Autumn 2025 Budget: What savers and investors need to know

At Unity Mutual, our mission is to help members thrive financially, no matter what changes arise. 

Below, we break down key policy updates from the Autumn 2025 budget (announced 26 November 2025) and the October 2025 CPI inflation figures from the Office for National Statistics, explaining what they mean for savers and investors and how you can continue to grow your savings.

Inflation and the UK Economy

With average prices going up by about 3.6% a year (inflation), money in regular savings accounts might not be keeping up and could be losing value. A lot of easy-access accounts may pay less interest than inflation, meaning your savings might not grow fast enough to keep up.

Lower inflation could lead to lower interest rates on savings products, such as fixed-term bonds. If you want to lock in one of our current term fixed rates, apply now or talk to a member of the team.

You could also look at other ways to grow your money, like Stocks and Shares ISAs, which can offer the potential for longer term growth while helping to preserve your savings against inflation (capital at risk).

ISA Reforms

Cash ISAs

From 6 April 2027, the ISA system will undergo significant changes affecting cash ISAs and how savers can use their allowance:

• The cash ISA limit will be reduced to £12,000, within the overall £20,000 annual ISA limit.
• Savers aged 65 or over can still invest the full £20,000 in cash ISAs.

Lifetime ISAs 

Changes to the Lifetime ISA are expected in 2026, following a government consultation set for early in the year. These changes could aim to help improve aspects of the Lifetime ISA, such as the maximum house purchase threshold (£450,000) and the rules around early withdrawals.

First-time home buyers may want to take full advantage of the £4,000 Lifetime ISA allowance for the 2025/2026 tax year, securing the 25% government bonus on any contributions before any changes come into effect.

What the ISA changes mean for savers and investors

Whilst there has been a significant reduction is the cash ISA allowance, it seems that ISAs will continue to play a central role in UK saving and investing policy, but there is a clear push towards Stocks and Shares ISAs.

Therefore, savers and investors may want to explore how Stocks and Shares ISAs could fit into their plans before the 2027 changes take effect.

For investors (Before-6 April 2027):

The full £20,000 ISA allowance can still be invested in a Cash ISA.

For investors (After-6 April 2027):

• The cash ISA allowance will be reduced to £12,000.
• The overall ISA allowance remains at £20,000. If you’ve maxed out your cash ISA, the remaining £8,000 would need to be invested in a Stocks and Shares ISA.
• Investors wishing to focus more on the potential for higher growth, can place the full £20,000 allowance into a Stocks and Shares ISA.

Stocks and Shares ISAs offer a variety of investment options to suit different risk preferences. For those new to investing, our guide on Stocks and Shares ISAs is a great starting point for people new to Stocks and Shares ISAs and unsure what to be looking out for.

At Unity Mutual, our Flexible Stocks and Shares ISA is invested in our Equity Fund, which includes over 600 UK companies. This helps spread risk, track overall market performance, and support the UK economy and businesses.

Tax rate changes for Savings

From 6 April 2027, income tax rates on ‘savings income’, such as interest from savings accounts or cash holdings, will increase by 2% across all tax bands:

• Basic rate: 22%
• Higher rate: 42%
• Additional rate: 47%

Existing allowances remain in place. The Personal Savings Allowance (PSA) still lets basic-rate taxpayers earn up to £1,000 in tax-free interest, equivalent to around £33,333 in savings at a 3% interest rate, and higher-rate taxpayers up to £500, or roughly £16,667 in savings.

Here’s an example to illustrate the impact on a basic-rate taxpayer:

Key budget takeaways for savers / investors:

The upcoming ISA changes highlight the importance of planning ahead to make the most of tax-efficient savings:

• Consider Stocks and Shares ISAs – From 6 April 2027, the Cash ISA limit will drop to £12,000, so you may need to adjust how you split funds between Cash and Stocks and Shares ISAs.
• Use your ISA allowance fully – With dividend and savings tax rates rising in the coming years, holding assets outside of an ISA will likely increase the tax you pay.
• Explore guaranteed interest options – For cautious savers, ISA-wrapped* products like the Unity Mutual Guaranteed Investment Bond allow you to use your full ISA allowance without fully moving into riskier stocks and shares-based products.

Planning ahead ensures you can take full advantage of the tax benefits ISAs offer while balancing risk and growth. Unity Mutual continues to provide accessible, flexible savings and investment options to help you save confidently as these new rules come into effect.

*An ISA wrapper is the legal structure that shields your savings or investments from tax, and can be added to products such as the Unity Mutual Guaranteed Investment Bond.

We’re here to help

The Autumn Budget may have brought some changes that seem daunting, but you can still save effectively and steadily build a secure financial future by making regular contributions to your ISA products.

If you’d like to understand how our Stocks and Shares Flexible ISA works, or if you’d like to know more about the ISA wrapper for our fixed rate bonds, our team is always happy to help explain your options. 

You can visit our Help & Support page, call 0161 214 4650, or email us at insure@unitymutual.co.uk with your query.