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Please see our glossary for information on the financial terms used in this article.
Following Chancellor John Healey's first Budget on Wednesday 28 October, here's a quick overview of the key announcements that may be of interest.
Key takeaways
- ISAs and savings: The planned reduction in the Cash ISA allowance for those aged under 65 has been cancelled, meaning all savers will still be able to put up to £20,000 into a Cash ISA each tax year.
- Energy and household costs: The temporary cut in VAT on household electricity bills from 5% to zero will be extended until 1 July 2027, from which the Government expects to take around £50 off the annual Ofgem price cap in April 2027.
A £100 household energy payment will also be provided for up to 20 million households in council tax bands A to D in England, with funding provided to the devolved governments.
From 2027, standing charges on household gas bills will also be scrapped, with reforms to electricity standing charges to follow.
- Pensions and tax: A new pension tax allowance will mean pensioners with income up to the value of the full new state pension will not pay income tax in this parliament.
- Savings and property income tax: Tax rates on savings and property income will increase by a further two percentage points from April 2027, following the increases announced in the 2025 Budget. For example, the Basic rate is increasing from 20% to 24%.
- Motoring costs: The 5p cut in fuel duty has been extended until July 2027. Tax-free mileage rates are also being increased, with the car and van rate rising to 55p for the first 10,000 business miles and the higher mileage rate increasing to 35p from April 2027.
ISA tax rules may change in the future. ISA tax advantages depend on your individual circumstances.
Not sure how these changes affect you?
The Budget announcements are likely to affect your finances in one way or another, but you don't have to figure it all out on your own. A financial adviser can explain what the changes mean for you and help you build a plan that fits your overall circumstances and longer-term goals.
If you don't already have an adviser, you can find one that's right for you.
The views expressed on this webpage should not be taken as a recommendation, advice or forecast. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.
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