AUTUMN BUDGET 2025: Key points and responses on its implications from social care leaders
The Chancellor of the Exchequer Rachel Reeves this week set out details of her second Budget since becoming chancellor. It saw increases totalling £26 billion in the face of forecasts of weaker economic growth, faster inflation and higher unemployment.
The budget announcement followed weeks of frenzied speculation as to what the Chancellor might announce with up to 13 potential tax policies mooted in the weeks before today’s official unveiling in Parliament.
The policies confirmed during the Chancellor’s Speech in the Commons and official Budget papers include a £150 cut to the average household energy bill from April next year as the government removes a large proportion of energy efficiency subsidies off electricity bills and scraps the energy company obligation (ECO) scheme.
The government will provide an additional £1.5 billion capital investment to tackle fuel poverty through its warm homes plan.
There will be a freeze on the thresholds for when people start paying different levels of income tax has been extended and this will result in 1.7 million people paying more tax. But the government has said that pensioners whose sole income is the basic or new State Pension will not have to pay the tax due when the state pension rises above the £12,570 threshold for paying 20% income tax.
Basic and new state pension payments will go up by 4.8 per cent from April, more than the current rate of inflation, under the triple lock.
More than £800 million in funding over the next three years was announced as part of the government’s Youth Guarantee which gives every young person a place in college, an apprenticeship or personalised job support.
Training for apprentices is to be free for under 25-year-olds at small and medium-sized companies as part of the programme. Meanwhile salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from national insurance from April 2029.
The Government also confirmed that VAT will apply to Advance Payments and that Insurance Premium Tax will apply to Motability Scheme leases which will take effect from July 2026. These tax changes will mean the Motability Scheme will become more expensive for disabled people but will remain sustainable with a choice of affordable vehicles. Premium brand vehicles will be removed from the Scheme.
A missed oppportunity?
Karolina Gerlich, CEO of The Care Workers’ Charity, said that she thought the Budget was a missed opportunity and that it contained no mention of the social care sector, or funding for it. She said: “While the Chancellor spoke of fairness, care workers—who provide essential, skilled work every single day were once again left without the investment they urgently need.
“Adult social care is the backbone of our society, yet the workforce continues to shoulder rising pressures with little recognition or reward. Care workers need real investment today: fair pay, safe staffing levels, and long-term stability. Without them, our entire care system is at risk.”
“Despite record levels of pressure in adult social care, the Autumn 2025 Budget contained no mention of the sector, no new funding, and no commitment to address the workforce crisis. Care workers continue to face unsafe staffing levels, rising workloads, burnout, and financial insecurity, yet they are absent from the Government’s priorities.
“This silence comes on the heels of immigration measures that disproportionately impact migrant care workers. Combined, these decisions send a troubling message about the value placed on the adult social care workforce.”
The Care Workers’ Charity is calling on the Government to take urgent action by committing to a fully funded workforce plan for adult social care and fair pay and career development for care workers. It also wants to see immediate investment to reduce vacancies and stabilise the workforce and long-term reform rather than short-term fixes
Amy Little, Head of Advocacy at Leonard Cheshire, also felt that the Budget was a missed chance to back social care as a major driver of growth. She said: “The Government’s own analysis is clear: investing in fair pay delivers returns worth additional billions. Yet despite a Budget built on the language of ‘fairness’, social care workers are still funded less than their NHS counterparts.
“Investing in social care is investing in people. The thousands who need to draw on care, the huge workforce that delivers social care, and many more providing unpaid care. These are the real figures that matter in this Budget.”
Other social care leaders responded to the announcements on the following topics…
On tax changes to the Motability Scheme
Nigel Fletcher, Chief Executive of the Motability Foundation, said: “We understand the challenges disabled people face in accessing reliable and accessible transport, and how important a Motability car is to Scheme customers.
“The changes to tax reliefs imposed on the Scheme mean the Scheme will need to evolve. We are working hard to minimise price increases for customers and are taking steps to assess the impact of potential changes to the leasing package. Our focus remains firmly on protecting the Scheme for those who need it most.”
Andrew Miller, Chief Executive of Motability Operations, said: “An evolved Motability Scheme will continue to put the disabled people we serve at the heart of everything we do. Changes to evolve the Scheme will involve understanding what matters most to disabled people, working closely with Motability Foundation.”
On cutting energy bills
Dr Carole Easton OBE, Chief Exceutive of the Centre for Ageing Better, commented:”As the UK pays some of the highest electricity charges in the world, moves in this budget to cut average energy bills by £150 from next April are welcome. Too many older people are forced to heat their homes based on what their energy meter is telling them, not what their body is telling them.”
