The 2026 Autumn Budget was John Healey’s first as chancellor, and one of the most closely watched in recent years.
As Healey acknowledged in his pre-budget speech, “The world’s a highly uncertain place. Conflicts abroad are pushing up energy prices, and the cost of living here at home – piling pressure on the families, on businesses and on our public finances.”
Against this challenging economic backdrop, the chancellor set out the government’s tax and spending plans for the year ahead and beyond.
Read on for a summary of the key announcements and what they could mean for your income, your savings, and your retirement.
Practical support for household energy bills
Standing charges are fixed daily fees applied separately to gas and electricity bills, which you pay regardless of usage.
In a popular move, the chancellor announced that he would remove standing charges from household gas bills for tens of millions of people.
Gas standing charges are currently £108 a year on average for the typical billpayer and the government has asked Ofgem to remove these charges by the end of 2027 or as soon as possible after. Instead, fixed costs will be paid on the unit rate – so you’ll likely benefit if you’re a low user of gas.
The chancellor also committed to reforming electricity standing charges, with further details to be announced next year.
He also extended the VAT cut on electricity bills to July 2027, taking about £50 off the energy price cap in April 2027 for the average household.
Finally, to provide further support for energy bills, the chancellor announced a one-off £100 Household Energy Payment for households in England from January 2027. If your home is in Council Tax band A to D, you’ll receive this payment directly to your bank account.
He said this energy payment will help “take the pressure off in the coldest months and see people through to the spring”.
The Scottish and Welsh governments and the Northern Ireland Executive will also receive funding towards this payment.
Reversal of the ISA limit reduction
In her final Budget as chancellor, Rachel Reeves announced a reduction in the amount that under-65s could pay into a Cash ISA from £20,000 to £12,000.
The government will now no longer go ahead with this change, meaning you will still be able to pay up to £20,000 into a Cash ISA each tax year. This is great news if you want to maximise your tax-efficient cash savings.
Healey added that he plans to work with the financial sector on a new incentive to help make investment more accessible if you want to invest in a Stocks and Shares ISA for the first time.
That said, the chancellor also announced that he would increase the tax on income from property and savings by a further two percentage points from April 2027.
These changes mean that, from April 2027, rates on savings and property income will increase by a total of four percentage points to 24%, 44%, and 49%, depending on the Income Tax band that you fall into.
First-time buyer support
To support about 70,000 first-time buyers onto the property ladder, the chancellor announced a new £4.7 billion Your First Home scheme for England from April 2027.
The scheme will provide 20% equity loans to first-time buyers who would not otherwise be in a position to buy a residential property. You’ll need at least a 2.5% deposit to access the scheme, and you will be able to access an equity loan with a five-year interest-free period, with a gradual increase after five years.
He also announced a new First Time Buyer ISA that will replace the existing Lifetime ISA for new savers from 6 April 2029.
Cheaper supermarket favourites
In a bid to ease cost of living pressures, the chancellor announced he was suspending import tariffs on more than 100 products including baked beans, chocolate, and dried fruit, while also supporting farmers facing higher fertiliser bills and households that rely on kerosene heating oil. This should result in cheaper prices on some popular household staples.
Higher tax-free mileage rates and more support for people who drive for work
The chancellor announced that he is making the 55p a mile rate for the first 10,000 business miles permanent, alongside increasing the rate above 10,000 miles from 25p to 35p a mile.
These measures will support about 3 million employees and self-employed people who use their own vehicle for work.
In light of record diesel prices, the chancellor also extended the 5p fuel duty cut and freeze to July 2027.
Further measures
The chancellor also reaffirmed several measures he had announced in the run-up to the Budget:
1. A new Pension Tax Allowance – If you’re a pensioner with incomes at or under the value of the full new State Pension, you won’t be brought into paying tax because of State Pension increases in this parliament.
2. Carer’s Allowance cliff edge removed – From 2030/31, unpaid carers in England and Wales will no longer lose their entire Carer’s Allowance simply for earning a penny over the Weekly Earnings Limit, equivalent to 16 hours of the National Living Wage. Instead, only £1 of support will taper away for every additional £1 earned.
3. The National Minimum Wage and the National Living Wage will rise by 3.9% from April 2027 – This will raise the National Living Wage to £13.21 an hour and the National Minimum Wage for 18- to 20-year-olds to £11.27 an hour.
4. Parental pay – From April 2029, self-employed fathers, partners, and adopters will be eligible for parental pay for the first time.
Reaffirmed salary sacrifice cap
The Budget small print also reaffirmed the government’s plans to cap the amount of National Insurance (NI) relief you will receive on pension contributions made through salary sacrifice from April 2029.
From April 2029, NI relief will only apply to the first £2,000 you contribute each year. Anything above that will receive Income Tax relief only.
That leaves fewer than 30 paydays to make the most of today’s rules and add to your retirement savings straight from your salary.
The sooner you start your Shared Cost AVC, the more you can put in before the cap arrives.
Start a new plan today or amend your existing plan.
Join our free webinar
If you’d like to hear more about the 2026 Autumn Budget and what it means for you, book on to one of our free webinars now.
👉 2 November at 10.30am
👉 2 November at 12.30pm
👉 3 November at 10.30am
👉 3 November at 12.30pm
👉 4 November at 12.30pm
👉 5 November at 2.30pm
👉 6 November at 12.30pm
Information taken from HM Treasury Budget 2026 document. This article is for information only and isn’t financial advice. Tax rules can change, and how they apply to you depends on your individual circumstances. The value of investments can go down as well as up, and you may get back less than you put in. You can’t usually access money in a pension until age 55 (57 from April 2028).