Everything Northern Ireland can expect in Budget 2025 as Rachael Reeves makes changes to benefits, savings and tax

The Chancellor will take to her feet in the House of Commons around 12:30pm on Wednesday

Everything you need to know

• The Northern Ireland Executive enters this Budget facing a serious structural deficit, with projected departmental overspends estimated at around £400 million. ^{Consequently, any new funding generated by the UK Budget must prioritise mitigating this existing financial crisis rather than funding radical new policy expansions.}
• The expected abolition of the two-child benefit limit is a crucial anti-poverty measure that applies across the entire UK welfare system. This policy change will have a statistically greater impact in Northern Ireland, which has a higher concentration of larger families compared to Great Britain .
• The expected proposal to extend the freeze on Income Tax and National Insurance contribution thresholds applies directly to all Northern Ireland workers. This policy, known as fiscal drag, disproportionately impacts the lower-to-middle income bracket in NI, where median earnings are significantly below the UK average.
• Increased spending on comparable services in England, such as the NHS, education, and childcare, will generate corresponding consequential funding for Northern Ireland via the Barnett formula. These funds are vital for sustaining critical, devolved services and addressing the Executive’s existing financial pressures.
• Planned increases to the National Living Wage and the commitment to the State Pension triple lock will provide a direct financial boost to NI households. ^{The rise in the minimum wage will particularly lift the income floor for a larger segment of the NI workforce, given the region’s comparatively lower average earnings.}
• Increases in reserved duties on items like alcohol and tobacco, and the widening of the Soft Drinks Industry Levy (sugar tax), will directly raise consumer prices in Northern Ireland. Conversely, the maintenance of the UK-wide fuel duty freeze, including the temporary 5p cut, will continue to provide cost-of-living relief to NI drivers.
• The anticipated proposed £2,000 yearly cap on the amount of money saved into a pension through salary sacrifice schemes will apply directly to NI employees and employers. This measure could reduce the National Insurance savings benefit for both parties and could potentially affect the size of retirement savings pots for workers in NI.
• Proposed hikes to various gambling duties and levies, particularly the remote gaming duty on online operations, are reserved matters and will apply directly to the Northern Ireland market. These increases are UK-wide revenue-raising measures intended to help fund national spending commitments, such as the scrapping of the two-child benefit limit.

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