Budget measures to slow price rises, along with inflation and economic growth forecasts, have increased the chances of an interest rate cut. Leave your thoughts on the budget below.
Thursday 27 November 2025 12:31, UK
For this week’s guide, Anna Bowes, savings expert from The Private Office, reviews the best offers on the savings market after Rachel Reeves delivered a £26bn tax-raising budget…
One of the biggest changes to savers was a cut to the tax-free cash ISA limit from £20,000 to £12,000 from April 2027. 
Savers over the age of 65 will continue to be able to save up to £20,000 in a cash ISA each year.
If you want to make the most of a cash ISA now, here’s a look at the best rates in the easy access cash ISA market… 
“It’s been low in activity in the easy access cash ISA market over the last couple of weeks, although the top rate available which was also Moneybox has dropped from 4.52% AER to 4.47%,” says Bowes. 
“The top three accounts are all via Fintech companies that are not actually banks themselves, however your cash is deposited with regulated and authorised banks that are part of the Financial Services Compensation Scheme (FSCS) – so your money is protected as long as you keep within the £85,000 limit.
“As we always say, it’s important to check all the terms and conditions to make sure you know where your money will be held, and to check for any tricks that could catch you out and see you earning less than you thought, or not having the access you wanted.” 
What about fixed rate cash ISAs? 
“It’s surprising that there has been much better news in Fixed Rate ISA tables over the last couple of weeks, perhaps due to the news that the cash ISA allowance was expected to be cut in the budget,” says Bowes. 
In the 1-year table, Investec has taken the top spot with an ISA paying 4.3% –  the highest rate we’ve seen in a couple of months.
And in the 2-year table the current top rate from Secure Trust Bank is 4.17% AER –  the highest rate since mid-October.
Sadly, in the 5-year table, rates have not been as resilient; Stalwart UBL reduced the rate it is offering from 4.22% to 4.13% which is now the joint leading rate with Castle Trust upping its offering to make sure UBL was no longer alone.
Here’s a rundown of what’s been happening to other types of accounts – and the best rates on offer. 
Easy access
Bearing in mind that the expectation is for a base rate cut at the next Bank of England meeting in December, Bowes says she’s not surprised that there has been very little activity in the easy access market.
In fact, it’s good news that things have actually remained very stable.
Monument Bank is still at the top with its Easy Access Savings Boosted Rate account paying 4.51% AER.
Fixed rate bonds
In the 1-year table we have a new leader, which is always exciting, says Bowes. 
Investec has launched a new market leading bond paying 4.50%. The rest of the providers are yet to react, but on the plus side not too many providers have been cutting rates. 
In the two-year table, a couple of new rates have entered over the last couple of weeks, taking the average of the top five accounts up from 4.39% to 4.40%
Sadly, for the five-year table, all of the leaders dropped away, leaving Chetwood Bank in the top spot, paying 4.30%.
“This activity could be another indication that markets are anticipating a base rate cut in December,” says Bowes. 
By Sarah Taaffe-Maguire, business and economics reporter
Analysts were braced for rapid and unpredictable changes in UK financial markets during the budget yesterday.
And they got them. Not least because of the shocking and unprecedented leak of the budget contents by the Office for Budget Responsibility (OBR). 
Now, though, things have calmed and settled in a better spot: the pound is up and government borrowing is slightly less expensive. 
The amount investors charge to lend to the UK – as measured by the interest rate on 10-year government bonds – has fallen to a two-week low this morning before edging slightly higher. 
The pound has also been boosted to a level not seen for most of this month, buying $1.32. 
And having been worth €1.13 for most of November, a pound is equal to €1.14. 
A stronger pound means buying things in other currencies is slightly cheaper as sterling goes further than before. 
Gambling giant not happy
We got a clear sense from the world’s largest sports betting and online gambling operator what the hit of new gambling taxes would be.
In one word: big. 
Paddy Power-owner Flutter Entertainment said the tax increases “will have a very significant impact on the overall market”.
It estimated the financial hit would be $320m (£242m) this year and $540m (£408m) in the next. 
Flutter’s UK and Ireland chief executive, Kevin Harrington, said: “These changes will hand a big win to illegal, unlicensed gambling operators who will become more competitive overnight.”
It is a “very disappointing outcome”, Harrington added. 
Massive profit rise at company behind Brixham water contamination
The parent company of South West Water, the business serving 1.8 million customers in southwest England, has announced a significant rise in profits.
Pennon’s underlying profit before tax rose to £65.9m from a £18.6m loss during the same period last year.
Some customers of the company were subject to a boil water notice in May last year, which remained in place for eight weeks, with roughly 17,000 households told to boil their water before drinking.
By Sarah Taaffe-Maguire, business and economics reporter
As everyone tries to work out what the budget means for their wallets and society, the economic forecasts released yesterday have taken a bit of a back seat.
But they could have as big an impact on you as some of the budget measures. 
Thanks to the announced measures to slow price rises, along with inflation and economic growth forecasts, the view is that an interest rate cut in December is now more likely.
