Autumn Budget 2026: what was announced and what it means for you

What was announced at the Autumn Budget on 28 October 2026

The Budget did not raise the headline rates of income tax, National Insurance or VAT, and it left every 2026/27 income tax, National Insurance, capital gains tax, dividend and ISA allowance figure as it was. Inside the 2026/27 tax year, the Lifetime ISA withdrawal charge for a first home above the £450,000 price cap fell from 25% to 20% for withdrawals on or after 29 October 2026, the 5p fuel duty cut was extended to 30 June 2027 with the January and March 2027 rises cancelled, and households in council tax bands A to D in England get a one-off £100 Household Energy Payment from January 2027. The larger changes start on 6 April 2027: savings and property income rates of 24%, 44% and 49% (instead of the 22%, 42% and 47% legislated at Budget 2025), a cash ISA limit that the government announced stays at £20,000 instead of falling to £12,000 for under-65s (the regulations that set the lower limit are to be amended), a Business Asset Disposal Relief lifetime limit of £500,000 (down from £1 million) and a £3,000 trading allowance (up from £1,000).

Sources, checked on 29 October 2026: HM Treasury, Budget 2026 (the Red Book); HMRC, Budget 2026: overview of tax legislation and rates (OOTLAR) and its Annex A, rates and allowances; OBR, Economic and fiscal outlook, October 2026; the HMRC and HM Treasury papers linked row by row below. Paragraph numbers refer to those documents.

What changes when

Measures that apply in the 2026/27 tax year

Measures from 6 April 2027 or later

The fiscal backdrop

The Treasury’s policy decisions table shows the Budget’s measures costing £7.6bn in 2026-27 and £2.5bn in 2027-28, then raising money from 2028-29, to a net £7.35bn in 2031-32 (Red Book, Table 6.1). The OBR describes the package as broadly neutral on average over its forecast (OBR, 3.6).

Already decided before the Budget

Income tax and thresholds

ISAs and savings

Pensions

Property and capital gains

Family and benefits

Motoring and duties

Rates and allowances for 2027/28

Scotland and Wales: Annex A gives no Scottish income tax rates or bands for 2027/28; the Scottish Government said further details would come in the Scottish Budget on 3 December 2026 (Scottish Government, 28 October 2026), and the Welsh Government referred to its Budget being published on 17 November 2026 (Welsh Government, 28 October 2026).

Budget day: Wednesday 28 October 2026 Confirmed

John Healey presented Budget 2026 to Parliament on Wednesday 28 October 2026 (GOV.UK, Budget 2026), the date he had set in a letter to the Treasury Select Committee published on GOV.UK on 31 July 2026: “The Budget will be held on 28 October 2026” (GOV.UK, Chancellor letter to the Treasury Select Committee). It was a Budget of firsts: John Healey’s first as Chancellor (he was appointed on 20 July 2026, succeeding Rachel Reeves), and the first fiscal event since Andy Burnham became Prime Minister on the same day (GOV.UK, Chancellor of the Exchequer; GOV.UK, Prime Minister). In his growth speech on 7 September 2026, Healey had said that “fiscal discipline was my first priority” and that he and the Prime Minister were “in lockstep in our commitment to meeting the fiscal rules at the upcoming Budget” (GOV.UK, Chancellor John Healey’s Growth Speech 2026).

The Office for Budget Responsibility published its full economic and fiscal forecast alongside the Budget; its new figures are in the fiscal backdrop table above. For how the previous fiscal event set the rules for this tax year, see our Autumn Budget 2025 summary; for the measures already in force in 2026/27, what changed in 2026/27.

How to read this page: the status labels

Pre-Budget coverage blurs the line between law, briefing and guesswork. We don’t. Before the Budget, every theme on this page carried one of four labels, and every claim named its source:

• Confirmed — announced government policy or legislation (enacted or in draft), with an official source. Not Budget speculation: this happens unless the government actively reverses it.
• Expected — strongly signalled by ministers or the near-consensus of serious analysts (IFS, NIESR, the big accountancy firms). Not yet law; could still change.
• Rumour — credible reporting or analyst speculation with no government confirmation. History says most Budget rumours do not happen. We said who was circulating it and why.
• Ruled out — explicitly ruled out by the government, or floated and formally dropped. A political pledge, not a law of physics — but breaking one carries a heavy price.

After the Budget, each theme’s heading shows its outcome, using the same labels plus two more:

• Changed: the Budget changed a figure, date or rule; the row says what and from when.
• Not announced (plain text, no label): the Budget documents contain no such measure.

