Autumn Budget 2026: what it means for you

7 hours ago

8 min read

Every Budget brings a flood of headlines, hot takes, and big numbers; but what most people really want to know is simple: will I be better or worse off? Today the Chancellor, John Healey, delivered his first Autumn Budget, and I've been through the announcements so you don't have to.

Below you'll find the key changes in plain English, who's likely to gain and who's likely to lose, some simple worked examples, and a section for sole traders and small business owners. Some details are still being confirmed, so I'll update this post as the full picture comes out.

The headlines - a first look

This was a cautious "steady as she goes" Budget from the Chancellor, John Healey: small help with bills and the cost of living, no rise in income tax, National Insurance, or VAT rates, and no big giveaways. Money is tight because the government's borrowing costs are rising, so most of the help is modest and targeted.

The five things most people will notice:

Energy bills: a one-off £100 payment for about 20 million households in council tax bands A to D; gas standing charges to be scrapped; and the VAT cut on energy kept until July, worth about £50 a year.
Pay: the minimum wage (National Living Wage) goes up 3.9%, from £12.71 to about £13.20 an hour.
Motoring: fuel duty stays frozen, with the 5p cut kept until July 2027.
Savings: the planned cut to the cash ISA allowance has been cancelled, so you can still save £20,000 a year tax free.
Small firms: more shops, pubs, restaurants, and gyms will pay no business rates, and you can now earn £3,000 a year from a side business before paying tax (up from £1,000).

The main people asked to pay more are banks (an extra 3% tax on profits for 15 months) and higher-stakes gambling machines. Income tax thresholds stay frozen, which quietly pulls more people into paying tax as wages rise.

Tax and money changes

Most everyday tax rates are unchanged; the changes are mainly help with bills, a pay rise for the lowest paid, and tweaks for savers and small businesses. Where no start date has been published yet, the table says so.

Area	What changes	When
Income tax and National Insurance	No change to rates. Thresholds stay frozen (personal allowance £12,570; higher rate from £50,271) until 2031, as announced last year.	Already in place
Pensioners and income tax	Reported: people whose income is no more than the full new state pension will not pay income tax on it this Parliament. Full details still to come.	Expected April 2027
State pension	Not clearly set out in the speech; a 3.9% rise was widely expected (to about £250.70 a week). Wait for the official figure.	April 2027
Minimum wage	Up 3.9%. Age 21 and over: £12.71 to about £13.20 an hour. Age 18 to 20: £10.85 to about £11.27.	April 2027
Carer's Allowance	The "cliff edge" goes: earn a little over the limit and you lose £1 of benefit for each extra £1, not the whole payment.	Date not given
Parental pay	Self-employed dads and partners can get paternity pay for the first time; about 150,000 more parents a year.	Date not given
Benefits	No cuts announced today. A welfare plan follows next year after reviews on young people out of work and disability.	2027
Energy bills	£100 paid into bank accounts for households in council tax bands A to D (about 20 million homes).	This winter
Energy bills	VAT cut on electricity kept until July, worth about £50 a year.	To July 2027
Energy bills	Gas standing charges scrapped and moved into the price per unit; Ofgem must approve.	2027 or soon after
Fuel duty	Frozen again; the 5p cut kept.	To July 2027
Business mileage	Rate for using your own car for work kept at 55p a mile; the higher-mileage rate rises from 25p to 35p.	Date not given
Alcohol	£10 million of duty relief for about 2,000 small brewers and cider makers. No general rise mentioned.	Date not given
Gambling	Duty on higher-stakes gaming machines rises from 20% to 25%.	Date not given
Food prices	Import tariffs removed on over 100 foods, such as baked beans, chocolate, and gherkins.	Date not given
Savings and ISAs	The planned cut to the cash ISA limit is cancelled; it stays at £20,000 a year. A new "Starter ISA" for first-time investors is planned.	April 2027
Savings and property income	Already announced last year: tax on savings interest and rental income rises by 2 percentage points (for example, 20% to 22%). Not reversed today.	April 2027
First-time buyers	Lifetime ISA to be replaced by a First-Time Buyer ISA. New "Your First Home" scheme: buy a new-build with a 2.5% deposit, with a government loan of 20%.	Date not given
Banks	Extra 3% tax on bank profits for 15 months, to help pay for the energy support.	From January 2027

Nothing was announced on stamp duty, council tax, or tobacco duty in the reports available at the time of writing.

Who is better off and who is worse off

Lower-income households, low earners, drivers, savers, and small high-street firms gain a little; banks, gambling firms, and middle earners hit by frozen tax thresholds lose out. Most of the gains are small, and energy campaigners say they will be swallowed by the expected January rise in the energy price cap (about 22% according to forecasts).

