Chancellor Rachel Reeves’ recent Budget announcements include significant changes that will directly affect younger people. Here's a breakdown of what’s changing and how it might impact you:

1. Bus Fares Are Going Up

The cap on single bus fares in England will rise to £3 in 2025.

For students, young professionals, and commuters who rely on buses, this means paying £1 more per journey starting January 1. The new cap will be in place through the end of 2025, an increase from the current £2 limit implemented to ease cost-of-living pressures.

Bus fares in London will remain at £1.75, and Greater Manchester fares at £2 due to different funding systems. Scotland, Wales, and Northern Ireland follow separate guidelines.

2. Train Fares and Railcard Costs to Increase

Regulated train fares in England are set to increase by 4.6% from March 2, 2025, along with a £5 price rise for most railcards, including the popular 16-25 railcard.

This is expected to impact young commuters significantly. The government emphasizes that this is the "lowest absolute increase in three years." Most railcards currently cost around £30 annually, but an industry review will assess the final pricing.

3. Employment Opportunities Might Tighten, But Minimum Wage Increases

Rising taxes on businesses could limit job openings, particularly for young job-seekers. All but the smallest employers will pay more National Insurance for each worker, potentially reducing new hires, available hours, and wage increases. However, minimum wage rates will see a boost in April:

• £12.21 per hour for those aged 21 and over,
• £10 per hour for those aged 18 to 20,
• £7.55 per hour for those aged 16 and 17 or in apprenticeships.

4. First-Time Home Buying May Become More Expensive

For first-time buyers, the stamp duty exemption threshold will revert from £425,000 to £300,000 from April 2025 in England and Northern Ireland. This could increase the costs for homebuyers, especially in southern England.

Currently, around 80% of first-time buyers avoid paying stamp duty; this is projected to drop to 60% under the new rules. Landlords face higher stamp duty surcharges, potentially passing costs to renters through increased rent. Rightmove reports that about 15 renters compete for each available property, highlighting a competitive rental market.

5. Inheritance Tax for Family Farms

Family-owned farms may see changes in inheritance tax relief. From April 2026, agricultural assets over £1 million will no longer be fully exempt from inheritance tax. Traditionally, tax relief allowed family farms to be passed down through generations without heavy tax burdens, but this change may affect succession planning.

Many farmers seek to mitigate this by taking out life insurance or gifting farm assets to family members at least seven years before they pass.

6. Vaping and Tobacco Will Cost More

Both vaping and smoking will soon be more expensive. Around 1 in 7 young adults aged 18-24 who haven't smoked tobacco are now vaping. The government will introduce a new £2.20 tax on every 10ml of e-cigarette liquid starting in October 2026, aligning with a scheduled ban on disposable vapes by summer 2025.

Additionally, tobacco duties will rise immediately by 2% for cigarettes and 10% for hand-rolled tobacco, with an extra £2.20 added per 100 cigarettes.

(Sources: bbc.co.uk)