The Chancellor’s Budget announcement today confirms what many have expected for months: most people across the UK will face higher taxes as the Government seeks to raise an additional £26 billion a year to stabilise public finances in the face of weak economic growth and high borrowing costs.
Higher taxes for millions
The most significant change comes from the extension of the freeze on income tax thresholds. Although subtle on paper, this ‘stealth tax’ is predicted to raise around £8 billion annually, as more workers gradually move into higher tax brackets.
Wage rises are welcomed, but puts pressure on employers
From April 2026, the National Living Wage and minimum wage rates will rise to:
£12.71 per hour for workers aged 21 and over,
£10.85 per hour for workers aged 18 to 20.
These increases will be welcome news for many employees struggling with rising living costs.
However, the impact on employers - particularly those hiring young or entry-level staff - could be significant. Higher wage bills may act as a deterrent to recruitment and investment, further complicating efforts to boost productivity and stimulate economic growth.
A question mark over growth
Despite Government optimism, Coles Miller notes that it is difficult to see how increased taxes and higher employment costs will translate into meaningful economic growth. With productivity already under strain, the Budget may not deliver the long-term uplift the country needs.
Concerns for the property market
The Budget also brings renewed focus to the housing sector. Landlords facing increased tax burdens may seek to pass rising costs on to tenants - potentially leading to higher rents at a time when many households are already under pressure.
This is especially concerning given the wider reforms underway in the rental and leasehold markets. Coles Miller’s property specialists warn that renters and leaseholders should be prepared for further changes over the coming months.
A need for cautious optimism
While there is hope that additional tax revenue will fund improvements in roads, health, education and other essential services, the impact remains uncertain. Whether the Budget will lead to genuine long-term growth - or further strain - remains to be seen.
Coles Miller Solicitors encourages workers, employers, landlords, and renters to seek early advice to understand how the Budget may affect their financial and legal position.
Neil Andrews, Partner at Coles Miller, commented:
“This Budget introduces significant financial pressures for individuals and businesses alike. The combination of higher taxes, rising wage costs and ongoing uncertainty in the housing sector means it is more important than ever to take professional advice. Our teams are here to help clients understand their rights, manage their risks and plan effectively in a changing environment.”
For further information or expert legal advice, please contact Neil Andrews, Partner, Coles Miller Solicitors