On 26 November 2025 the Chancellor of the Exchequer, Rachel Reeves, will unveil the eagerly awaited Autumn Budget.
Packed with technical terms, it’s easy to get lost in the jargon. To help you join in the conversation (and understand what any changes mean for your money), we’ve put together this 2025 Autumn Budget jargon-busting guide.
Capital Gains Tax (CGT) – CGT is the tax you pay on profits when you sell an asset, such as shares or a second home. Currently, lower-rate taxpayers pay 18% and higher-rate taxpayers pay 24%, with an annual exempt amount of £3,000 that you can receive before any tax is due.
Council tax / bands – The local tax you pay to your council for services like rubbish collection and street lighting. It’s charged in council tax bands based (A to H)1 on the value of your home, and rumours suggest the chancellor may introduce higher bands for more expensive properties.
Dividend allowance / tax – The amount of dividend income you can receive tax-free each year. It was cut from £2,000 in 2023 to £500 today. Everything’s on the table, so it’s not beyond the realm of possibility that it could be reduced in the upcoming Autumn Budget.
Fiscal drag – When incomes rise but tax thresholds stay frozen, more of your earnings get taxed at higher rates without any official rate increase. It’s a ‘stealth’ way for the government to raise revenue as pay and prices grow.
Gifting allowances – The yearly amount you can give away without it counting towards inheritance tax. Currently, you can gift up to £3,000 per tax year (plus small-gift allowances) without it forming part of your estate. Rumours suggest a new lifetime cap on total gifts could be introduced.
Inheritance tax – A 40% tax on estates above the nil-rate band (currently £325,000 per person), plus a possible residence nil-rate band if you pass on your home. The chancellor may extend the freeze on these bands or tweak the rules on pension funds.
ISA allowance – This the maximum amount you can save tax-efficiently into an Individual Savings Account each year (currently £20,000). There’s speculation that the government may cut the cash-ISA element to encourage more investment.
National Insurance Contributions (NIC) – Payments you and your employer make on your earnings to fund state benefits and pensions. Changes to NIC rates or thresholds can affect take-home pay and pension contributions via salary sacrifice.
Nil-Rate Band – The threshold (currently £325,000) below which an estate pays no inheritance tax. It’s been frozen since 2009 and could stay that way or be reduced.
Office for Budget Responsibility (OBR) – The independent watchdog created in 2010 to forecast the UK’s public finances and assess whether the government’s plans are sustainable. Its forecasts accompany each budget and help frame fiscal decisions.
Residence Nil-Rate Band – An extra allowance (effectively up to £175,000 per person) for passing your main home to direct descendants free of inheritance tax. The allowance started as £100,000 in 2017, gradually increasing to £175,000 in 2020 so could be reviewed.
Salary sacrifice – An arrangement where you give up part of your salary in return for benefits, most commonly extra pension contributions. It’s tax-efficient because pension contributions aren’t subject to income tax or NICs, but the government could potentially cap or remove these exemptions.
Stamp duty land tax – The tax you pay when you buy a property. There’s talk of replacing stamp duty and council tax with a single annual levy on valuable homes.
Tax-free cash – The portion of your pension pot you can withdraw without paying tax, currently capped at 25% (up to £268,275). It may be targeted for cuts or tighter rules in the upcoming Autumn Budget.
Wealth tax – A proposed annual levy on individuals with net assets above a high threshold (for example, £5 million or more). It’s been floated by some politicians as a way to raise extra revenue from the richest.
1In Wales there are nine council tax bands A to I
Important information - This is not a personal recommendation for a particular course of action. If you’re unsure about what the right approach is for you, you should speak to an authorised financial adviser. Withdrawals from a pension product will not normally be possible until you reach age 55. This is due to change to 57 in 2028.
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