Hey there, money-savvy friends! 👋 The new Labour government has just dropped their first Budget since 2010, and we know these announcements can feel about as clear as a foggy London morning. So, let’s break down what Chancellor Rachel Reeves’ Budget means for your wallet in plain English!

The Big Picture 🎯

Before we dive in, here’s the headline: we’re looking at some significant tax changes aimed at funding public services, particularly the NHS. But don’t worry – we’ll focus on what matters most to your personal finances.

Your Take-Home Pay 💰

Good news for your payslip! The basic rates of income tax and National Insurance aren’t changing. Even better, from 2028, income tax bands will rise with inflation, which means you won’t be pushed into paying higher rates just because your salary keeps pace with rising prices.

Minimum Wage Warriors 💪

If you’re on minimum wage, here’s something to celebrate:

• Over 21s: Rising from £11.44 to £12.21 per hour (from April)
• 18-20 year olds: A bigger jump from £8.60 to £10 per hour
• This is part of a plan to eventually move towards a single adult rate

Getting Around Town 🚌

Some changes to your travel costs:

• Bus fares: The £2 cap on single fares is increasing to £3 from January (except in London and Greater Manchester)
• Driving: The 5p fuel duty cut stays for another year
• Flying: Air Passenger Duty is going up in 2026 (£2 more for short-haul economy flights)

Housing Headlines 🏠

For all you aspiring homeowners:

• First-time buyers will start paying stamp duty at £300,000 (down from £425,000)
• If you’re dreaming of a second property, the stamp duty surcharge is increasing from 3% to 5%
• Good news for social housing tenants – you’ll keep all the cash from Right to Buy sales

Vaping and Night Out Costs 🍺

• A new £2.20 tax per 10ml of vaping liquid coming in October 2026
• Non-draught drinks tax increasing with inflation
• But there’s a small cut in tax on draught drinks (cheers to that! 🍻)

Looking at the Bigger Picture 📈

The Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.1% this year and 2% next year. But what does this mean for you? Well, economic growth often translates to job opportunities and potential wage increases. With inflation predicted to average 2.5% this year and 2.6% next year, it’s more important than ever to make sure your money is working as hard as you are!

Planning Ahead: Your Money Moves 💡

Given these Budget changes, here are some smart money moves to consider:

1. Review Your Budget
   With bus fare increases and changes to alcohol duties, it’s a good time to revisit your monthly spending plan. Could you save money by switching to a monthly bus pass? Or maybe it’s time to explore cycling options?
2. Check Your Savings Strategy
   While the Budget didn’t directly address savings rates, the economic forecasts suggest we’ll be dealing with inflation above the Bank of England’s 2% target for a while. This might be a good time to review whether your savings are in the best possible place.
3. Think About Housing
   If you’re planning to buy your first home, the changes to stamp duty thresholds mean you might need to adjust your savings goals. Remember, good financial planning isn’t just about responding to changes – it’s about anticipating them!
4. Consider Your Career
   With minimum wage increases coming, especially for 18-20 year olds, some employers might be adjusting their pay scales across the board. This could be a good time to have conversations about career progression and compensation.

What’s Next? 🎯

While Budgets can sometimes feel like distant political events, they have real impacts on our daily financial lives. That’s why staying informed and understanding these changes is crucial for making smart money decisions.

At Mognito, we believe that financial education shouldn’t be intimidating or boring. We’re here to help you navigate these changes with confidence, whether you’re just starting your financial journey or looking to level up your money management skills.

Watch this space for our upcoming deep dives into specific Budget measures. We’ll be exploring topics like:

• Interest Rates finally started to Fall and What Does It Mean for Your Money?
• Tips for managing your money in an inflationary environment

The Mognito Take

These Budget changes show just how important it is to stay informed about your finances. While some changes won’t kick in for a while, understanding them now helps you plan better for the future. Whether you’re earning minimum wage, saving for your first home, or just trying to make your money work harder, knowledge is power!

Remember, every financial change brings both challenges and opportunities. The key is understanding how these changes affect you and having the knowledge to make informed decisions about your money.

Mognito is launching soon, and our mission is to bridge the wealth divide by democratising access to money management education for all. We provide an engaging, fun curriculum tailored across proficiency levels – from personal finance fundamentals to advanced investing strategies. Sign up for our newsletter and follow our socials to stay updated!