Tax and benefits · United Kingdom

UK Budget 2026: every change to your money, in pounds

The Chancellor presented Budget 2026 on 28 October 2026. This page lists every change that affects a household’s money, with its start date and what it is worth. Tax changes still have to pass in the Finance Bill 2026-27.

The biggest changes at a glance

Income tax: savings, property and allowances

• Savings interest: the rates become 24% (basic), 44% (higher) and 49% (additional) from 6 April 2027, across the UK. The Personal Savings Allowance (£1,000 basic rate, £500 higher, £0 additional) and ISAs are unchanged, so most savers pay nothing extra. Example: £50,000 at 4% earns £2,000; a basic-rate taxpayer pays £40 more a year, a higher-rate taxpayer £60 more.
• Rental profits: property income rates become 24%, 44% and 49% from 6 April 2027 in England, Wales and Northern Ireland. £10,000 of profit costs £200 more a year at any band.
• Thresholds: the £12,570 Personal Allowance and the higher-rate threshold stay frozen until April 2031.
• Side income: the trading allowance rises from £1,000 to £3,000 from 6 April 2027, so up to £3,000 a year of casual self-employed income is tax-free.
• Driving for work: tax-free mileage rates rise to 55p a mile for the first 10,000 business miles (from 6 April 2026) and 35p above that (from 6 April 2027).
• Selling a business: Business Asset Disposal Relief’s lifetime limit falls to £500,000 from 6 April 2027; a new 10% Founders’ Relief on up to £10 million of gains starts the same day for qualifying founders.

Pensions and older people

• State Pension: the full new State Pension rises 3.9% to £250.70 a week (£13,036.4 a year) from April 2027. The triple lock is to be adjusted from the next Parliament so the State Pension tracks earnings over time.
• Pension Tax Allowance (6 April 2027 to 5 April 2030): people over State Pension age whose total income is at or under the full new State Pension get an automatic deduction worth 20% of the gap between it and the Personal Allowance (£93.28 with the 2027-28 rates), so they pay no income tax; it tapers away just above that income.
• Pension death benefits: the two-year rule for taxing pension and lump sum death benefits is removed from 28 October 2026.
• Plan your own retirement: pension drawdown: is my pot enough? · can I retire at 60? · voluntary NI from abroad

Energy, fuel and travel

• £100 Household Energy Payment: paid from January 2027 to households in England in council tax bands A to D (about 20 million); Scotland, Wales and Northern Ireland get funding to do similar.
• VAT on domestic electricity: 0% instead of 5% from 1 October 2026 to 1 July 2027, about £50 off the annual Ofgem price cap in April 2027.
• Fuel duty: the temporary 5p-a-litre cut and the freeze are extended to 1 July 2027.
• Buses: single fares capped at £2 in England outside London for a year from 1 January 2027.

Work, families and benefits

• National Living Wage: £13.21 an hour from 1 April 2027 (+3.9%, about £910 a year full-time); the 18 to 20 rate rises to £11.27.
• Universal Credit: the £2,500 surplus earnings threshold is kept for another year from 1 April 2027.
• Student loans: interest on Plan 2 and Plan 3 loans is capped at 6% from 1 September 2026 to 31 August 2027.
• Later: parental pay for self-employed fathers, partners and adopters from April 2029; a taper instead of a cliff edge on Carer’s Allowance earnings in 2030-31 (England and Wales).

Homes, ISAs and first-time buyers

• Cash ISA: the limit stays at £20,000 from 6 April 2027.
• Lifetime ISA: from 29 October 2026, first-time buyers buying above the £450,000 price cap pay a 20% withdrawal charge instead of 25%.
• First Time Buyer ISA from April 2029: up to £4,000 a year with a 25% bonus on homes up to £450,000 and no upper age limit, replacing the Lifetime ISA for new savers.
• Your First Home: a new equity loan scheme for around 70,000 first-time buyers from April 2027. Buying costs: stamp duty calculator · first-time buyer relief.

Frequently asked questions

What are the main changes in the UK Budget 2026?
For households: income tax on savings interest and on rental profits each rises by 2 percentage points from 6 April 2027; the full new State Pension rises 3.9% to £250.70 a week; a new Pension Tax Allowance stops pensioners whose total income is at or under the full new State Pension paying income tax (up to £93.28 a year); the National Living Wage rises to £13.21 an hour; a £100 Household Energy Payment goes to council tax bands A to D in England from January 2027; VAT on domestic electricity is 0% to 1 July 2027; the 5p fuel duty cut is extended; and the cash ISA limit stays at £20,000.

How much more tax will I pay on my savings from April 2027?
Only on interest above your Personal Savings Allowance (£1,000 for basic-rate taxpayers, £500 higher rate, £0 additional rate), and none on interest inside an ISA. The rate on the rest goes from 20% to 24%, 40% to 44% or 45% to 49%. £50,000 earning 4% (£2,000 of interest) costs a basic-rate taxpayer £40 more a year and a higher-rate taxpayer £60 more.

What is the Pension Tax Allowance?
From 6 April 2027 to 5 April 2030, people over State Pension age whose total income is at or under the full new State Pension get an automatic deduction worth 20% of the gap between the full new State Pension and the Personal Allowance, so they pay no income tax. With the full rate at £13,036.4 a year from April 2027 and the allowance frozen at £12,570, that is £93.28. It is withdrawn gradually just above that income. It still needs to pass in the Finance Bill.

Is the triple lock changing?
The Budget says the triple lock will be adjusted from the next Parliament so that the State Pension tracks earnings over time. The State Pension still rises 3.9% in April 2027 under the current triple lock.

Are income tax thresholds still frozen?
Yes. The £12,570 Personal Allowance and the higher-rate threshold stay frozen until April 2031 (Finance Act 2026 s.10); this Budget did not change that.

Sources

• HM Treasury: Budget 2026 (28 October 2026), policy decisions table and chapters on households, pensions, property and savings income
• HM Treasury: Pension Tax Allowance explainer
• Government Actuary’s Department: Budget 2026 technical bulletin (full new State Pension £250.70 a week from April 2027)
• GOV.UK: Personal Savings Allowance (£1,000 / £500 / £0)
• Finance Act 2026 s.10 (thresholds frozen to 2030-31)

Read on the linked pages on 10 November 2026. Measures needing legislation are expected in Finance Bill 2026-27. General information, not tax or financial advice. Journalists and bloggers may use these tables with a link to this page.