Chancellor Rachel Reeves will set out her Budget in the House of Commons around 12:30 GMT, facing pressure to find extra revenue while promising investment to cut NHS waiting lists and tackle the cost of living.
She has flagged that tough but fair decisions are needed to reduce national debt and drive growth, with an immediate response from opposition leader Kemi Badenoch expected after the speech.
Some measures have already been revealed.
From April 2026 the National Living Wage for over-21s rises by 50p to £12.71 an hour.
Younger workers also get boosts: 18-to-20-year-olds move to £10.85, and 16-to-17-year-olds and apprentices will see pay lifted to £8.
Businesses have warned that repeated increases could prompt hiring freezes or redundancies.
The government will extend the sugar levy to milk-based drinks such as milkshakes, flavoured milks and some coffee drinks, a move likely to add a few pence to affected products or push manufacturers to cut sugar.
Reeves has said she will use a mix of tax rises and spending adjustments to close a funding gap.
She reportedly will not raise headline income tax rates, but ministers may keep income tax and National Insurance thresholds frozen beyond 2028-29 — a change that would pull more people into higher tax bands as wages rise.
Other options under consideration include capping the tax advantage from pension "salary sacrifice" schemes — media reports suggest a £2,000 limit — which could raise roughly £2bn by making larger contributions subject to National Insurance.
A planned rise in the state pension is expected from April under the triple lock, amounting to more than £550 a year for those on the full new state pension.
Property taxes appear to be a focus.
Reports say properties worth over £2m could face a new levy after revaluing council tax bands F, G and H, affecting some 100,000 homes.
Separately, think-tanks have urged that more landlords pay National Insurance on rental income.
As petrol and diesel use falls, ministers are considering a road-use charge for electric vehicles — the Telegraph reported a possible 3p-per-mile charge — while also allocating an extra £1.3bn to the plug-in car grant to keep subsidies for some buyers.
The government may tighten tax advantages on other employee benefits: limits for the Cycle to Work salary-sacrifice scheme and a reduction in the annual cash Isa allowance from £20,000 to around £12,000 have both been suggested.
Officials are also expected to close a loophole that lets overseas retailers send goods worth under £135 into the UK without import duties, a change aimed at leveling the playing field for domestic firms.
Child-related support could change too.
Reeves has signalled the two-child cap on universal credit and tax credits is unfair to larger families, and ministers may soften or remove the limit.
Measures to ease household energy costs are under discussion, including a possible temporary cut in the 5% VAT on domestic energy or lowering certain regulatory charges that suppliers pass on to customers.
On employment, the Budget may fund paid placements for young people out of work for 18 months, intended to help them re-enter the jobs market.
Reeves says these steps are needed to meet her fiscal rules: stop borrowing for day-to-day spending and ensure government debt falls as a share of national income by the end of the parliament.
The Office for Budget Responsibility has assessed a hole in the public finances at close to £20bn, according to government sources.
The economy’s backdrop makes the choices harder.
Growth has been sluggish, borrowing remains higher than forecast and inflation — while easing from recent peaks — is still above the Bank of England’s 2% target.
Expect close scrutiny of the Budget’s winners and losers once Reeves speaks, as politicians, businesses and households assess how the package balances tax rises, public services and incentives for growth.
