What Reeves' pre-budget speech didn't say and what it could mean for you

CREATED BY ROGER EDDOWES Published: 06/11/2025 @ 09:00AM #pre-budget speech #UKBudget #Taxes #UKEconomy #CostOfLiving #PersonalFinance

I'm uneasy after Reeves' pre-budget speech because tax rises are definitely on the agenda now. So what might change - from Income Tax to frozen thresholds - and why? If you've a payslip or a mortgage, or even just a weekly food bill, this really matters ...

What the pre-budget speech didn't say, Eager ears await the plans, Taxes rise await

That pre-budget speech sounded less like reassurance and more like the soft drumbeat before something painful lands on our payslips. We've heard talk of black holes, and there have already been several tax rises, and now she's coming back for more.

I'm struck by how carefully everything was phrased!

There was no outright promise to keep Income Tax, VAT, or National Insurance untouched; instead, we got talk of tough choices, debt rules, and everyone “doing their bit”. That's political code for more money coming from us, and it won't be subtle.

I've listened for months to talk of reduced productivity, poor growth, and the need for fiscal headroom, and I hear a story being built around the idea that higher taxes are the rational, unavoidable outcome.

The trouble is, being rational doesn't make it any easier when your monthly budget is already stretched. If the government extends the tax thresholds freeze again, many of us will creep into higher bands without any vote in the matter, and that 'stealth' rise feels especially grim when wages aren't keeping up with the cost of living.

An explicit rise in the basic rate of Income Tax would be a political gamble, but I can't ignore the murmurs about breaking a half-century taboo. An alternative is to freeze thresholds longer and call it prudence. Either way, the Treasury still collects more, and we feel poorer even if the headline rates look unchanged.

There are also signals on National Insurance
and VAT as well!

Even if those aren't touched directly, the tax mix can still shift through allowances, reliefs, and timing tricks that don't make headline news, but hit take-home pay all the same. If the plan is to raise billions quickly to satisfy fiscal rules and calm the markets, the simplest levers are the ones most of us notice on payday.

I keep thinking about 'headroom' and how brittle it has become. When Labour took office, there was supposedly a £22 billion black hole (which the OBR said was actually £9 billion). Now economists believe we're at £60 billion, even though the Chancellor raised employers' contributions and tweaked other taxes last time around.

Now we're told the official forecasts have worsened and that debt must be falling by the end of the Parliament. That combination almost guarantees a hunt for a lot more revenue now to avoid scrambling later. Markets might applaud discipline, but households aren't markets; we can't hedge our grocery bills.

I noticed the pound sliding and gilt moves flickering after her remarks, and none of that helps my nerves as an accountant, a business owner and homeowner. Currency wobbles and borrowing costs feed into imported prices and mortgage rates, and I can't separate that from the tax conversation. Even a measured tax rise layered onto high rents, energy anxiety, and council tax pressures feels like a slow squeeze rather than a one-off pinch.

I want growth to do the heavy lifting, but that's
exactly what worries me!

We're being told to expect more from an economy that has underdelivered for years. If investment is supposed to surge on the back of 'credibility', then the design of any tax rises really matters. A blunt hike that saps consumer demand or discourages work risks being counterproductive, and yet a targeted, fair package is politically complicated and technically fiddly under time pressure.

I keep circling back to the idea of trade-offs that sound neat on paper. Pairing a rise in Income Tax with a cut to employee National Insurance could be sold as rebalancing, but will it actually leave typical workers protected once thresholds, local taxes, and benefit tapers are factored in? I'm not convinced, and I worry the actual arithmetic will be far less kind than the announcement.

I wish we'd had clearer red lines in the pre-budget speech so families could plan. Without them, it feels like we're braced for impact without knowing from which direction the storm is coming. Do I adjust my pension contributions now? Do I build a bigger emergency buffer, even if it means deferring essential repairs? These are not abstract questions if a few hundred pounds a year could move out of my control overnight.