Traders reckon there’s a 93% chance the Bank of England will bring the interest rate down to 3.75% in December, according to London Stock Exchange Group (LSEG) data. 
Lower interest rates mean cheaper borrowing and lower mortgage rates.
And interest rate falls are on course to continue into next year. Currently, cuts are anticipated in March and July, which would bring the rate down to 3.25%, according to the LSEG data. 
While independent forecasters, the Office for Budget Responsibility (OBR), think inflation for this year will be higher than their last estimate (thanks to wage rises), they do recognise it will fall. 
Plus, measures to bring down price rises, such as energy bill cuts and the fuel duty freeze, will help too.
The fact further drops aren’t expected reflects the inflation worry the OBR has.
For a look at the key points, including more detail on what it means for the economy, tap on the link below…
The chancellor’s budget is set to raise the tax burden on Britons to an all-time high, but most of the big changes won’t be implemented for several years.
Five ways you’ll be hit (tap on the links for more detail about each measure)
Income tax threshold freeze extension: Millions will pay more tax on their income between 2028 and 2031 as a result of this change – enter your income into our calculator to work out how much.
Savings: The cash ISA limit will be reduced from £20,000 to £12,000 except for over-65s from April 2027. Taxes on savings interest, dividends and property income are also rising.
Pension contributions raid: From 2029, pension contributions via your employer’s salary sacrifice scheme will be subject to national insurance after £2,000.
Mansion tax: A new surcharge on properties valued over £2m will be introduced in 2028.
EV tax: Starting from April 2028, drivers of battery electric vehicles and plug-in hybrids will be subject to a 3p per mile tax.
Five ways it could help
Minimum wage hike: From April, the national living wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over. Rates are also rising for younger workers.
Energy bills: Some of the policy costs within energy bills will be moved to general taxation from April, knocking an average of £150 from bills.
Cost freezes: Rail fares in England and prescription charges will be frozen next year.
Families: The two-child cap on benefits has been scrapped to bring hundreds of thousands of children out of poverty – find out how much extra families can claim here.
Inflation: Announcements on energy bills and rail fares are expected to help decrease inflation by 0.3 percentage points in 2026, the Office for Budget Responsibility says.
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The chancellor has announced that she will increase taxes on property income, such as rent, by 2 percentage points from April 2027.
Matt Hutchinson, the director of flatshare site SpareRoom, says this “hasn’t been thought through” as it may inadvertently hit tenants.
Landlords may pass added costs on to tenants by increasing rents, he says.
Rental stock could also be reduced as landlords, already overwhelmed by the Renters’ Rights Act, may stop letting their homes, he said, adding:
“Tenants… can’t take much more. To do this now could be terrible timing when the rental market is already in such a state of flux.”
Consumer champion Martin Lewis has been delving into what the budget means for energy bills – after Rachel Reeves said her changes would knock £150 off on average.
Lewis says the reduction will kick in next April and will be roughly equal to a 3.3p drop in electricity unit price and a 0.3p cut in gas price before VAT.
On average, Lewis says this will lead to around a £150-a-year reduction – but if you use more energy it’ll be a larger discount and smaller if you use less.
Here’s what else Lewis says:
Read his full post in full here…
One of Labour’s most high-profile election promises last year was that they would not raise the rates of income tax, national insurance or VAT paid by working people over the course of this parliament.
Rachel Reeves is now two budgets down and she’s technically avoided doing that so far.
But will voters see it that way? 
The actual rates of tax paid by people are projected to rise, as frozen thresholds mean they are dragged into higher tax bands.
Average earners are paying 18.8% in tax now, compared with 18.2% when Labour took office. 
That is now projected to reach 19.8% by March 2031.
Higher and lower earners will be hit worse, however, as their salaries are closer to the thresholds.
For low earners – those earning two-thirds of the national average – their effective personal tax rate is set to reach its highest level since March 2013. 
High earners will not have paid more since 2008.
Average earners were paying more between October 2021 and March 2023, however.
The freeze to the thresholds is partly offset by the cut to National Insurance rates under the Sunak/Hunt government in April 2024.
Employees now pay 8% of their earnings in National Insurance. That had been 12% through most of the 2010s and as high as 13.5% for a period in 2022.
The freezing of tax thresholds is described as a “stealth tax”. You won’t notice any changes on your payslip right away, but as your pay goes up over the next few years to adjust to the cost of living, you will end up paying more.
A smaller proportion of your earnings will be tax-free, and higher earners will have to pay more of their salary at higher rates of tax.
See how you will be affected: Enter your current salary to the nearest £1,000 and we’ll tell you how much more tax you’ll be paying by 2031 and what today’s three-year extension means for you.
The people who are worst hit are those whose current earnings are closest to the various tax thresholds – for example the tax-free personal allowance of £12,570 and the 40% rate threshold of £50,270.
Throughout the afternoon we’ve been answering your questions on what the budget means for you – catch up below.
Thanks to all those who submitted a question – and sorry if we didn’t get to yours.
We’ll be back with live updates tomorrow at 6.30am.
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