Chancellor Rachel Reeves delivered the Autumn Budget on Wednesday 26 November in the House of Commons. Here’s a breakdown of the key factors that will impact hairdressers and the hairdressing industry.
Autumn Budget 2025: The Key Facts for Hairdressers
Freeze in Income Tax Thresholds
Rachel Reeves has confirmed that income tax and national insurance thresholds are to remain frozen at their current level for another three years from 2028 until 2031 – a year longer than expected. This means pay rises could lead people into a higher tax bracket. She stated: “I know that maintaining these thresholds is a decision that will affect working people.”
Basic and higher income tax rates on property, savings and dividend income is also set to increase by 2%.
National Minimum Wage
From April, there will be a 4.1% increase to workers over 21, bringing the minimum wage up to £12.71 an hour. The minimum wage for 18–20-year-olds will go up from £10 to £10.85. Meanwhile, the minimum wage for 16-17-year-olds will see an increase by 6% to £8 an hour.
Rachel Reeves also announced that training for under-25s on apprenticeships will be made free for small and medium-sized businesses.
Inflation
The Office for Budget Responsibility (OBR) predicts the UK economy will grow by 1.5% this year, in comparison to the 1% forecast in March. Meanwhile, inflation is predicated to average 3.5% this year before falling to 2.5% next year.
Cap on Pension Salary Sacrifice
The chancellor has introduced a £2000 cap on salary sacrifice into a pension, with contributions above that taxed in the same way as other employee pension contributions. This will come into effect in 2029.
New Youth Guarantee
The chancellor has announced the government is to fund a new ‘youth guarantee’ which will provide £820m over the next three years. The initiative promises every 18-21-year-old access to an apprenticeship, training and education opportunities to help to find a job.
The Response from the Hairdressing Industry to the Autumn Budget 2025
Caroline Larissey, chief executive of the NHBF:
"Today’s Budget delivers little for the small, people-focused businesses at the heart of every high street. Hair and beauty is one of the most accessible and empowering routes into work for women, young entrepreneurs and neurodiverse individuals — yet this Budget was far from the ‘fair and necessary’ action our sector urgently needed.
"Our Members have been clear: salons and barbershops are already at breaking point following the last round of wage rises and relentless cost pressures. Hair & beauty employers have always backed fair pay, but the Chancellor cannot keep loading costs onto small businesses without offering the support needed to keep them trading and providing opportunities in every community.
"If the Government truly wants to grow the economy, end low pay and keep high streets open, today’s wage announcement must be matched with serious support on National Insurance, business rates, skills and enforcement. Over the coming weeks, individuals and businesses will be working out what this means for them, and the NHBF will be on hand to advise Members and set out clearly to Government the action our sector needs."
Benjamin Shipman, The Hair Movement, Sidcup:
"This wasn’t a Budget any of us were hoping for, but as an industry we need to focus on what we can control not what we can’t control. There was nothing in it to incentivise or help us, so it forces us all to futureproof our business ourselves. This means further communicating the value of our services, the experiences we offer and refining our prices. We need to focus on the business rather than the creative side of the business as we have to make sure we can support ourselves for the next four years as the message was you’re on your own. Looking at the positives, it allows us to be stronger and be quality driven despite the squeeze the Budget puts on us – it will make us more resilient. We do this already; it’s about what you can do for yourself to become more business savvy which will help independent salons survive."
Billy Ryan, Tribe Salons, Clapham Common:
"The Budget didn’t bring many surprises. We all expected higher costs, and now they’re confirmed. Minimum wage will rise again in April 2026, hitting the salons who invest in the future of our industry by taking on apprentices and training new talent. Even with the promise of fully funded apprenticeships for under-25s, the wage increase outweighs the savings. Higher taxes and pension changes will leave both clients and staff with less disposable income. Freezing thresholds lets the government say tax rates haven’t risen, but people will feel it as the cost of living increases. For a sector already managing higher bills, slower growth and clients watching their spending, this adds even more pressure. We can’t change the Budget or how it impacts the wider economy. What we can do is be clear on how we run our salons. Strong financial planning, reliable systems and steadily increasing the value of what we deliver will matter more than ever. Finding ways to stay profitable and reinvest will be essential. The next year will need calm heads and steady leadership. If we focus on what we can control and keep improving the small things each day, we’ll stay resilient, support our teams and keep moving forward no matter what the economy brings."
Sean Hanna, award-winning salon owner and founder of Sean Hanna Consultancy:
"Increased costs are always tough, so it’s important to genuinely plan and strategise. It may be obvious but hope and complaining are not a strategies. Business owners need to assess their costs and establish the implication from a financial perspective. Then make changes as necessary. Business leaders have a choice; either stand still and endure whatever happens or be a true leader and make decisions that will ensure their business succeeds in what we all accept are difficult and challenging times. Pricing, performance, and costs all need to be analysed and optimised. This wasn’t a great budget for small business owners. That being said, I can’t remember the last budget that was good for small business owners - so book a time to get all your numbers nailed and create a plan that ensures a way forward for you and your team."
