How the Budget will impact your finances, in your 20s, 30s, and 40s

This week’s Budget will have an impact on your personal finances, with everything from energy bills to ISAs covered by the Chancellor. But how exactly the announcements will effect you could depend on your age. We examine what people in different age groups need to consider following the Budget, as well as previously announced Labour policy changes that might affect your money. Shorts In your twenties The number of young people not in education, employment or training (known as Neets) has risen to almost one million. To encourage more young people in to work, Healey announced minimum wage increases. The rate paid to workers aged 21 ​and over, currently £12.71 an hour, and the rate payable to workers aged ‌18 to 20, now £10.85, will both rise by 3.9 per cent. The increase means the National Living Wage will increase ​to £13.21 an hour and the 18 to 20 National Minimum Wage will be £11.27. Labour have also announced plans to create thousands more apprenticeship placements and jobs for young people. More controversially, employers will have to contribute 25 per cent towards the cost of “older” apprentices, aged 25 and above. Training for apprentices aged between 16 and 24 will continue to receive full funding from the Government’s growth and skills levy budget. More help has come for young people in the form of Your First Home, a scheme open to first-time buyers in England. It will help people on the property ladder with a deposit of just 2.5 per cent and will give eligible buyers a loan worth 20 per cent of their new-build property’s value. However, Labour is also increasing the tax on income from property by four percentage points from April 2027. This means some landlords will pass the increase on to renters, eating into their savings and making it harder to gather a deposit. In your thirties The Chancellor made no changes to income tax thresholds, meaning the point at which most people start paying income tax stays the same at £12,570. When you are in your thirties, your salary often starts to rise at a time when your life is likely to be more expensive. Chris Ball, chief executive of Hoxton Wealth, said: “The continued freeze on income tax thresholds is particularly relevant to people in their thirties. “Many are progressing professionally and getting pay rises, but a bigger share of those earnings may now be lost to tax.” In a previous Budget, Labour announced that only the first £2,000 of employee contributions each tax year will be free from national insurance (NI) from April 2029. So, you will start paying NI on more pension contributions. Higher taxes are being imposed on banks’ profits which banks could pass on extra costs to borrowers, Chris Hallam, senior wealth planner at Canaccord Wealth, said. “Some of that cost will inevitably be passed on to the customer through higher borrowing costs, tighter lending restrictions or lower savings rates,” he added. There has been an increase announced to the minimum wage (Photo: Yau Ming Low/Getty/iStockphoto) In your forties Many people in their forties will be dragged into higher income tax rates as income tax thresholds have been maintained. “The Budget leaves untouched the cliff edges that can wipe out much, if not all, of a pay rise”, Hallam said. Healey did not announce an increase to capital gains tax (CGT) and it has not been hiked to match income tax rates. CGT is levied on profits from assets like shares, second homes, buy-to-let properties and personal possessions like art. Ball said: “Whatever happens in a Budget, do not rush to sell assets you never planned to sell. With a big CGT rise off the table for now, some of the pressure has been taken off those who were considering selling early to beat a potential rise in CGT.” Hallam said: “In this age category, retirement is close enough to matter, but for many, mortgages, children and everyday costs are competing for every pound.” In your fifties and above Without knowing if CGT will increase in the future, it will be more difficult for people in their fifties and above to establish whether or not they should sell an asset to help support their retirement or gift money to loved ones. People might still hold investments or property they no longer want simply to avoid CGT, Hallam said. He added: “This makes it harder for people in their fifties and above to pass money down when younger family members may need it the most.” Inheritance tax thresholds remain frozen. This is important because it means more households will fall in scope for inheritance tax in the future. If inheritance tax applies, anything above the tax-free limit is charged at 40 per cent. In a previous Budget, Labour announced that most pensions would no longer be exempt from inheritance tax from April 2027. Currently, if you die before the age of 75, your beneficiaries can usually draw income from your pension without paying tax. After April 2027, even if you die, at 51 for example, your loved ones might have to pay inheritance tax on your pensions, unless you leave the money to a spouse or civil partner. In September 2026, Andy Burnham announced major changes to the state pension triple lock in a bid to help fund social care. The triple lock ensures the state pension goes up by inflation, wages or 2.5 per cent, whichever is higher. From April 2030, Labour wants to introduce an “adjusted” triple lock, meaning the state pension would rise by the highest of 2.5 per cent or inflation. For people who only live off the state pension, the Government has confirmed they will not pay tax on their income as it passes the personal allowance for the first time. Those looking to replace more of their state pension income themselves will need to build higher private pensions. From April 6, 2026, only the first £2,000 of salary sacrificed each tax year will be free from NI. Affecting all ages The Chancellor said that he would be making a £100 payment to all households in council tax bands A to D for England – and similar funding for other nations – to help with energy bills. The payment will go to 20 million households – and will be paid directly into people’s bank accounts, in theory giving those who don’t need help on their energy bills an extra £100 to be spent as they wish. The money will help cover rising energy bills this January. Projections suggest that the energy price cap will rise in the new year, moving annual bills for a typical household from £1,723 a year to £2,188 a year. Labour also announced changes to ISAs. At the moment, people can put £20,000 a year into ISAs – stocks and shares or cash – and the returns or interest are entirely tax-free. From next April, under plans announced by former chancellor Rachel Reeves, the annual cash ISA limit for those under 65 was set to drop to £12,000, as part of a government move to encourage investment in stocks and shares. This move has now been scrapped. Instead, Healey said he would work with the financial sector to create a new “starter ISA” for first-time investors. Motorists will also benefit from an extension to the “temporary” 5p cut to fuel duty in place, which has been extended multiple times. It was due to end on 1 January, 2027, with a planned 3p-per-litre increase and another 2p increase on 1 March, 2027. But Healey announced the temporary cut will be extended to July.