The label each theme carried before the Budget is kept beside it in the outcome tables at the top of the page. Nothing on this page is our invention. Where we add our own reading, we say so in plain terms, and every worked “what it means for you” number is labelled as illustrative arithmetic.

The fiscal backdrop before the Budget

Three numbers framed the Budget. The OBR’s new figures for each are in the fiscal backdrop table at the top.

• Headroom of about £22 billion, last measured in November 2025. At Budget 2025 the OBR judged the fiscal mandate (balancing the current budget in 2029–30) met by £22bn, 0.6% of GDP, up from £10bn in March 2025 (OBR, Economic and fiscal outlook, November 2025). The March 2026 spring forecast did not re-assess the fiscal rules, because the OBR now does that only once a year, at the Budget (OBR, Economic and fiscal outlook, March 2026). So the forecast published with the 28 October Budget was the first new test of the rules for eleven months.
• Borrowing running £8.1 billion above forecast. Public sector borrowing was £77.3bn in April–August 2026, £8.1bn above the OBR’s forecast, mainly because central government spending, including social benefits and debt interest, was higher than expected (ONS, Public sector finances: August 2026, published 22 September 2026). When we checked on 2 October 2026, the ONS had scheduled the next release, covering September, for 21 October, a week before the Budget.
• New cost-of-living measures. The Burnham government removed VAT from household electricity in Great Britain from 1 October 2026 to 31 March 2027, at an estimated cost of around £850m in 2026–27, paid for by cancelling the Digital ID programme (GOV.UK, 21 July 2026). It also announced a £2 cap on single bus fares in England outside London from 1 January to 31 December 2027, with £400m of extra funding taken from elsewhere in government budgets (GOV.UK, 22 July 2026). Whether the VAT cut would continue beyond March 2027 was left to the Budget, which extended it to 30 June 2027.

Borrowing above forecast, with the main income tax, VAT and employee NI rates pledged away, was why serious previews (for example Alexander & Co’s Budget 2026 preview) looked to thresholds and allowances, capital gains tax, reliefs and property- or wealth-related measures for any revenue-raising, rather than headline rates. In the event, the OBR’s largest revenue raisers were the cut in writing-down allowances (about £1bn a year from 2027-28), the higher savings and property income rates (about £1bn a year from 2028-29), the temporary rise in the bank surcharge (about £1bn in 2027-28) and smaller, more regular Self Assessment payments (an average of £1.6bn a year from 2029-30) (OBR, Economic and fiscal outlook, October 2026, paragraph 3.4).

Already decided before the Budget: the baseline, and what happened to it

A surprising amount of what gets reported as “Budget news” was already law or announced government policy before 28 October. As at 2 October 2026, this was the confirmed baseline. The Budget outcome for each item follows it, and the outcome table at the top gives the source:

• Cash ISA cap from 6 April 2027. Before the Budget, cash ISA subscriptions were to be capped at £12,000 a year for under-65s (65-and-overs keeping £20,000), with a 22% charge on interest on cash held inside Stocks & Shares or Innovative Finance ISAs and restrictions on transfers from those ISAs into Cash ISAs. The Individual Savings Account (Amendment) (No. 2) Regulations 2026 were made on 10 September 2026 to bring this in on 6 April 2027 (legislation.gov.uk, SI 2026/1018; GOV.UK policy paper, 17 September 2026). Budget outcome: Changed. The government announced that the cash ISA limit stays at £20,000 from April 2027, with a new statutory instrument to amend the regulations; the Budget documents do not say whether the interest charge and the transfer rules also go. Detail in our ISA guide’s April 2027 section.
• Savings and property income rates up 2 points from 6 April 2027, to 22% basic, 42% higher and 47% additional (the property rates in England, Wales and Northern Ireland), as announced at Budget 2025 (GOV.UK policy paper). Budget outcome: Changed. A further 2 points, to 24%, 44% and 49% from 6 April 2027 (OOTLAR 1.1 and 1.2). The savings interest tax calculator uses the 2026/27 rules.
• Unused pension pots enter inheritance tax from 6 April 2027 — announced at Budget 2024 and legislated in Finance Act 2026 (Royal Assent 18 March 2026), for deaths on or after that date (GOV.UK technical note). Our 2027 pensions-into-IHT guide covers who is affected. Budget outcome: Confirmed. The 6 April 2027 start stands, with two technical amendments (OOTLAR 1.27).
• Making Tax Digital for Income Tax expands from April 2027 — the threshold drops from £50,000 to £30,000 of qualifying self-employment and property income, then £20,000 from April 2028 (GOV.UK guidance). See our MTD ITSA guide. Budget outcome: Confirmed. The thresholds and dates are unchanged; people joining in April 2027 get no late-submission penalty points for their 2027/28 quarterly updates (Red Book 7.15).
• Income tax thresholds frozen to April 2031 — the £12,570 personal allowance and £50,270 higher-rate threshold, extended for three further years at Budget 2025 (GOV.UK policy paper). Budget outcome: Confirmed. No change; Annex A shows the same thresholds for 2027/28.
• Fuel duty: 3p a litre on 1 January 2027 and a further 2p on 1 March 2027, from 52.95p to 55.95p and then 57.95p a litre for petrol and diesel, was the “legislative default” in the amended plan published on 22 May 2026, which said the government would confirm final rates at Budget 2026 (GOV.UK). Budget outcome: Changed. Both rises were cancelled: 52.95p until 30 June 2027, then 60.59p from 1 July 2027 (OOTLAR 2.18).
• The “mansion tax” (High Value Council Tax Surcharge) from April 2028 on homes in England worth £2m or more, at £2,500–£7,500 a year. Announced at Budget 2025, with the detailed rules and legislation to follow (GOV.UK policy paper). Budget outcome: Confirmed. The £2 million threshold, the four bands and the 1 April 2028 start, with first bills in March 2028.
• Salary-sacrifice pension cap from April 2029 — only the first £2,000 a year of sacrificed contributions is to keep its NI exemption. The National Insurance Contributions (Employer Pensions Contributions) Act 2026, which received Royal Assent on 29 April 2026, gives the government the power to apply the cap (CIPP). Budget outcome: Confirmed. Not reversed; the Budget documents give no new detail or start date, and the OBR’s re-costing refers to the £2,000 annual threshold (OBR 3.28).

