What Healey’s Budget could mean for your money

With one month to go until the Budget, Chancellor John Healey is promising a “new confidence in Britain” and a “new age of industrialisation” putting growth at the heart of his economic message.

But for households, confidence starts with knowing where they stand.

Maike Currie, vice president of personal finance at PensionBee, said: “If growth is the priority, every Budget measure should face a simple test: does it give households and businesses greater confidence to plan, invest and grow?

“People make decisions about their homes, investments, pensions and retirement over decades, not political cycles. What they need from this Budget isn’t another round of short-term tinkering, but stability and a clear long-term direction of travel so they can put their money to work with confidence.”

Property: take control of your property wealth

The High Value Council Tax Surcharge is due from April 2028, starting at £2,500 a year on homes worth £2 million, sitting alongside a property’s existing Council Tax bill. Reports suggest the Chancellor could lower the threshold to £1.5 million.

Currie said: “Calling it a ‘mansion tax’ disguises just how many households could ultimately be affected, particularly in London and the South East.”

Meanwhile, the Personal Allowance remains frozen at £12,570 until April 2031. In England, Wales and Northern Ireland, the 40 per cent higher rate starts once income exceeds £50,270.

HMRC estimates 7.7 million people will be higher-rate taxpayers in 2026/27 – around 1.9 million more than in 2023/24. PensionBee research found 69 per cent of savers want the Personal Allowance unfrozen, with 43 per cent wanting the Chancellor to act immediately.

Currie said: “Frozen thresholds have become one of the most powerful forms of tax by stealth, quietly pulling more of people’s income into the tax net as wages and pensions rise while thresholds stand still.

“Higher-rate tax was once associated with the highest earners. As salaries rise while thresholds remain frozen, more professionals – including doctors, teachers and other public-sector workers – can find themselves dragged into higher-rate tax. Meanwhile, a 3.9 per cent triple lock increase would take the full new State Pension above the £12,570 Personal Allowance. One arm of government is raising pensioners’ incomes while another claws some of it back through tax.”

What it means for your personal finances: Check which tax band you are actually in, particularly after a pay rise. Someone earning above £50,270 in England, Wales or Northern Ireland can start paying 40 per cent tax on part of their income, while the thresholds are different in Scotland.

Pensions become even more valuable as you move into higher tax bands because contributions can attract tax relief at your marginal rate, subject to the usual rules and allowances. Salary sacrifice, where offered, can also reduce taxable pay and National Insurance – a benefit that is already set to become less generous. From April 2029, only the first £2,000 a year of pension contributions made through salary sacrifice will remain exempt from National Insurance. Any employee contributions above that will attract both employee and employer NI.

For now, fiscal drag makes it increasingly important to understand not just what you earn, but what tax band you are in and whether you’re making full use of the pension and tax allowances available to you.