From savings and pensions to property and household bills, we explore the Budget’s key announcements, what they could mean for you and your family, and where planning ahead could help.
Despite arriving just before Halloween and a warning that “global economic storms” required “fiscal discipline”, there were no seriously scary surprises in Chancellor John Healey’s first Budget.
Here are the key takeaways from the 2026 Autumn Statement that may affect you and your family.
There’ll be an extra 2% tax on income from savings and property rentals from the next tax year. Combined with the 2% increase announced in 2025 (and now confirmed), this represents a 4% hike from April 2027.
Plans to limit cash ISA deposits for under-65s to £12,000 from next April have been scrapped, so the amount everyone can save in ISAs each year will remain at £20,000.
Another U-turn is the proposed 22% charge on interest from cash within a stocks and shares ISAs, which will no longer go ahead. This means all cash held in a stocks and shares ISA will continue to be tax-free from next April. A new incentive for first-time stocks and shares ISA investors is being explored.
A First Time Buyer ISA will replace the Lifetime ISA from April 2029, offering a 25% bonus (capped at £20,000) towards a first home worth up to £450,000. Existing Lifetime ISAs carry on under the current rules, other than an immediate 25% to 20% reduction in the penalty for first homes above £450,000.
There was no change to Dividends or Capital Gains Tax rates and most personal tax thresholds remain frozen at existing rates up to 2031.
The triple lock stays in full until April 2029. The new, flat-rate State Pension will rise by around £488 a year (3.9%) from April, with the old basic State Pension up by £375.
A new Pension Tax Allowance comes in from April 2027 to prevent lower income pensioners from paying tax on their pension. The full allowance applies up to £13,037 of income and tapers to nil at £13,319.
As announced back in 2024, pensions will be caught in the Inheritance Tax net from April 2027. The 2026 Budget paperwork confirmed that the pension scheme can pay the bill straight to HMRC, so at least the family won't have to find the cash elsewhere first.
A new council tax surcharge for homes in England worth £2 million or more comes in from April 2028.
Stamp Duty rates stay the same, including the 5% surcharge on additional homes, but HMRC is consulting on getting data from third parties to ensure all rental income is declared.
The Business Asset Disposal Relief lifetime limit halves from £1 million to £500,000 for disposals on or after 6th April 2027, with special rules for contracts made before the change.
The trading allowance for side income – for example, selling online, doing odd jobs or offering a service – triples from £1,000 to £3,000 from April 2027.
Standing charges to be scrapped on gas bills from next year, saving an estimated £45 a year for most households.
VAT is cut on electricity bills up to 2027, taking around £50 off the annual price cap.
A one-off £100 energy payment for 20 million households in England (council tax bands A to D) will be paid directly into bank accounts from January.
Tariffs removed on over 100 household goods, including baked beans, chocolate and gherkins. Prescription costs remain the same and the fuel duty rise has been cancelled.
The good news is that main income tax, National Insurance and VAT rates aren't going up. However, with most tax-free thresholds still frozen while inflation moves untethered, this means that more tax will be payable on income each year.
Thanks to the new tax-free pension allowance, at least those who rely on the State Pension will be shielded as payments rise with the triple lock, so no more small tax bills for lower income pensioners from next April.
The not-so-great news? From April 2027, rates on savings interest and rental income rates rise and the Business Asset Disposal Relief halves. So if your money works hard for you in savings, rental property or in a business you hope to sell one day, more of it may be funnelled off to HMRC. Fortunately, the U-turn on ISA charges means ISAs can continue to be an effective tax wrapper for a good portion of your savings, and capital gains and dividends are treated as before.
The biggest headache in the next tax year for many of our clients is pensions coming under fire for Inheritance Tax. From next April most unused pensions and death benefits will count towards your estate for inheritance tax, bringing many families into liability for the first time.
Most of the announced changes don't come into play until April 2027, so there’s still a chance to plan ahead. Now’s the time to review where your cash and investments sit as well as your pensions and estate planning to minimise the potential tax burden on you and your family. There’s more to consider if you’re a business owner looking to sell up.
The Goodmans Tax Agency has put together a more detailed briefing on the Budget and what’s coming next April, including illustrations of how each key change plays out in certain situations. This is available in the Goodmans app for all our clients. And with our open-door promise, our clients are always welcome to get in touch with us for personalised support.
If you’re not with Goodmans and want to make sense of what the Budget means for you, get in touch.