Winners and losers from Labour’s Budget

Telegraph Money reveals whether the Chancellor has left you better or worse off Daily Telegraph 16/11/25 Link Rachel Reeves has unleashed a series of tax increases and announced handouts for millions of benefits claimants. Middle-class families will bear the brunt of the Chancellor’s smorgasbord of tax raids as she attempts to plug the £20bn gap in public finances. A deep freeze on tax thresholds, a new levy for landlords and the introduction of a mansion tax are the headline-grabbing policies, but electric car drivers and savers will also be hit hard. Telegraph Money reveals who the Budget’s winners and losers are.

Winners State pensioners The new state pension will rise by 4.8pc from April, thanks to the triple lock. Retirees receiving the full new state pension will be around £550 better off a year, while those who retired before April 2016 on the old state pension scheme will get an extra £440 a year. The increase means the benefit will reach £12,547 a year for the full new flat-rate state pension. However, if another increase follows in 2027, an individual receiving just the state pension will be taxed on their income, also known as “retirement tax”, as it will surpass the frozen personal allowance of £12,570. People on benefits The Chancellor announced a series of welfare handouts, including the lifting of the two-child benefit cap at a cost of £3bn a year. Working-age benefit payments – including Universal Credit, Personal Independence Payments (Pip) and child benefit – will rise by 3.8pc in April. Free school meals will also be further rolled out to cover all households on Universal Credit in September 2026. All Universal Credit claimants will also become eligible for the Help to Save scheme, which rewards benefit recipients with 50p for every £1 saved over four years. Eligible savers can put away a maximum of £2,400 and receive a £1,200 government bonus. Low-paid workers The Chancellor has announced a 4.1pc increase to the national minimum wage, taking it to £12.71 an hour from April 2026. This means a full-time worker will be £700 better off a year. The salary for 18 to 20-year-olds will rise by an inflation-busting 8.5pc, taking the hourly wage to £10.85 per hour. Meanwhile the minimum wage for apprentices will rise by 6pc to £8 an hour. Train passengers Rail fares will be frozen for the first time in 30 years in 2026. Prices remain the most expensive in Europe, but next year’s freeze is a reprieve for commuters who had expected a rise of almost 5pc. The freeze covers regulated train fares, meaning prices for season tickets on most commuter journeys and day singles and returns will remain steady. Advance purchase tickets, first-class fares and certain flexible products are deemed as unregulated fares, so prices could still rise. Energy bill payers An estimated average of £76 will be shaved from annual domestic energy bills between 2026 and 2029, through the partial removal of a green levy. The Renewables Obligation, which funded the first generation of wind farms, costs the average consumer about £102 a year but the Treasury will fund 75pc of the costs for the next three years. Prescription patients The cost of a single NHS prescription in England will be frozen at £9.90 for the second year in a row. Ten years ago, the price was £8.20. Losers Earners More workers will be dragged into higher tax bands after the Chancellor extended the deep freeze on thresholds by a further three years to 2031. Freezing thresholds means that, as salaries rise over time, more people’s incomes hit the higher rates, meaning they will pay more tax. This will affect income tax, but also inheritance tax and capital gains tax. It is a move which goes against the spirit of Labour’s manifesto pledge not to raise the Treasury’s largest revenue source. Even if you’re not pushed into a higher tax bracket, anyone whose pay increases over the next six years will end up paying more tax if they earn more than the personal allowance. Calculate How much will Rachel Reeves's stealth tax raid cost you? Read more Workers using salary sacrifice The perks that employees can utilise to lower their take-home pay and save more efficiently for their pensions will shrink. The Treasury has announced an annual cap on the tax-free amount that workers can divert from their pay packet to their pension via salary sacrifice. The overhaul – enforced from 2029 – will result in any pre-tax contributions above £2,000 incurring National Insurance charges from both the employee and employer. Currently, there is no limit. Homeowners A “mansion tax” targeting England’s most expensive homes valued at more than £2m will come into force from 2028. It is the first tweak to the council tax system since 1991 and could cause millions to pay more tax. Those with the most expensive homes (£5m or more) will also have to pay a surcharge of up to £7,500 a year that will go to central government. Those in the lowest mansion band (£2m to £2.5m) will pay £2,500. To find the most expensive, all 2.4 million homes in council tax bands F, G and H will be reassessed. It is likely a host of these properties will be pushed into higher tax brackets as a result, raising about £400m to £450m for the