On 28th October 2026, Chancellor of the Exchequer John Healey announced his Autumn Budget in the House of Commons, setting out the government’s plans for the UK economy for the remainder of the year and beyond.
This was the Chancellor’s first Budget since assuming the role, and the first for Andy Burnham’s government. It focused onstability, reducing household pressures, and targeted support for growth. The Chancellor promised that this Budget will “deliver breathing space today, and fresh hope for the future.”
What is the Budget?
The Budget is the UK Government’s annual plan for how it will raise and spend money. The Chancellor of the Exchequer presents it to Parliament in a speech, along with documents explaining the government’s decisions.
As one of the government’s most important financial announcements, the Budget explains its priorities for the coming year to the public. It sets out changes to taxes, government spending and other measures designed to support the economy. It also includes forecasts from the Office for Budget Responsibility (OBR), which assess the UK’s economic and financial outlook.
The Autumn Budget is usually followed by a Spring Statement, which provides an update on the economy and public finances. This update is normally shorter and includes fewer policy changes.
Key Autumn Budget 2026 Announcements
Here is a summary of the key takeaways from this year’s Autumn Budget:
Savings, Investments and Tax
- A new First Time Buyer ISA will replace the Lifetime ISA. With the aim of simplifying government-backed support for people saving towards their first home.
- The Bank Corporation Tax Surcharge will increase by 3 percentage points from January 2027. This means banks will pay more tax on their profits, helping to increase government revenues.
- The annual Cash ISA allowance will remain at £20,000. Savers will continue to be able to protect up to £20,000 of savings interest from tax each year.
- A new Pension Tax Allowance will be introduced for working pensioners. Eligible pensioners will be able to earn up to the value of the full new State Pension tax-free on top of their Personal Allowance, reducing tax bills for some older workers.
- The trading allowance will increase from £1,000 to £3,000 from April 2027. More people earning money through ‘side hustles’, freelance work or small businesses will be able to earn tax-free income before additional tax rules apply.
Support for Households
- Households in Council Tax bands A to D in England will receive a £100 energy payment this winter. The payment is designed to help families manage higher energy costs during the colder months.
- The VAT cut on domestic electricity bills will be extended until July 2027. Households should continue to benefit from lower electricity costs for longer.
- Tariffs on more than 100 supermarket products will be suspended. This could lead to lower prices on some imported food and household items, helping to reduce the cost of the weekly shop.
- The 5p fuel duty cut will be extended until July 2027. Drivers will continue to benefit from lower fuel duty, helping to manage the cost of filling up.
- Gas standing charges will be removed from household bills from next year. Households will no longer pay a fixed daily gas charge regardless of how much energy they use, which could reduce bills for lower-usage customers.
Work and Families
- The National Living Wage and National Minimum Wage will increase by 3.9% from April 2027. Millions of workers are expected to see a boost to their earnings.
- Changes to Carer’s Allowance will remove the current ‘cliff edge’ for earnings. Carers will be able to earn more without immediately losing all of their financial support.
- Self-employed fathers and partners will become eligible for paid parental leave. More families will have access to financial support when taking time off following the birth or adoption of a child.
Business Measures
- The Small Business Rates Relief threshold for retail, hospitality and leisure properties will increase from £12,000 to £18,000. More small businesses will qualify for relief, helping to lower their operating costs.
- All business rates revenue will be retained locally by the end of the decade. Local authorities will have greater control over how this funding is invested in their communities.
For more information on the measures announced and the full Budget document, visit the official page on gov.uk.
What does this mean for investors?
Changes to ISA allowances scrapped
In the 2025 Autumn Budget, the former Chancellor, Rachel Reeves, announced measures that limited how much of your £20,000 annual ISA allowance you could save in a Cash ISA. The planned changes would mean that only £12,000 of the tax-free allowance could be used in Cash ISAs, in an attempt to encourage more people to invest.
Andy Burnham’s government have scrapped these changes that were due to take effect in April 2027. As a result, savers and investors can continue to choose how to use their ISA allowance as normal.
Market response
Markets had been braced for a more radical Budget but John Healey instead delivered what many have described as a “safe hands” Budget that has prioritised stability and fiscal credibility. It is therefore unlikely to significantly change the outlook for interest rates, inflation or public borrowing in the short term. Market reactions so far have been minimal.
No need to change course
Our Director of Finance and Investments, Derence Lee says:
“Many of the measures will impact everyday Britons in some way or another. From an extra £100 in your pocket to help with energy costs, or a step onto the property ladder; some of the changes could make a difference to lives across the UK.
“For investors or those considering taking the first step into investing, the fact that the government has scrapped proposed changes to the Cash ISA allowance doesn’t mean you have to change course.
“Investing in a Stocks and Shares ISA can help you grow your wealth for the long term, whereas a Cash ISA can be helpful for short-term goals or emergency funds. Both are tax-efficient ways to plan for your future.
“However you choose to save or invest, it’s always good to have a plan that’s tailored to your money goals and individual circumstances. And with the cost of living remaining high, you may wish to consider ways of futureproofing your finances. Making sure you have a good savings pot is a good start, but insurance plans like income protection can offer a safety net and are often overlooked.
“The period directly following a Budget announcement can be a tense time for investors, as they await the impact on the markets. Fortunately, none of the Chancellor’s measures have been drastic or significant enough to cause any sudden volatility. Though, with ongoing geopolitical events, the overall picture in the markets remains uncertain. As always, temporary fluctuations will be part of any investing journey.”
When you invest, your capital is at risk.
Please note: No advice has been given by Shepherds Friendly, and if you are in any doubt as to which savings, investment or insurance product is suitable to your needs, then you should contact a financial adviser. There may be a charge for financial advice, and any costs should be confirmed to you before any advice is given.
