UK Budget 2025: "A painful budget for savers and investors”

Commenting on personal tax measures at the Budget, Christine Cairns, tax partner at PwC said:

“The reversal of last year’s ‘giveaway’ that there would be no extension to frozen income tax thresholds beyond 2028 means a further five years of fiscal drag which will continue to hit the public in their pockets.  This, compounded by the increase in Employers’ National Insurance Contributions last year, means that nearly a quarter of taxpayers will be paying the higher rate by 2030.

“The Government has raised tax across the board on investment income (interest, dividends, rents) by 2p in the pound. This will be felt sharply by those relying on investment income and it’s one of a long series of rises for those running a rental business. With the changes to salary sacrifice also predicted to raise significant sums this is a painful budget for those whose income is heavily reliant on savings and investments.  Together these measures are forecast to raise over £8bn by 2030-31 for the Chancellor

“The surcharge on high value properties will be a particular concern for those retired and living off savings and pensions in London and the South East who - subject to the consultation on deferral - could see their after-tax disposable income substantially fall.

“Those hoping for tax simplification will also have been disappointed as the Chancellor has introduced three new rates of income tax as well as other taxes, levies and exemptions,  which will add to complexity.  

“The £8,000 reduction to the cash ISA limit is aimed at encouraging investment in stocks and shares ISAs which produces more growth in the long term, tax free.”

Our full Budget reaction