UK Budget 2026: what it means for your money
Chancellor John Healey delivered the Autumn Budget 2026 on 28 October 2026. For most employees, the headline story is continuity: no rise in the basic rates of Income Tax on earnings, National Insurance, or VAT — with support aimed at energy, motoring, and wages, and targeted tax rises on savings and property income.
FinPlanly explains Budget measures for information only. Use the salary calculator and Am I better off? tools as illustrations, then verify details on gov.uk.
The short version
- Earnings tax rates stay the same; Personal Allowance (£12,570) and higher-rate threshold (£50,270) remain frozen.
- Household Energy Payment: £100 for many England council-tax bands A–D in 2027, with related support elsewhere in the UK.
- Fuel duty 5p cut extended to 1 July 2027.
- Cash ISA annual limit stays £20,000 for all adults — the planned £12,000 under-65 cap is cancelled.
- Savings and property Income Tax rates rise by a further 2 percentage points from April 2027 (on top of Budget 2025).
- National Living Wage rises 3.9% to £13.21 from 1 April 2027.
What did not change for pay packets
If you are paid a salary through PAYE, Budget 2026 did not cut or raise the 20% / 40% / 45% earnings Income Tax rates in England, Wales and Northern Ireland, and employee NI main rates were not rewritten in the Budget speech. Scottish rates remain a matter for Holyrood.
That does not mean take-home pay feels the same after a pay rise. Frozen thresholds mean fiscal drag: more of each extra pound can fall into tax as inflation and wages lift cash earnings. See our guide on frozen thresholds and fiscal drag.
Model a salary with the UK salary calculator using 2026/27 figures.
Energy and everyday bills
The Budget packages “breathing space” on household energy:
- A £100 Household Energy Payment for up to around 20 million England households in bands A–D, with funding for comparable support in other nations.
- Extension of the temporary 0% VAT on qualifying domestic electricity into 2027 (Treasury illustrated roughly £50 off the April 2027 price-cap view).
- Longer-term work on standing charges and industrial energy schemes — less immediate for a payslip, more important for bills over time.
Plug your council-tax band and other details into Am I better off? to sketch those line items.
Drivers and fuel duty
The temporary 5p per litre fuel duty cut is extended to 1 July 2027, with the planned RPI uprating deferred to the same date. Parliament-wide fuel decisions are quoted by the Treasury as saving a typical car driver hundreds of pounds versus earlier plans — your mileage matters. The better-off calculator estimates the six-month extension using miles and a typical mpg assumption.
Savers, landlords, and ISAs
Two saver stories run in parallel:
- Good news for cash ISA fans: the £20,000 cash ISA limit is kept for everyone from April 2027. The Budget 2025 plan to cut under-65 cash ISAs to £12,000 will not proceed.
- Higher tax on unwrapped savings and property income from April 2027 — rates move to 24% / 44% / 49% after stacking Budget 2025 and Budget 2026 2ppt rises. Personal Savings Allowance still applies to interest.
Details: savings, ISAs and property tax.
Pensioners
The Pension Tax Allowance (from April 2027) is designed so people over State Pension age with total income up to the full new State Pension are not pulled into small Income Tax bills purely by State Pension uprating. Around half a million pensioners are expected to benefit in 2027/28 according to Budget materials.
Workers on lower pay
From 1 April 2027, the National Living Wage rises 3.9% to £13.21 an hour — about £910 more gross a year for a full-time NLW worker before tax and NI. The better-off tool can show an approximate take-home uplift if you flag NLW pay.
How to use FinPlanly after the Budget
- Run your salary through the salary calculator.
- Add energy, miles, savings interest, property income and ISA plans in Am I better off?.
- Read the deeper notes on thresholds, savings & ISAs, and energy, fuel & wages.
- For pensions and retirement maths, return to the planner — Budget 2026 did not rewrite private pension annual allowances in the household summary above.
Disclaimer
This article summarises publicly described Budget 2026 measures for education. Legislation, guidance and OBR forecasts can refine the detail. It is not tax advice, financial advice, or a personal recommendation.
