Autumn Budget 2026: Key takeaways you need to know
Written by Boring Money
28 Oct, 2026
This year's Autumn Budget has arrived after weeks of intense speculation about pension reforms, property taxes, and a continued freeze on fuel duty. John Healey promised us a boring budget. In the end, it was boring enough to keep the bond markets happy, but there was a fair bit going on beneath the surface.
“Your First Home” Scheme - Provides first-time buyers who put down 2.5% deposit with 20% equity loan
First Time Buyer ISA - a new First Time Buyer ISA will replace the Lifetime ISA from April 2029, and the Lifetime ISA penalty is cut for homes over £450,000
VAT cut on electricity bills extended - the zero rate of VAT on household electricity now runs until July 2027, taking around £50 off the April 2027 price cap
Cash ISAs - £20,000 limit will remain, but tax on non-ISA cash savings hits 49% for top-rate taxpayers
Landlords clobbered (again) – Another 2% on rental income, on top of Renters’ Rights bill, higher stamp duty, limits on expenses
Founders’ relief vs BADR - a new 10% Capital Gains Tax rate on up to £10m of lifetime gains for founders of high-growth firms, while the Business Asset Disposal Relief lifetime limit is cut from £1m to £500,000. Both from 6 April 2027
Increase taxes on the bank sector - Extra 3% on the bank surcharge for 15 months from January
Taxes on businesses - Online retail businesses expected to be made responsible for collective tax owed by traders. Small businesses start paying rates from £12,000 to £18,000
Continued freeze on fuel duty - Rising petrol and diesel costs increase inflation to 3.5%
Rising energy bills - £100 bonus for households in council tax bands A-D
Triple lock - Adjustments to the Triple Lock from April 2030, meaning State Pension payments will rise in line with the higher of inflation or 2.5%. State Pension will rise by 3.9% from April 2027
Industrialisation in the UK and increased spending on defence - The National Wealth Fund and British Business Bank get an extra £20.4bn of capital to back investment across the UK. At next year’s spending review, the government will set out how it will reach 3% of GDP on defence by 2030 and 3.5% by 2035
Ramping up devolution - Local and regional government will keep 100% of business rates income by the end of the decade, and all Mayors will get a share of income tax from 2028
Energy Wealth Fund - £2bn for a new Energy Wealth Fund, part of the National Wealth Fund, to invest in renewable and low-carbon energy across the UK. It will be linked to the government’s future North Sea revenues
Budget Reactions
We've pulled together the main takeaways so you can leave the Budget knowing how it affects your finances and how you can respond.
In summary, this Budget was:
1. Economic Outlook
In the run-up to the Budget, there was widespread speculation that a left-leaning government would be tough on wealth creation, lifting Capital Gains Tax (CGT) and expanding a mansion tax. In this respect, it was a more wealth-friendly budget than expected, with breaks for entrepreneurs and targeted support for businesses.
The Budget did its most important job: keeping bond markets steady. A gilt is a fixed income bond issued by the UK government. They are so named because, historically, the paper certificates used to issue these bonds had a gilt (gilded) edge. The government issues gilts in order to fund public spending. The return or profit on an investment, usually expressed as a percentage of the total price per year. For example, if the yield on a bond was 5%, this means an investor with £100 in that bond would get £5 in returns per year. dropped a little in the immediate aftermath of the budget, suggesting investors were reassured by the Chancellor’s commitment to fiscal discipline.
He chose to lower the Treasury’s fiscal headroom rather than heap more taxes on the population. It dropped from £24bn to £15bn, but markets took this in their stride. The biggest dent to the UK’s financial position has come from higher borrowing costs. Inflationary pressures have lifted UK bond yields, raising the cost of borrowing for the government.
UK inflation has risen to 3.5%, driven largely by the closure of the Strait of Hormuz. The closure has disrupted crude oil supplies and pushed up fuel costs: between August and September, the price of petrol rose to 169.5p per litre and diesel to 192.5p per litre. This is likely to keep public finances under pressure. Government borrowing has risen to £25bn, and National Debt now tops £3tn.
