Autumn Budget 2026: What you need to know

The Budget can feel like a lot of noise, so we've picked out the changes most likely to affect your money. For each one, understand what's changing, what it means for you and what you may want to do. Not everything will apply to you, and most changes don't start for months.

Your pay and tax

The National Living Wage increase

The National Living Wage rises to £13.21 an hour from April 2027

What does this actually mean?
From 1 April 2027, the National Living Wage will increase by 3.9%, from £12.71 to £13.21 an hour for eligible workers aged 21 and over. For workers aged 18 to 20, the hourly rate will rise from £10.85 to £11.27 an hour.

If you work full-time and are aged 21 and over, the increase could mean around £910 more a year before tax, depending on your working hours and current rate of pay.

What you may want to do: Check your payslip in April 2027 to make sure you're being paid the correct minimum wage for your age and working hours.

Business mileage allowance

The 55p tax-free mileage rate for your first 10,000 business miles becomes permanent

What does this actually mean?

If you use your own vehicle for work, the 55p-per-mile rate for the first 10,000 business miles will remain in place permanently. This rate can be used to calculate tax-free mileage payments or tax relief, depending on your circumstances. It doesn't automatically mean your employer must pay you 55p per mile.

What you may want to do: If you drive for work, keep a record of your business miles and check your employer's mileage reimbursement policy.

Income tax and National Insurance

Tax rates stay the same but income tax thresholds remain frozen until April 2031

What does this actually mean?
Income tax and National Insurance rates aren't changing, but the income thresholds at which you start paying certain taxes will remain frozen until April 2031. If your wages increase while these thresholds stay the same, you could pay more tax as a result.

Student loan repayment rules are not changing under this announcement.

What you may want to do: Check your payslip so you understand how much you're taking home after tax, National Insurance and any student loan repayments.

Your household bills

The electricity VAT change

No VAT on home electricity until 1 July 2027 (Applies across England, Scotland and Wales)

What does this actually mean?
Normally, household electricity is subject to VAT at the reduced rate of 5%. The VAT on home electricity will be removed until 1 July 2027.

In practical terms, you’ll pay no VAT on your household electricity from 1 October 2026 until 1 July 2027. The government expects the three-month extension to take around £50 off the yearly energy price cap from April 2027. Your actual saving will depend on how much electricity you use.

What you may want to do: You don’t need to do anything. Your energy supplier applies this to your bills.

The £100 household energy payment

A one-off £100 payment from January 2027

Who qualifies?

To qualify you need to meet the following criteria:

• Your main home is in England
• Your property is in council tax band A,B,C or D
• You live in the property and are liable for its council tax (most households exempt from council tax are also eligible)

How will you receive the £100?

• If you pay Council Tax by Direct Debit - You shouldn’t need to apply. The payment is expected to be paid directly into your bank account
• If you don’t pay by Direct Debit - Your local council will invite you to apply. Full details will be published in due course. Only your council should contact you about this payment. If you’re unsure a message is genuine, check with your council.

What you may want to do: Check your council tax band here and your council’s website from January 2027.

Financial support

The Universal Credit earnings buffer

The £2,500 earnings buffer will remain until March 2028

What does this actually mean?
If you receive Universal Credit, the £2,500 earnings buffer will remain in place until March 2028. This is intended to help protect your Universal Credit entitlement if your earnings temporarily increase in a particular month, subject to the scheme's rules.

What you may want to do: If your pay varies from month to month, check how the earnings buffer applies to your circumstances and keep an eye on updates to Universal Credit rules.

The energy debt relief scheme

One-off help with energy debt from 2027 (For eligible households in Great Britain)

What does this actually mean?

If you're behind on your energy bills, you may be eligible for one-off support to help with your energy debt. The scheme is expected to launch in 2027, but it isn't open yet and the full eligibility criteria and application process are still to be confirmed.

What you may want to do: If you're struggling to pay your energy bills, contact your energy supplier now to discuss affordable repayment options and any support available while you wait for the scheme to launch.

Saving and investing

Tax on savings interest

Tax rates rise on savings held outside an ISA from April 2027

What does this actually mean?

From 6 April 2027, basic rate taxpayers will pay 24% tax on taxable savings interest, up from 20%. Your £20,000 annual cash ISA allowance stays the same, and interest earned in a cash ISA remains tax-free.

What you may want to do: Check how much of your savings is held in a cash ISA and whether you could benefit from using your available tax-free ISA allowance.

Cash ISA allowance

The £20,000 cash ISA limit stays the same

What does this actually mean?
Last year’s Budget announced that from April 2027, people under 65 could only put £12,000 a year into a cash ISA. That cut will no longer go ahead. You can keep saving up to £20,000 a year in a cash ISA, and the interest stays tax-free. The £20,000 is your total allowance across all your ISAs.

What you may want to do: If you changed your saving plans because of the planned cut, you may want to review them before the new tax year starts on 6 April 2027.

Your home

Help for first-time buyers

An interest free government loan for eligible first time buyers

What does this actually mean?

The Your First Home scheme will offer eligible first-time buyers a government loan of up to 20% of a new-build home's price in England, with deposits starting at 2.5%. The loan is interest-free for the first five years. After that, interest is 1.5% in year 6 and 3% from year 7. The loan is linked to your home’s value, so the amount you repay can go up. Income limits apply. You can check the rates and example costs in GOV.UK’s Your First Home guidance.

What you may want to do: Pre-registration is expected to open by the end of December 2026, with applications opening in February 2027. Check the eligibility criteria and consider whether you could afford the costs after five years.

Lifetime ISA withdrawal charge

The charge falls from 25% to 20% for some first home purchases over £450,000

What does this actually mean?
From 29 October 2026, the withdrawal charge for eligible first-time buyers using a Lifetime ISA to purchase a property costing over £450,000 will fall from 25% to 20%. At 20%, you’d lose the government bonus but not the money you paid in. Other early withdrawals still have a 25% charge, which means losing some of your own savings.

What you may want to do: If you have a Lifetime ISA, check the withdrawal rules before using your savings to buy a property.

Getting around

Fuel duty cut extended until July 2027

What does this actually mean?

The 5p-per-litre fuel duty cut will remain until 1 July 2027. When it ends, fuel prices may rise.

What you may want to do: Factor potential fuel cost increases into your budget from July 2027.

Car tax rates rise with inflation from April 2027

What does this actually mean? Vehicle tax rates will increase in line with inflation from 1 April 2027. The amount you pay will depend on your vehicle.

What you may want to do: Check the updated rates before your next vehicle tax renewal.