Money Saving Expert’s Martin Lewis has responded to the key announcements of this year’s Budget after Rachel Reeves scrapped the two-child benefit cap and cut energy bills by £150 a year
Autumn Budget: Martin Lewis discusses energy bills
Martin Lewis has issued his instant verdict on the Budget and how changes to taxes and energy bills will affect the “pound in your pocket”.
The Money Saving Expert founder responded in a new video this evening to Chancellor Reeves’ second Budget, which saw her scrap the two-child benefit cap, lower energy bills and announce a new tax on luxury homes worth over £2 million.
Mr Lewis said he was “pleased” with the reforms to charges on gas and electricity bills, and explained: “What they’re doing is taking some of the levies that I’ve been ranting about, and they’re going to be moving those into general taxation – they’re also getting rid of the ‘eco scheme’.
“This is going to mean a reduction of the unit rate – the amount you pay for each unit of energy you use – of around 3.4p off the electricity unit rate, and 0.3 per kWh off the gas unit rate. Overall, everything else remaining equal, this should be about £150 a year off a typical energy bill.”
READ MORE: Budget 2025 LIVE: Rachel Reeves confirms axe of DWP two-child benefit cap
But he admitted the “big question” is whether this will apply to fixed rate tariffs – and said he had been told by “someone very senior” that the Government “intends for companies to pass on these savings directly to consumers” and that they will be “working on it”.
“This should be a reduction on everybody’s bills from next April”, he added.
‘Mansion tax’, electric vehicle surcharge and NHS prescription charge freeze
Meanwhile, on the high-income surcharge to be added to council tax on high-income homes in England from April 2028 – the so-called “mansion tax” – Mr Lewis explained: “For houses £2million to £2.5million it’s £2,500 a year, £2.5million to £3.5million it’s £3,500 a year, £3.5million to £5million it’s £5,000 a year, and £5million is £7,500 a year.
Owners of electric vehicles are meanwhile set to pay a 3p-per-mile surcharge form April 2028 – but he said it is not clear yet how this will be paid, “whether you’ll have to declare it, and how they’ll measure it”.
Bus fares, rail fares and NHS prescription charges will be frozen next year under Reeves’ plans – but unfortunately the “cost of booze will be going up” as duty rises in line in inflation, he explained, along with cigarettes.
Changes to ISAs explained
Delving into the tweaks to Cash ISAs announced today, Martin Lewis added: “Cash ISA annual allowance cut to £12,000 (from £20,000) per tax year This will not apply to over 65s, who will keep £20,000 cash ISA limit The shares ISA will remain at £20,000.
“There’s logic in here based on the policy aims. While I would’ve preferred a carrot not stick approach – this isn’t as bad as it could’ve been, £12,000 per year is still a reasonable whack for many people. The stated aim was not to raise revenue but to encourage young people to invest rather than save – both for the economy but also because on average it outperforms.
‘Staggering’ OBR blunder slammed
It comes after Mr Lewis slammed the Office for Budget Responsibility for their ‘staggering’ mistake which saw major decisions on tax and spending leaked hours before the Chancellor was due to address parliament. Martin wrote on Twitter : “This looks like staggering fat fingers from the OBR publishing budget outcome before the budget, govt will be fuming.”
This afternoon, the head of the OBR apologised for the “mistake” which led to the early publication of its Budget forecast.
“The document was unintentionally uploaded onto our website too early,” Richard Hughes, chairman of the organisation said as he started the watchdog’s presentation regarding its latest report.
“We’ve initiated an investigation into how and why it happened. That investigation will report into our oversight board, the Treasury and to the Treasury Committee and I will abide by their recommendations.”
When asked whether he would resign over the issue if asked to, he said: “I will abide by their recommendations.
“I will always serve so long as I have the confidence of the Chancellor and the Treasury Committee.
“We take it very seriously which is why we have initiated an investigation and why it will report to the Treasury and Treasury Committee.”
Rachel Reeves does not think the chairman of the Office for Budget Responsibility (OBR) should resign over the leak, which caused confusion on the financial and currency markets this morning. A spokesman for the Chancellor said: “The Chancellor has confidence in Richard Hughes.”