The Budget could build on, tweak or (in principle) reverse any of these, but reversal needed an announcement and, in most cases, fresh legislation. In the event it changed three (it reversed the cash ISA cut, raised the savings and property rates further and cancelled the fuel duty rises) and left the other five in place.

Income tax and thresholds

Rises in income tax, VAT or employee NI rates Ruled out

Outcome: Ruled out, and the pledge held. The Red Book states that the Budget does not increase the headline rates of income tax, National Insurance contributions or VAT (Red Book 3.6). It used the route the caveat below describes instead: the rates on savings and property income rise to 24%, 44% and 49% from 6 April 2027.

Before the Budget: on taking office, Andy Burnham committed to Labour’s 2024 manifesto pledge not to increase the main rates of income tax, VAT or employee National Insurance (Saffery, 21 July 2026), and the Institute for Government read Healey’s 7 September growth speech as ruling out a breach again (Institute for Government, 7 September 2026). One honest caveat: Budget 2025 showed how a government can raise income tax rates on specific income types (dividends, savings, property) while keeping the pledge on the main rates. That route stayed open.

The threshold freeze rolls on — fiscal drag is the tax rise nobody announces Confirmed

The personal allowance (£12,570) and higher-rate threshold (£50,270) are frozen to April 2031 (GOV.UK policy paper), and the Budget left the freeze alone: Annex A shows the same thresholds for 2027/28 (Annex A). As pay rises and the thresholds stand still, more people are drawn into higher tax bands each year. The OBR says rising income tax and National Insurance receipts, with personal tax thresholds frozen, are the largest driver of the rising tax take (OBR 1.20).

What it means for you (illustrative arithmetic, re-run on the Budget figures on 29 October 2026): crossing £50,270 takes your marginal rate from 28% (20% tax + 8% NI) to 42% (40% tax + 2% NI). So each £1,000 of pay that inflation drags above the frozen threshold costs about £140 a year more than if the threshold had risen with it. The result is the same as before the Budget, because the thresholds and the 8% and 2% NI rates are unchanged for 2027/28. Put your own salary through the Tax Drag Calculator, and see the cumulative effect on the fiscal drag tracker.

A higher personal allowance: not announced

Outcome: not announced. The Personal Allowance stays at £12,570 in 2027/28 (Annex A). The one targeted change is the Pension Tax Allowance from 6 April 2027: people over State Pension age whose total income is no more than the full new State Pension get up to £94 off their Income Tax, which clears it for most (OOTLAR 1.4).

Before the Budget (labelled Rumour): Burnham told The Times that the frustration about the frozen personal allowance he heard while campaigning was “lodged in my mind”. By 22 July 2026 he was describing any change as “difficult given the financial circumstances”, while saying “all of this will be looked at” at the Budget (Professional Adviser, 22 July 2026). We treated it as an aspiration rather than a plan: every £100 added to the personal allowance is worth £20 a year to a basic-rate taxpayer, but the cost runs into billions across tens of millions of taxpayers, at a time when borrowing was running above forecast. No serious analyst pencilled it in.

