Have you ever opened a Budget statement and felt it was written specifically about you – just not in a good way?
Last month’s Autumn Budget left a lot of us doing exactly that. The Chancellor stood up and talked about “everyone doing their bit”, yet when you dig into the small print, the burden looks suspiciously lopsided. Some age groups are quietly breathing a sigh of relief. Others are staring at their finances wondering where it all went wrong.
I’ve spent the past few weeks speaking to accountants, financial planners and, frankly, a lot of very confused readers. The picture that emerges is fascinating – and more than a little unfair.
The Generational Fault Line Running Straight Through the Budget
Here’s the thing nobody in government will say out loud: this wasn’t a neutral Budget. It was a deliberate transfer of pain from one generation to another.
Younger workers largely shrugged. Many even quite liked parts of it. Over-55s? A completely different story. Surveys taken immediately after the announcement showed approval ratings swinging from +37% among 18-34 year-olds to a brutal -37% among the over-55s. That’s not a small gap. That’s a canyon.
So let’s stop dancing around it. Here’s exactly how the new rules hit different age groups – no spin, no sugar-coating.
The Salary Sacrifice Shock (Mostly a Middle-Age Problem)
One of the sneakiest changes is the upcoming cap on pension salary sacrifice. From 2029 you’ll only be able to sacrifice £2,000 of salary tax-free for pension contributions. Anything above that gets hit with National Insurance again.
Who does this actually hurt? Not graduates earning £28k. Not retirees. It hurts the 40-55 year-old professional who’s finally earning decent money and trying to stuff as much as possible into their pension before the kids finish university.
Think about the classic profile: £80k-£120k salary, big annual bonus, using salary sacrifice to keep taxable income under the £100k personal allowance cliff-edge. That trick just got a lot less useful.
“It feels like the goalposts have been moved at the worst possible moment,” one financial planner told me last week. “These are exactly the people who’ve played by the rules for twenty years.”
Suddenly the maths that made maxing your pension feel clever now looks complicated and expensive. And once employers realise they’ll pay employer NI on anything over £2,000, guess how enthusiastic they’ll be about offering unlimited sacrifice?
Frozen Tax Thresholds: The Slow-Burn Tax Rise Nobody Votes For
The income tax thresholds freeze – now extended to 2031 – is the gift that keeps on taking. Every year your salary rises with inflation (if you’re lucky), more of it gets taxed at 40%, and eventually you’re paying higher-rate tax on what used to be a middle-class income.
Younger workers don’t feel this yet. They’re still climbing the ladder, often below the higher-rate threshold anyway. But give it five years? Ten? They’ll be dragged in too.
The over-55s feel it right now because many planned their retirement around current thresholds. State pension plus a modest private pension was meant to keep them in basic rate tax. Thanks to fiscal drag, that’s becoming fantasy for more people every year.
- Average earner in 2010 paid higher-rate tax at roughly today’s £70k+ in real terms
- Today that kicks in at £50,271
- By 2030 it could easily be under £45k in real terms
It’s a tax rise disguised as doing nothing. Genius, really – if you’re the Treasury.
Cash ISA Cuts: The Strangest Age Discrimination in Years
From April 2027 the cash ISA allowance drops from £20,000 to £12,000. Except… if you’re over 65 you keep the full £20,000. Honestly, you couldn’t make this up.
So a 64-year-old saver gets £8,000 more tax-free cash allowance than their 40-year-old child. And from 2028 the rest of us won’t even be able to hold money-market funds inside a stocks-and-shares ISA without penalties, while over-65s can still do whatever they like.
The official reason? “Older savers rely more on cash interest.” Which might be true, but it doesn’t explain why the solution is to punish everyone younger instead of just giving pensioners a higher allowance on top.
In practice this hits first-time-buyer deposits hardest. The exact group the government says it wants to help.
Property and Landlord Taxes: Another Over-50s Headache
Buy-to-let landlords – disproportionately older – just took another kicking. Higher stamp duty, reduced mortgage interest relief, and now income tax on rental profits calculated differently. Many are looking at marginal tax rates pushing 60-70% on rental income.
Add the coming inclusion of pensions in inheritance tax from 2027 and you see the pattern: wealth that took decades to build is suddenly fair game.
Younger people renting from these landlords won’t thank them when rents rise to cover the tax bill, of course. But that’s a problem for another day.
What Younger Generations Actually Gained (Yes, Really)
It’s not all bad if you’re under 35. The national living wage rise got genuine cheers. Removing the child-benefit high-income charge taper helps families. And many simply aren’t affected by pension or ISA changes yet.
There’s also a sense – fair or not – that the system might finally be tilting in their direction after years of house-price madness and student debt.
But here’s the sting in the tail: many of the measures that look “young-people-friendly” today create problems tomorrow. Higher employer costs usually mean fewer jobs or lower wages. And when today’s twenty-somethings hit their fifties? Guess who’ll be paying for today’s spending.
The State Pension Winners (For Now)
One group came out genuinely better off: anyone relying mainly on the state pension. The triple lock remains, meaning above-inflation rises continue. And because the personal allowance is still ahead of the full new state pension (just), most pensioners pay zero income tax.
That combination – tax-free, inflation-proofed income rising faster than wages – is actually extremely valuable. You won’t hear many politicians admit it, though.
So where does this leave us?
The Budget wasn’t cruel by accident. It was cruel by design – a conscious decision to protect certain voters while making others pay. Whether that’s politically smart or morally defensible is above my pay grade. But as a financial decision? It’s crystal clear who won and who lost.
If you’re in your twenties or thirties, enjoy the moment – but start planning for the day the bill arrives. If you’re over fifty, the old rules just changed, probably forever. The strategies that worked for your parents’ generation are being dismantled piece by piece.
Either way, pretending this was “everyone doing their bit equally” is the biggest fiction of all.
The Treasury might call it fixing the public finances. Most families will call it something rather different.
