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 ...
		Why small businesses are dropping the green agenda as survival pressures rise Cashflow is getting tight for many small businesses, so dropping the green agenda is now a logical survival step. That's quite understandable. This blog post looks at why priorities are shifting and how firms can still move t...
		Can HMRC take money from your business bank account for unpaid tax? Wondering if HMRC can take money from your business bank account? They can, but only in limited cases, using the Direct Recovery of Debts process after repeated non-engagement, as long as key safeguards are in place. The opti...
		Scrapping Directors' Reports: More companies to become exempt Scrapping directors' reports is the government's latest push to simplify annual reporting. More firms could qualify for a strategic reporting exemption, and group accounts may cover more subsidiaries. This means less duplicat...
		Employment Rights Act Timeline for Employers: What's Changing in 2026 and 2027 The Employment Rights Act will be implemented in phases across 2026 and 2027. My blog post guides you through the changes that occur and what to prepare for. It's a practical, conversational timeline for staying confident and...
		Government Makes Further Concessions on Inheritance Tax reforms for Farms and Firms Here's the latest on Inheritance Tax reforms: the APR/BPR allowance is rising to £2.5m. That should narrow the impact to the biggest estates while keeping planning practical. Less cliff-edge, clearer options, and more time to...
		Business costs are rising, yet smarter workers' rights reforms could ease pressure Business costs are rising, and bosses can feel it in wages and energy bills. However, the latest concessions on workers' rights could mitigate the impact and give firms more time to adapt. It's a pragmatic tweak that keeps pr...
		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 ......

Other bloggers you may like ...
		Renovating your home in Milton Keynes? Come and stay with us! Posted by Emily Freeman on https://blog.shortstay-mk.co.uk Renovating your home can be loud, messy, and surprisingly draining. You can sidestep the chaos by staying somewhere local that feels settled, private, ...
		What is the career landscape like right now? Posted by Dave Cordle on https://blog.davecordle.co.uk So, what is the career landscape like right now? It's faster, more flexible, and more skills-driven than it used to be. You'll do best by translating ...
		How an Online PA can help you with your professional document production Posted by Sarah Hannaford on https://blog.sarahpasolutions.co.uk If your pages look inconsistent, people assume your thinking is too. Professional document production signals competence before anyone reads a word. A ...
		Preparing to retire: practical advice for small business owners Posted by Jacky Sherman on https://www.jackysherman.com Thinking about retiring from your business can feel a bit surreal. For many small business owners in the UK, the line between 'work' and 'life' has be ...