Chancellor Rachel Reeves delivered the Autumn Budget today (Wednesday 26 November) in the House of Commons. Here’s a breakdown of the key factors that will impact barbers and the barbering industry.
Autumn Budget 2025: The Key Facts for Barbers
Freeze in Income Tax Thresholds
Rachel Reeves has confirmed that income tax and national insurance thresholds are to remain frozen at their current level for another three years from 2028 until 2031 – a year longer than expected. This means pay rises could lead you into a higher tax bracket. She stated: “I know that maintaining these thresholds is a decision that will affect working people.”
Basic and higher income tax rates on property, savings and dividend income is also set to increase by 2%.
National Minimum Wage
From April, there will be a 4.1% increase to workers over 21, bringing the minimum wage up to £12.71 an hour. The minimum wage for 18–20-year-olds will go up from £10 to £10.85. Meanwhile, the minimum wage for 16-17-year-olds will see an increase by 6% to £8 an hour.
Rachel Reeves also announced that training for under-25s on apprenticeships will be made free for small and medium sized businesses.
Inflation
The Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.5% this year, in comparison to the 1% forecast in March. Meanwhile, inflation is predicated to average 3.5% this year before falling to 2.5% next year.
Cap on Pension Salary Sacrifice
The chancellor has introduced a £2000 cap on salary sacrifice into a pension, with contributions above that taxed in the same way as other employee pension contributions. This will come into effect in 2029.
New Youth Guarantee
The chancellor has announced the government is to fund a new ‘youth guarantee’ which will provide £820m over the next three years. The initiative promises every 18-21-year-old access to an apprenticeship, training and education opportunities to help to find a job.
