On 28 October, Chancellor John Healey delivered his first Autumn Budget and the first of Andy Burnham’s Government. Against a challenging economic backdrop and with limited room for manoeuvre, the Chancellor unveiled a range of tax and spending measures. For savers, there was some welcome certainty, with pension tax-free cash and Capital Gains Tax (CGT) left unchanged. However, with continued pressure on the public finances, the Budget still brings important changes to consider.
Savings and Rental Income: Another 2% Increase
Building on changes announced in the 2025 Autumn Budget, a further 2% increase will be applied to Savings and Property income. From April 2027, tax on savings income – including bank interest and property income will rise to 24%, 44%, and 49% for basic, higher, and additional rate taxpayers, respectively. Savings-income rates will apply across the UK, while the new property-income rates will apply in England, Wales and Northern Ireland.
Action: Consider whether your savings, investments and assets are structured tax efficiently, making appropriate use of available allowances such as pension, ISA and spousal allowances.
Pension Tax Allowance: Protecting Those on Lower Retirement Incomes
From April 2027, a new Pension Tax Allowance will prevent those relying solely on the full new State Pension from paying Income Tax as it rises above the Personal Allowance. The measure will apply until April 2030.
Action: If applicable, check your income tax code via the HMRC app.
Self-Assessment: More Regular Tax Payments
From April 2029, those making Payments on Account will move to smaller, more regular tax payments throughout the year, making liabilities easier to budget for.
Action: Consider how the revised payment schedule could affect your future cash flow and keep an eye on further details as the new system is developed.
Trading Allowance: More Room for Additional Income
From April 2027, the Income Tax Trading Allowance will increase from £1,000 to £3,000, meaning more individuals with ‘side hustle’ income could fall within the allowance.
Action: If you have additional trading income, consider whether you could benefit from the increased allowance.
ISAs: Boost for Savers and First-Time Buyers
The Government has reversed plans to reduce the Cash ISA limit for those aged under 65, which will remain at £20,000. They are also exploring incentives for first-time Stocks & Shares ISA investors.
Changes are also coming for those saving towards their first home. Existing Lifetime ISA holders can continue under the current rules. From 29 October 2026 the withdrawal charge when purchasing a qualifying property above the £450,000 property cap will reduce from 25% to 20%.
From April 2029, a new First Time Buyer ISA will replace the Lifetime ISA, offering a 25% Government bonus on contributions of up to £4,000 a year, subject to a £20,000 maximum bonus towards a first-home purchase. The £450,000 property limit will apply and there will be no upper age restriction.
Action: Continue to use your annual ISA allowance as part of your wider savings and investment strategy. First time buyers should also monitor the developing rules when deciding which savings arrangements best suit their objectives.
Pension Death Benefits: Simplifying the Rules
From 28 October 2026, pension death benefits will no longer become taxable solely because the previous two-year payment or designation deadline is exceeded.
Action: Beneficiary nominations should still be kept up to date, particularly following changes in personal or family circumstances.
Business Asset Disposal Relief: Lifetime Limit Reduced
From 6 April 2027, the lifetime limit on gains qualifying for Business Asset Disposal Relief will reduce from £1 million to £500,000.
Action: Business owners considering a sale should review how the reduced limit could affect their plans.
Founders’ Relief: New Support for Entrepreneurs
From 6 April 2027, qualifying founders of high-growth, innovative companies could benefit from a 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains under the new Founders’ Relief. This relief is subject to technical consultation.
Action: Consider how the new relief could affect the timing and structure of a future business sale.
State Pension: Changes to the Triple Lock
From April 2027, the State Pension will rise to £13,036.40 per annum. From April 2030, the Government plans to introduce an adjusted Triple Lock.
Action: Check your State Pension forecast and National Insurance record regularly to understand how it fits into your wider retirement planning: Check your State Pension forecast.
The Budget reinforces the importance of regularly reviewing your financial plans, with changes across savings, pensions, estate planning and business ownership potentially affecting individuals and families in different ways.
If you would like to understand how these changes could affect you and your financial plans, our Wealth Planning team would be happy to help. Whether you are considering investing for the first time or would value a second opinion on your existing arrangements, get in touch with us at info@jmfinn.com.
Please note: This summary reflects our initial interpretation of the Autumn Budget 2026 announcements. The measures outlined may be subject to change following consultation and detailed legislation. The information provided is of a general nature and is not a substitute for specific advice with regard to your own circumstances. You are recommended to obtain specific advice from a qualified professional before you take any action or refrain from action.
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