Increase savings income tax rates by 2pp (November 2025 Autumn Budget)

[MaxGhenis]

Summary

The November 2025 Autumn Budget increases savings income tax rates by 2 percentage points from April 2027.

Policy Details

From the OBR Economic and Fiscal Outlook November 2025:

• Effective date: April 2027
• Basic rate: Increases to 22% (from 20%)
• Higher rate: Increases to 42% (from 40%)
• Additional rate: Increases to 47% (from 45%)
• Revenue: Estimated to yield £0.5 billion a year on average from 2028-29

Behavioral Effects Noted by OBR

• Small behavioral response expected
• Individuals may move more savings into ISAs, reducing average annual yield by £0.1 billion

Implementation Required

Add new savings income tax rate parameters or update existing ones:

• Basic savings rate: 20% → 22% (from April 2027)
• Higher savings rate: 40% → 42% (from April 2027)
• Additional savings rate: 45% → 47% (from April 2027)

Note: This may require creating new parameters if savings income is currently taxed at the same rates as employment income. Check if separate savings rate parameters exist.

Source

OBR Economic and Fiscal Outlook November 2025, Chapter 3 (Policy measures), paragraph 3.33, Table 3.5

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[policyengine]

This policy has been fully implemented in the baseline. Savings income tax rates increase by 2pp (to 22%/42%/47%) from April 2027.