Better off	Why
Households in council tax bands A to D	£100 energy payment this winter
Low gas users (smaller homes, flats)	Scrapping standing charges could save around £40 to £45 a year
Minimum wage workers	About 49p an hour more from April
Unpaid carers who work	No more losing all of Carer's Allowance for going pennies over the limit
Self-employed dads	Paternity pay for the first time
Drivers, especially those who drive for work	Fuel duty frozen; higher mileage allowance
Savers	Can still put £20,000 a year in a cash ISA
Low-income pensioners	Reported protection from paying income tax on the state pension
People with a small side business	Can earn £3,000 a year tax free (was £1,000)
Small shops, pubs, restaurants, and gyms	About 70,000 more will pay no business rates
First-time buyers of new-builds	Smaller deposit through "Your First Home"

Worse off	Why
Most working people on middle incomes	Tax thresholds stay frozen, so pay rises are taxed more over time
High gas users (large or poorly insulated homes)	Higher unit prices could cost about £25 a year more once standing charges go
Households in council tax bands E to H	Miss the £100 payment
Employers paying the minimum wage	Higher wage bills from April
Savers and landlords outside ISAs	Last year's 2% rise in tax on savings and rental income still goes ahead in April 2027
Banks	Extra 3% tax on profits
Gambling machine operators, adult gaming centres, and vape shops	Higher duty and no business rates relief
Online marketplace sellers avoiding VAT	Tougher VAT rules

What it means for the ordinary person

For a typical household, this Budget is worth roughly £100 to £200 over the next year in direct help, mostly on energy; it does not change your tax bill much either way. These simple examples use rounded figures and assume you live in England and pay basic rate tax.

A full-time worker on the minimum wage (37.5 hours a week)

Pay rises by about 49p an hour, or about £955 a year before tax.
After 20% income tax and 8% National Insurance, that is roughly £690 a year more in your pocket.

A couple in a band B house who use little gas

£100 energy payment this winter.
The electricity VAT cut stays until July, avoiding about a £50 rise.
Once gas standing charges go (2027 or later), around £40 to £45 a year less on gas.

Total: up to about £200 over the next 18 months; but the expected January price cap rise could wipe much of this out.

A pensioner living only on the full new state pension

If the expected rise to about £13,036 a year goes ahead, that is about £466 above the tax-free allowance.
Without the new protection, they would owe about £93 a year in tax; with it, nothing.

A saver with £20,000 to put away each year

Without today's U-turn, only £12,000 could go in a cash ISA from April 2027.
At 4% interest, the extra £8,000 in an ISA earns about £320 a year tax free; for a basic rate taxpayer already using their £1,000 savings allowance, that saves about £70 a year in tax.

Someone with a small side income (crafts, dog walking, selling online)

Earn £3,000 a year from it and, under the new £3,000 allowance, pay no tax on it.
Under the old £1,000 allowance, £2,000 would have been taxed: about £400 a year for a basic rate taxpayer.

Any worker getting a pay rise

Because tax thresholds are frozen, every £1 of a pay rise above £12,570 is taxed. A 4% rise on £30,000 (£1,200) brings home about £860 after tax and National Insurance.

Sole traders and small businesses

For most sole traders and micro businesses this is a mildly positive Budget: a bigger trading allowance, better mileage rates, and paternity pay, with no rise in income tax, National Insurance, dividend tax, or the main corporation tax rate. Employers on the minimum wage face higher wage bills from April.

Trading allowance tripled to £3,000: you can earn up to £3,000 a year from self-employment without paying tax or registering for it. If your income is higher, you can deduct £3,000 instead of your actual expenses; best for businesses with very low costs.
Mileage: the 55p a mile rate for business journeys is now permanent, and miles above 10,000 a year rise from 25p to 35p (one report says 30p). Helpful for anyone who drives a lot for work.
Business rates: the 100% small business rate relief threshold for retail, hospitality, and leisure rises from £12,000 to £18,000 rateable value; about 70,000 more firms pay nothing. Other firms in these sectors get rates frozen in real terms for two years. Vape shops and adult gaming centres are excluded.
Minimum wage up 3.9% from April: budget for higher staff costs if you employ anyone on or near it.
Paternity pay for the self-employed: self-employed fathers and partners can claim for the first time.
New founder support: a 10% "founders' relief" tax rate on lifetime business sale gains up to £10 million; a Young Entrepreneurs Allowance covering a year of living costs for young founders; and a £200 million scale-up programme for women-led businesses through the British Business Bank.
HMRC crackdown: more money for HMRC and stronger powers to collect overdue tax, plus changes to how self-assessment tax is collected (details to follow). Online marketplace sellers avoiding VAT will be targeted.
No change to dividend tax or employment income tax: worth noting for anyone weighing up a move to a limited company; last year's changes still apply.
Landlords and savers: the 2 percentage point rise in tax on rental and savings income from April 2027 still goes ahead.

Final thoughts

This wasn't a Budget of big surprises. For most households, the changes add up to a little help with energy bills and a bit more breathing room for savers, side hustlers, and the lowest paid; but frozen tax thresholds and rising prices mean many of us will still feel the squeeze. For small businesses, the bigger trading allowance, better mileage rates, and business rates relief are welcome, while employers will need to plan now for higher wage bills from April.

The important thing is not to panic or guess. Check how each change affects your own situation, keep good records, and plan ahead for April. If you're not sure what any of this means for you or your business, get in touch; I'm always happy to help you make sense of the numbers.