Autumn Budget 2026: What It Means for Your Money

Quick overview

Chancellor John Healey presented the Autumn Budget to the House of Commons yesterday, Wednesday 28 October 2026. Here’s an easy-to-read overview of the changes most likely to affect your day-to-day finances.

Key points

Before you start

Households in Council Tax bands A to D in England will get a £100 payment towards energy bills.
The cash ISA allowance stays at £20,000 a year.
The national minimum wage and many benefits will rise from April 2027.
Gas standing charges will be removed, and the electricity VAT cut has been extended.
Some tax rates and thresholds are changing too, so it’s worth checking how they affect you.

Help with energy bills

£100 payment for Council Tax bands A to D

Around 20 million households in England in Council Tax bands A to D will get a £100 payment next year. It’s due to arrive from January 2027. If you pay Council Tax by Direct Debit, it should arrive automatically. Otherwise, your council may ask for your details.

You can check your band on GOV.UK .

Gas standing charges to be removed

The daily standing charge on gas bills is due to be removed by the end of 2027, or soon after. The cost will move into the unit price instead. For most homes, this could reduce bills, giving you more control over what you pay for usage. However, households that use a lot of gas, such as large families, may pay more than they do now.

VAT cut on electricity extended

The temporary removal of VAT on domestic electricity has been extended to 1 July 2027. It was due to end on 31 March 2027.

Pay, Benefits and Support

National minimum wage rise

From April 2027, the minimum wage for those aged 21 and over rises 3.9% to £13.21 an hour, up from £12.71. For 18- to 20-year-olds, it goes up to £11.27 an hour.

Benefit increases from April 2027

Several benefits are set to rise from April 2027. These include:

Universal Credit: the standard allowance rises 4.3%. For single claimants aged 25 and over, that’s £443.21 a month.
Child Benefit: £28 a week for the eldest or only child, and £18.55 for each additional child.
Pension Credit (just the guarantee element): £247.30 a week for singles and £377.40 for couples.
Carer’s Allowance: £89.50 a week.
Personal Independence Payment: £79.40 a week.

Carer’s Allowance cliff-edge to be removed

At the moment, carers who earn even slightly over the Carer’s Allowance earnings limit lose the whole benefit. From the 2030/31 financial year, that’s set to change so the benefit reduces gradually as earnings rise.

Self-employed new parents

From April 2029, around 150,000 self-employed new parents will be eligible for two weeks of statutory parental pay, worth up to £194 a week.

Savings, tax and pensions

Cash ISA limit stays at £20,000

A planned cut to the cash ISA limit for under-65s, from £20,000 to £12,000, has been scrapped. The Government will also consult on a new “starter investment ISA”.

Lifetime ISA change for pricier homes

From today, Thursday 29 October, the withdrawal charge for first-time buyers using a Lifetime ISA to buy a home above £450,000 is reduced from 25% to 20%. A First-Time Buyer ISA is also due to replace the Lifetime ISA from April 2029.

Tax on savings interest

If you pay tax on savings interest, the rates rise by four percentage points from April 2027. Many savers won’t pay tax on interest at all, thanks to the Personal Savings Allowance and ISAs.

State Pension and the new Pension Tax Allowance

From April 2027, the full new State Pension rises to £13,036 a year, which is above the £12,570 Personal Allowance. A new Pension Tax Allowance is intended to mean people whose only income is the State Pension won’t pay tax on it, an effective tax cut of up to £94.

Pensions and Inheritance Tax

Pensions will be included in Inheritance Tax from April 2027, but most estates will still not pay Inheritance Tax.

Income Tax thresholds

The tax-free Personal Allowance stays at £12,570 until at least April 2031. As wages rise, this can mean paying more tax over time, known as “fiscal drag”.

Student loans

The Plan 2 repayment threshold freeze, announced last year, remains in place until 2029. The threshold is currently £29,385.

Homes, driving and everyday costs

“Your First Home” mortgage scheme

First-time buyers in England will be able to apply from February 2027 for an equity loan of up to 20% of a home’s price. The ‘Your First Home’ scheme is for new-build homes and requires a deposit of at least 2.5%.

Fuel duty and mileage

Fuel duty stays at 52.95p a litre, with the temporary 5p cut extended to July 2027. From April 2027, the tax-free mileage rate for using your own vehicle for work stays at 55p a mile for the first 10,000 miles. Above that, it rises from 25p to 35p a mile.

Side hustles

From 6 April 2027, the trading allowance rises from £1,000 to £3,000. If your side income is below that, you won’t need to register for Self Assessment.

Alcohol duty

Alcohol duty rises by 4.55% on 1 February 2027. If fully passed on, that’s roughly 3p extra on a pint or a glass of wine.

FAQs

Autumn Budget 2026 - Common questions

Do I need to apply for the £100 energy payment?

If you live in England, are in Council Tax bands A to D and pay by Direct Debit, it should arrive automatically from January 2027. If you pay another way, your council may ask for your details. You can check your band on GOV.UK.

Will removing the gas standing charge cut my bills?

For most homes, it’s expected to reduce bills, as the cost moves into the unit price of gas. Households that use a lot of gas, such as large families, may pay more than they do now.

How long is the VAT cut on electricity lasting?

It’s been extended to 1 July 2027. It was originally due to end on 31 March 2027.

Can I still save £20,000 a year in a cash ISA?

Yes. The planned cut to £12,000 for under-65s has been scrapped. The Government will also consult on a new “starter investment ISA”.

Will I pay more tax on my savings?

Only if you already pay tax on savings interest. From April 2027, the rates rise by four percentage points: basic-rate taxpayers go from 20% to 24%, higher-rate from 40% to 44%, and additional-rate from 45% to 49%. The Personal Savings Allowance and ISAs mean many people won’t pay tax on interest at all.

Is the Personal Allowance changing?

No. It stays at £12,570 until at least April 2031. As wages rise, more people may pay more tax over time, which is known as “fiscal drag”.

When do the pay and benefit increases start?

The minimum wage rise and the benefit increases listed in this post take effect from April 2027.

What is the new Pension Tax Allowance?

From April 2027, the full new State Pension (£13,036 a year) rises above the £12,570 Personal Allowance. The new Pension Tax Allowance is intended to mean people whose only income is the State Pension won’t pay tax on it, an effective tax cut of up to £94.

What’s changing for first-time buyers?

The “Your First Home” scheme opens in February 2027, offering an equity loan of up to 20% of a new-build home’s price with a deposit of at least 2.5%. The Lifetime ISA withdrawal charge for homes above £450,000 falls from 25% to 20% from today, and a First-Time Buyer ISA is due to replace the Lifetime ISA from April 2029.

Do I need to declare side hustle income?

From 6 April 2027, you only need to register for Self Assessment if you’re self-employed or your side income is over £3,000 a year, up from £1,000.

Do the Autumn Budget changes apply outside England?

Not entirely. Scotland sets its own income tax bands, and some benefits and schemes differ across the UK nations. Check the guidance for Scotland, Wales or Northern Ireland.

What The Autumn Budget 2026 Means For You