Under 25 – six ways the Budget will affect you

Some policies announced by Chancellor Rachel Reeves in the Budget will have a specific impact on younger people.

Here are some of the key ones.

The single bus fare cap in England will be raised to £3 in 2025.

If you’re relying on the bus to get you to and from school, a university campus or work you’ll end up paying £1 more each way for a return journey, from 1 January.

It is an increase on the current limit of £2 which was introduced under the previous Conservative government to help with the cost of living.

The new cap, covering most bus journeys in England, will run until the end of 2025.

Single bus fares in London with Transport for London will remain at £1.75 and those in Greater Manchester at £2, owing to a different funding system in those cities.

Scotland, Wales and Northern Ireland have separate rules.

The Budget revealed that regulated train fares in England are to increase by 4.6% next year, while the price of most railcards will rise by £5.

The changes will come into force on 2 March 2025.

As the 16 to 25 railcard is one of the most popular in the UK, this change will have a big impact.

The government said the 4.6% increase to regulated rail fares in 2025 was “the lowest absolute increase in three years”.

It added that the £5 rise in the cost of railcards would be subject to an industry review. Most railcards generally cost £30 per year.

Businesses are the hardest hit by the Budget’s increases in tax and pretty much everyone – including the chancellor – agrees that it may affect what they pay staff.

In particular, all but the smallest employers will need to pay more National Insurance for every worker they have.

That means they may not hire as many people, they may not offer them many hours and they may not give them such big pay rises.

That said, minimum wages will rise in April.

They will go up to £12.21 an hour for those aged 21 and over, £10 an hour for those aged 18, 19, or 20, and £7.55 an hour for those aged 16 and 17 or in an apprenticeship.

Something the chancellor failed to mention, but could be important for anyone buying a home in certain parts of the country, is stamp duty.

That’s a tax in England and Northern Ireland when you buy a property.

Since 2022, for first-time buyers it was only charged when buying a property that cost more than £425,000. You only pay stamp duty on the portion above £425,000.

However, from April it will again be paid for properties that cost more than £300,000. Primarily, this will affect people buying in southern England.

Analysis by property portal Zoopla suggests about 80% of first-time buyers currently pay no stamp duty, but this is now expected to fall to about 60%.

Landlords face paying a higher stamp duty surcharge. They could choose to pass on some of that extra cost to tenants in higher rents.

If they choose not to buy, that could mean more homes for homebuyers to purchase, but it could also squeeze the number of available rental properties. Rightmove says about 15 prospective tenants are chasing every rental property on average at the moment.

This is one of the more complicated areas of the Budget, but it may be significant for family farms.

From April 2026, agricultural assets worth more than £1m will no longer be entirely exempt from inheritance tax.

For years, tax relief has enabled small family farms – including land used for crops or rearing animals, as well as farm buildings, cottages and houses – to be handed down through the generations.

However, some have considered it a loophole in the inheritance tax system.

Tax experts say some farmers take out life insurance to protect them from the impact of inheritance tax, or gift the farm to their children more than seven years before they die.

Both vaping and smoking are set to get more expensive.

The number of younger people using e-cigarettes has been rising. About one out of every seven 18-24-year-olds who never regularly smoked tobacco now vape.

Reeves announced a new tax on vaping fluid, which comes at a cost of £2.20 per 10ml of e-cigarette liquid.

However, this won’t kick in until October 2026.

That means the tax will come into effect after the government bans disposable vapes by next summer.

The vaping tax will be accompanied by an equivalent increase of £2.20 per 100 cigarettes in tobacco duty.

The government said it wanted to “maintain the financial incentive to switch from tobacco to vaping”.

There will also be immediate cost increases of 2% on tobacco and 10% for hand-rolled tobacco.