A week before the Budget, the government approved extraction from Jackdaw, a gas field in the North Sea, saying it will help keep the UK’s gas supply secure through the winter. The decision has been controversial. Energy Secretary Miatta Fahnbulleh told the BBC that Jackdaw “won’t lower energy bills this winter”. However, Neil McCulloch, chief executive of Adura, argued that the project will benefit the economy by creating jobs and generating economic value. [1]
In the labour market, the unemployment rate stands at 4.7%. ONS figures show vacancies fell by 21,000 in September to 691,000. Most of the fall was among smaller businesses, which are struggling with rising labour costs. Young people remain the hardest hit. Unemployment among 16 to 24-year-olds was 15.6% in June to August, down slightly from 16.4% in March to May. The ONS also found that nearly one million young people are not in education, employment or training (NEET).
What do the experts say?
There were lots of welcome announcements from the Chancellor today in his Budget.
Abandoning the planned changes to Cash ISAs makes a lot of sense. Providers will have already wasted resources on projects to cater for these changes, but there will be widespread relief they are not proceeding. Both cash and shares are important parts of any financial plan and simplicity was always an important part of the ISA’s popularity. The potential complexity of proposed changes for limited proven benefits was always questionable.
More helpfully, the Chancellor has mooted a new “Starter ISA” for first-time investors. The carrot was always going to be more effective than a stick and I think this is a brilliant idea. One of the biggest cited barriers to investing is not knowing where to start, so anything we can do to remove jargon and complexity will be hugely positive for those contemplating that first step.
Cutting LISA penalties so that those whose first home costs more than the limit at least get back what they put in is also a hugely positive step. Coupled with the new First Time Buyer ISA and the Your First Home scheme, there are a handful of changes which make that first flat feel much more accessible than before.
As for pensions, the lack of any big announcement was in itself welcome. We have had so much change over recent years that I welcome the refreshing feeling of no post-Budget pension drama.
I think in general this was a Budget which paid careful attention to younger voters and has delivered some support to those starting businesses, saving for a first flat and potentially those considering investing for the first time.
This was the boring Budget that bond markets demanded after a particularly challenging period for gilts. There were no large unfunded giveaways, which is exactly what gilt investors had hoped for. Healey started on the right track by setting out the constraints: elevated energy and gas prices, their impact on inflation, and the extra cost of government borrowing through higher interest payments. In doing so, he set out his stall for a cautious Budget.
Today's budget offered households some relief from the cost of living crisis, but not enough to change the economic outlook. Measures to ease consumer prices will help at the margin, but there is little reason to revisit our near-term forecasts that resilient growth and rising inflation mean the Bank of England will raise rates a couple of times, starting next week.
Markets are unlikely to react much either. The bigger challenges are likely to lie ahead.
Reduced fiscal headroom leaves the government vulnerable to further future upward pressure on gilt yields, at a time when the US economy is overheating and Europe is entering a fraught electoral period. Gilts typically move more sharply than the wider global bond market, and a 1-1.5% increase in yields would wipe out the remaining headroom, putting renewed pressure on the government to rein in spending.
2. State Pension
Current rules
At the moment, the government's Triple Lock guarantee stipulates the State Pension goes up each year by either 2.5%, inflation, or earnings growth - whichever is the highest figure. The current full new State Pension is £241.30 per week or £12,548 per year for the 2026-27 tax year.
What's changing?
The government will adjust the Triple Lock to help fund a new National Care Service. The Triple Lock stays in place until 2030. From April 2030, the State Pension will rise each year by the higher of inflation or 2.5%. Its value will also be checked against average earnings growth since 2030, with a top-up if it has fallen behind. The Prime Minister first announced this at the Labour conference in September.
The Triple Lock stays until 2030, so the full new State Pension is going to rise by 3.9% (£489) to £13,036 a year from April 2027. The personal allowance for the lowest-income pensioners is expected to rise to match it, so nearly one million pensioners avoid paying income tax on it.
When does it happen?
From April 2030.
What do the experts say?
Burnham’s decision to part ways with the Triple Lock is far more than an exercise in making the balance sheet add up. Although keen to ensure the state pension holds its value with increases in workers’ earnings, moving to a smoothed average likely means pensioners in the future will be missing out on the full increases in earnings, especially in the years when wages spike.
But this isn’t the end of tough decisions on the State Pension. Deciding when to bring forward the move in the State Pension age from 67 to 68 is still hanging over this government. If the government wants to bring forward this change to the late 2030s, it will need to make the call soon to give people at least 10 years’ notice in line with convention for increasing the State Pension age.
