Chancellor Rachel Reeves has unveiled the long-anticipated budget. It comes after a report from the Office for Budget Responsibility (OBR), which analyses policies decided on by the chancellor, was published early in error.

Below we have outlined a summary of the key announcements; however as always, we advise checking the GOV.UK website for the most up-to-date information and advice:

PUBLIC SECTOR PAY / WAGES

• Minimum wage increases

A 4.1% rise to the national living wage - taking it to £12.71 an hour for eligible workers aged 21 and over. For 18-20 year-olds, it will rise by 85p, taking it to £10.85 an hour.

BUSINESS

• Business rates reform

Business rates will be reduced for 750,000 retail, hospitality and leisure properties, which will be funded by an increase on premises worth more than £500,000.

The Budget confirmed a permanently lower business-rates regime for eligible hospitality, retail, and leisure premises as part of a reform.

Specifically, properties with a “rateable value” (RV) below £500,000 will benefit from reduced multipliers from April 2026.

However — larger sites (RV above £500,000) will face a higher rate — meaning bigger chains or large-format venues may actually pay more.

TAXES

• Tax thresholds will be frozen for an additional three years

The Budget freezes personal income-tax and NI thresholds until 2031. It can mean earners will be dragged into higher tax bands when they get a pay rise. This will raise £8bn.

While this doesn’t directly impose extra costs on employers, it means more of their staff may have less take-home pay in real terms (if inflation outpaces wages), which could influence staff morale, retention and cost-of-living pressures.

• Milkshake tax

Dairy-based drinks such as milkshakes and canned lattes are being added to the sugar tax. The levy will also be tougher overall, with the threshold for its application cut from 5g for each 100ml to 4.5g.

• Tobacco and alcohol duty

Alcohol duty will rise in line with inflation. It normally rises in line with the Retail Price Index from September – which this year was 4.5%. Alcohol duty will be uprated with the RPI on 1 February 2026 to maintain its current real-terms value.

Tobacco duty increased by 0.8 per cent to raise £8bn this year, and a new immediate higher duty on vapes will raise £600mn by 2030-31.

• Taxes hiked on gambling

The gambling industry is going to be taxed more, to raise more than £1bn. Remote gaming duty will rise to 40% from 21% while online betting tax will rise from 15% to 25%. The bingo tax is being abolished from April.

• New mileage-tax on electric cars

Electric car drivers will be subject to a 3p charge for every mile they drive. Plug-in hybrid vehicles will be charged 1.5p per-mile. This is expected to raise £1.4bn, according to the OBR report.

PENSIONS

• Salary-sacrifice pension contributions above £2,000 to face national insurance

From April 2029, national insurance will be charged on salary-sacrificed pension contributions above an annual £2,000 threshold. This will raise £4.7bn and will come into effect in 2029.

• State pension increases

There’ll be an increase of £440 per year for the basic state pension and an increase of £575 per year for the new state pension.

FUEL DUTY

• Fuel duty to be frozen until next September

The duty, or tax, paid on diesel and petrol has been frozen at 52.95p per litre. This will cost the government £2.4bn next year and £900m each year after.

SCHOOLS/EDUCATION

• Training for apprentices under-25 free at small companies

A new Youth Guarantee will give £820m towards tyring to guarantee every young person a place in college, an apprenticeship or personalised job support. After 18 months, 18-to-21 year-olds will be offered paid work instead of benefits.

TRANSPORT

• Rail fares frozen

Rail fares will be frozen for the first time in 30 years, with passengers not paying any more for season tickets, peak return and off-peak return tickets between major cities.

ECONOMY

• OBR forecast

The OBR now predicts the economy will expand by 1.5% this year, higher than its previous estimate of 1%. GDP will be 1.4% in 2026, down from a previously anticipated 1.9%. It will be 1.5% for the rest of the decade.

According to the independent forecasters, prices are expected to rise faster than the OBR thought in March due to higher wages and food costs. Inflation will be 3.5% this year and 2.5% next.

The amount of fiscal headroom the chancellor has doubled to £22bn in 2029-30. This means a £22bn financial cushion against price shocks such as the COVID-19 pandemic and soaring energy costs.