Autumn Budget 2026: what it means for you
John Healey's Budget brings a £100 energy payment for many homes in England, VAT-free electricity and a fuel duty freeze until July 2027. Tax on savings interest and rental income rises from April 2027, while tax on pay stays the same.
Last updated 28 October at 16:34
What's happening
Chancellor John Healey's Budget on 28 October 2026 kept the headline rates of income tax, National Insurance and VAT the same. For households the main changes are help with energy bills and the cost of driving this winter, and higher tax on savings interest and rental profits from April 2027. Homes in council tax bands A to D in England are due a £100 Household Energy Payment from January 2027. VAT on home electricity stays at 0% until 30 June 2027, and the 5p fuel duty cut lasts until then too. From 6 April 2027 savings interest above your allowances and rental profits are taxed at 24%, 44% or 49%. The National Living Wage rises to £13.21 an hour, side income up to £3,000 becomes tax-free, and a new Pension Tax Allowance stops pensioners on about the full State Pension paying small amounts of tax.
At a glance
Budget 2026 document, HMRC Overview of tax legislation and rates and Annex A, published 28 October 2026. Savings figure is an illustrative calc
- Applies to
- Almost every household in some way
- Act by
- Most changes start in January, April or July 2027. Check your ISA allowance before 5 April 2027 if you have taxable savings interest
The main changes at a glance
- Who
- Households in council tax bands A to D in England, up to 20 million
- When
- From January 2027
- Worth
- £100
0% VAT on home electricity extended
- Who
- Almost all households in Great Britain, with Northern Ireland expected from April 2027
- When
- Until 30 June 2027
- Worth
- About £50 off the April 2027 price cap (Treasury estimate)
Gas standing charges to be abolished
- Who
- Gas customers, with costs moved to unit rates
- When
- Aim: end of 2027
- Worth
- Average standing charge £108 a year
Tax on savings interest up two more points
- Who
- Savers with interest above their allowances, outside ISAs
- When
- 6 April 2027
- Worth
- Rates of 24%, 44% and 49%
Tax on property income up two more points
- Who
- Landlords in England, Wales and Northern Ireland
- When
- 6 April 2027
- Worth
- Rates of 24%, 44% and 49%
Cash ISA limit kept at £20,000
- Who
- Savers over 18
- When
- From April 2027
- Worth
- Planned cut reversed
Lifetime ISA charge cut for homes over its price cap, and a new First Time Buyer ISA
- Who
- First-time buyers
- When
- 29 October 2026; new ISA April 2029
- Worth
- Charge falls from 25% to 20%
- Who
- Pensioners with total income up to £13,319
- When
- 6 April 2027 to 5 April 2030
- Worth
- Up to about £93 a year (illustrative calc)
- Who
- Future State Pension rises
- When
- From the next Parliament
- Worth
- State Pension to track earnings over time
- Who
- About 2.3 million workers
- When
- 1 April 2027
- Worth
- £13.21 an hour; £910 a year for full-time workers
- Who
- People with small side incomes
- When
- 6 April 2027
- Worth
- £1,000 to £3,000
Mileage rates: 55p made permanent, 35p above 10,000 miles
- Who
- About 2 million employees and 1 million self-employed people
- When
- 35p from 6 April 2027
- Worth
- About £120 a year at 6,000 miles (Treasury)
- Who
- All taxpayers
- When
- 2027 to 2028
- Worth
- Personal Allowance stays £12,570
Carer's Allowance earnings taper and self-employed parental pay
- Who
- About 48,000 carers in England and Wales; over 150,000 parents a year
- When
- 2030 to 2031; April 2029
- Worth
- Not yet set
- Who
- Drivers across the UK
- When
- Until 30 June 2027, then 60.59p a litre
- Worth
- 5p a litre less than the old plan
- Who
- Drivers, especially of electric cars
- When
- VED 1 April 2027; EV charging VAT 1 November 2026; eVED 1 April 2028
- Worth
- Standard VED £210; eVED 3p a mile
£2 bus fare cap and food tariff suspensions
- Who
- Bus users in England outside London; shoppers
- When
- 2027; tariffs to December 2028
- Worth
- £2 single fares
What it means for you
- Basic-rate taxpayer: Tax on your pay is unchanged in 2027 to 2028. If you have savings interest over £1,000 outside an ISA, the extra is taxed at 24% from April 2027.
- Higher-rate taxpayer: Your bands are frozen, so a pay rise can pull more income into the 40% band. Savings interest over £500 is taxed at 44% from April 2027.
- Earning £100k or more: The Personal Allowance still tapers away above £100,000. Savings interest at the additional rate is taxed at 49% from April 2027.
- Below the personal allowance: No income tax changes for you. If you are in a band A to D home in England, the £100 energy payment applies.
- Saver: Interest above your allowances is taxed 4 points more than in 2026 to 2027. ISAs stay tax-free and the cash ISA limit stays at £20,000.
- Landlord: Rental profits in England, Wales and Northern Ireland are taxed at 24%, 44% or 49% from April 2027.
- Investor: Dividend rates and the £500 allowance are unchanged. The government will explore a new incentive for first-time stocks and shares ISA investors.