Reversing the dividend and savings rate rises: not announced

Outcome: not announced, and savings went the other way. Dividend rates stay at 10.75%, 35.75% and 39.35%, with the £500 allowance, in 2027/28 (Annex A), and the Chancellor said in the speech that there would be no change to tax on dividend income (Budget 2026 speech). Savings income rates rise further than planned, to 24%, 44% and 49% from 6 April 2027 (OOTLAR 1.1).

Before the Budget (labelled No credible reporting): the dividend rates rose to 10.75% (basic) and 35.75% (higher) on 6 April 2026 (GOV.UK), and the 2-point savings and property rises were legislated for April 2027. As of 2 October 2026 we had found no credible reporting that the government planned to reverse either. Our plain reading at the time (Expected) was that the announced rates would stand, because reversal would cost revenue while borrowing was running above forecast. The dividend tax calculator uses the 2026/27 rates.

ISAs and savings

The £12,000 Cash ISA cap from April 2027: reversed Changed

Outcome: reversed. The government announced at the Budget that it is not going ahead with the cut: the cash ISA limit stays at £20,000 from April 2027, including for savers under 65 (OOTLAR 2.5; Red Book 1.2). The lower limit is still written into SI 2026/1018, which comes into force on 6 April 2027 unless it is amended; the Budget said a new statutory instrument would be laid in November 2026 to keep the limit at £20,000. The overall ISA allowance stays at £20,000 for 2027/28 (Annex A).

Before the Budget (labelled Confirmed): this was the one big “Budget 2026” story that was not speculation, and from September it was law. The Individual Savings Account (Amendment) (No. 2) Regulations 2026 were made on 10 September 2026 and laid before Parliament on 14 September, to come into force on 6 April 2027 (legislation.gov.uk, SI 2026/1018). They capped Cash ISA subscriptions at £12,000 a year for under-65s, kept the full £20,000 for the 65-and-overs, added a 22% charge on interest paid on cash held inside investment ISAs, and restricted transfers from investment ISAs into Cash ISAs. HMRC’s tax information and impact note followed on 17 September (GOV.UK policy paper). The draft was consulted on from 25 June to 2 August 2026 (GOV.UK consultation).

What it means for you (illustrative arithmetic, re-run on the Budget figures on 29 October 2026): before the Budget, an under-65 saver who wanted to put £20,000 into cash would have had to redirect £8,000 from April 2027; with the limit kept at £20,000 as announced, that is no longer needed. The difference shows if the £8,000 sits outside an ISA instead: in an ordinary savings account at an illustrative 4.5% it earns £360 a year of interest, tax-free if it fits inside your Personal Savings Allowance. If the allowance is already used up, the tax is £72 (basic rate) or £144 (higher rate) in 2026/27 and, at the 2027/28 savings rates of 24% and 44%, £86.40 or £158.40. More detail: what changes in April 2027 in our ISA guide, and the savings interest tax calculator.

Softening the ISA package Changed

Outcome: partly. The cash cap was reversed (above), and the Lifetime ISA withdrawal charge for a first home above the £450,000 price cap fell from 25% to 20% for withdrawals on or after 29 October 2026 (OOTLAR 2.4). The Budget documents do not say whether the other rules made with the cap also go: the charge on interest from cash held in stocks and shares or Innovative Finance ISAs, and the limit on transfers into a cash ISA to people aged 65 or over. The government also said it would explore, with the investment industry, a new incentive for people putting money into a stocks and shares ISA for the first time; its design, value and start date were left to that work (Red Book 3.9 and 7.21).

Before the Budget (labelled Rumour): reaction to the draft rules was critical. MoneySavingExpert’s founder, Martin Lewis, called the 22% charge on cash held in stocks and shares ISAs “a very blunt tool” that “will be very frustrating for many stocks and shares ISA holders” (MoneySavingExpert, 23 June 2026). But the government went ahead: the final regulations were made in September. Changing them would need new regulations, and there was no government signal of a rethink. Our plain reading at the time (Expected) was that the cap would start on 6 April 2027 as made; the Budget proved that reading wrong.

Pensions

Cutting pension tax-free cash or tax relief: not announced

Outcome: not announced. No change to the 25% tax-free lump sum, the £268,275 Lump Sum Allowance, the £60,000 annual allowance or the rates of pension tax relief (Annex A). Pension death benefits got a relaxation instead: the two-year rule was removed for lump sum death benefits paid on or after 28 October 2026 (OOTLAR 1.18).