3. “Your First Home” Scheme
Current rules
The government has run several versions of this kind of scheme, including FirstBuy and Help to Buy, all designed to help first-time buyers onto the property ladder. Under Help to Buy alone, around 387,000 homes were bought, and 328,000 of the buyers were first-time buyers.
What's changing?
The scheme will give first-time buyers who put down a 2.5% deposit an interest-free equity loan worth 20% of the property’s value. It applies only to new-build homes and is meant to help Labour meet its target of building 1.5 million homes.
There are some stringent rules around the new scheme. The small print shows that there will be income caps - set at £110,000 per household outside London and £140,000 inside London. There will also be price caps based on local authority median prices, with inner and outer London caps of £650,000 and £500,000 respectively. The deposit requirement will be set at 2.5%, with a maximum deposit of 15%.
Nevertheless, for those that qualify it is likely to be an attractive option. People will be able to access equity loans with a five-year interest free period, with a gradual increase after five years. That means those who use the scheme could save hundreds of pounds per month compared with a standard mortgage.
Alongside the scheme, the government said it will give councils stronger powers to take over empty homes and use them to house people in need.
When does it happen?
Pre-registration opens by the end of December 2026, full applications open in February 2027, and the first loans will be issued from April 2027. It is funded by £4.7bn of government-backed lending.
Who does it impact?
The scheme is aimed at first-time buyers in England, particularly young people struggling with housing costs and those without help from the “bank of mum and dad”. Councils also gain, through stronger powers to take over empty homes and use them to house people in need.
What do the experts say?
This is a reintroduction of the previously successful Help to Buy scheme, which helped 300,000 people onto the property ladder over 10 years. There is no interest on the Government loan initially (5 years if it replicates the previous scheme), and low interest thereafter, as the Government participates in your home’s growth in value while helping to lower the barrier to entry.
This is a step in the right direction. However, with high interest rates, high rental costs and house price inflation having historically outpaced wage growth, it should not take Government incentives that risk inflating house prices to allow people to get onto the property ladder. A better environment for young people should make these incentives unnecessary.
4. ISA changes
Current rules
The Lifetime ISA can be opened up to the age of 40 and investors can continue to contribute up to the age of 50. It allows contributions of up to £4,000 a year with a 25% government bonus. It needs to be used for your first home or at retirement, otherwise the government claws back its contribution and the investment gains on that contribution.
What’s changing?
A new First Time Buyer ISA will replace the Lifetime ISA from April 2029. The product will retain some of the features of the Lifetime ISA, with a bonus paid on the value of the account balance when funds are withdrawn for a qualifying first home purchase, up to the value of £450,000, so avoiding the need for any withdrawal charge. The new product will have no upper age restriction.
From 29 October 2026, Lifetime ISA holders buying a qualifying first home worth more than £450,000 will pay a reduced 20% withdrawal charge, down from 25%. That means they get back what they paid in, but lose the government bonus.
The Government also announced a new ‘Starter ISA’ to get young people savings. The details are being finalised, but it is likely to be similar to that proposed by Martin Lewis. His idea was that young people could put up to £1,000 in (whether lump sum or dripped in monthly), “as well as it being tax-free, you'll get, for example, a 5% boost on contributions from the state (with the cost split between investment providers and the state) as long as the money is kept in investments for a set time (for example, one year).
When does it happen
The First Time Buyer ISA will be introduced from April 2029. The design of the new Starter ISA will be developed with industry, with no launch date yet
Who does it impact?
The new First Time Buyer ISA is aimed at those saving for their first home.
What do the experts say?
Reducing the Lifetime ISA withdrawal charge from 25% to 20% for first-time buyers purchasing above the £450,000 cap addresses a longstanding unfairness. Removing the government bonus is one thing but eating into someone’s own savings is another.
A new First Time Buyer ISA focused squarely on homeownership, without an upper age restriction or punitive withdrawal penalty, is a welcome attempt to fix some of the Lifetime ISA’s flaws. But retaining the £450,000 property cap risks carrying an old problem into a new product. A lifetime limit on the government bonus could be a fairer way of controlling costs than a rigid house-price ceiling that becomes increasingly outdated as property prices rise.
The government should also be careful not to discard what worked well with the Lifetime ISA. Paying the bonus monthly means it can earn interest or investment returns alongside the saver’s own money as their deposit builds. If the new ISA instead pays the government bonus only when someone buys their home, savers lose that benefit.