Treasury. There is a difference of £1,200 a year in jumping from band F to H. Savers Savers are in the running to be the biggest losers. The annual cap on the amount that can be deposited into a cash Isa has been slashed from £20,000 to £12,000. Over 65s, however, will retain the full £20,000 allowance – creating a tiered structure to the nation’s most popular form of Isa. Under 65s will be encouraged to put the remaining £8,000 of their allowance into a stocks and shares Isa. To add insult to injury, savers putting money in traditional savings accounts outside of an Isa wrapper will face higher taxes from 2027. For those going over the personal savings allowance, there will be a further 2pc added to the tax take. This means basic rate taxpayers will pay 22pc, higher rate pay 42pc and additional ratepayers face a 47pc rate. Investors The Government wants more money to be ploughed into the stock market, but it has announced an attack on dividends paid out on shares held outside an Isa. A 2pc increase to the basic and higher rates of dividend tax will be enforced from April. Basic rate tax will rise to 10.75pc and the higher rate will rise to 35.75pc. This will hurt investors in shares, as well as company directors who pay themselves a minimal salary to reduce income tax combined with more generous dividends, which are taxed at a much lower rate. Drivers Ms Reeves announced the first fuel tax increase in 15 years, with a rise coming in next September. Traditionally, fuel duty rises in April but there will be a five-month freeze until the autumn, when “staged increases” are introduced. The fuel tax currently stands at 52.95p per litre. The Chancellor also confirmed that a pay-per-mile pricing scheme will be introduced for electric car drivers from 2028. The 3p tariff – added to car tax bills based on predicted annual mileage – will add around £255 in costs for the average driver covering 8,500 miles. The rate per mile will rise in line with CPI inflation each year. Plug-in hybrids will also be caught in the pricing net, and will be charged 1.5p per mile. As more of the country’s fleet shifts to zero-emission cars, this is a change which will impact millions more drivers in the future. Landlords Landlords often seem like an easy target at fiscal events, and it’s proved the same story again. They will be hit with a 2pc increase on property income from April 2027. Landlords on basic, higher and additional rates of income tax will be hit with a rise to 22pc, 42pc and 47pc respectively. Students The Government has frozen the repayment and interest rate thresholds for Plan 2 student loan repayments for three years beginning in 2027-28. The move freezes interest rates at 7.9pc, instead of falling alongside interest rates and inflation. Sweet coffee drinkers The price of pre-packaged sugary coffees and milkshakes is rising. The existing sugar tax, which mainly applies to fizzy drinks, will be applied to bottles and cartons of milk-based drinks, including flavoured milk, milk substitute drinks and lattes. Sugary drinks made in coffee shops and bars will be exempt. It is instead ready-to-drink beverages, such as canned lattes, that are affected. Farmers Having been last year’s biggest losers, farmers – who descended on central London this morning – were hoping for a reprieve at the second time of asking. But Labour is standing firm on its decision to apply 20pc inheritance tax on agricultural estates valued over £1m. The controversial policy will come into force in April. Taxi users A nationwide VAT rate will be imposed on private hire companies such as Uber. As it stands, VAT is only charged on the profit taken and not the fare itself, except in London. But this will change from January, in a move hoped to raise £700m for the Treasury. Taxi firms unable to shoulder the added costs will likely pass the increases on to the customer. Holidaymakers Mayors in England are to be given new powers to charge hotel guests for staying overnight. There could be a fixed fee, such as £1 per night, or a tariff based on the percentage of booking cost. Weekend getaways, lengthy staycations and overnight trips away for medical appointments will fall under the tourist tax net. The government is consulting on how best to introduce the levy. Gambling firms Gambling taxes paid by bookmakers are to increase from April, with the remote gaming duty almost doubling from 21pc to 40pc. This covers earnings from punters playing online games of chance. The Government will also introduce a new rate of general betting duty for remote betting, set at 25pc, from April 2027. Self-service betting terminals, spread betting, pool bets, and horse racing are spared from the new levy. Who is breathing a sigh of relief? Housebuilders and new-build buyers A huge increase to landfill tax was under consideration but did not make its way into the Budget. The Government had consulted on a 36-fold increase on the taxes imposed on housebuilders for sending inert material such as soil, sand, and gravel to landfill. Banks Ms Reeves batted away calls to target the banking sector by not raising taxes on lenders. Banks currently pay a corporation tax rate of 28pc, including a 3pc surcharge on top of the standard corporation tax rate of 25pc.