The 2026 Autumn Budget. What’s changing and what it means for you

The UK Government has just announced its 2026 Autumn Budget, outlining the plans for the economy, public spending, and taxation, against a backdrop of more resilience than expected from the UK economy.

Among the major announcements related to personal finances were a reversal of the planned cut to Cash ISA allowances and the creation of a new Your First Home ISA to support first time property buyers.

Other announcements included a further 2% tax increase on income from property and savings, from the 2% increase previously announced, and measures to help households with rising costs – particularly in relation to energy bills.

Staying informed about what's changing and what remains the same can help you make well-informed decisions about your financial future. Below, we explain the key points so you can focus on what matters to you, including previously announced changes that have yet to take effect.

Tax treatment depends on individual circumstances and may change in the future. If you’re unsure about how any Budget changes may affect you personally, you should seek advice from a qualified financial adviser or tax professional. Tax rules and allowances are subject to change. The value of any tax benefits will depend on your personal circumstances.

What’s changing

In an unexpected reversal of previously announced cuts, the annual Cash ISA allowance will remain at £20,000.

A new First Time Buyer ISA will be introduced from April 2029 to help savers build a deposit for their first home.

Holders of a Lifetime ISA who wish to purchase a property may withdraw their funds to do so provided they meet qualifying rules. 

Know your limits

The overall annual ISA allowance will remain £20,000 per person, and this limit is frozen until 2030/31.

The annual allowance can be used to fund Cash ISAs, Stocks & Shares ISAs, an Innovative Finance ISA, or any combination of the three.

From April 2029, the First Time Buyer ISA allowance will be £4,000 per year with a 25% government bonus.

For holders of a Lifetime ISA (LISA), the withdrawal charge for purchases of properties above the LISA property price cap will be reduced to 20%. The charge for unauthorised withdrawals will remain 25%.

All income and dividends received within an ISA are not subject to UK income or capital gains tax and investors can hold multiple ISAs at the same time.

What you might want to consider

Investors can maximise ISA allowances for the current tax year or top up any existing ISAs that they hold.

Savers interested in a First Time Buyer ISA and holders of Lifetime ISAs should visit the Government website for full details of the schemes.

What’s changing

The rates of property income tax will increase by a further 2% across all tax bands in April 2027.

The rates of savings income tax above the personal allowance will rise across all tax bands from April 2027. 

Know your limits

Property income tax is paid on money earned from renting out land or property, such as a house, flat, commercial space, or room in your home.

The first £1,000 of income from property rental is tax-free. This is your ‘property allowance’.

The rate of property income tax you pay depends on your overall income tax band. For the 2027 to 2028 tax year the rates will be:

• The property basic rate at 24%
• The property higher rate at 44%
• The property additional rate at 49%

The Personal Savings Allowance and rate of income tax you pay on savings above that allowance depend on your overall income tax band.

For the 2027 to 2028 tax year the income tax rates above the Personal Savings Allowance will be:

• The savings basic rate at 24%
• The savings higher rate at 44%
• The savings additional rate at 49%

What you might want to consider

For landlords or property investors, re-evaluate rental yield and return assumptions under the new levy regime.

Consider alternative investments other than Buy to Let.

For savers, be sure to know the interest rate you receive on your savings.

Factor any rate increases into your personal tax assessment and future budgeting, as more of your income may become taxable if you receive a pay rise or higher income. 

What’s changing

As previously announced, from April 2027 defined contribution pensions will no longer be exempt from inheritance tax (IHT) and the value will be included in a person’s estate on death for calculating any IHT liability.

Additionally, from April 2029, salary-sacrifice pension contributions above £2,000 per year will no longer be exempt from National Insurance Contributions (NICs).

Know your limits

The standard annual pension contribution allowance is £60,000, or up to 100% of a person’s earnings, whichever is lower. For high earners the allowance may be tapered. 

What you might want to consider

Review your overall pension planning strategy, taking into account the potential increase in the cost of funding your retirement.

Salary sacrifice will remain useful, but above £2,000 it loses NIC advantage post-2029.

Recalculate long-term retirement savings projections under the new rules to evaluate whether contribution levels need adjusting.

What’s changing

The Government announced the ‘Your First Home’ scheme that will help people take their first step onto the housing ladder. The scheme will provide equity loans to first-time buyers who would not otherwise be in a position to purchase a residential property.

As previously announced, from April 2028 a new ‘high-value property surcharge’, commonly referred to as the ‘Mansion Tax’, will apply to homes valued at £2 million or more. This will rise to £7,500 per year for properties valued above £5 million.

Stamp duty land tax and property taxes remain in place.

What you might want to consider

Prospective first-time buyers will be able to apply for the ‘Your First Home’ scheme from February 2027 and should visit the Government website for full details of the scheme.

If you own - or plan to buy - a property over £2 million, factor in the potential future surcharge when doing cashflow and long-term wealth planning.

What’s changing

The government is reducing the lifetime limit for capital gains eligible for Business Asset Disposal Relief (BADR) from £1 million to £500,000 from April 2027. 

What you might want to consider

Factor any rate changes into your personal tax assessment and future budgeting.

The above is a summary of some of the changes, to see a complete list of the Budget announcements, please visit the official Government website. If you’re unsure about how any Budget changes may affect you personally, you should seek advice from a qualified financial adviser or tax professional.