A<\/span>fter we all spent months anxiously awaiting the start of Rachel Reeves\u2019 Budget 2025 speech, it was the Office for Budgetary Responsibility (OBR) that broke first.<\/p>\n Like a twitchy sprinter in the 100m who jumps the starter\u2019s gun, the OBR went early and published<\/a> its assessment of the budget \u2013\u00a0complete with most if not all of the contents of Reeves\u2019 speech \u2013 more than half an hour before she got up to speak in the House of Commons.<\/p>\n Of course it was probably a computer glitch rather than sheer excitement on the OBR\u2019s part. But where is the colour in that?<\/p>\n Either way, the unprecedented leak caused market-moving mayhem such as this for homebuilders:<\/p>\n Source: Google Finance<\/p>\n And this for UK gilts:<\/p>\n Source: Google Finance<\/p>\n The chancellor stood up just after 12.30pm. So you can see from the graphs when the details leaked \u2013 and the bungee jump that assets made on the news.<\/p>\n It\u2019s curious to ponder why, say, builders moved like this.<\/p>\n One possibility is some naive trading algorithms responded to news of taxes on property, without taking into account other offsetting factors in the budget.<\/p>\n More likely though (or as well) is that these moves reflect trading entities caught offside by not expecting any news until 12.30pm, and then new money piling in on the leak overwhelming those prior strategic positions.<\/p>\n But I\u2019m just speculating and I\u2019m looking forward to reading more about it.<\/p>\n Anyway, emboldened by the OBR, I\u2019ll also not wait. Below are my first takes on the major points in the budget, unsullied by the opinions of others. (Well, not counting the last three month\u2019s worth of pundit pontifications\u2026)<\/p>\n I won\u2019t go much into the economic and fiscal upgrades or downgrades.<\/p>\n But I will note that where the budget\u2019s impact is disinflationary (such as reducing household energy bills) that should dampen inflation and gilt yields. <\/p>\n In turn that should bring down gilt yields \u2013 and by extension government borrowing costs. A good thing!<\/p>\n In fact, this budget is arguably a missed opportunity to make deeper upfront moves to shore up the public finances, and so curb borrowing costs sooner.<\/p>\n \u201cNo one likes us and we don\u2019t care,\u201d <\/em>sing Millwall fans. Given nobody currently likes Labour either, perhaps we might have seen bolder cuts and hikes.<\/p>\n Being tough now could have injected more life into the UK economy \u2013 not least through lower mortgage rates. That could even have seen Labour in a better position ahead of the next election, rather than seems likely with this dispiriting status quo.<\/p>\n Politically, however, both Reeves\u2019 backbenchers and the electorate-at-large seem to have little patience for either welfare cuts or explicitly<\/em> higher taxes.<\/p>\n Hence this stealthy muddle. And also a gilt market left to guesstimate how much of the back-ended higher revenues will actually materialise.<\/p>\n Let\u2019s also acknowledge it\u2019s hard to cheer a tax rise that affects oneself. Or to be too viscerally concerned about benefit cuts for others.<\/p>\n Monevator<\/em> readers are \u2013 like me \u2013 drawn from a certain slice of the population. Like most of you I don\u2019t love the trajectory of public spending. I\u2019d also prefer a focus on growth to get us out of the debt trap.<\/p>\n But realistically nothing in this budget will move the dial like the economic damage from Brexit<\/a>, nor Reeves\u2019 foolish decision to hike employers\u2019 national insurance contributions in the last budget<\/a>.<\/p>\n This budget is mostly just fiddling at the sides. It\u2019s driven by politics and the kind of spreadsheet maths familiar to anyone who has ever tried to make a holiday rental property add up.<\/p>\n So from that perspective, here are my first takes on the most Monevator<\/em>-adjacent bits. I look forward to reading yours below!<\/p>\n Note: bullet point summaries are from the budget document<\/a> where possible.<\/p>\n The showpiece tax generator. Reeves says is worth an extra \u00a37.6bn a year by 2030 from income taxes alone. With NICs some \u00a38.6bn<\/a> by 2030-2031.<\/p>\n There are pros and cons, besides its tax-raising and political efficacy.<\/p>\n The biggest plus is it effectively postpones the pain versus a straight tax hike. Given the economy remains lacklustre at the moment, that\u2019s no small thing.<\/p>\n For me the big negative is it\u2019s stealthy and confusing. It also feels somehow more anti-aspirational than, say, increasing the basic rate of tax by 2p \u2013 even if it\u2019s ultimately less costly to most taxpayers.<\/p>\n It\u2019s also a strangely unprogressive move for a Labour government.<\/p>\n Millions more unspectacular earners will be paying higher-rate taxes by 2030. Indeed according to Hargreaves Lansdown over six million more people are paying income tax compared to 2021 when the freeze was first introduced. It says that\u2019s worth an extra \u00a389bn in income taxes a year.<\/p>\n Broadening the taxpaying base doesn\u2019t seem the worst thing in the world to me. We\u2019ve all seen those graphs showing how most income tax is paid by the very highest earners.