Chancellor Rachel Reeves has unveiled the long-anticipated budget.

It comes after a report from the Office for Budget Responsibility (OBR), which analyses policies decided on by the chancellor, was published early in error.

Here are the key points:

Tax thresholds will be frozen for an additional three years from 2028

The point at which people start paying higher rates of tax will be held. It can mean earners will be dragged into higher tax bands when they get a pay rise.

This will raise £8bn.

Taxes hiked on gambling

The gambling industry is going to be taxed more, to raise more than £1bn.

Remote gaming duty will rise to 40% from 21% while online betting tax will rise from 15% to 25%.

The bingo tax is being abolished from April.

New mileage-tax on electric cars

Electric car drivers will be subject to a 3p charge for every mile they drive.

Plug-in hybrid vehicles will be charged 1.5p per-mile.

This is expected to raise £1.4bn, according to the OBR report.

Change to capital gains tax for employee ownership trusts

Capital gains tax relief on business sales made to employee ownership trusts will be reduced from 100% to 50%.

This is expected to raise £900m.

Other tax hikes

The tax paid on dividends – payments to shareholders – as well as property and savings income will rise 2 percentage points, raising £2.1bn.

Two-child benefit cap scrapped

The government will scrap the two-child benefit cap from April 2026.

This currently limits the amount of benefits parents can claim for their third child or subsequent children who were born after 6 April 2017.

By scrapping the cap, the government hopes an estimated 450,000 children will be lifted out of poverty.

According to the OBR’s analysis of the chancellor’s budget this will cost the government £2.3bn.

Salary-sacrifice pension contributions above £2,000 to face national insurance

From April 2029, national insurance will be charged on salary-sacrificed pension contributions above an annual £2,000 threshold.

This will raise £4.7bn and will come into effect in 2029.

State pension increases

There’ll be an increase of £440 per year for the basic state pension and an increase of £575 per year for the new state pension.

Reforms for cash ISAs

Savers will only be able to put up to £12,000 into cash ISAs tax-free each year. This is reduced from £20,000 in the hopes that Britons will instead put their money into stocks and shares ISAs.

Over 65s can retain the full £20,000 allowance.

Fuel duty to be frozen until next September

The duty, or tax, paid on diesel and petrol has been frozen at 52.95p per litre.

This will cost the government £2.4bn next year and £900m each year after.

Mansion tax introduced on properties worth more than £2m

It means the most expensive properties in the country, worth more than £2m, will have to pay extra. This will be £2,500 for properties worth £2m to £2.5m and up to £7,500 for homes valued at £5m.

This will raise £400m, the OBR has confirmed.

Cut in energy bills

The average annual energy bill will be cut £150 from April by reducing levies.

The Energy Company Obligation (ECO) scheme, which is designed to tackle fuel poverty and help reduce carbon emissions, will be scrapped.

Luxury cars removed from the Motability scheme

This scheme, which provides subsidies for people with a disability to lease a vehicle, is part of PIP.

Freeze on student loan repayment rate

The student loan repayment threshold will be maintained for three years.

Training for apprentices under-25 free at small companies

A new Youth Guarantee will give £820m towards tyring to guarantee every young person a place in college, an apprenticeship or personalised job support.

After 18 months, 18-to-21 year-olds will be offered paid work instead of benefits.

Wider inheritance tax rules

A change to inheritance tax will allow the transfer of 100% relief allowance between spouses.

Uber and Bolt journeys to be taxed

Journeys taken on ride-hailing apps such as Uber and Bolt will be subject to tax in a measure being described as a taxi tax.

Rail fares frozen

Rail fares will be frozen for the first time in 30 years, with passengers not paying any more for season tickets, peak return and off-peak return tickets between major cities.

Business rate changes

Business rates will be reduced for 750,000 retail, hospitality and leisure properties, which will be funded by an increase on premises worth more than £500,000.

The tax reduction will be paid for by an increase in taxes on properties worth £500,000 or more, like the warehouses used by online giants.

Stamp duty break for companies new to London Stock Exchange

A stamp duty holiday for companies newly listing on the London Stock Exchange will be in place for three years.

OBR forecast

Next year, economic growth is expected to be lower than the OBR thought in March. GDP will be 1.4% in 2026, down from a previously anticipated 1.9%.

It will be 1.5% for the rest of the decade.

According to the independent forecasters, prices are expected to rise faster than the OBR thought in March due to higher wages and food costs.

Inflation will be 3.5% this year and 2.5% next.

The amount of fiscal headroom the chancellor has doubled to £22bn in 2029-30. This means a £22bn financial cushion against price shocks such as the COVID-19 pandemic and soaring energy costs.

NHS technology and new neighbourhood health centres

The government will invest £300m in NHS technology and 250 new neighbourhood health centres with the aim to expand more services into communities.

Over 100 centres, including in Birmingham, Truro and Southall, are expected to be delivered by 2030.

Prescription costs frozen

The cost of an NHS prescription in England will be frozen at £9.90.

2.6% of GDP to be spent on defence

The government will spend 2.6% of GDP, a measure of everything produced in the economy, on defence.

National wage increases

From next April, the national living wage will rise by 4.1% to £12.71 an hour for eligible workers aged 21 and over.

The national minimum wage rate for 18 to 20-year-olds will increase by 8.5% to £10.85 an hour.

For 16 to 17-year-olds and those on apprenticeships, the national minimum wage will increase by 6% to £8 an hour.

Nations and local mayors

The government of Northern Ireland government will get an additional £317m, £505m for the Welsh government and £820m for the Scottish government.

“Flexible” funding worth £13bn has been pledged for seven regional mayors to invest in skills, business support and infrastructure.

