Money-saving expert Martin Lewis recently discussed significant changes stemming from Chancellor Rachel Reeves‘ Budget 2025 during his special podcast episode. He pointed out that while certain aspects of the budget could have been detrimental, there were notable adjustments that might benefit consumers, particularly regarding cash ISAs and energy bills.
One of the crucial updates involves cash ISAs, which will see changes implemented in April 2027. According to documents released by the Treasury, tax rates on savings income will increase by 2% across basic, higher, and additional rates starting from that date. Additionally, the Starting Rate of Savings limit will remain at £5,000 from April 2026 to April 2031. Lewis emphasized the impact these changes could have on savers with balances of £20,000 or more.
The podcast also covered the upcoming adjustments to energy bills, which are set to take effect from April 2024. This discussion follows the recent increase of 2% in Ofgem’s energy price cap, effective from October 1, 2023. As a result, the average dual-fuel household paying via Direct Debit will face an annual cost of approximately £1,755.
Concerns Over Telecom Pricing and Consumer Protections
Lewis expressed concerns regarding the government’s commitment to protecting consumers, particularly in the telecoms sector. He criticized O2 for a recent bill increase that he described as “outrageous,” stating that the price hike was 40% above what many customers had initially signed up for. This change has affected approximately 15.6 million customers.
In response, an O2 spokesperson defended the company’s actions, stating, “We have been fully transparent with our customers about this change, writing directly to them and providing the right to exit without penalty if they wish.” The spokesperson highlighted the company’s substantial annual investment of £700 million into its mobile network, asserting that the increase, which equates to just 8p per day, is justified by ongoing improvements in service.
Lewis noted that Chancellor Reeves is expected to address these pricing concerns directly with Ofcom, with a letter anticipated to have been issued recently.
Increased Benefits and Poverty Alleviation Initiatives
Budget 2025 also introduced a substantial £15 billion benefits spending plan, which includes the elimination of the two-child benefit cap. The Chancellor announced increased payments for recipients of Universal Credit, Personal Independence Payment (PIP), and child benefits. This initiative, projected to impose an annual cost of £3 billion on taxpayers, aims to lift hundreds of thousands of children out of poverty.
Chancellor Reeves framed these adjustments as essential steps toward enhancing support for vulnerable populations, marking a significant shift in the government’s approach to welfare and economic assistance.
As discussions around the budget continue, the implications of these financial changes will undoubtedly be felt across various sectors, influencing both individual consumers and broader market dynamics.
