Rachel Reeves has delivered her first Budget as Chancellor, setting out a number of key spending decisions and tax raising measures.
Among the announcements include an increase to how much national insurance employers must pay and a hike to capital gains tax.
Here are the key measures and what they mean for your money.
No extension to frozen tax thresholds
Rachel Reeves has opted not to freeze income tax thresholds again in a surprise move.
The thresholds at which people start paying the basic, higher and additional rates have been frozen since 2021 and will start rising with inflation again each year from 2028.
Keeping the thresholds at £12,570 for the 20p basic rate, £50,270 for the 40p higher rate and £125,140 for the 45p additional rate will mean taxpayers getting pushed into a more punitive income tax band as their salaries increase in line with inflation.
By opting not to freeze this thresholds, workers in the future will hopefully avoid moving up bands so dramatically.
An increase to national insurance paid by employers
Labour confirmed it will increase national insurance (NI) payments by 1.2 percentage points for employers from 13.8 per cent to 15 per cent.
When a worker is paid a wage, that wage is subject to both employee NI contributions of 8 per cent and employer contributions of now 15 per cent.
There will also be a significant reduction in the secondary earnings threshold at which employers start making national insurance contributions, from its current level of £9,100 to £5,000.
If money is paid into a pension instead, neither the employer or the employee need to pay any NI.
Partly offsetting this, Reeves 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.”
Businesses have warned this move may make them more reluctant to hire as it would cost them more money.
Hike to workers pay
The Chancellor announced a pay rise for over 3 million workers next year, increasing the National Living Wage by 6.7 per cent.
It will rise from £11.44 to £12.21 an hour from April 2025 – a pay boost worth £1,400 for an eligible full time worker.
Meanwhile, the National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10 an hour – the largest increase in the rate on record.
Labour said the £1.40 increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year.
Increase to Carer’s Allowance
Carer’s allowance currently provides up to £81.90 per week to those with additional caring responsibilities.
Reeves said: “Today, I can confirm that we are increasing the weekly earnings limit to the equivalent of 16 hours at the National Living Wage per week the largest increase since Carer’s Allowance was introduced in 1976.
“That means a carer can now earn over £10,000 a year while receiving Carer’s Allowance allowing them to increase their hours where they want to and keep more of their money.”
Maintain to fuel duty freeze
Fuel duty has not been increased, despite some expectations it would be.
It has been frozen since 2011, and a 5p cut brought in by the Conservatives in 2022 has been extended at every subsequent Budget.
Changes to capital gains tax
Capital gains tax (CGT) has been increased, as was widely expected.
CGT is paid by investors, business owners, and some property owners who make a profit when selling houses or flats they do not live in, such as holiday homes or buy-to-let properties.
The lower rate of CGT will rise from from 10 per cent to 18 per cent and the higher rate from 20 per cent to 24 per cent.
The rates on residential property will remain at 18 per cent per cent and 24 per cent.
CGT rates on carried interest will rise to 32 per cent from April 2025 and, from April 2026, deliver further reforms.
Stamp Duty
The government will increase the stamp duty land surcharge for second-homes, by 2 per cent to 5 per cent from tomorrow (31 October).
Reeves said this will support over 130,000 additional transactions from people buying their first home, or moving home over, the next five years.
Inheritance tax reliefs removed
There have been several changes to inheritance tax (IHT) reliefs. IHT is paid on the estate of someone when they pass away. However, there are amounts that can be passed on tax-free.
Labour is freezing to thresholds for a further two years, until 2030.
This 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 £1m when a tax free allowance is passed to a surviving spouse or civil partner.
It is also bringing inherited pensions into inheritance tax from April 2027.
Additionally, Labour will reform Agricultural Property Relief and Business Property Relief. From April 2026, the first £1m of combined business and agricultural assets will continue to attract no inheritance tax at all but for assets over £1m, inheritance tax will apply with 50 per cent relief, at an effective rate of 20 per cent.
Reeves said: “This will ensure we continue to protect small family farms and three-quarters of claims will be unaffected by these changes.
“I can also announce that we will apply a 50 per cent relief, in all circumstances, on inheritance tax for shares on the Alternative Investment Market (AIM) and other similar markets per cent, setting the effective rate at 20 per cent.
“Taken together, these measures raise over £2bn in the final year of the forecast.”
Tobacco Duty to rise
The Government will renew the Tobacco Duty escalator for the remainder of this Parliament at RPI plus 2 per cent as well as increase duty by a further 10 per cent on hand-rolling tobacco this year, introduce a flat rate duty on all vaping liquid from October 2026 as well as introduced a one off increase in Tobacco Duty to maintain the incentive to give up smoking.
Draught duty cut
Alcohol duty rates on non-draught products will increase in line with RPI from February next year.
However, Reeves said nearly two-thirds of alcoholic drinks sold in pubs are served on draught.
Instead of uprating these products in line with inflation, Labour is cutting draught duty by 1.7 per cent, which means a penny off a pint in the pub.
VAT on private school fees
Labour had already confirmed that it will introduce a 20 per cent VAT on private school fees from 1 January 2025.
This is despite warnings from the sector and unions that schools are not ready.
Some parents have said they can no longer afford to send their children to private schools with calls for the implementation to be delayed.
Vape tax introduced
Ms Reeves announced that a new levy will be imposed on all vaping liquid from October 2026.
Bus fare cap rise
The single bus fare cap applied to many routes in England will be raised from £2 to £3, extending it for a further year until December 2025.
Triple lock promise
The Government re-iterated its promise to look after pensioners confirming the basic and new state pension will be uprated by 4.1 per cent in 2025-26.
Reeves said: “This means that over 12 million pensioners will gain up to £470 next year, up to £275 more than if uprated by inflation.”
The Pension Credit Standard Minimum Guarantee will also rise by 4.1 per cent from around £11,400 per year to around £11,850 for a single pensioner.
Air Passenger Duty
Labour is increasing the rate of Air Passenger Duty on private jets by a further 50 per cent.