5. Cash ISA
Current rules
UK savers have an annual ISA allowance of £20,000, which can be split between Cash ISAs and Stocks & Shares ISAs as they choose. All interest and gains within ISAs are tax-free.
What’s changing?
Annual contributions to Cash ISAs were set to be reduced to £12,000 a year. The rationale was to encourage more people to invest in stocks and shares rather than holding everything in cash. The Chancellor has abandoned this change and all ISA investors can now invest up to £20,000 in a cash ISA if they choose.
This has become increasingly important as the Chancellor simultaneously added another 2% tax on savings income. That means savers may be paying as much as 49% on any income from ordinary savings accounts. It may feel safe, but it makes traditional savings accounts look like a poor option. A saver paying the top rate of tax, with £100,000 in a 4% savings account, would receive £4,000 a year, but then lose £1,960 of it in tax.
Money held in ISAs isn’t affected, and the Treasury says 84% of income tax payers won’t pay more.
When does it happen
The higher tax rate for savings will apply from April 2027.
What do the experts say?
The decision to increase tax on savings income to 24%, 44% and 49% from April 2027 makes holding large amounts of cash on deposit increasingly unattractive, particularly for higher and additional-rate taxpayers.
Cash will always have an important role in providing liquidity, but the tax changes significantly alter the equation for money held beyond immediate needs. For an additional-rate taxpayer facing a 49% rate on taxable savings income, a 4% savings rate would deliver just 2.04% after tax.
For those holding substantial excess cash, that growing opportunity cost will become increasingly difficult to ignore.
Scrapping plans to reduce the Cash ISA allowance shows John Healey is prepared to listen to reason and take common sense choices when it comes to savings and investment policy.
Rachel Reeves’ ISA reforms were a car crash, lamented by most of the retail investment industry, who criticised the complexity they would add for little consumer benefit, and building societies, who warned they would increase mortgage costs. Given the Prime Minister’s main focus is on easing cost-of-living pressures, it makes sense the Cash ISA cut has been unceremoniously ditched.
While the central aim of encouraging more people to invest for the long term was the right one, the route Healey’s predecessor chose to achieve this was painfully convoluted, hardening the border between short-term saving and long-term investing and adding overwhelming complexity – not to mention a tax charge – into the system in the process.
6. Increase taxes on the bank sector
Current rules
Currently, banks in the UK are reporting huge profits, with four of the biggest banks making £15bn in the first six months of 2026.
What’s changing?
The government is temporarily increasing the Bank Corporation Tax Surcharge from 3% to 6% for 15 months.
The banking sector thought it would be worse, with share prices rallying in the aftermath of the Budget. It is also good news for UK investors. The banking sector is a significant part of the UK market – around 20% of the Also called “Footsie”, the name for the share index made up of the largest 100 companies by market capitalisation (total value of all shares) listed on the London Stock Exchange. HSBC alone is a 10% weight in the index. They are also important dividend payers. This reprieve is welcome.
When does it happen?
From 1 January 2027 to 31 March 2028.
Who does it impact?
All UK banks.
What do the experts say?
The lower-than-expected 3% increase in the bank surcharge was much less aggressive than markets had feared, and today’s rally in UK banking shares suggests investors had been positioned for a full reversal of the previous cut.
7. Capital Gains Tax
No changes to the main rates, which remain as below. But there is a new 10% founders’ relief on up to £10m of lifetime gains (see Taxes on businesses), and the lifetime limit for Business Asset Disposal Relief falls from £1m to £500,000. Both from 6 April 2027.
Type of asset | Basic rate | Higher rate |
Shares | 18% | 24% |
Residential property | 18% | 24% |
Bitcoin/Cryptocurrency | 18% | 24% |
Other | 18% | 24% |
Type of asset | Basic rate | Higher rate |
Shares | 18% | 24% |
Residential property | 18% | 24% |
Bitcoin/Cryptocurrency | 18% | 24% |
Other | 18% | 24% |
Correct as at 2026-27 tax year.
8. Continued freeze on fuel duty
Fuel duty has not gone up since 2011. In 2022, the Conservative government also brought in a temporary 5p cut per litre, which was extended several times, including under Keir Starmer. That cut is due to expire in January.
What’s changing?
The Chancellor has extended the 5p fuel duty cut again, this time until 1 July 2027. He said the war in the Middle East is still pushing up fuel prices, so the cut will run through the winter and spring. The planned inflation-linked rise in fuel duty is also deferred to July 2027. For people who need their cars for work, the mileage rate above 10,000 business miles rises from 25p to 35p per mile, and the temporary 55p rate for the first 10,000 miles becomes permanent.
