Money-saving expert Martin Lewis has outlined significant changes resulting from Chancellor Rachel Reeves’ Budget 2025. During his special podcast, Lewis discussed alterations to cash ISAs and energy bills, noting that some aspects of the budget could have been more detrimental.
Changes to Cash ISAs and Energy Bills
One of the most notable changes involves cash ISAs, which will see new tax rates implemented from April 6, 2027. The Treasury has confirmed an increase of 2% on tax rates for savings income across basic, higher, and additional rates. Furthermore, the Starting Rate of Savings limit will remain at £5,000 from April 2026 until April 2031.
In addition to these changes, Lewis highlighted forthcoming adjustments to energy bills, effective from April 2024. Following a recent decision by the energy regulator Ofgem, the energy price cap increased by 2% on October 1, 2023, raising annual costs for a typical dual-fuel household paying by Direct Debit to £1,755.
Consumer Protection and Telecoms Concerns
Lewis also expressed concerns regarding consumer protection in the telecoms sector, particularly following a recent price increase by O2. The company raised bills by an average of 40%, impacting approximately 15.6 million customers. Lewis indicated that Chancellor Reeves is expected to address these pricing issues in a letter to Ofcom, which has now been made available on GOV.UK.
“We have been fully transparent with our customers,” stated an O2 spokesperson. “While we recognise price changes are never welcome, an increase equivalent to 8p per day is greatly outweighed by the £700 million we invest each year into our mobile network.”
The spokesperson also mentioned that customers were informed directly about the changes and were granted the option to exit their contracts without penalty, adhering to existing regulations.
In a broader context, Chancellor Reeves unveiled a £15 billion benefits spending plan during the Budget announcement. This initiative includes the removal of the two-child benefit cap and increased payments for recipients of Universal Credit, Personal Independence Payment (PIP), and child benefits. Reeves framed this move as a strategy aimed at lifting hundreds of thousands of children out of poverty, with projected annual costs for taxpayers reaching £3 billion.
Martin Lewis’ insights highlight the ongoing changes in fiscal policy and consumer protection measures, reflecting the government’s efforts to address economic challenges while seeking to support vulnerable populations. As these changes unfold, individuals and families will need to navigate the evolving landscape of savings and energy costs.