- Company director: Business Asset Disposal Relief's lifetime limit halves to £500,000 from April 2027. Dividend tax rates stay the same.
- State Pension age or over: From April 2027 the Pension Tax Allowance removes or cuts income tax for total incomes up to £13,319. The Triple Lock is set to change from the next Parliament.
- Self-employed: The trading allowance rises to £3,000, mileage above 10,000 miles rises to 35p, and self-employed fathers and partners get parental pay from April 2029.
- Employed (PAYE): Tax and National Insurance on pay work as now. Minimum wage rates rise on 1 April 2027.
- Drive a petrol or diesel car: Fuel duty stays at 52.95p a litre until 30 June 2027, then rises to 60.59p. Car tax goes to £210 for most newer cars from April 2027.
- Drive an electric car: Public charging gets 20% VAT from 1 November 2026, and pay-per-mile tax of 3p a mile starts in April 2028.
- Children 5–17: Child Benefit is £28.00 a week for the eldest child and £18.55 for others in 2027 to 2028.
- Caring for someone: The Carer's Allowance cliff edge is replaced by a taper, but not until 2030 to 2031.
- Get benefits: The Universal Credit £2,500 surplus earnings threshold is kept for another year from April 2027. Jobs Guarantee support is promised for 18 to 24 year olds on Universal Credit.
- Renting: The £100 energy payment depends on your home's council tax band, not on whether you own it. Landlords' groups warn tax rises could push up rents.
- Under 25: The minimum wage for 18 to 20 year olds rises 3.9% to £11.27 an hour from April 2027.
In detail
What it means for you
Budget 2026 for pensioners: the new Pension Tax Allowance, the Triple Lock change and what else affects you
From April 2027 a new Pension Tax Allowance means pensioners with income up to about the full new State Pension will not pay small amounts of income tax. The Triple Lock is set to change from the next Parliament.
What's changing
Budget 2026 for drivers and shoppers: fuel duty, car tax, EV charging, £2 bus fares and food tariffs
Fuel duty stays at 52.95p a litre until the end of June 2027, then rises to 60.59p. Car tax goes up in April 2027, single bus fares in England outside London are capped at £2 through 2027, and tariffs on over 100 foods are suspended.
What's changing
Budget 2026 for workers and families: minimum wage, tax bands, mileage, side income, Child Benefit and carers
The National Living Wage rises to £13.21 an hour from April 2027 and the tax-free trading allowance triples to £3,000. Income tax bands stay frozen, and help for carers and self-employed parents comes later.
Get ahead
Tax on savings interest and rental income goes up in April 2027. What changes and what you can do before then
From 6 April 2027 the basic rate of tax on savings interest rises to 24%, and the same rise applies to rental profits in England, Wales and Northern Ireland. The cash ISA limit stays at £20,000.
What's changing
Budget 2026 and your energy bills: the £100 payment, 0% VAT on electricity and the end of gas standing charges
Households in council tax bands A to D in England are due a £100 Household Energy Payment from January 2027. VAT on home electricity stays at 0% until the end of June 2027.
Dates to know
- 29 Oct 2026 Lifetime ISA charge cut for homes over the price capChange · today
- 1 Nov 2026 20% VAT on public EV chargingChange · in 3 days
- 15 Dec 2026 £65 rental property register fee starts rolling outChange · in 47 days
- 1 Jan 2027 £100 Household Energy Payment beginsChange · in 64 days
- 1 Jan 2027 £2 single bus fare cap startsChange · in 64 days
- 1 Feb 2027 Alcohol duty rises with RPIChange · in 95 days
- 1 Apr 2027 Car tax (VED) rises for 2027 to 2028Change · in 154 days
- 1 Apr 2027 National Living Wage rises to £13.21Change · in 154 days
- 5 Apr 2027 Last day to use this year's ISA allowance before savings tax risesDeadline · in 158 days
- 6 Apr 2027 Trading allowance rises to £3,000 and mileage rate above 10,000 miles to 35pChange · in 159 days
- 6 Apr 2027 Tax on savings and rental income risesChange · in 159 days
- 6 Apr 2027 Pension Tax Allowance startsChange · in 159 days
- 6 Apr 2027 Unused pensions come within inheritance taxChange · in 159 days
- 30 Jun 2027 Temporary removal of VAT on household electricity endsChange · in 244 days
- 1 Jul 2027 Fuel duty rises to 60.59p a litreChange · in 245 days
- 1 Apr 2028 Pay-per-mile tax on electric cars startsChange · in 520 days
Updates
28 October at 16:34
First published
Sources
- Budget 2026 (HTML), HM Treasury (2026-10-28)
- Budget 2026: Overview of tax legislation and rates (OOTLAR), HMRC (2026-10-28)
- OOTLAR Annex A: rates and allowances, HMRC (2026-10-28)
- Impact on households: distributional analysis to accompany Budget 2026, HM Treasury (2026-10-28)
- Budget 2026 in full, HM Treasury (2026-10-28)
- Supporting documents for Budget 2026, HM Treasury (2026-10-28)
- Budget 2026 reaction: what have people said in response to John Healey's first speech?, LBC (2026-10-28)