Millions of pensioners across the UK are set to receive a significant financial uplift, as Chancellor Rachel Reeves prepares to announce an above-inflation increase to the state pension in her Autumn Budget this Wednesday.
Substantial Increase for Pensioners
The highly anticipated budget is expected to deliver a boost of more than £550 per year for those on the full new state pension. This increase will benefit approximately 13 million pensioners and is scheduled to be formally unveiled on Wednesday, 26 November 2025.
Chancellor Reeves has reaffirmed the government's commitment to the pension triple lock, stating: "Whether it's our commitment to the triple lock or to rebuilding our NHS to cut waiting lists, we're supporting pensioners to give them the security in retirement they deserve."
Potential Tax Changes and Business Concerns
While pensioners gain, the chancellor is believed to be considering changes to pension contribution rules for workers. One proposal under review involves limiting how much employees can put into their pension pots through salary sacrifice schemes before being liable for National Insurance contributions.
This potential move has drawn criticism from business representatives. Craig Beaumont, External Affairs Director at the Federation of Small Business, commented: "The chancellor promised not to come back for more but attacking salary sacrifice, which has been in place for 40 years to help employers help their staff, will impact business and their staff."
Broader Budget Measures
The budget is also expected to include several other significant measures aimed at raising revenue and reforming existing systems.
In a push to combat welfare fraud, the government plans to extend targeted case reviews of Universal Credit claims, with an ambition to raise £1.2 billion. Furthermore, ministers are thought to be evaluating the introduction of a pay-per-mile tax for electric vehicle drivers, signalling a new approach for road taxation as the country transitions to greener transport.
With speculation rife about potential tax rises and their targets, Wednesday's budget announcement is poised to have wide-reaching consequences for both retirees and workers across the nation.