I also can't ignore the trust issue. Breaking a high-profile pledge like, "We won't raise taxes on working people if you elect us" corrodes confidence, even if the reasons are compelling. Once that bond is strained, every future promise won't be believed, and I'm afraid that makes the next few years choppier for both policy and the broader economy, no matter how carefully the Autumn Budget 2025 announcement is framed.

I'm not looking for perfection!

I'm simply looking for honesty with numbers that add up for ordinary people. If there must be rises, I want clear, time-bound plans, real protection for low and middle earners, and a credible route to investment-led growth rather than austerity by stealth. Without that, the fear is that we pay more now and still face the same problems later.

I'll be watching the actual Budget like a hawk, wary that what wasn't said in the pre-budget speech might matter more than what was.

And I hope the Chancellor's choices don't make this cost-of-living tightrope impossible to walk.

Until next time ...

ROGER EDDOWES
Join our mailing list! Click here and be one of the first to know when we publish a new blog post!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #pre-budget speech #UKBudget #Taxes #UKEconomy #CostOfLiving #PersonalFinance

About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

More blog posts for you to enjoy ...
		Key payroll changes for 2026 every UK employer should plan for now Key payroll changes for 2026 are mainly about higher wage floors, tighter thresholds and better forward planning. My blog post today walks through what shifts in PAYE, National Insurance, and compliance mean in practice. Cons...
		My predictions for small businesses in 2026: tax, tech and growth Here are my predictions for small businesses in 2026. I've been thinking about tax reporting changes, hiring incentives, cyber resilience, smarter AI use, sustainability data requests and new channels to market ......
		What HMRC using AI on social media really means for you Here's the lowdown on HMRC using AI to review social media in criminal tax probes. It's about more intelligent fraud detection with human oversight, not bots running wild. Taxpayers should receive clearer guidance and fewer e...
		How AI can help you prepare your tax return this year AI speeds up data capture and checks, while accountants provide guardrails. Use both to prepare your tax return with fewer errors and less hassle. It's efficient, affordable, and grounded in human oversight ......
		Merry Christmas 2025 from everyone at Essendon Accounts & Tax Not long to go now, and everyone at Essendon Accounts & Tax is looking forward to a well-deserved break over Christmas. We will be closing at 1pm on Wednesday the 24th of December 2025, returning at 8am on Tuesday the 5th...
		Mandatory payrolling of Benefit-In-Kind delayed until 2027 Mandatory payrolling of Benefit-in-Kind, originally slated to arrive in April 2026, has now been delayed until 2027. Employers will eventually shift tax and Class 1A NICs into payroll. Here's what changes, what's unclear, and...
		Why duplicate firms are appearing on Companies House Wondering why duplicate firms are appearing on Companies House? Here's what's happening, why it matters, and how firms can stay ahead. It's practical, calm, and focused on action ......
		Key changes to Income Tax administration, payments and penalties Here's a quick take on Income Tax administration. New penalty rules, payment tweaks and MTD deferrals are coming. It's practical to plan now and avoid surprises ......

Other bloggers you may like ...
		Serviced accommodation for contractors in Milton Keynes: a smarter base for work Posted by Emily Freeman on https://blog.shortstay-mk.co.uk If you want a calm base that simply works, serviced accommodation for contractors beats hotels and patchy Airbnbs. You get your own place, proper faci ...
		You've been made redundant? Let's separate you from the job Posted by Dave Cordle on https://blog.davecordle.co.uk If you've been made redundant, it can feel personal, but it isn't. The role has gone, not your strengths, experience or future. Let's reset the story ...
		What an Online PA actually does for busy professionals Posted by Sarah Hannaford on https://blog.sarahpasolutions.co.uk Wondering what an Online PA actually does day to day? They keep schedules, inboxes and documents under control, while handling research and process-he ...
		So, Why This Business? Why Are You Starting It? And Why Now? Posted by Jacky Sherman on https://www.jackysherman.com In June, I published this blog post, which started out asking the question, Why are you in the business you're in? Then it went on to list everything ...