We were braced for pain in the budget, and we got ￡40bn of tax hikes, including bad news for investors and those planning to leave a legacy. However, in some cases the tax squeeze didn’t grip people quite as hard as they’d feared, with real relief on income tax and fuel duty.

Income tax

One of the biggest pieces of good news was that there will be no extension to the income tax freeze beyond April 2028. There had been rumours that it could keep going for another year or two, hiking tax bills all round, but that didn’t come to fruition. It means there’s light at the end of the tunnel, but there’s still plenty of tunnel to get through first, so the income tax pain won’t be over for a while yet.

Fuel tax freeze

There’s also relief for drivers, because fuel duty will be frozen next year — for the 15th year running. They were about to be run over by the end of the 5p temporary cut in March and the annual rise in April, so this reprieve will be hugely welcome.

Cigarettes and alcohol

There was more mixed news on other duties, with a rise in tobacco duty, plus a new vaping duty to be introduced in 2026. The use of vapes has grown massively in recent years — up 400% between 2012 and 2023 — and now more than 9% of the population buy them. Both from the perspective of encouraging behaviour change and raising funds, it was always on the cards for duty to be applied to vapes.

Read more: Budget 2024 live: Rachel Reeves says she will raise taxes by ￡40bn

Alcohol duty will also rise from February next year, when the freeze that Jeremy Hunt previously announced will come to an end. However, in an effort to support pubs, the duty on draught beer will be cut, which raised a cheer from MPs.

Minimum wage

Lower earners had something positive to take away from the announcement too, because the minimum wage will rise substantially in April. The national living wage will rise 6.7% to ￡12.21 per hour. For 18- to 20 year-olds it will rise 16.3% to ￡10, and for those aged 16 to 17 and apprentices it will be ￡7.55, up 18%. Larger rises for younger people is part of the phasing in of a single adult rate, to help younger earners make a more positive start in adult life.

Inheritance tax

Changes to inheritance tax were widely expected, but some of the biggest fears didn’t materialise. The inheritance tax threshold will be frozen until 2030, which will push more people into paying this tax.

However, with the allowance for a couple passing their home to children still at ￡1m, it’s a tax that’s not going to touch most people.

Inheritance tax on pensions

Those with large pensions may be alarmed at plans to bring them into people’s estates for inheritance tax purposes. It doesn’t sound like a particularly dramatic change, but could mean an awful lot of careful pension savers are walloped with a tax bill.