When does it happen?
Suggested text: The 5p cut now runs until 1 July 2027. The new 35p mileage rate applies from 6 April 2027.
9. Mansion Tax
Current rules
A “Mansion Tax” was introduced in last year’s Budget on properties over £2m, expected to raise around £0.4bn. This is known as the High Value Council Tax.
The additional annual cost will be a £2,500 levy on properties worth £2 million or more, which will progressively increase to a £7,500 levy on properties over £5 million.
The former Chancellor, Rachel Reeves, announced that there would be a consultation about people’s options to defer these payments, to acknowledge those who are property-rich but cash-poor. Think Downton Abbey!
What's changing?
There have been rumours about the government extending it to properties worth more than £1.5m, however, these were dismissed.
When does it happen?
2028.
Who does it impact?
Any mansion tax or property wealth tax would primarily hit homeowners with high-value properties, particularly in London and the Southeast, where property prices are highest. However, experts warned this could create market disruption at the higher end as homeowners who purchased large family homes decades ago may be discouraged from downsizing if faced with unexpected tax liabilities. This could reduce the availability of larger homes for growing families and will hit the capital hardest.
10. Taxes on businesses
Current rules
The current business rates relief system provides reductions for eligible businesses. The 2024 Budget introduced 40% relief for retail, hospitality, and leisure properties, up to a cash cap of £110,000 per business. In the 2025 Autumn Budget, this has been extended from 1 – 3 years, so they remain eligible on their first property for 3 years after expanding into a second property.
What's changing?
The Chancellor cut business rates for small high street businesses. From April 2027, around 70,000 more retail, hospitality and leisure businesses in England will pay no business rates, as the threshold for full relief rises from a rateable value of £12,000 to £18,000, with tapered relief up to £21,000. Vape shops and adult gaming centres will no longer qualify for the lower rates for these sectors, and pubs, social clubs and music venues get extra relief of 35%.
He also raised Machine Games Duty from 20% to 25% on machines with stakes over £1. The money raised helps pay for a freeze in business rates for retail, hospitality and leisure properties, so none faces a real-terms increase. To protect pubs and seaside arcades, the rate on lower-stake machines stays the same. From October 2027, online marketplaces will also collect the VAT owed by UK businesses selling on them.
11. Rising energy bills
Healey announced that standing charges will be scrapped from household gas bills. It is due to take effect next year “or as soon as possible”. The Treasury says this will save 60% of households an average of £45 a year.
Twenty million households in council tax bands A to D in England will get a £100 ‘household energy payment’ from January 2027, paid straight into their bank accounts. The scheme is costed at £2.6bn. The zero rate of VAT on household electricity has also been extended until July 2027, which the Treasury expects to take around £50 off the April 2027 price cap.
12. Other key takeaways
Payment on account changes: From April 2029, taxpayers who already make Payments on Account will make smaller, more regular contributions towards their tax bill throughout the year, bringing payment closer to when income is earned. This will help taxpayers budget and plan for their tax obligations, reducing the risk of large, unexpected tax bills and making it less likely that they fall behind on tax due and build up debt. The government will continue to work with stakeholders and affected taxpayers on implementing this change. Alongside these reforms, the government will make it easier for around 160,000 employees to claim tax relief on employment expenses by removing the need to use Income Tax Self Assessment in the UK tax system solely to make these claims.
Pension Tax Allowance: from April 2027, pensioners with income up to the full new State Pension won’t be brought into paying income tax by State Pension rises for the rest of this Parliament.
Minimum wage: the National Living Wage rises 3.9% to £13.21 an hour from April 2027. Workers aged 18 to 20 get the same 3.9% rise, to £11.27.
Carer’s Allowance: a new taper in 2030-31 means carers won’t lose their entire allowance when they earn over the threshold.
Paternity leave: self-employed fathers and partners will be able to get parental pay from April 2029.
Food prices: tariffs suspended on more than 100 food and drink products.
Bus fares: single fares capped at £2 in England outside London for a year from January 2027.
Pension death benefits: the two-year rule for taxing pension and lump sum death benefits is removed from today.
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I'm not sure how this budget addresses any of the significant problems facing businesses and the UK economy at the moment. And it just kicks the UK Defence can down the road again!