Autumn Budget 2026: what you need to know

Date: Wednesday 28th October, 2026

The Chancellor, John Healey, has now delivered his first Autumn Budget, announcing a reversal on the Cash ISA allowance, support for first-time buyers, changes to tax, and help with energy bills.

We cut through the noise to break down the key changes, and what they could mean for your money. In this article: 

• Cash ISA allowance stays at £20,000

• Reducing the Lifetime ISA withdrawal penalty when buying a home over £450,000

• New “Your First Home” scheme for first-time buyers

• Changes to tax on savings and property income

• New ISA incentive for first-time investors

• Pensioners on the State Pension protected from income tax

• Help with energy bills

• National Living Wage to rise from April 2027

Cash ISA allowance stays at £20,000

The Chancellor has confirmed that the planned cut to the Cash ISA allowance for under 65s will be scrapped. That means from 6th April 2027, you'll still be able to put your full £20,000 tax-free allowance into a Cash ISA, whatever your age and assuming you’re eligible to subscribe to a Cash ISA.

The government says it wants to keep providing generous support for savers, while making investing more accessible. Even without this reversal, a regular saving habit remains one of the most effective ways to build financial resilience. Top up your Cash ISA today if you have one. ISA and tax rules apply.

If you’ve not got a Cash ISA already, open one to make full use of your ISA allowance with tax-free interest. 

Brian Byrnes, Director of Personal Finance at Moneybox, said: “By reversing the proposed cut to the Cash ISA limit, the Chancellor has made a decision that will reassure savers. We look forward to working alongside the government and regulators to focus on what matters: financial education and accessible advice, to empower people to take the next positive step with their finances and start investing.”

Reducing the Lifetime ISA withdrawal penalty when buying a home over £450,000

From 29th October 2026, if you buy your first home above the £450,000 property price cap, the withdrawal penalty will be reduced from 25% to 20%. This change means if you buy a home over the £450,000 limit and need to withdraw, you’ll get back everything you put in. Plus interest.

If you already have a Lifetime ISA, or if you open one before April 2029, you can continue to use your account. You can keep paying in up to £4,000 a year, and you’ll still earn your 25% government bonus.

Got a Lifetime ISA? Top it up today to earn more of this tax year’s bonus. Govt. withdrawal charge may apply. ISA and tax rules apply. The reduced penalty is designed to protect your original contributions, assuming the account value has not fallen. The charge also applies to interest or investment growth.

What it means if you don’t have a Lifetime ISA

Saving for your first home or retirement? The government has confirmed that the Lifetime ISA will close to new savers from April 2029, when the new First-Time Buyer ISA launches (more on that below). You can open one before then and keep using it under the current rules - which are subject to change.

The Lifetime ISA bonus is free money from the government. For every £4 you put in, you get £1 on top - and there aren’t any other accounts with a guaranteed 25% return on your deposits. You can use it to buy your first home, or keep it for retirement. Plans change, so opening one now keeps your options open. 

New “Your First Home” scheme for first-time buyers

The government has set out more detail on its new £4.7 billion Your First Home scheme, which will help around 70,000 households in England take their first step onto the housing ladder. Buyers will need a deposit of at least 2.5%, and the government will provide an equity loan worth 20% of the property’s value, interest free for the first five years.

It will be open to first-time buyers with combined incomes of up to £110,000 outside London and £140,000 in the capital. Property price caps will be based on local median prices, with caps of £650,000 in inner London and £500,000 in outer London. Pre-registration opens by the end of December 2026, with full applications from February 2027 and the first loans from April 2027.

The Budget also confirmed that the new First-Time Buyer ISA will launch in April 2029, replacing the Lifetime ISA for new savers. You’ll be able to pay in up to £4,000 a year and get a 25% government bonus on the value of the account, paid when you withdraw to buy a first home worth up to £450,000. The bonus will be capped at £20,000, and there will be no upper age limit.

Brian Byrnes, Director of Personal Finance at Moneybox, said: “Having long campaigned on behalf of the UK’s largest community of aspiring first-time buyers, today's announcement that the LISA’s withdrawal penalty will be reduced from 25% to 20% for those purchasing a property over £450,000 limit is a huge win for LISA savers, particularly those in London and the South East where property prices are notoriously high.

“With a new first-time buyer ISA not expected until 2029 at the earliest, first-time buyers can continue to benefit from a product that provides a leading interest rate that competes with any regular Cash ISA on the market, without the risk of losing any of their hard-earned savings if their first home exceeds the current house price cap.

