The UK government released the autumn budget today, with the freeze on income tax thresholds extended and changes to salary sacrifice schemes among the leading headlines.
Forecasts from the Office for Budget Responsibility (OBR) were accidentally published before chancellor Rachel Reeves gave her statement today in a chaotic start to this year’s budget announcement.
Reeves says the OBR has updated the growth forecast for 2025 from 1% to 1.5%.
The growth in real household income, however, is predicted to fall significantly, from 3% in 2024-25 to around 0.25% a year over the forecast – a drop on the OBR’s previous forecast in March.
Here’s what we know so far.
What are the key announcements in the autumn budget?
- Freeze on income tax thresholds extended for another three years
- ‘Mansion tax’ introduced on properties worth more than £2 million
- ISA allowance of £20,000 remains but cash ISA limit capped at £12,000 – except for over-65s. The remaining £8,000 allowance is eligible for investment only
- Two-child benefit cap to be scrapped from April 2026
- New mileage tax for electric vehicles from April 2028
- Salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance. This will come into force from April 2029.
What does the autumn budget mean for dentists?
Iain Stevenson, head of dental at Wesleyan, said: ‘The decision to keep income tax rates unchanged offers little comfort to dentists facing the reality of frozen thresholds. This ongoing freeze means that as incomes rise to keep pace with inflation, practitioners find themselves pushed into higher tax brackets – a form of fiscal drag that reduces take-home pay without any headline rate changes.
Left unaddressed, this erosion of real income risks fuelling a growing sense that taxation policy is working against the profession – a condcern that could add further pressure to workforce retention across both NHS and private practice.’
Regarding the fact there was no change to the pension lump sum, he said: ‘It’s good news that the tax-free lump sum remains untouched. That stability will reassure dentists who have been anxious about possible changes.
‘For now, this continuity helps maintain confidence in retirement saving, and we’d encourage dentists to use this as an opportunity to review their long-term retirement plans – or start one if they don’t have one yet.’
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