Budget 2026: what changes for your money
What the 28 October 2026 Budget changes for UK households, with worked figures: savings and property income taxed at 24%, 44% and 49% from April 2027, the £20,000 Cash ISA limit kept, the Lifetime ISA's new charge and its replacement, the Pension Tax Allowance, and the allowances and thresholds that did not move.
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The Budget on 28 October 2026 left income tax, National Insurance and the main allowances where they were, but three things matter for anyone with savings outside an ISA, rental income or a Lifetime ISA. This guide sets out what changed, when, and what it costs in pounds, using HM Treasury’s own tables. The savings, rental and Cash ISA changes are already in the Hundred Summers engine, and the full list of dated rule changes is on UK money rules we track.
Savings interest: taxed at 24%, 44% and 49% from April 2027
From 6 April 2027, interest on savings outside an ISA or pension is taxed at its own rates of 24%, 44% and 49%, across the UK. Last year’s Budget had set 22%, 42% and 47%; today it is 20%, 40% and 45%. The allowances are unchanged: the first £1,000 of interest is tax-free for a basic-rate taxpayer and £500 for a higher-rate one, and the £5,000 starting rate for savings still applies to those with low other income. On £40,000 earning 4% (£1,600 a year), a basic-rate saver pays £120 now and £144 from April 2027; a higher-rate saver pays £440, then £484. The savings growth calculator works it out for your balance and rate.
Rental income: 4 points more from April 2027
Property income gets its own rates from the same date: 24%, 44% and 49% in England, Wales and Northern Ireland, 4 points above the main rates (Scotland sets its own). On £12,000 of rental profit, a basic-rate landlord’s tax goes from £2,400 to £2,880, and a higher-rate landlord’s from £4,800 to £5,280: £480 a year more either way, twice what last year’s Budget had planned. Mortgage interest still earns only a 20% credit. The rental income tax calculator shows both years, and the buy-to-let guide the whole picture.
The Cash ISA limit stays at £20,000
The planned cut, which would have let under-65s put only £12,000 a year into cash ISAs from April 2027, has been reversed: the whole £20,000 allowance can still go into cash at any age (the regulations are due in November 2026). With savings tax rising, that matters more than before: interest in a cash ISA is never taxed. The ISA vs general account calculator shows what the wrapper saves on investments.
Lifetime ISA: a smaller charge, then a replacement
From 29 October 2026, using a Lifetime ISA towards a first home costing more than £450,000 costs a 20% charge rather than 25%; other early withdrawals still pay 25%. From April 2029 a new First Time Buyer ISA replaces it for new savers: a 25% bonus on up to £20,000, paid when the money is used for a first home worth up to £450,000. Existing Lifetime ISAs carry on under their current rules. The Lifetime ISA calculator prices the bonus and the charge.
What did not change
Income tax rates (20%, 40%, 45%), the £12,570 personal allowance and the £100,000 point where it starts to be withdrawn; tax and National Insurance thresholds, frozen until April 2031; dividend tax (10.75%, 35.75%, 39.35%) and its £500 allowance; the £20,000 ISA allowance and £9,000 Junior ISA; Capital Gains Tax at 18% and 24% with its £3,000 exemption; the pension allowances (£60,000 annual allowance, £10,000 money purchase annual allowance, £268,275 tax-free cash); and the inheritance tax bands of £325,000 and £175,000. Pensions still join the estate for inheritance tax from April 2027, as already legislated; the pensions and inheritance tax guide explains it.
The smaller measures
From April 2027 the trading allowance rises from £1,000 to £3,000, so small side-income below it needs no tax return, and the lifetime limit for Business Asset Disposal Relief halves to £500,000. Voluntary Class 3 National Insurance rises to £19.05 a week. For 2027 to 2030, a Pension Tax Allowance spares pensioners whose income is no more than the full new State Pension (£13,037 in 2027–28) from paying small amounts of income tax, tapering away above it. From April 2028 homes worth £2 million or more pay a council tax surcharge. And pension death benefits no longer become taxable just because they are paid more than two years after a death.
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