What the Budget means for you and your money

Chancellor Rachel Reeves is announcing her Budget, but details were published early by the official forecaster.

It is packed with policies that will directly affect you and your finances.

Here are the key measures and how they will affect you and your money.

You may pay more tax

The amount of income at which we pay different rates of income tax - known as tax thresholds - will not be increased in line with rising prices.

Instead they will stay fozen until 2031. That is three years longer than previously planned, and a year longer than pre-Budget speculation suggested.

This means any kind of pay rise could drag you into a higher tax bracket, or see a greater proportion of your income taxed than would otherwise be expected.

The longer freeze could mean more than one million more people paying income tax and create hundreds of thousands of new higher rate taxpayers.

Scotland has its own income tax rates.

You may not earn enough to pay income tax, so VAT, paid when buying goods and services, may hit you harder and that's been left unchanged.

Driving an electric car will be more expensive

The government subsidises the purchase of new electric vehicles - or EVs - but they will also tax EV and hybrid car drivers for using the road.

EV drivers will be charged per mile, on top of other road taxes, in new road pricing from April 2028.

Calculating the number of miles that drivers cover is difficult.

Elsewhere on the roads, fuel duty has been frozen since 2011, and that will continue.

If you're on the minimum wage your pay will rise

The chancellor confirmed increases in April for those on minimum wages.

It means:

• Eligible workers aged 21 and over on the National Living Wage will receive £12.71 an hour, up from £12.21 which is a rise of 4.1%
• If you are aged 18, 19 or 20, the National Minimum Wage increase to £10.85 an hour, up from £10 which is a rise of 8.5%
• For those aged 16 or 17, the minimum wage will rise to £8 an hour, up from £7.55 which is a rise of 6%

The separate apprentice rate which applies to eligible people under 19 - or those over 19 in the first year of an apprenticeship – will also increase to £8 an hour, from £7.55.

The burden of these increases falls onto employers, who may need to cut other costs or raise prices as a result.

With the minimum wage gap between younger and older workers narrowing, there have been suggestions that bosses may be keener to hire older people who are more likely to stay. That could affect the job prospects of younger workers.

If your home is worth £2m you will pay more tax

Anyone who lives in a home valued at £2m or more in England will face a council tax surcharge from April 2028.

There will be four price bands with the surcharge rising from £2,500 for a property valued in the £2m to £2.5m band, to £7,500 for a property valued in the highest band of £5m or more

While known as a mansion tax, it may also capture homes in expensive areas, and will be levied on about 100,000 properties, primarily in London and south east England.

The move will require the valuation of homes in the top council tax bands - F, G and H - for the first time since 1991.

You can check your council tax band here if you are in England and Wales, Scotland, and Northern Ireland.

Travelling by train in England won't cost you more

Regulated rail fares in England will be frozen until March 2027 - the first time they have been left unchanged for 30 years.

These fares include season tickets covering most commuter routes, some off-peak return tickets on long-distance journeys and flexible tickets for travel in and around major cities.

The freeze only relates to travel in England, and also only applies to services run by England-based train operating companies.

Train operators are free to set prices for unregulated fares.

The bus fare cap of £3 for a single journey, covering most bus journeys in England, is already in place until March 2027.

If you have three children you may get more money

At present, parents can only claim universal credit or tax credits for their first two children.

A total of 1.6 million children are living in larger families who have not been able to claim these means-tested benefits as a result.

The chancellor says this two-child cap will be scrapped in April next year.

Some 630,000 children will be lifted out of poverty in the coming years as a result, according to independent economic think tank, the Institute for Fiscal Studies.

A limit on what you can save into a pension through salary sacrifice

A third of private sector employees and a tenth of public sector workers use a salary sacrifice scheme for their pension savings.

These workers give up a portion of their salary in return for their employer paying the equivalent amount into their pension. The benefit to both employee and employee is that they make savings in national insurance.

A £2,000-a-year cap on the amount that can be put into pensions through this salary sacrifice arrangement will be in place from April 2029.

Employees would still get income tax relief on their pension contributions, but some argue the move will reduce pension saving incentives.

Most benefits and the state pension are going up

Some benefits, including all the main disability benefits, such as personal independence payment, attendance allowance and disability living allowance, as well as carer's allowance will rise by 3.8% in April, in line with rising prices.

There will be a string of changes to universal credit in April, following announcements made earlier by the government.

The state pension in April will rise by 4.8% in line with average wages, which means:

• the new flat-rate state pension - for those who reached state pension age after April 2016 - will increase to £241.30 a week, or £12,547.60 a year, a rise of £574.60
• the old basic state pension - for those who reached state pension age before April 2016 - will go up to £184.90 a week, or £9,614.80 a year, a rise of £439.40

In general, you need 35 years of qualifying contributions to get a full state pension.

This brings the state pension closer to being subject to income tax - a source of some debate. It will also reignite discussions over the "fairness" of the so-called triple lock.

More on the milkshake tax, prescription charges and Motability

A range of other measures in the Budget had already become clear or been announced in recent days. They included:

• The UK tax on fizzy drinks will be extended to milk-based products in 2028, taking in pre-packaged milkshakes and coffees that are high in sugar. This may push up prices, or lead to ingredient changes
• The cost of a single NHS prescription in England will be frozen at £9.90 for the second year in a row in April
• Disabled people who have a car through the Motability scheme will no longer be allowed "premium" vehicles such as BMWs, Mercedes, Audi, Alfa Romeo and Lexus
• England's mayors could be given the powers to charge a levy on overnight stays, sometimes referred to as a 'tourist tax'. Mayors would decide the level of the charge, and how to spend the money in their areas, under the plans which will be consulted upon