The Budget on 28 October 2026 was more about the next few years than about this one. If you're employed, your pay packet won't change because of it before April. But there are changes to savings, energy bills and help for first-time buyers that are worth knowing about now.
Your pay: no change this tax year
The headline rates of income tax and National Insurance stay the same. The personal allowance stays at £12,570 and the 40% rate still starts at £50,270. Those thresholds are now frozen until 2031.
A freeze sounds like nothing happens, but as wages rise more of your pay gets taxed at the higher rates. If your pay goes up, it's worth checking where you now sit.
ISAs: the cash ISA cut is off
The plan to cut the cash ISA limit to £12,000 for under-65s from April 2027 has been scrapped. You can still save up to £20,000 a year in ISAs, all in cash if you want.
That matters more than before because tax on savings interest outside an ISA rises from April 2027, to 24% for basic-rate taxpayers (44% higher rate, 49% additional rate). The Personal Savings Allowance stays: £1,000 of interest a year tax-free for basic-rate taxpayers and £500 for higher-rate taxpayers.
Buying your first home
- Lifetime ISA: from 29 October 2026 the charge for using it on a home over £450,000 falls from 25% to 20%.
- First Time Buyer ISA: from April 2029 it replaces the Lifetime ISA for new savers. It keeps the 25% bonus on up to £4,000 a year but has no upper age limit.
- Your First Home (England): from April 2027, an equity loan of up to 20% with a deposit from 2.5%, interest-free for the first five years. Household income caps apply: £110,000, or £140,000 in London.
Energy bills
- Households in England in council tax bands A to D get £100 from January 2027, paid through the council tax system.
- The 0% VAT on household electricity now runs to July 2027, which should take about £50 off the price cap from April 2027.
- Ofgem has been asked to abolish gas standing charges, aiming for the end of 2027.
Help to Save gets wider
Help to Save adds 50p for every £1 you save, up to £1,200 over four years. From spring 2028 banks and building societies will offer it, and Universal Credit claimants without earnings will be able to join. If you qualify now, you don't need to wait.
Also announced
- The National Living Wage rises 3.9% to £13.21 an hour from April 2027.
- The 5p cut in fuel duty is extended to July 2027.
- Interest on Plan 2 and Plan 3 student loans is capped at 6% until August 2027.
What to do now
- Use this year's ISA allowance if you have savings outside one, especially before April 2027.
- If you're saving for a first home, look at whether a Lifetime ISA suits you now.
- Check your energy deal and watch for the £100 payment from your council.
This article is general information, not financial advice. Figures come from the government's Budget 2026 documents.