The owner of Candy Kittens, the vegetarian sweet brand, is in talks about a cut-price deal to buy Graze, the snacks range owned by FTSE-100 consumer goods giant Unilever.

Sky News has learnt that Katjes Group, which is headquartered in Germany, is in advanced talks to buy Graze for about £35m.

The price represents a huge discount on the roughly £150m Unilever paid to buy the healthy snacks brand in 2019.

Graze’s products, which are sold in major supermarkets and also through subscriptions directly to consumers, include espresso-flavoured almonds and honeycomb oat bars.

Founded in 2008, Graze was bought by Unilever after it saw off interest from competing bidders including Kellogg and Pepsico, the owner of Walkers Crisps.

The brand has performed poorly under Unilever’s ownership, however, prompting new chief executive Fernando Fernandez to put it up for sale earlier this year.

Nevertheless, the sale price of about £35m is lower than market estimates suggested earlier this year.

Mr Fernandez has also initiated a sale process for prominent British food brands including Colman’s, Bovril and Marmite, according to reports last week.

The new Unilever boss is prioritising investments in faster-growing areas in consumer healthcare and beauty, snapping up the personal care brand Wild earlier this year.

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A Unilever spokesman declined to comment.

The amount you can save in a tax-free cash ISA has been slashed from £20,000 to £12,000 in the budget.

The cut will come into effect from April 2027, but it will not affect over-65s, who will be allowed to stick to the £20,000 limit.

Chancellor Rachel Reeves hopes the cut will get savers investing and help boost the economy, but experts have warned it could have a detrimental effect and put people off saving completely.

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In the lead-up to the budget, banks, building societies and campaigners warned it could force people to pay more tax.

So, will it? Here we explain what a cash ISA is, what’s changed and what impact it could have on your savings.

What is a cash ISA?

It’s a tax-free savings account, meaning you don’t have to pay tax at all on any interest you earn. Before today you could deposit up to £20,000, but Reeves has cut this to £12,000.

Some cash ISAs are instant access, while others require you to lock money in for a certain period of time to get higher interest rates.

What does this mean for savings?

It’s important to stress that the full ISA limit – the amount you can deposit across three types of tax-free ISA accounts (cash, innovative finance, and stocks and shares) – is staying at £20,000.

But if neither of the other ISA options appeal (you may be a more cautious saver who doesn’t want to put money in stocks that can go up and down), you’ll have to look for another savings account once you get to £12,000. Bonds would be one option – but these aren’t tax-free.

The amount you could have to pay depends on your personal savings allowance.

Basic rate taxpayers are allowed to earn £1,000 in interest before paying income tax at 20%.

Higher-rate taxpayers can earn £500 in interest before paying tax.

Tax benefits aside, the change will mean you’ll earn less interest in a cash ISA.

Here’s an example…

You have £20,000 in savings, and you are happy to lock it away for a year.

Under the old cap, you would be able to place all of that money into a one-year cash ISA.

The highest interest rate on offer is 4.28%, according to The Private Office, meaning you would earn £856 of tax-free interest.

But under today’s changes, you can only add up to £12,000 into it, meaning the interest earned drops to £513.60.

Let’s say you put your remaining £8,000 into the top-paying one-year bond, which is offering 4.5%, rather than an innovative finance or stocks and shares ISA.

On the face of it, you might think it’s a higher rate, so you’ll get a better return – but take into account the tax you would have to pay and that interest rate drops to 3.6%, giving you a £288 return.

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Add those together, and your interest has dropped by £55 to £801.60.

For a higher-rate taxpayer in the same situation, the change is more drastic.

They would still earn the £513.60 in their cash ISA, but the interest rate on their one-year bond would effectively drop to 2.7% after the tax deduction, giving them £216 in interest.

In total, across both accounts, they would have earned £729.60, instead of £856.

“It’s not just people with loads of money that this will affect. A basic rate taxpayer will breach the personal savings allowance with just £22,223 in the top one-year bond paying 4.5%,” Anna Bowes, saving expert at The Private Office, said.

What is Reeves trying to do?

Reeves is hoping that lowering the cap will push people to put their savings into a stocks and shares ISA instead, but cash ISAs are significantly more popular.

Around 14.4 million people have a cash ISA, according to figures from AJ Bell, while 4.2million hold a stocks and shares ISA.

Before the budget Tom Selby, director of public policy at AJ Bell, warned: “Tinkering with the cash ISA allowance would be an ineffective way to promote investing, with more than half of Brits saying that, if faced with a cash ISA cut, they would simply move their money to a different savings account.

“It would also add significant further complexity to the system when Labour said before the general election they were committed to simplification.”

Banks and building societies, which use money in cash ISAs to lend to customers, warned the cut could cause mortgage rates to rise.

The important things to remember

One of the real risks of the cut is the psychological impact it will have on savers, with several experts warning that people may withdraw their cash even if it’s nowhere near the £12,000 simply through lack of understanding.

“On one hand, slashing the cash ISA allowance from £20,000 to £12,000 will not have a dramatic effect on most people,” Adam French, head of news at Moneyfacts, said.

“The average amount saved into a cash ISA in the 2023/24 tax year was just under £7,000 per person. However, cultural and behavioural barriers to investing run much deeper than the limit on what can be saved into a cash ISA.”

Selby warned that it could create a “scarcity mindset”, resulting in savers taking a “use it or lose it approach” towards contributions.

The plus side is the new limit is unlikely to affect money already stashed away in your cash ISA.

MoneySavingExpert Martin Lewis said the limits usually only applied to new money being put in – but we should get more confirmation of this in due course.