<\/p>\n Still, I\u2019d rather see a comprehensive revamp and simplification of the whole tax regime. <\/p>\n At least there\u2019s no silly Dad\u2019s Army ISA<\/a>. But this is still a needless complication that won\u2019t do much to boost investment.<\/p>\n I haven\u2019t seen the small print \u2013 and there will be plenty \u2013 as to how cash-like you can get in your non-cash ISA. If you can hold Money Market Funds<\/a> or short-term gilts, then for Monevator<\/em> readers this will be a nothing burger.<\/p>\n Years ago though there were rules against that sort of thing in stocks and shares ISAs, so we\u2019ll have to wait and see. Nothing happening until 2027.<\/p>\n Interestingly, shares in wealth managers rose today. Optimistically you might think that\u2019s because they\u2019ll see more money coming from banks\u2019 cash ISAs.<\/p>\n But maybe it just reflects how average punters will be yet more confused about ISAs, and so more likely to hand their money over to St James Place.<\/p>\n Anyway, as someone who has been explaining ISAs here and offline for nearly 20 years, I know this move will confuse people.<\/p>\n Talking of complications, there is talk of a new \u2018simpler\u2019 ISA to support home buyers. It will replace the Lifetime ISA. More to come in early 2026. <\/p>\n I suppose it could have been worse. The government says fewer than 1% of properties will affected.<\/p>\n Otherwise, after many months of speculation about such a measure \u2013\u00a0which has already slowed the property market \u2013 we\u2019re all familiar with the arguments. <\/p>\n The main pro, if you believe in this kind of thing, is it taxes wealth that is growing disproportionately at the high end versus the general population. <\/p>\n The cons are multiple. The cost and faff of valuation, the cliff edge introduced and likely shenanigans around it, the difference between asset-rich and having the cashflow to pay a surcharge, and the arbitrariness of hitting property.<\/p>\n On at least the latter point\u00a0\u2013 I\u2019ll live.<\/p>\n The tax system is riddled with cliff edges and arbitrary measures. I spent 20 years as a renter who invested my money instead \u2013 with a limited annual tax-free sheltering capacity \u2013 while friends made six or even seven-figure sums tax-free from their homes. Meanwhile I paid capital gains tax on relatively modest unsheltered share gains.<\/p>\n Also, UK homes are in limited supply and, as just stated, gains on your own home have hitherto been tax-free. So there\u2019s an argument UK property is a special case worthy of a wealth tax. This in addition to the practical fact that a house can\u2019t go anywhere!<\/p>\n On the other hand, people will rightly fear this could be the thin end of the edge, as we saw with dividend taxes (see below).<\/p>\n Once the medicine has been swallowed, who\u2019s to say a chancellor won\u2019t eye up homes worth over \u00a31m next? In much of London that doesn\u2019t get you anything beyond a 900 sq ft Victorian terrace or a nice flat. Hardly a mansion.<\/p>\n At least we won\u2019t have issue of prices shooting up above the \u00a32m threshold for a while. The property market has been going backwards in real terms in the South East for over a decade. This is hardly going to spark a revival.<\/p>\n I liked Finumus<\/em>\u2018 initial take: \u201cNow I know my retirement date.\u201d<\/em><\/p>\n As a site that promotes self-reliant saving and investment, there\u2019s no way Monevator<\/em> can applaud this move.<\/p>\n Something immediately attractive \u2013 an income today \u2013 was being traded for future security \u2013 a pension.<\/p>\n Isn\u2019t that what the government wants to encourage? Remember there are other restrictions on pension contributions and the like, to curb any alleged excesses.<\/p>\n Thus it looks like a short-term tax grab aimed at relatively wealthy workers. Politically understandable but yet another example of moving the goalposts and fostering a fundamentally unstable and hard-to-track savings regime.<\/p>\n I do not commend it to the house.<\/p>\n The government is:<\/p>\n I don\u2019t see anything to like about the dividend and savings rate increases. But I would say that, wouldn\u2019t I? The only mitigation is the \u00a320,000 ISA allowance remains intact. So for a lot of people most of their savings should be sheltered. <\/p>\n![\"\"](\"https:\/\/i0.wp.com\/monevator.com\/wp-content\/uploads\/2025\/11\/housebuilders-26-11-2025.jpg?resize=1024%2C746&ssl=1\")
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<\/a><\/figure>\nHot takes on the budget 2025 announcements<\/h2>\n
Timed to imperfection<\/h4>\n
Why meeee?<\/h4>\n
Tax thresholds frozen for three more years until 2031<\/h3>\n
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Cash ISA allowance curtailed to \u00a312,000 a year<\/h3>\n
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The High Value Council Tax Surcharge (aka Mansion tax)<\/h3>\n
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Salary sacrifice curbed to \u00a32,000 limit<\/h3>\n
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Dividend tax, property, and savings tax hiked<\/h3>\n
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