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BUDGET 2025: What does it mean for investors?

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BUDGET 2025: What does it mean for investors?

There wasn’t much in yesterday’s speech that was directed at investors. If you rely on dividend income, however, there was one nasty surprise – tax rates on dividends are to be increased by 2% from April 2026.

It’s rising, the government says, to bring it more inline with the rate paid on income from other sources. The cost of owning income-producing shares will increase at the ordinary rate from 8.75% to 10.75%, while the upper rate will go from 33.75% to 35.75%.

Our view

The new tax on dividends flies in the face of the government’s goal to encourage more of the UK public to invest and boost share-ownership (and therefore, investment capital) in UK companies. However, this tax won’t apply to anyone investing via a Stocks and Shares ISA, so it’s still the most important rule – invest first using an ISA, and only once you’ve maxed out your annual £20,000 allowance, use a General Investment Account.

For our top tips on the Best Stocks and Shares ISAs currently available (for all levels of investor from beginner to pro) take a look at this page.

Clare West
Clare West Finance Editor

As a finance writer and editor, I can’t make decisions for you because only you know what’s right for you, and your personal priorities and goals. My role is to understand the things that are going to be important to you, remove anything that could work as a barrier to understanding, and then ensure you don’t miss a thing.

It’s an approach that has won me awards from professional bodies (‘Website of the Year’ at the Professional Adviser Awards 2021; Finalist – ‘Start Up of the Year’ at the UK FinTech Awards 2025) and seen me featured in the press as a commentator and expert.

Finances are about so much more than numbers on a page. Achieving your financial goals allows you to feel peace of mind, have confidence in your future, and achieve the things that matter to you. Financial wellbeing allows for life goal fulfilment.

I’ve spent more than a decade specialising in writing about financial services, so I know that in financial services, trust is absolutely vital. I am delighted, therefore, that everything we do at Investing Insiders centres around trust. Our mission is to write honest reviews based on our personal opinions and professional insights. We are not swayed in our opinions by incentives or influences from providers. Where we have a relationship with a provider that could affect our neutrality, we will let you know. But we are clear; whatever relationship we have with providers, our reader comes first. Simply put, we can’t be paid to change our opinion. My obligation is to you, the saver or investor, looking to build your wealth and protect your future.

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