Before the Budget (labelled Rumour, and a perennial one): honesty first, a raid on the 25% tax-free lump sum or higher-rate relief is rumoured before every Budget, and it had not happened at any recent one. Ahead of Budget 2025, reports said tax-free cash cuts were explicitly off the table (Hargreaves Lansdown). This cycle, AJ Bell asked Healey to commit to a “Pension Tax Lock” on tax-free cash and tax relief, because the speculation does real damage: it said FCA data point to an extra £10 billion withdrawn around the 2024 Budget alone (AJ Bell, 28 July 2026). Taking tax-free cash cannot usually be undone, and money taken out leaves the pension’s tax shelter; pension tax traps sets out the costs of acting early.

The 2029 salary-sacrifice cap: kept, softened or scrapped? Confirmed

Outcome: kept, with no new detail. The Red Book mentions the cap only as an earlier decision and gives no new figure or start date (Red Book 2.2). The OBR re-costed the Budget 2025 measure, which ends the NI exemption for salary-sacrificed pension contributions above £2,000 a year, and raised its expected yield by an average of about £0.4 billion a year in 2029-30 and 2030-31 (OBR 3.28).

Before the Budget (labelled Confirmed, with reversal a rumour): from April 2029, only the first £2,000 a year of salary-sacrificed pension contributions is to keep its NI exemption, as announced at Budget 2025, with the power to apply the cap in the National Insurance Contributions (Employer Pensions Contributions) Act 2026 (CIPP). AJ Bell had urged Healey to take “a second look”, saying the biggest impact would cluster around employees earning £45,000–£50,000 (AJ Bell, 23 July 2026). What it means for you (illustrative arithmetic, re-run on 29 October 2026 and unchanged, because the employee and employer NI rates stay at 8% and 15% in 2027/28): sacrifice £6,000 a year and the £4,000 above the cap would attract employee NI at 8%, about £320 a year, plus employer NI at 15% (£600) that employers may pass on. Model your own set-up with the salary sacrifice calculator.

Pensions into inheritance tax from April 2027 Confirmed

Outcome: confirmed. Unused pension funds and pension death benefits enter the estate for inheritance tax from 6 April 2027, as already legislated in Finance Act 2026. The Finance Bill adds two technical changes: in some cases a prospective personal representative can tell scheme administrators to pay the inheritance tax due to HMRC, and those administering an estate can choose where pension property sits when working out the 36% rate for estates leaving at least 10% to charity (OOTLAR 1.27).

Before the Budget: unused pension pots were set to enter the IHT net from 6 April 2027, a Budget 2024 measure legislated in Finance Act 2026 for deaths on or after that date (GOV.UK technical note). AJ Bell had urged Healey to reconsider it and look for a simpler approach (Pensions Age, 3 August 2026), but nothing credible suggested the Budget would reverse it, and it did not. Who it catches, and the estate-planning consequences, are in our 2027 pensions-into-IHT reform guide.

Property and capital gains

The £2m+ “mansion tax” stays on track for April 2028 Confirmed

Outcome: confirmed, with the detail now published. The surcharge starts on 1 April 2028 on homes in England worth £2 million or more (2026 values), in four bands: £2,500 a year (£2m to £2.5m), £3,500 (£2.5m to £3.5m), £5,000 (£3.5m to £5m) and £7,500 (£5m and over). Owners pay it on top of their council tax, and councils send the first bills in March 2028. HMRC and HM Treasury estimate that around 150,000 individuals will be liable. No lower £1.5 million threshold was announced (HMRC and HM Treasury, high value council tax surcharge; HM Treasury factsheet, updated 28 October 2026; OOTLAR 1.22).

Before the Budget: the High Value Council Tax Surcharge, announced at Budget 2025, was set to apply from April 2028 to homes in England valued at £2m or more in 2026: £2,500 a year (£2m–£2.5m) rising in bands to £7,500 (£5m and over), paid by owners on top of council tax and raising an estimated £430m a year (GOV.UK policy paper). The detailed rules and the legislation had not been published. One preview reported that the government had considered lowering the threshold from £2m to £1.5m (labelled Rumour), with no official confirmation (Alexander & Co).

CGT rates or reliefs Changed

Outcome: rates unchanged, reliefs changed. The main rates stay at 18% and 24% and the annual exempt amount at £3,000 in 2026/27 and 2027/28, so 2026/27 disposals are taxed at the same rates and with the same allowance (Annex A). For disposals on or after 6 April 2027, the Business Asset Disposal Relief lifetime limit halves from £1 million to £500,000, at the same 18% rate (OOTLAR 1.33), and a new Founders’ Relief taxes qualifying disposals by founders and early investors in high-growth companies at 10% on up to £10 million of lifetime gains (OOTLAR 1.32). The government says three in four Business Asset Disposal Relief claimants will still get relief on their whole gain.