Responding to the Government’s Warm Homes Plan she added: “This is good for household budgets and good for the environment. So while we welcome further funding to tackle fuel poverty through the Warm Homes Plan, it is disappointing that the government has had to reduce the budget for energy efficiency measures to balance the books.
“Two of the Chancellor’s three budget priorities were cutting NHS waiting lists and cutting the cost-of-living. Tackling the nation’s appallingly energy inefficient housing stock could go a substantially long way to meeting both those aims. We eagerly await the details of the Warm Homes Plan.”
On benefits
Diane Lightfoot, CEO of Business Disability Forum, said: “We believe that access to benefits needs to be protected for those who need it, and a strong welfare system is essential for disabled people and ultimately good for the economy too. The welfare system also has an important role to play in helping disabled people find and stay in work.
“We welcome any measures to reduce the burden on disabled people of having to frequently be reassessed for PIP when their condition is unlikely to change. Getting the narrative right around welfare changes as a whole is important, however.
“What we need to hear is that disabled people are a critical part of the growth strategy – as part of the solution rather than a target for cuts. We also need to frontload the employment support that disabled people need to get in and stay in work before cutting benefits they rely on.”
On salary sacrifice
Dr Carole Easton OBE, Chief Exceutive of the Centre for Ageing Better, commented:“The decision to cap salary sacrifice incentives to just £2,000 is a short-sighted move that values topping up Treasury shortfalls in the short-term over people’s own long-term prosperity. We know that people already don’t, or can’t, save enough for their retirement.
“More than 14 million are undersaving for their retirement. The government should be doing everything in its power to encourage people to put themselves in the best position possible for the future, not restricting people’s ability to save and penalizing companies that encourage them to do so.
“The government should be using all levers at its disposal to encourage planning for retirement at a time when the transition from work into retirement is shifting and changing like never before. We need a long-term strategy for our ageing population, as well as a comprehensive review of the government’s approach to people in their 60s, so that there is a coherent, long-term vision to ensuring as many people as possible have a good later life.”
On the Youth Guarantee
Dr Carole Easton OBE, Chief Exceutive of the Centre for Ageing Better, commented: “It is welcome that the government is committing more than £800 million towards its Youth Guarantee over the next three years and removing costs for the training of young apprenticeships in SMEs. This is an important issue that needs to be tackled.
“But the number of so-called NEETS is almost exactly matched by the number of people 50-64 who are out of work and would like to work and they will rightly be asking where is their support? The government will never achieve its employment rate and economic growth targets if it does not fix the current employment inequality experienced by 50+workers.
“One of the critical differences between the UK and countries that already have an 80 per cent employment rate, is that they have a far higher proportion of 50+ people in employment.
“The government should allocate a proportion of the enormous savings they make from pension age increases to fund tailored employment support programmes for people in their 50s and 60s whose financial futures have been made more precarious by the rises in state pension age.”
On income tax thresholds
Dr Carole Easton OBE, Chief Exceutive of the Centre for Ageing Better, commented: “The government’s decision to continue to freeze the income tax thresholds means that, even with mitigations for those solely reliant on basic or new State Pension, there is the potential that pensioners with low incomes will be required to begin paying tax directly to HMRC. Not only does this chip into meagre household budgets that are already being stretched to breaking point, but it will also create an additional administrative burden for millions of people.
“The move is also likely to act as a deterrent to those one in eight people over state pension age who are still in employment to work additional hours if they will be liable to 40% tax rates and so is likely to reduce the labour supply of older workers.
On budget uncertainty
Dr Carole Easton OBE, Chief Exceutive of the Centre for Ageing Better, commented: “This may well have been the most speculated upon budget of all-time and to the ordinary voter this just creates doubt, uncertainty and worry. Older people have told us that the drawn out and fevered speculation ahead of the budget had only served to heighten existing financial concerns.
“Beyond the leaks, the briefings and the projections, are real people leading real lives. Politicians would do well to remember that before becoming too wrapped up in the political theatre of the budget.”
On ending the two-child benefit cap
James Watson-O’Neill, Chief Executive of the national disability charity Sense, said: “We welcome the decision to end the two-child benefit cap. However, for families raising disabled children – who were already exempt from the cap and are still far more likely to be living in poverty – this change does nothing to ease the pressures they face.
“Disabled families shoulder significant and unavoidable extra costs: from electric hoists and feeding machines to specialist diets and essential equipment. Sense research shows that two in five parents of disabled children cannot properly heat their homes in winter, and the same proportion are skipping meals so their child can eat. This is unacceptable in modern Britain – yet it remains unaddressed.
“The lack of wider investment, combined with uncertainty around potential future cuts, leaves disabled people fearful about how they will cope. In this context, it is vital that the Government rules out any cuts to the Health Element of Universal Credit for 16 to 21 year olds. Removing this support would push many young disabled people into even deeper hardship.”
