when the fiscal position is so difficult, I have to be frank with the House that this is a substantial commitment to make.

“I have concluded that in these difficult circumstances while the cost of living remains high and with a backdrop of global uncertainty increasing fuel duty next year would be the wrong choice for working people.

“It would mean fuel duty rising by 7p per litre. So, I have today decided to freeze fuel duty next year and I will maintain the existing 5p cut for another year, too. There will be no higher taxes at the petrol pumps next year.”

National Insurance changes

Chancellor Rachel Reeves announced the expected increase in employers’ national insurance contributions, but has thrown a lifeline to small businesses.

Employers will pay an additional 1.2 percent to 15%, from April 2025. The secondary threshold – the level at which employers start paying national insurance on each employee’s salary – will also be reduced from £9,100 per year to £5,000. This will raise £25 billion per year by the end of the forecast period. 

"I know that this is a difficult choice. I do not take this decision lightly," she said. 
She also unveiled an increase to the Employment Allowance for small businesses, which allows eligible employers to reduce their national insurance liability.

She told the Commons: “I am today increasing the Employment Allowance from £5,000 to £10,500. This means 865,000 employers won’t pay any national insurance at all next year, and over one million will pay the same or less as they did previously.

“This will allow a small business to employ the equivalent of four full-time workers on the national living wage without paying any national insurance on their wages.”

She accepted it was a 'difficult decision'. 

Martin Lewis reacts to Budget 2024

Martin Lewis has responded to Rachel Reeves' autumn budget.

Martin said on X, formerly known as Twitter: "So she isn't reversing the 2% Tory NI cut to employees, but shifting it to employers. 

"So the rabbit out of the hat was 'not extending the freeze on tax & NI thresholds' beyond what was planned to 2028.

"An extension of that would've only been on paper anyway, as it could always be changed, increased or reversed at future budgets.

"The change of threshold so employers now start paying National Insurance at £5,000 not £9,100 is big. For the employers who pay it, at the new 15% rate that alone's £615 increased cost per most employees per year.

"The question is where will that money come from, profits, increasing charges or reducing salaries/benefits?"