What it means for you (illustrative arithmetic, re-run on the Budget figures on 29 October 2026): the rate alignment discussed before the Budget did not happen, so a higher-rate taxpayer with a £20,000 taxable gain still pays £4,800 at 24%, in 2026/27 and in 2027/28. The change that bites is the relief limit. A higher-rate taxpayer with an £800,000 gain that qualifies for Business Asset Disposal Relief, and none of the lifetime limit used, pays £144,000 at 18% on a disposal in 2026/27. On a disposal on or after 6 April 2027, only £500,000 gets the 18% rate (£90,000) and the other £300,000 is taxed at 24% (£72,000): £162,000 in all, £18,000 more, before the annual exempt amount. Current rules and rates: our capital gains tax guide 2026/27.

Before the Budget (labelled Rumour): capital gains tax was on most analysts’ lists of “commonly discussed” candidates for this Budget (Alexander & Co), partly because it sits outside the manifesto pledge. Business Asset Disposal Relief’s rate had already risen from 14% to 18% on 6 April 2026 (GOV.UK). One recurring proposal was aligning CGT with income tax rates: on the same £20,000 gain, tax at 40% would have been £8,000, £3,200 more than at 24%.

Lifetime gift caps and main-residence CGT: not announced

Outcome: not announced. The Budget made no change to the inheritance tax rules on lifetime gifts (the seven-year rule, the annual exemption, gifts out of normal income) or to principal private residence relief (Red Book; OOTLAR).

Before the Budget (labelled Rumour, dormant): both were heavily trailed before Budget 2025 and did not materialise (Macfarlanes). We found no fresh, credible reporting that either was back on the table for this Budget.

For landlords: the Budget and the backdrop Changed

Outcome: changed. Property income rates rise further than planned, to 24%, 44% and 49% from 6 April 2027 in England, Wales and Northern Ireland, instead of the 22%, 42% and 47% set at Budget 2025 (OOTLAR 1.2). The government also published a consultation on how HMRC collects property income data from third parties, and a landlord registration fee for the private rented sector appears in a footnote to the Red Book’s Table 6.1 with no amount or start date (Red Book 7.15 and Table 6.1).

Before the Budget (labelled Confirmed): two already-confirmed tracks shaped landlord maths regardless of the Budget: property income tax rates rising 2 points from April 2027, and the Renters’ Rights Act phasing in. Section 21 evictions ended and tenancies became periodic from 1 May 2026, with the PRS database rolling out from late 2026 (NRLA).

Family and benefits

High Income Child Benefit Charge: not announced

Outcome: no change to the thresholds. The charge still starts at £60,000 of income and equals the full Child Benefit above £80,000. The one HICBC measure is administrative: HMRC sets a Child Benefit overpayment against any charge already paid for the same overpayment, from Royal Assent to Finance Bill 2026-27 and backdated to January 2013 (HMRC, Child Benefit overpayments and the High Income Child Benefit Charge). Child Benefit itself rises to £28.00 a week for the eldest or only child and £18.55 for each other child in 2027/28 (Annex A).

Before the Budget (labelled No credible rumours either way): we tracked it because fiscal drag makes it bite harder every year the thresholds stand still, but as of 2 October 2026 we had found no credible reporting of planned HICBC changes at this Budget. If your income sits near the taper, check where you stand with our HICBC threshold and taper guide and the HICBC calculator . Under the current rules, a pension contribution lowers adjusted net income, which is what the charge is worked out on.

The cost-of-living package: the electricity VAT cut extended Changed

Outcome: extended, with a new payment added. The 0% VAT rate on household electricity in Great Britain, in place since 1 October 2026, is extended by three months to 30 June 2027 (OOTLAR 2.20), and the government expects the extension to take around £50 off the annual Ofgem price cap in April 2027 (Red Book 4.3). Northern Ireland is still at 5%, and the Red Book says extended relief is expected to apply there from April 2027. Households in council tax bands A to D in England also get a one-off £100 Household Energy Payment through the council tax system from January 2027: those who pay council tax by Direct Debit receive it automatically, and others are invited by their council to apply (DESNZ, 28 October 2026). The £2 bus fare cap for 2027 is confirmed. The Red Book links the temporary rise in the bank surcharge, from 3% to 6% between 1 January 2027 and 31 March 2028, to paying for the energy support. More on the cap: our energy price cap guide.

