Autumn Budget 2026 explained. See who’s getting the £100 energy payment, new minimum wage rates, tax changes and what happens next.
Millions of households in England will receive a £100 energy payment this winter, while workers on the minimum wage are set for a pay rise following the Autumn Budget on Wednesday 28 October 2026.
Chancellor John Healey has also confirmed plans to scrap gas standing charges, help first-time buyers get onto the property ladder and increase the amount people can earn from small side hustles before paying tax.
But there are changes that could cost some people more, including higher tax on savings interest and rental income.
And while some measures will start within months, others won’t happen for several years.
Here’s a breakdown of the biggest announcements and what they could mean for your money.
Autumn Budget 2026 at a glance
| What’s changing? | When? |
|---|---|
| £100 energy payment for eligible households in England | January 2027 |
| Electricity VAT cut extended | Until July 2027 |
| Gas standing charges to be removed | By the end of 2027 or later |
| Minimum wage rises to £13.21 an hour | April 2027 |
| Fuel duty cut extended | Until July 2027 |
| Tax-free trading allowance rises to £3,000 | April 2027 |
| Higher tax on savings interest and rental income | April 2027 |
| Cash ISA limit stays at £20,000 | From April 2027 |
| New first-time buyer scheme | Applications from February 2027 |
| New First Time Buyer ISA | April 2029 |
| Carer’s Allowance earnings rule changes | During 2030–31 |
£100 energy payment for millions of households
One of the biggest announcements is a new £100 Household Energy Payment.
The government says up to 20 million households in England living in Council Tax bands A, B, C or D will receive the money from January 2027.
It will be delivered through local councils using the Council Tax system, with payments expected to go directly into bank accounts.
There’s also £100 million of extra funding for councils to help households struggling badly with energy bills, including some living in higher Council Tax bands.
The £100 payment is for England. Scotland, Wales and Northern Ireland will receive funding to provide their own support, but equivalent payments haven’t been confirmed.
Full payment arrangements have yet to be explained.
Electricity VAT cut extended until July 2027
The government has extended its temporary removal of VAT from household electricity bills.
The 5% VAT cut began on 1 October 2026 and was originally due to end in March 2027. It will now continue until July 2027.
The Treasury estimates the extension will reduce Ofgem’s annual energy price cap by around £50 in April 2027, compared with leaving VAT in place.
That doesn’t mean everyone will receive £50 or save £50 over the extra three months. Your actual saving depends on how much electricity you use.
The measure applies to Great Britain. The government also plans comparable support for Northern Ireland.
Gas standing charges will be scrapped
The government has confirmed that gas standing charges will be removed from household bills in Great Britain, aiming for the end of 2027 or as soon as possible afterwards.
The typical household currently pays around £108 a year in these fixed charges.
However, the costs won’t disappear. They’ll be moved into the price charged for each unit of gas.
The government estimates that around 60% of households with gas accounts could save an average of £45 a year, while some households that use more gas could pay extra.
The government is also planning changes to electricity standing charges, with more details next year.
We’ve explained the important catches in our full guide to gas standing charges being scrapped.
Minimum wage rising to £13.21 an hour
Around 2.3 million workers are expected to benefit from higher minimum wages from 1 April 2027.
The new hourly rates will be:
| Age | Current hourly rate | From April 2027 |
|---|---|---|
| 21 and over | £12.71 | £13.21 |
| 18 to 20 | £10.85 | £11.27 |
| 16 to 17 | £8.00 | £8.31 |
| Eligible apprentices | £8.00 | £8.31 |
All rates are increasing by 3.9%.
For someone aged 21 or over working 35 hours a week on the minimum wage, that’s an extra £910 a year before tax, assuming they work all 52 weeks.
Your actual take-home pay increase could be smaller because of tax, National Insurance or changes to benefits.
The new rates apply across the UK.
Income tax rates unchanged, but some people will still pay more
The Chancellor hasn’t increased the main rates of income tax, National Insurance or VAT.
However, the tax-free Personal Allowance will remain at £12,570 in the 2027–28 tax year.
That’s the amount most people can earn before paying income tax.
Because the allowance isn’t rising with wages, someone receiving a pay rise may find that more of their income becomes taxable.
The main income tax rates for England, Wales and Northern Ireland remain at 20%, 40% and 45%. Scotland sets its own rates on employment income.
Tax-free side hustle allowance rising to £3,000
There’s a change for people making money from small businesses and side hustles.
From 6 April 2027, the trading allowance will increase from £1,000 to £3,000 a year.
This means eligible people using the allowance could earn up to £3,000 a year from trading without paying income tax on that income.
For example, someone making £2,000 a year from a small online business could fall within the new allowance, provided they meet the rules.
The government is also increasing the Self Assessment trading income reporting threshold to £3,000.
However, this applies to trading income, generally before expenses, and there are restrictions on who can use the allowance. Ordinary sales of your own unwanted belongings aren’t automatically treated as trading.
Savings interest and rental income could face higher tax
People earning taxable interest from savings or income from renting out property could pay more tax from 6 April 2027.
The new income tax rates on savings will be 24%, 44% and 49%, depending on your tax band.
