UK Budget 2025 Update

The Government’s View of the UK Economy

According to the Government, the UK’s financial position is stronger than previously expected. They indicate this provides more room to support the economy while keeping policies stable. The Government also forecasts slightly softer growth in the near term but maintains that the overall direction remains positive.
Why this matters: These are projections from the Government. Your focus should remain on how any confirmed changes may affect your financial plans.

Government Measures to Support Everyday Costs

The Government has announced measures aimed at easing household pressures, including:

• Lower energy bills
• A freeze on rail fares
• A freeze on other key transport cost

The Government suggests these steps may help guide inflation lower, potentially influencing interest-rate decisions later in the year.
Why this matters: Any reduction in everyday costs can improve long-term financial stability, regardless of forecasts.

ISA Changes

The Government has confirmed that the annual ISA allowance remains at £20,000 until changes to rules that will apply from April 2027

• Savers under 65 may contribute a maximum of £12,000 annually to cash ISAs
• Savers aged 65 and over may continue to contribute the full £20,000

Why this matters: These changes aim to encourage longer-term investing, such as in stocks and shares ISAs. Your focus should remain on strategies aligned with personal goals and risk tolerance.

Tax and Property Announcements

Key measures include:

• Income tax thresholds frozen from 2028–29, which may result in more people moving into higher tax bands over time.
• A new council-tax surcharge for properties over £2 million, with an additional uplift for properties above £5 million.

Why this matters: These are Government-led policies that could influence planning for UK property and income

UK Market Measures

The Government has introduced a three-year stamp duty freeze for new UK stock-market listings (IPOs) to encourage companies to launch in the UK.
Why this matters: The measure aims to support the market, but its impact depends on broader economic conditions. Opportunities or risks will vary depending on individual circumstances.

Pension Salary Sacrifice – Government Update

From April 2029, National Insurance will apply to salary-sacrifice pension contributions above £2,000.
Impact: This structural change may affect contribution levels and long-term pension planning, depending on individual circumstances.

If you would like a focused review of how this Budget affects your savings, pension plans or UK based assets, we’re here to help you move forward with confidence. Contact your adviser or email info@montfort-intl.com 

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