Autumn Budget 2026: Key Facts

Thursday 29 October, 2026

The Autumn Budget 2026 and its impact on your finances brought changes to household bills, savings, property, pensions and first-time buyer support. Announced by Chancellor John Healey, the measures include immediate help with energy costs alongside tax changes taking effect from April 2027.

Here are the key facts and what they could mean to you.

Energy bills and the cost of living

£100 household energy payment: A one-off payment from January 2027 for eligible households in council tax bands A–D in England, supporting up to 20 million households. Funding will be provided to devolved governments for equivalent support.
Electricity VAT: The temporary reduction in VAT on domestic electricity will continue until 1 July 2027. This is expected to reduce the annual Ofgem price cap by around £50 in April 2027.
Gas standing charges: Ofgem has been asked to remove household gas standing charges by the end of 2027, or as soon as possible afterwards. Costs will instead be reflected in unit rates, so the effect will depend on how much gas a household uses.
Fuel duty: The 5p fuel duty cut and freeze will continue until 1 July 2027, when the planned increases will begin to take effect.

Income tax and personal finances

Income tax: The main rates of income tax on earnings will not increase as a result of this Budget.
Savings interest: From 6 April 2027, the tax rates applying to savings income will increase by 2%. The basic rate will be 24%, the higher rate 44% and the additional rate 49%.
Rental income: Tax rates on property income will also see a 2% increase from 6 April 2027, rising to 24%, 44% and 49% respectively in England, Wales and Northern Ireland.
Personal Savings Allowance: The existing allowances remain £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. Additional-rate taxpayers continue to have no allowance.
Casual Income Trading Allowance: From April 2027, the tax-free allowance for casual and miscellaneous income will increase from £1,000 to £3,000 a year.

What this means: Savers with substantial cash balances outside tax-efficient accounts and landlords receiving rental income may face higher tax bills. Reviewing how savings and investments are held could help ensure available allowances are being used effectively.

ISAs and investments

Cash ISA allowance: The annual allowance remains £20,000. The planned reduction to £12,000 for under-65s has been abandoned.
Stocks and Shares ISAs: The overall annual ISA allowance remains £20,000. The Government will work with the investment industry to explore an additional incentive for people investing in a Stocks and Shares ISA for the first time.
Dividend tax: No new increase to dividend tax rates or change to the £500 dividend allowance was announced.
Capital Gains Tax: No new increase to Capital Gains Tax rates was announced. The existing annual exempt amount remains £3,000.
Bank surcharge: The tax surcharge on bank profits will temporarily increase from 3% to 6% between 1 January 2027 and 31 March 2028.

What this means: The full ISA allowance is being retained, providing continued scope to shelter savings and investments from tax. The additional bank surcharge could affect bank profitability, but the Budget does not specify any direct impact on customer rates or charges.

First-time buyers and housing

Your First Home scheme

The Government is introducing a new equity-loan scheme intended to help around 70,000 first-time buyers purchase eligible new-build homes in England.

Smaller deposits: The scheme will offer an equity loan of up to 20%, with a minimum deposit of 2.5% and a maximum deposit of 15%.
Income limits: Household income must be below £110,000 outside London or £140,000 in London.
Loan charges: The equity loan will be interest-free for the first five years, with charges increasing thereafter.
Launch timetable: Pre-registration is expected by the end of December 2026, applications from February 2027 and the first loans from April 2027.

Eligibility criteria and local property price limits will apply, so the scheme will not be suitable for every buyer.

First Time Buyer ISA

A new First Time Buyer ISA will be introduced from April 2029, replacing the Lifetime ISA for new savers.

Contributions of up to £4,000 a year will qualify for a 25% Government bonus.
The maximum Government bonus will be £20,000.
The bonus will be available towards an eligible first home costing up to £450,000.
There will be no upper age limit.
Existing Lifetime ISA holders can continue using their accounts under the current rules.

From 29 October 2026, the Lifetime ISA withdrawal charge for eligible first-home purchases above the £450,000 property price cap will fall from 25% to 20%. The 25% charge will remain for other unauthorised withdrawals.

More affordable housing

A further £1.5 billion has been allocated to social and affordable housing in England, taking planned capital investment over the next ten years above £40 billion.

Pensions and retirement planning

Pension Tax Allowance: From 6 April 2027, a new allowance will prevent pensioners whose total income is no higher than the full new State Pension from having to pay small amounts of income tax. The measure is scheduled to run until April 2030.
Pension death benefits: The two-year rule for taxing pension and lump sum death benefits will be removed from 28 October 2026. This changes the tax treatment of certain benefits where payment is delayed following notification of a member's death.
Pension scheme options: The Government is progressing changes intended to support the consolidation of defined contribution pension schemes and introduce new guided retirement and collective defined contribution arrangements.

What this means: Retirement planning remains an important area to review, particularly where pension income, other savings and plans for passing on wealth need to work together.

Inheritance Tax and estate planning

Pensions and Inheritance Tax: The previously announced changes bringing most unused pension funds and pension death benefits into the value of an estate for Inheritance Tax purposes remain scheduled for 6 April 2027.
Trust arrangements: Changes taking effect for relevant deaths and other chargeable events from 28 October 2026 will clarify when liabilities relating to trust property can be deducted when calculating Inheritance Tax and strengthen anti-avoidance provisions.
High-value properties: The Government has confirmed arrangements for deferrals, discounts and exemptions relating to the proposed High Value Council Tax Surcharge in England, alongside a 100% premium for properties left empty and unoccupied for at least 12 months. The surcharge measures are scheduled to be introduced from April 2028.