Changes to tax on savings and property income

From 6th April 2027, tax rates on savings income will rise by a further 2%, on top of the 2% increase announced last year. That means the savings basic rate will be 24%, the higher rate 44%, and the additional rate 49%. The same increases apply to tax on property income.

The government says 84% of income tax payers will be unaffected. Thanks to the Personal Savings Allowance and the Starting Rate for Savings, a basic rate taxpayer would need over £25,000 in savings, on top of any ISA savings, before paying tax on their interest.

Tax-free accounts like ISAs are still a great way to protect your returns. Even small tax changes can add up over time, so staying on top of allowances and planning ahead helps you keep your money working hard.

The trading allowance will also triple from £1,000 to £3,000, to support people starting a business.

Brian Byrnes, Director of Personal Finance at Moneybox, said: “Savers are facing a double squeeze from frozen tax thresholds and higher tax rates on savings income. Saving is the foundation of financial resilience, and policy should reward rather than penalise the habit. Utilising tax-free wrappers like ISAs remains one of the best ways for households to protect their hard-earned money, and the upcoming changes to allowances shouldn’t deter people from making full use of them.”

New ISA incentive for first-time investors

The government will work with the investment industry to explore a new ISA incentive for people investing in a Stocks & Shares ISA for the first time. The detailed design will be developed with industry, and we’ll keep you updated as more details emerge.

Pensioners on the State Pension protected from income tax

From April 2027, the full new State Pension is set to rise above the £12,570 personal allowance, which would have meant some pensioners paying income tax on it for the first time.

The government has confirmed a new Pension Tax Allowance from 6th April 2027. If you’re over State Pension age and your total income, from any source, is at or below the value of the full new State Pension, you won’t pay income tax, and this will happen automatically. For those with incomes just above that level, the allowance will be gradually reduced. It will apply until 5th April 2030.

If you have other income alongside your State Pension, such as a private or workplace pension, you may still pay tax. It's a good reminder to check how your retirement income fits together.

The State Pension will also continue to rise under the triple lock until April 2029. From April 2030, the triple lock will be adjusted so the State Pension rises each year by the highest of 2.5%, inflation, or the amount needed to keep its value in line with earnings as reached in April 2029. Pension and tax rules apply. 

Help with energy bills

From January 2027, the government will make a £100 Household Energy Payment to up to 20 million households in council tax bands A to D in England, with funding for similar support across the rest of the UK. The cut to VAT on electricity bills will also be extended until July 2027, which is expected to take around £50 off the annual Ofgem price cap in April 2027.

The government has also asked Ofgem to abolish gas standing charges, aiming for the end of 2027 or as soon as possible after. These are the fixed daily fees you pay regardless of how much gas you use, averaging £108 a year. The costs will move into gas unit rates instead, and the government will set out targeted support for households less able to benefit. Electricity standing charges will also be reformed, with details to follow next year.

With energy bills forecast to rise again in January, it's a good moment to review your monthly outgoings. Keeping a cash buffer for unexpected costs remains one of the most effective ways to build financial resilience.

The 5p cut to fuel duty has also been extended until 1st July 2027, and tariffs will be suspended on more than 100 everyday products.

National Living Wage to rise from April 2027

From 1st April 2027, the National Living Wage for those aged 21 and over will rise by 3.9% to £13.21 an hour. That’s an increase of £910 a year before tax for a full-time worker. The National Minimum Wage for 18 to 20-year-olds will also rise by 3.9%, to £11.27 an hour.

A pay rise is a great moment to think about your savings. Setting aside even a small part of the increase each month can help you build towards your goals over time.

Withdrawal restrictions vary across both Cash ISA accounts. A lower rate of 0.75% AER (variable) applies if your balance is below £500.

Interest is earned daily on cleared balances (rounded down to the nearest penny) and is paid monthly on the first day of each month. The underlying rate is variable, and we'll inform you if it changes. The bonus interest rate is fixed for 12 months from the date you open your Moneybox Cash ISA.

A government withdrawal charge of 20% or 25% may apply if you withdraw money from a Lifetime ISA other than for a qualifying first-home purchase, retirement from age 60 or qualifying terminal illness. When investing, you may get back less than you paid in.

Tax treatment depends on individual circumstances and may be subject to change in the future.

We don't offer financial advice, seek independent advice if needed.