Autumn Budget 2026: The Key Changes and What They Mean for You

The Chancellor John Healey has delivered his first budget which he said aims to give families and businesses breathing space today, while delivering the big structural changes needed for the future.

After much speculation around possible increases to rates of Capital Gains Tax in the weeks running up to the budget, the main rates have been left alone.

We are reviewing the full detail of the budget and will discuss this in our next Henwood Court Podcast, so keep an eye out for this and make sure to give it a listen for our key takeaways and insights. Of course, any urgent matter personally affecting you will be raised by your financial planner.

In the meantime, we’ve summarised some of the key highlights below:

Savings and investments

Cash ISA limit unchanged. The £20,000 cash ISA limit stays in place for everyone, scrapping previous plans to reduce this to £12,000 for under-65s from April 2027.
New ‘Starter ISA’ incentive for first-time investors. The Government will work with the private sector on a new starter ISA to reward first time investors.
Tax on savings and property income rises. From April 2027, tax rates on savings and property income will rise by a further two percentage points across all tax bands.

First-time buyers

Lifetime ISA withdrawal charge reduced for property purchases above the price cap. With immediate effect, the withdrawal charge has fallen from 25% to 20% for first-time buyers using a Lifetime ISA to buy a home worth more than the £450,000 limit. For example, someone who has paid in £20,000 and received £5,000 in bonuses would now get back £20,000 if they withdrew the full £25,000, rather than £18,750 (ignoring investment growth). They would still lose the bonus but no longer lose any of their own contribution. The full 25% charge still applies to other non-qualifying withdrawals.
New First Time Buyer ISA and “Your First Home” scheme. The new First Time Buyer ISA is designed as a pure home-buying savings account and removes the retirement element that the Lifetime ISA gave. The “Your First Home” scheme is designed to support first-time buyers who do not have financial assistance to get onto the property ladder.

Pensioners

New Pension Tax Allowance. From April 2027, people above State Pension age with total income up to the level of the new State Pension will not pay Income Tax. Around 500,000 pensioners are expected to benefit in 2027-28.
State Pension Triple Lock. Plans to adjust the State Pension Triple Lock starting in April 2030. Currently the State Pension is increased annually when in payment by the highest of inflation, 2.5% or earnings. Whilst the government has committed to this basis throughout the current parliament, from April 2030 it is proposed that the State Pension will instead increase each year by the highest of inflation, 2.5% or the amount required to return or maintain the value of the State Pension relative to earnings. The government state that the adjustment will see the State Pension rise in line with average earnings over time, rather than consistently growing faster than wages.
Removal of two-year tax rule on lump sum death benefits. Under previous rules, where a person died under age 75, beneficiaries could usually receive pension benefits free of income tax (provided they had sufficient lump sum and death benefit allowance available) only if they were paid within two years of the death being notified. If the two-year limit was missed, the benefits were taxed at the recipient’s marginal rate. From 28 October 2026, beneficiaries will no longer be taxed purely because payment took longer than two years.

Business owners and entrepreneurs

New Founders Relief. Eligible founders of high-growth, innovative companies will pay a reduced 10% rate of Capital Gains Tax on up to £10 million of lifetime gains. This is subject to consultation, and we understand there will be many conditions attached, and that it is not as generous as the previous Entrepreneurs’ Relief. More to follow.
Reduction in Business Asset Disposal Relief. The threshold for capital gains eligible for business asset disposal relief will reduce from £1m to £500,000.
Trading allowance. This tax exemption for small amounts of self-employed, casual or freelance income increases from £1,000 to £3,000.
Company distributions. The rules will be modernised with the intention to stop complex arrangements being used to extract profits at lower tax rates. Genuine commercial transactions and family business succession are said to be protected.
Business rates. Retail, hospitality and leisure properties in England will see rates frozen in real terms, reduced or cut to zero.

Everyday costs

Energy support. A £100 Household Energy Payment is planned for up to 20 million households in England in bands A to D, with equivalent funding for the rest of the UK. The temporary VAT cut on electricity bills is extended to 1 July 2027.
Gas standing charges. The Government will ask Ofgem to abolish them and move the cost into unit rates.
Warm Homes loans. Loans will help spread the upfront cost of solar panels, batteries and heat pumps.
Fuel duty. The 5p cut is extended by a further six months, and the planned RPI-linked increase is deferred to 1 July 2027.
Mileage rates. Tax-free mileage rates are being permanently increased for people who drive for work.
National Living Wage. It rises 3.9% to £13.21 an hour from 1 April 2027.
Parental pay. More than 160,000 additional parents, including self-employed dads and partners, will become eligible.

What happens next?

Many of the details are still to be confirmed. We’ll keep reviewing them as they emerge and discuss them further in an upcoming episode of our podcast.

If you’d like to talk through how any of this affects your plans, please get in touch. For our clients, your financial planner is on hand to help with any questions, as always.