Before the Budget (labelled Confirmed to 31 March 2027): VAT on household electricity in Great Britain fell from 5% to 0% on 1 October 2026, to stay at 0% until 31 March 2027; in Northern Ireland it stayed at 5% (HMRC Revenue and Customs Brief 10 (2026)). Ofgem’s price cap for 1 October to 31 December 2026 is £1,723 a year for a typical dual-fuel household paying by Direct Debit, up £60 (4%), and Ofgem says the rise would have been around £45 higher without the VAT cut (Ofgem, 26 August 2026). Single bus fares in England outside London were already set to be capped at £2 from 1 January to 31 December 2027 (GOV.UK). Whether the electricity VAT cut would be extended past March 2027, and how any extension would be paid for, was left to the Budget.

Motoring and duties

Fuel duty: the 3p rise on 1 January 2027 and 2p in March, both cancelled Changed

Outcome: both rises cancelled. The 5p cut is extended for six months, so the main rate for petrol and diesel stays at 52.95p a litre until 30 June 2027 (the Red Book words this as “to 1 July 2027”). On 1 July 2027 the cut ends and the rate returns to its pre-March 2022 level uprated by RPI: 60.59p a litre (OOTLAR 2.18; Annex A).

What it means for you (illustrative arithmetic, re-run on the announced rates on 29 October 2026): the 3p rise this example used to price (about 3.6p a litre at the pump once VAT is added, £1.98 a 55-litre tank, around £49 a year at 12,000 miles and 40mpg) does not happen. The step on 1 July 2027 is 7.64p a litre of duty, about 9.2p at the pump with VAT: roughly £5.04 more per 55-litre tank, or around £125 a year for the same driver once it has applied for a full year.

Before the Budget (labelled Legislative default): the legal position, amended in May 2026, had the duty freeze running to the end of 2026, a 3p-a-litre rise on 1 January 2027 and a further 2p on 1 March 2027, restoring the pre-2022 rate of 57.95p in full. The government called this the “legislative default” and said final rates would be confirmed at Budget 2026 (GOV.UK, amended Fuel Duty rates, 22 May 2026).

Cancelling the rise, again Confirmed

Outcome: it happened. The rises were cancelled and the RPI increase deferred to 1 July 2027; the Red Book says fuel duty is now as low as at any point for over 16 years (Red Book 4.4). The Treasury’s policy decisions table costs the extended cut at £575 million in 2026-27 and £780 million in 2027-28 (Red Book, Table 6.1).

Before the Budget (labelled Rumour): every pencilled-in fuel duty rise since 2011 had been cancelled or deferred at a fiscal event, a pattern the OBR documents (OBR, fuel duties), and preview coverage flagged fuel duty as squarely in play depending on conditions (Alexander & Co). But a “cost of living government” that also needed the revenue faced a genuine dilemma: cancelling the rises would cost revenue while borrowing was running above forecast. We labelled cancellation a rumour, not an expectation, because history leaned one way and that year’s arithmetic the other. History won.

Rules for the rest of 2026/27

The Budget left these 2026/27 rules as they were. Changes announced for later years do not alter what has already been done under them:

• The 2026/27 ISA allowance. The £20,000 allowance applies for this tax year. With the cash ISA cut reversed, the government has announced the same £20,000 cash limit for 2027/28, including for savers under 65. Start with the complete ISA guide.
• Know the CGT annual exempt amount. The £3,000 allowance dies with the tax year, and it stays at £3,000 in 2027/28. The Budget left the 18% and 24% rates unchanged for both years; the Business Asset Disposal Relief lifetime limit falls to £500,000 for disposals on or after 6 April 2027. Whether or when to realise a gain depends on your own circumstances. Rules and rates: the CGT guide 2026/27.
• Pension headroom on current rules. Annual allowance plus carry-forward applies now, with relief at the current marginal rate, and the Budget left the £60,000 annual allowance and the rates of relief unchanged; the pension carry-forward calculator shows the headroom. Tax-free cash, once taken, cannot usually be put back; pension tax traps explains why taking it on a rumour so often goes wrong.
• Frozen thresholds. The thresholds are frozen to 2031, and the Budget left them there, so a pay rise can take more of each extra pound in tax; the Tax Drag Calculator shows where a salary sits.
• If HICBC or the 60% trap is near, adjusted net income decides it — pension contributions and Gift Aid reduce it under the current rules. More in the HICBC threshold guide.
• The seasonal checklist. Our Autumn 2026 money checklist lists the dates and deadlines for the rest of the year.

