We break down the key points from the 2025 autumn Budget, with expert guidance from Chartered Financial Planner Mel Kenny.
By Lyndsay Conway
Yesterday’s autumn Budget may have been overshadowed by the Office of Budget Responsibility (OBR) leak that landed just before The Chancellor’s speech, but behind the headlines are several important changes that could shape life for older people, family carers and the care sector. It’s not a dramatic overhaul, but there’s plenty that’s worth knowing about if you’re supporting ageing parents – or if your family relies on care services.
Key highlights:
- State Pension to increase by 4.8% in April 2026
- Key benefits for the elderly: Attendance Allowance, PIPs and Carer’s Allowance to rise by 3.8%
- Prescription charges frozen
- Energy bills cut by £150
- £20,000 cash ISA Allowance protected for the over 65s
- National Living Wage to rise by 4.1%, which will impact care workers, their employers and their customers
Mel Kenny, Chartered Financial Planner at Radcliffe & Newlands Wealth, offers a helpful summary: “The Budget tilted the see-saw modestly toward redistribution – a small transfer of wealth from the better-off to the worse-off. The government has sought to tiptoe carefully, trying not to upset voters too much or spook markets with excessive borrowing, while heeding party principles.”
So what does all this mean for you, your parents and the care businesses many families depend on? Here’s a clear look at the Government’s plans and what they could mean in practice.
State Pension and benefits: a lift for many older people
One of the Budget’s more generous measures is a rise in the State Pension under the Triple Lock, reflecting recent wage growth. As Mel explains: “The State Pension sees the biggest increase in benefits under the Triple Lock guarantee: a 4.8% rise in April 2026. This reflects average wage growth (including bonuses) between May and July 2025, comfortably beating both the 3.8% Consumer Prices Index (CPI) and the 2.5% minimum guarantee.”
Other benefits that you or your parents may be claiming – including Personal Independence Payment (PIP), Attendance Allowance, Disability Living Allowance and Carer’s Allowance – will rise by 3.8%. This is welcome, but as Mel points out, there is still a long way to go: “Carer’s Allowance increases by the same rate, but remains woefully inadequate given the substantial savings carers deliver to the taxpayer.” This will ring true for anyone caring for someone at home while juggling work, children and everything else in between. Family carers can help to reduce demand for care homes, hospital beds and community services, yet the financial support they receive still falls far short of the value they provide.
Everyday living costs: some small bright spots
There’s some modest relief in the Budget, with freezes on prescription charges and rail fares, plus a small cut to energy bills, all of which may help your elderly relatives. But for anyone with savings or investments, there are also some important tax changes to be aware of.
As Mel explains: “If you have savings and investments outside of pensions, three upcoming tax changes on wealth may affect you. From April 2026, dividend income earned outside an ISA will face an additional 2% tax. Then, from April 2027, the same 2% increase will apply to rental income and interest from savings held outside an ISA. This transfer of wealth has not gone down well at all in some quarters, so the maintaining of the £20,000 cash ISA allowance for the over-65s provided some cheer for them, I can tell you! Do make sure you make full use of your annual ISA allowance if you want to reduce the impact of these changes.”
For many older people, especially those relying on savings to supplement their pension, these adjustments could make a noticeable difference.
Impact on care businesses: higher costs and uncertain funding
Many families may also be wondering what the Budget means for care homes and live-in care agencies, especially if your relative already uses these services or you’re considering it for the future.
The National Living Wage will rise by 4.1%, which is positive for care workers, but as Mel notes: “With payroll the biggest cost for care providers, the increase will likely be passed on through higher care fees.”
There’s also a looming structural issue affecting the entire sector: “The real elephant in the care sector is what emerges from Baroness Casey’s Independent Commission into Adult Social Care, which reports in 2026. The commission is initially tasked with improving care using existing resources, with bigger, longer-term reforms deferred until a second report in 2028.”
In other words, big reform is still a long way off, and providers (and families using their services) must get through the next few years first.
Final Thoughts
For most families, the autumn Budget won’t require immediate action, but it’s a good reminder to check in with your elderly relatives about money, care plans and how they’re coping. Small policy shifts – a higher pension, lower energy bills, or rising care fees – can make a real difference to both everyday life and long-term planning.
