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November 5, 2026

2026 Budget Update

By George Smart, Financial Planner, Walker Crips Financial Planning

The Chancellor, John Healey, delivered his first Autumn Budget on 28th October. Overall, there were no major headline-grabbing announcements, but there were a number of smaller measures aimed at helping households with the ongoing cost of living. Alongside these, there were some important changes to taxation and savings which are worth being aware of, particularly when considering your longer-term financial plan.

I have outlined below a summary of what was announced, how it may affect individuals and business owners, and where it could be worth taking a closer look. It is also important to note that the information below is based on the Budget announcements, and several measures still need to pass through the Finance Bill before they become law.

What was announced?

Area	What was announced	When
Income tax	Headline rates unchanged. Personal allowance (£12,570) and tax thresholds stay frozen.	Until April 2031
Savings and property income	A further 2 percentage points on top of last year’s increase: 24% basic, 44% higher, 49% additional.	From 6 April 2027
ISAs	Planned cut to the cash ISA limit for under 65s scrapped. Lifetime ISA to be replaced by a First Time Buyer (“FTB”) ISA.	Cash ISA: April 2027 plans dropped. FTB ISA: from April 2029
Capital Gains Tax (“CGT”)	Main rates (18% and 24%) and the £3,000 annual exempt amount unchanged.	No change
Business Asset Disposal Relief	Lifetime limit falls from £1 million to £500,000, raising the tax on a qualifying sale by up to £30,000 per person.	Disposals from 6 April 2027
Founders’ Relief (new)	10% CGT on up to £10 million of gains for qualifying founders over their lifetime. Conditions are narrow and still under consultation.	From 6 April 2027
Pensions	Tax-free cash rules unchanged. Two-year rule on tax-free death benefits removed. Unused pensions still enter the estate for IHT.	28 Oct 2026 / 6 April 2027
Inheritance Tax (“IHT”)	Nil-rate band (£325,000) frozen until 2031. No further change to Business Relief, which has a £2.5 million full-relief allowance since April 2026.	Ongoing

In addition to the tax changes outlined in the table above, there were a number of small measures announced which are intended to provide some support to households and ease the pressure of the cost of living. Rather than one significant change, the focus was on a collection of more targeted measures. For example:

Standing charges on gas supplies will be abolished, with this added onto the unit rate instead. This is expected to benefit lower-usage households, while higher-usage households may face higher overall costs.
The previously announced VAT cut on domestic electricity has been extended to 1st July 2027.
Individuals living in properties in council tax bands A to D will get a £100 Household Energy Payment from 1st January 2027.

What this could mean for you

One of the main announcements for individuals is the further 2% increase in tax rates on savings interest and rental income, which is particularly relevant if you hold significant cash savings outside an ISA or receive rental income from investment properties.

The combined changes mean the tax rates on taxable savings income and rental income from April 2027 will be:

Basic rate: 24%
Higher rate: 44%
Additional rate: 49%

There was some positive news for savers, with the previously proposed reduction to the annual Cash ISA allowance being reversed. The allowance will therefore remain at £20,000 per tax year, rather than decreasing to £12,000 for under 65s from 6th April 2027.

For business owners, the lifetime limit for Business Asset Disposal Relief (a tax relief that reduces the rate of capital gains tax on qualifying business sales) halves from £1 million to £500,000 for disposals from 6 April 2027. For someone with a sale on the horizon, the difference could be up to £30,000 per person in additional tax. It is not a reason to rush a sale, but it is a reason to understand your timeline.

The government also announced a new Founders' Relief, offering a reduced 10% CGT rate on up to £10 million of lifetime qualifying gains for entrepreneurs and early investors. That said, the relief is subject to a number of qualifying conditions, and a technical consultation is currently underway, closing on 30th November 2026. The final details and eligibility criteria may therefore be subject to change.

Why an ongoing plan matters

As always, the important thing is to consider these announcements in the context of your own circumstances and longer-term plans. Not every change will affect everyone, and there is no need to make knee-jerk decisions.

A financial plan is not something you create once and never revisit. Legislation changes, markets move, your income, your business, your family and your objectives change too. Reviewing your plan regularly helps it keep pace with all of that, so you can feel confident it is still doing what you need it to do.

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Talk to George Smart
‍If you would like to discuss any of the areas outlined in this article, or need help or advice when it comes to putting a plan in place, please contact the team at Walker Crips Financial Planning. Our team of experienced financial planners are on hand to offer you expert advice and guidance every step of the way.

‍ Get in touch with Walker Crips Financial Planning →

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This article is for general information purposes only and does not constitute personal financial advice. The scenarios and examples used are illustrative only and are not based on any individual’s circumstances. Tax rules depend on individual circumstances and may change. You should always seek regulated financial advice tailored to your own situation before making any decisions.

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