Autumn Budget 2026: What It Means for You

The Chancellor delivered the Autumn Budget on 28 October 2026. Headline income tax, employee National Insurance and VAT rates were not raised, but property and savings income will be taxed more from April 2027, the trading allowance triples, and there are changes for savers, pensioners, first-time buyers and business owners. Here is what was announced, when it starts, and which PayToolkit calculators it affects.

The Budget at a glance

Income tax and National Insurance: frozen, not raised

• The Personal Allowance stays at £12,570, the higher-rate threshold at £50,270 and the additional-rate threshold at £125,140.
• Income tax thresholds are frozen until April 2031, and the remaining National Insurance thresholds stay at 2026/27 levels until 2030/31. Because pay rises push more income into higher bands, more people pay more tax without any rate change. This is called fiscal drag.
• The effective 60% rate between £100,000 and £125,140 remains. See our £100k tax trap guide.

Try it: Take-Home Pay Calculator and National Insurance Calculator.

Property and savings income tax: up again from April 2027

From 6 April 2027 the rates of income tax on property income and on savings income rise to 24% (basic), 44% (higher) and 49% (additional). Property income gets its own set of rates, and finance cost relief for landlords follows the property basic rate. The way you report and pay tax does not change, only the rates.

The Personal Savings Allowance (£1,000 basic rate, £500 higher rate), the starting rate for savings (up to £5,000) and the £1,000 property allowance are unchanged. Interest inside an ISA stays tax free. From April 2027 the Personal Allowance will be set against employment, trading and pension income first. Our calculators use the 2026/27 rates until the new ones take effect.

Try it: Buy-to-Let Tax Calculator, Rental Income Tax Guide and Tax-Free Interest Calculator.

Self-employed and side income: trading allowance to £3,000

The trading allowance rises from £1,000 to £3,000 from 6 April 2027, and the trading income reporting threshold for Self Assessment rises to £3,000 as well. If your gross side income is covered by the allowance you generally do not need to declare it or pay tax on it. Until then £1,000 applies. Someone with £2,500 of gross side income has to declare it today but would not from April 2027.

Making Tax Digital for Income Tax thresholds stay as planned: income over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028. The Budget also confirmed that no late-submission penalty points will apply to quarterly updates in the 2027/28 tax year for people joining in April 2027, although updates must still be sent before you can file your return.

The mileage rate for business miles above 10,000 rises from 25p to 35p a mile from 6 April 2027. The first 10,000 miles stay at 55p. On 12,000 business miles, the extra 2,000 miles would be worth £700 instead of £500.

See: trading allowance guide, side hustle tax calculator, MTD checker and mileage tracker.

State Pension and pensioners

• The State Pension is reported to rise 3.9% from April 2027, taking the full new State Pension to about £250.70 a week (currently £241.30). The triple lock continues through to April 2029.
• A new Pension Tax Allowance applies for 2027/28 to 2029/30. Pensioners whose total income is no more than the full new State Pension should not have to pay small amounts of income tax through Simple Assessment. It is withdrawn at £1 for every £3 of income above that level.
• Pensions come within inheritance tax from April 2027, and salary-sacrifice pension contributions will have their National Insurance relief capped at £2,000 from April 2029. Both were announced earlier.

See the State Pension forecast calculator and pension tax relief calculator.

Minimum wage

The National Living Wage (age 21 and over) rises 3.9% from £12.71 to £13.21 an hour in April 2027. The 18 to 20 rate becomes £11.27, and the 16 to 17 and apprentice rate becomes £8.31. For someone working 37.5 hours a week all year, £0.50 an hour adds roughly £975 to gross annual pay. Employers should update payroll before April. Try the payslip generator.

Savings, ISAs and the Lifetime ISA

• The £20,000 ISA allowance is kept, and the cash ISA limit stays at £20,000 for everyone over 18 from April 2027. The planned cut for under-65s did not go ahead.
• From 29 October 2026 the Lifetime ISA withdrawal charge is 20% when the money buys a property above the £450,000 cap. Other unauthorised withdrawals still carry the 25% charge.
• A First Time Buyer ISA will replace the Lifetime ISA for new savers, due from April 2029. It pays a 25% government bonus on the final balance, up to £20,000, on withdrawal towards a first home worth up to £450,000. Existing Lifetime ISA holders can keep contributing under the current rules.
• The government will also work with industry on a new incentive for first-time Stocks and Shares ISA investors.

Use the ISA calculator and the Lifetime ISA calculator.

Capital gains tax and business owners

• The Business Asset Disposal Relief (BADR) lifetime limit falls from £1 million to £500,000 for qualifying disposals on or after 6 April 2027. The BADR rate is 18% for disposals from 6 April 2026.
• A new Founders' Relief will give a lower rate of CGT on qualifying disposals of shares or securities from 6 April 2027. The design is out for technical consultation until 30 November 2026, so the rate and limits could still change.
• The main CGT rates stay at 18% and 24%.

Use the Capital Gains Tax Calculator.

Inheritance tax, property and council tax

• Inheritance tax thresholds stay frozen until 2030/31, and the 100% agricultural and business relief is capped at £2.5 million, as previously announced.
• There is no change to residential stamp duty.
• The High Value Council Tax Surcharge on homes worth £2 million or more starts from April 2028.

See the inheritance tax calculator, stamp duty calculator and council tax band checker.

Frequently asked questions

Sources

Official documents: Budget 2026: overview of tax legislation and rates, Low Pay Commission: National Living Wage to £13.21 and changes to tax rates for property, savings and dividend income. State Pension figures are as reported on Budget day and will be confirmed when the Department for Work and Pensions publishes the uprating.