What this means: Anyone with significant pension savings, property or trust arrangements may wish to review their estate planning ahead of the forthcoming changes.

Mortgages and interest rates

Bank tax: The temporary increase in the bank corporation tax surcharge from 3% to 6% will apply for 15 months from January 2027.
Mortgage rates: The Budget does not announce a direct change to mortgage rates or the Bank of England Base Rate as a result of the bank surcharge. Any effect on lenders' pricing will depend on their individual decisions and wider market conditions.
First-time buyers: The Your First Home scheme could help eligible buyers reduce the deposit and mortgage borrowing required, although the equity loan's future charges need to be considered.
Household affordability: Changes to energy bills, savings taxation and rental income may affect household budgets and the amount some people can afford to borrow or repay.

Mortgage rates will continue to be influenced by inflation, funding costs, market conditions and decisions by individual lenders. The Budget does not guarantee that rates will rise or fall.

Wages, carers and family support

National Living Wage: From 1 April 2027, the rate will rise by 3.9% to £13.21 an hour.
National Minimum Wage: The rate for 18–20-year-olds will rise by 3.9% to £11.27 an hour. The rate for 16–17-year-olds and eligible apprentices will increase to £8.31 an hour.
Carer's Allowance: The earnings rules will be reformed so unpaid carers do not automatically lose their entire allowance when their earnings exceed the limit. A tapered reduction will apply instead.
Parental pay: Entitlement will be extended to self-employed fathers and eligible partners, including those in same-sex couples.
Tax-free mileage rates: The tax-free mileage rates for employees and self-employed people who use their own vehicles for work will become more generous.

Business and wider economic measures

Business rates: Retail, hospitality and leisure businesses in England will benefit from a package of support, including a two-year real-terms freeze on qualifying bills, alongside changes to Small Business Rates Relief.
Small Business Rates Relief: For qualifying retail, hospitality and leisure properties, the threshold for 100% relief will rise from £12,000 to £18,000 in rateable value. The threshold for tapered relief will increase from £15,000 to £21,000.
Pubs, social clubs and live music venues: Additional relief of 20% will increase total support to 35% for qualifying pubs, social clubs and all but the largest live music venues during 2027/28 and 2028/29.
Business rates increases: Qualifying retail, hospitality and leisure properties, including eligible pubs and live music venues, will have annual bill increases capped at CPI inflation for two years, until 31 March 2029.
Transitional Relief Supplement: The supplement will be extended for a further two years to help manage the impact of changes to business rates.
Review of relief thresholds: The new £18,000 and £21,000 Small Business Rates Relief thresholds will be reviewed at the 2029 business rates revaluation.
Business investment: The first-year capital allowance for qualifying expenditure will increase to 50% from January 2027, while the main writing-down allowance will fall to 12% from April 2027.
Machine Games Duty: The tax rate on higher-stakes gambling machines will rise from 20% to 25%.
Online marketplace VAT: The Government will strengthen enforcement against online marketplace sellers who fail to comply with VAT rules.
Tax administration: From April 2029, taxpayers already making payments on account under Self-Assessment will be required to make more regular in-year payments towards their final tax bills.

These measures provide targeted support for certain high-street businesses while changing the tax treatment of some business activities. The impact will depend on the type of business, its rateable value and the reliefs for which it qualifies.

AI and business support

AI funding: The Budget includes additional funding for the Sovereign AI Unit, AI research and procurement, and AI security, intended to help UK AI firms scale and create public-sector demand for AI solutions.
Business finance: The British Business Bank receives a £5bn uplift, including £1.4bn for equity funds supporting high-growth businesses and £450m for a new venture-debt product for innovative firms.
Founders and small businesses: The tax-free trading allowance rises from £1,000 to £3,000 from 6 April 2027, while a Young Entrepreneurs Allowance pilot will support eligible young founders with living costs.
Investment incentives: The Budget includes changes to venture-capital schemes, simplified R&D tax-relief administration and a reduced capital gains tax rate for qualifying founder gains of up to £10m.
Skills and workforce: £100m will expand local apprenticeship services across 14 Mayoral Strategic Authorities in England, aiming to help employers, including SMEs, create apprenticeship opportunities.
Practical impact: These measures are targeted at AI firms, innovative scale-ups, founders and energy-intensive businesses rather than providing a universal grant or tax cut for every SME. Eligibility, timing and detailed rules will determine whether an individual business benefits.

Simon Hawker, Managing Director & Financial Adviser at Lonsdale in St Albans, Hertfordshire, said:

“The Budget contains a number of changes that could affect how people save, invest, plan for retirement and manage their property. While some measures provide welcome support with household costs, others mean it is important to look carefully at the tax implications for your individual circumstances.

“Our focus is on helping customers understand what these announcements mean for them, rather than making decisions based on headlines alone. Taking the time to review your financial plans can help ensure they remain appropriate for your needs and longer-term objectives.”

How Lonsdale can help

The Budget affects people in different ways depending on their income, savings, pensions, property and future plans.

We will be contacting our customers to discuss their individual position and what the Budget announcements may mean for their financial plans.

If you have any immediate questions or would like to review your arrangements, please contact the Lonsdale team. We will be happy to talk through your circumstances and help you understand the options available to you.

Need financial planning advice?

If you would like a free initial financial planning review, complete the form below, or contact our St Albans, Barnet, Harpenden, Leeds & Bradford, Stafford, Ringwood, Ware, Wimbledon or Chippenham office.