Budget 2026: What the 28 October Announcements Actually Mean for Your Money

The Budget on 28 October 2026 reversed the planned Cash ISA cut, raised tax on savings and property income again, and launched new help for first-time buyers and households struggling with energy bills. Before the Budget we wrote two preview pieces - what was already locked in for your ISA and pension and how to prepare your household budget. Some of what those articles described as “already confirmed” has now changed, so this is the round-up of what was actually announced.

What’s changed since our earlier articles

• The Cash ISA cut is cancelled. The cash limit stays at £20,000 from April 2027, instead of falling to £12,000 for under-65s. See our full article on what this means for your allowance.
• The April 2027 rise in tax on savings and property income is now twice as big. Instead of 22%, 42% and 47%, the rates will be 24%, 44% and 49%.
• The Lifetime ISA’s replacement now has a date and a design. The new First Time Buyer ISA arrives in April 2029 rather than around 2028, and the penalty for buying above the £450,000 cap with a Lifetime ISA has already been cut to 20%. See our article on the Lifetime ISA changes.
• The temporary 0% VAT on electricity has been extended to July 2027, rather than ending in March. See our article on energy bills in 2027.

Savings and ISAs

• The cash ISA limit stays at £20,000, and the overall ISA allowance is unchanged at £20,000.
• From 6 April 2027, interest outside an ISA that isn’t covered by your Personal Savings Allowance will be taxed at 24% (basic rate), 44% (higher rate) or 49% (additional rate). That’s 2 percentage points more than announced at the 2025 Budget, and 4 points more than today. This applies across the whole UK.
• The Personal Savings Allowance and the starting rate for savings are unchanged. The Treasury estimates that a basic-rate taxpayer would need over £25,000 in savings outside ISAs before paying any tax on the interest.
• The government will work with the investment industry on a new incentive for people opening a Stocks & Shares ISA for the first time. No details yet.

Buying a home

• A new £4.7 billion equity-loan scheme for first-time buyers in England, called Your First Home, will lend up to 20% of the property price with a deposit from 2.5%. Pre-registration opens by the end of December 2026. See our full guide to Your First Home.
• The First Time Buyer ISA will replace the Lifetime ISA for new savers from April 2029.
• From 29 October 2026, Lifetime ISA holders buying a first home above £450,000 pay a 20% withdrawal charge instead of 25%.

Energy bills and motoring

• Electricity stays at 0% VAT until July 2027, which the Treasury expects to take around £50 off the annual price cap in April 2027.
• A £100 Household Energy Payment will be paid from January 2027 to households in England in council tax bands A to D, through the council tax system. The devolved governments get funding to provide similar support.
• Gas standing charges, currently about £108 a year for a typical household, are to be abolished by the end of 2027 or as soon as possible after, with the cost moved onto unit rates. Electricity standing charges will be reformed, with details next year.
• The 5p fuel duty cut has been extended to 1 July 2027, and the planned January 2027 rise is cancelled.
• The 55p-a-mile tax-free mileage rate for the first 10,000 business miles in your own car or van is now permanent, and the rate above 10,000 miles rises from 25p to 35p from 6 April 2027.

Pensions

• The triple lock stays as it is until April 2029. From April 2030, the State Pension will rise by the highest of 2.5%, inflation, or the amount needed to keep its value relative to earnings at the level reached in April 2029. Our State Pension guide describes the triple lock as it works today.
• A new Pension Tax Allowance from 6 April 2027 means pensioners whose total income is no more than the full new State Pension won’t be brought into paying income tax by State Pension rises during this Parliament.
• The “two-year rule” for pension death benefits has been removed for payments made on or after 28 October 2026. Beneficiaries will no longer become taxable just because a tax-free payment arrives more than two years after the death. See our article on the two-year rule going.
• Nothing in the Budget changes the plan to bring unused pensions into inheritance tax from April 2027, or the £2,000 salary sacrifice NI cap from April 2029.

Work, pay and families

• The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027. The rate for 18 to 20-year-olds rises to £11.27.
• Income tax and National Insurance rates on earnings are unchanged.
• From April 2029, self-employed fathers, partners and adopters will be able to get parental pay for the first time.
• Carer’s Allowance will taper off as earnings rise, rather than stopping entirely when you go a penny over the earnings limit. This won’t happen until 2030-31.
• The 6% interest cap on Plan 2 and Plan 3 student loans, running from 1 September 2026 to 31 August 2027, is confirmed. Our student loans guide already covers this.

Landlords, the self-employed and business owners

• Property income tax rates rise to 24%, 44% and 49% from 6 April 2027 in England, Wales and Northern Ireland, up from the 22%, 42% and 47% described in our buy-to-let article.
• People joining Making Tax Digital for Income Tax in April 2027 won’t get penalty points for late submission of their first four quarterly updates, and the roll-out to some other groups has been put off until further notice. Our Making Tax Digital article covers who is affected.
• The lifetime limit for Business Asset Disposal Relief halves from £1 million to £500,000 for disposals from 6 April 2027. A new Capital Gains Tax Founders’ Relief at 10% starts on the same date.

Key dates

• 29 October 2026: lower 20% Lifetime ISA charge for buying above £450,000.
• End of December 2026: Your First Home pre-registration opens.
• January 2027: £100 Household Energy Payment begins.
• 1 April 2027: National Living Wage rises to £13.21.
• 6 April 2027: savings and property income tax rises to 24%, 44% and 49%; Pension Tax Allowance starts; the Cash ISA limit stays at £20,000.
• April 2027: first Your First Home loans issued.
• 1 July 2027: fuel duty cut and electricity VAT relief end, unless extended again.
• April 2029: First Time Buyer ISA launches.
• April 2030: triple lock adjustment takes effect.

The bottom line

For most savers, the headline is good news: you can keep putting up to £20,000 a year into cash tax-free. The catch is that tax on interest outside an ISA is going up faster than expected, which makes using that allowance more valuable, not less. If you’re buying your first home, the new equity loan and the Lifetime ISA changes are worth understanding now, as some of them have already taken effect.