Autumn Budget 2026: What It Means for You

The Chancellor delivered the Budget on Wednesday 28 October 2026. Most of the announcements do not take effect straight away. Many changes start in April 2027, and some are years away. Notably, the Budget did not raise the headline rates of income tax, National Insurance or VAT.

This post sets out the updates that affect ordinary workers, savers and households, alongside the date each one begins. It is based directly on the official Budget documents published on GOV.UK. Please note that several changes still require new laws or regulations before they officially take effect.

Minimum wage from 1 April 2027

The National Living Wage and the National Minimum Wage will both rise by 3.9% on 1 April 2027:

• 21 and over: £13.21 an hour (up from £12.71)
• 18 to 20: £11.27 an hour
• Under 18: £8.31 an hour
• Apprentices: £8.31 an hour

These rates apply across the entire UK. Until 1 April 2027, current rates remain active. You can view our comprehensive minimum wage guide for a full side-by-side comparison table.

Energy bills and the £100 payment

£100 Household Energy Payment. Households in England in council tax bands A to D will receive a £100 payment starting in January 2027. The Budget outlines that this will be paid directly into bank accounts via the council tax system. The government has not yet confirmed whether households need to apply manually. Councils will also receive additional funding to give further help to some households in higher bands.

Note: This specific payment applies to England only. The Scottish and Welsh Governments and the Northern Ireland Executive will receive a funding share through the Barnett formula to use at their own discretion.

No VAT on household electricity until 30 June 2027. Household electricity has been zero-rated for VAT since 1 October 2026. Originally scheduled to expire on 31 March 2027, the Budget has extended this relief to 30 June 2027. The government expects this extension to shave roughly £50 off the annualised Ofgem price cap in April 2027.

Gas standing charges. The government has formally requested that Ofgem abolish gas standing charges on domestic bills, targeting the end of 2027 or as soon as possible thereafter. Energy suppliers would instead recover these costs through the gas unit rate. This means your ultimate savings will depend directly on how much gas you use. Electricity standing charges are also slated for reform, with structural details expected next year.

Side income and the self-employed

Trading allowance £1,000 to £3,000. From 6 April 2027, the tax-free trading allowance triples from £1,000 to £3,000. The Self Assessment reporting threshold for trading income will also rise to £3,000. This measure requires the upcoming Finance Bill to pass into law and will not apply to any income generated before 6 April 2027. The current £1,000 limit remains active until then.

Making Tax Digital penalty break. If you are required to join Making Tax Digital (MTD) for Income Tax in April 2027, you will benefit from an administrative grace period. The government will waive late-submission penalty points for quarterly updates during the 2027 to 2028 tax year. However, you must still submit your quarterly updates before you can file your final tax return. Anyone who already joined MTD in April 2026 is not eligible for this penalty holiday.

Mileage rates. From 6 April 2027, the approved tax-free mileage rate for business miles exceeding 10,000 miles a year rises from 25p to 35p a mile. This is the maximum rate employers can pay tax-free, and the rate self-employed workers can claim. Meanwhile, the temporary 55p rate for the first 10,000 miles is being made permanent.

Savings, property income and ISAs

Income tax on savings and property income. From 6 April 2027, income tax rates on savings income will rise to 24% (basic rate), 44% (higher rate), and 49% (additional rate). The exact same rates will apply to property income (such as residential rent) in England, Wales, and Northern Ireland. Scotland and Wales can set their own property income rates.

Cash ISA stays at £20,000. A previously proposed reduction to the cash ISA allowance has been reversed. The cash ISA limit stays at £20,000 for savers aged 18 and over from April 2027.

Lifetime ISA. Effective from 29 October 2026, the withdrawal charge for taking money out from a Lifetime ISA (LISA) to buy a residential home priced above the active LISA property cap drops from 25% to 20%. The standard 25% charge for other unauthorised early withdrawals remains unchanged. Additionally, a new First Time Buyer ISA is scheduled to launch in April 2029, intended to eventually replace the LISA framework for new savers.

Pensioners

The Pension Tax Allowance, first announced in the November 2025 Budget, will officially launch on 6 April 2027. The allowance is designed to shield pensioners whose total income is no more than the full new State Pension from being pulled into income tax as the State Pension rises. For individuals with total incomes above this threshold, the allowance reduces by £1 for every £3 of excess income. It is scheduled to run for three tax years (from 2027 to 2028 through to 2029 to 2030).

The Budget also stated that the government intends to adjust the State Pension triple lock mechanism starting in the next Parliament. No specific operational details or new calculations have been provided yet.

Drivers

The temporary 5p per litre fuel duty cut, alongside the broader fuel duty freeze, has been extended until 30 June 2027. Starting 1 July 2027, fuel duty is scheduled to revert to its baseline pre-cut level and will then rise in line with RPI inflation.

Carers

Under current rules, exceeding the weekly Carer's Allowance earnings limit triggers a "cliff-edge" where you lose your entire benefit payment. The Budget announces that this will be replaced by a progressive taper system, allowing payments to decrease gradually as your independent earnings rise. The taper is due to start during 2030 to 2031. Until then, the current earnings limit stays in place.

Not law yet

Remember, a Budget is a statement of intent. Most of these updates require the upcoming Finance Bill to clear Parliament or specific secondary regulations to be written. Until those steps happen, existing financial rules remain active and specific implementation details could shift. We will update our comprehensive site guides as each measure is formally locked in.

Sources: HM Treasury: Budget 2026 (28 October 2026); HM Treasury and HMRC: Budget 2026 Overview of Tax Legislation and Rates (28 October 2026); GOV.UK: National Minimum Wage and National Living Wage rates.