UK Plans 2‑Point Increase in Personal Income Tax Rate

The UK government announced plans to raise the personal income tax rate by 2 percentage points and cut social security contributions by 2 percentage points. The proposal was disclosed on Friday, 7 November 2025, ahead of the upcoming Autumn Budget.

Finance Minister Rachel Reeves said the measures respond to a narrow fiscal space, aiming to preserve fairness and curb inflation. The Autumn Budget scheduled for 26 November 2025 will target cost‑of‑living pressures, protect the National Health Service (NHS), and reduce the debt‑to‑GDP ratio.

If enacted, the tax increase will boost revenue while the contribution cut eases workers’ out‑of‑pocket costs. The policy aligns with Prime Minister Starmer’s commitment to fund routine government spending from taxes rather than borrowing and to gradually lower the debt ratio by the 2029‑2030 fiscal year.