After Budget day (28 October 2026): what changed on this page

Once the Budget documents were out, we checked every theme against them on 29 October 2026 and changed the page in four ways:

• Every theme above was re-labelled with its outcome: Confirmed, Changed or Ruled out, or “not announced” in plain text where the documents contain no such measure, with the Red Book, the overview of tax legislation and rates, the OBR forecast or an HMRC paper as the source.
• A “What was announced” section went at the top, with a table of what changes when, separating the measures that apply in 2026/27 from those starting on 6 April 2027 or later.
• Every worked example was re-run against the announced figures. The fiscal drag (£140) and salary-sacrifice (£320 and £600) examples come out the same; the cash ISA, capital gains tax and fuel duty examples now use the Budget outcome. The 2026/27 calculators needed no new rates, because no 2026/27 income tax, NI, capital gains tax, dividend or ISA allowance figure changed. Each change is in the update log below.
• The hero, the short version, the FAQs and the page descriptions now describe what was announced. For the measures already in force this tax year, see what changed this tax year; for the previous fiscal event, our Budget 2025 summary.

The address of this page stays the same.

Update log

• 29 October 2026: Budget outcome added from the documents published on 28 October 2026, checked on 29 October 2026: HM Treasury, Budget 2026; HMRC, overview of tax legislation and rates and Annex A; OBR, Economic and fiscal outlook, October 2026; and the HMRC and HM Treasury papers linked in the tables. New “What was announced” section, and every theme re-labelled. Changed: the cash ISA cap (reversed), savings and property income rates, fuel duty, the electricity VAT cut, capital gains tax reliefs and the landlord backdrop. Confirmed: the threshold freeze, pensions into inheritance tax, the salary-sacrifice cap, the Making Tax Digital thresholds, the mansion tax, the bus fare cap and the fuel duty cancellation. Ruled out, and held: headline rate rises. Not announced: a higher personal allowance, reversing the dividend and savings rises, pension tax-free cash or relief cuts, lifetime gift caps and main-residence CGT, and HICBC threshold changes. Worked examples re-run; fiscal backdrop, hero, title, short version, FAQs and descriptions updated.
• 2 October 2026 — Full re-check of every theme against its source, and corrections. The fiscal backdrop now uses the OBR’s last assessment of the fiscal rules (£22bn of headroom at Budget 2025); the £9.9bn figure we gave was the March 2025 figure, and the March 2026 forecast did not assess the rules. The Budget date is now sourced to the Chancellor’s letter on GOV.UK, replacing two news reports. The fuel duty default is stated in full (3p on 1 January 2027, 2p on 1 March 2027; we had also listed RPI uprating from April 2027 as part of the amended plan, which does not set it). The mansion tax and salary-sacrifice cap are described as announced policy with legislation or regulations still to come, and pensions-into-IHT as legislated in Finance Act 2026. The personal allowance theme now reflects the Prime Minister’s comments of 22 July 2026. The dividend-reversal theme is relabelled “No credible reporting”, because the report we cited did not support it. Revenue and population estimates, and a provider comment on the ISA rules, that their cited sources did not contain were removed.
• 1 October 2026 (logged 2 October) — The 0% VAT rate on household electricity in Great Britain took effect, alongside Ofgem’s new price cap. Family and benefits section updated.
• 22 September 2026 (logged 2 October) — ONS public sector finances for August 2026: borrowing of £77.3bn in April–August, £8.1bn above the OBR’s forecast. Fiscal backdrop updated (it previously used the June 2026 release).
• 10 September 2026 (logged 2 October) — The Cash ISA regulations were made (SI 2026/1018, laid before Parliament on 14 September, in force from 6 April 2027), with HMRC’s policy paper published on 17 September. Status stays Confirmed; the ISA section and FAQ now say the cap is law.
• 8 September 2026 (logged 2 October) — HMRC Revenue and Customs Brief 10 (2026) confirmed the temporary 0% VAT rate on household electricity runs from 1 October 2026 to 31 March 2027 in Great Britain, with Northern Ireland staying at 5%.
• 7 September 2026 (logged 2 October) — Chancellor’s growth speech: he called fiscal discipline his “first priority” and said the government would meet the fiscal rules at the Budget. No status change.
• 26 August 2026 (logged 2 October) — Ofgem confirmed the 1 October to 31 December 2026 price cap: £1,723 a year for a typical dual-fuel household, up £60 (4%), and around £45 lower than it would have been without the VAT cut.
• 2 August 2026 — Page launched. Budget date (28 October) confirmed sourcing added; fiscal backdrop from the March 2026 OBR forecast and June 2026 ONS borrowing data; first status pass on all themes. The ISA technical consultation closes today — we will link the government response when published.

Dated entries are added here every time a status changes, so you can see exactly what moved and when. Spot something we have missed? Tell us via the contact form.

Budget 2026 FAQs