The same rates will apply to property income in England, Wales and Northern Ireland, although devolved powers mean the final position could differ.
That doesn’t mean everyone with savings will pay more.
Interest earned inside an ISA remains tax-free. The existing Personal Savings Allowance will also continue to protect some interest earned outside ISAs.
For landlords, the tax applies to taxable property income, rather than automatically to every pound of rent collected.
Cash ISA limit will stay at £20,000
Plans to reduce the annual cash ISA allowance have been reversed.
The government has confirmed the limit will remain at £20,000, rather than falling to £12,000 in April 2027.
An ISA lets you save money without paying tax on the interest earned inside it.
The government is also exploring a new incentive for people investing in a stocks and shares ISA for the first time.
That new incentive is still being developed, so there’s no new account or bonus to apply for.
First-time buyers could get onto the property ladder with a 2.5% deposit
The government has confirmed more details of its £4.7 billion Your First Home scheme.
The plan is to help around 70,000 first-time buyers in England purchase an eligible new-build home.
Buyers could put down a deposit of just 2.5%, with a government equity loan covering 20% of the property price.
The loan would be interest-free for five years, with charges increasing after that.
Household income limits will be £110,000 outside London and £140,000 in London. Local property price limits will also apply.
Pre-registration is planned by the end of December 2026, with full applications opening in February 2027 and the first loans from April.
The government loan still needs to be repaid, so the smaller deposit doesn’t mean the property is cheaper.
Read our Your First Home scheme guide for an explanation of how the borrowing works.
Lifetime ISA changes confirmed
The government is introducing a new First Time Buyer ISA from April 2029 to replace the Lifetime ISA for new savers.
It will allow up to £4,000 in contributions each year, with a 25% government bonus when money is used for a qualifying first home costing no more than £450,000.
Existing Lifetime ISA holders will be able to continue using and paying into their accounts.
There’s also a change happening sooner.
From 29 October 2026, the withdrawal charge for existing Lifetime ISA savers buying a qualifying first home costing more than £450,000 will fall from 25% to 20%.
The usual 25% penalty will still apply to other withdrawals that don’t qualify.
Carer’s Allowance earnings rule will change
Unpaid carers will eventually be able to earn above the weekly Carer’s Allowance limit without immediately losing their entire payment.
Currently, earning even slightly more than the £204 weekly limit can mean losing the full £86.45 allowance.
Under the proposed system, the payment will reduce by £1 for each £1 earned above the limit.
But the new rule won’t begin until the 2030–31 financial year.
It is planned for England and Wales. Scotland has its own Carer Support Payment.
For now, the existing rules still apply.
We’ve covered the details, examples and what carers need to know in our Carer’s Allowance earnings rule guide.
Extra parental pay for some self-employed parents
Eligible self-employed fathers, partners and adoptive parents will be able to receive a new parental allowance from April 2029.
It is also expected to help some parents with irregular employment who don’t currently qualify for statutory parental pay.
The government estimates more than 150,000 parents could benefit each year.
The payment will cover up to two weeks, with support worth up to £194 a week at current rates.
The scheme will apply in Great Britain. Full eligibility and application details will follow, so there’s nothing new to claim yet.
Fuel duty cut extended until July 2027
Drivers won’t face the planned reversal of the temporary 5p fuel duty cut in January 2027.
The Chancellor has extended the cut and the fuel duty freeze until 1 July 2027, when a planned increase has also been deferred to.
Fuel duty is part of the price you pay for petrol and diesel.
Keeping the cut means prices should be lower than they would otherwise have been, but it doesn’t guarantee prices at the pumps will fall.
Fuel prices are also affected by oil costs, exchange rates and retailers.
The government has also confirmed that the higher 55p tax-free mileage rate for the first 10,000 business miles will become permanent, with the rate above 10,000 miles increasing from 25p to 35p.
Food shopping costs could fall slightly
Import charges on more than 100 food and drink products will be temporarily suspended from 26 November 2026.
The products include baked beans, dried fruit, chocolate and plant-based drinks.
Reducing these charges could lower the cost of importing certain foods, although supermarkets won’t necessarily pass every saving on to customers.
The measure will run until the end of December 2028.
Separate import charge cuts have also been announced for fertiliser and heating oil.
For shoppers, the main point is that these changes may help with some prices, but there isn’t a guaranteed saving on your weekly food bill.
What should you do now?
Most people won’t need to make any immediate changes because of the Budget.
However, there are a few useful things to check:
- Energy bills: Check your Council Tax band and watch for official information from your council about the £100 payment.
- Wages: If you’re paid the minimum wage, check your hourly rate when the new figures start in April 2027.
- Side hustles: Keep records of your income and expenses. The new £3,000 allowance won’t apply until April 2027.
- First-time buyers: Check the confirmed eligibility rules before planning around the smaller deposit. The scheme hasn’t opened yet.
- Carers: Continue following the current earnings limit until the new rules are introduced.
And if money is already tight, it’s worth checking whether you’re missing out on financial help. Our guide to checking unclaimed benefits explains where to start.
The Budget contains several changes that could help households, alongside measures that may increase costs for others.
What matters is which changes apply to you, how much difference they could make and when they actually begin.
