What does the Autumn Budget 2026 mean for your savings?

The Government is increasing tax on savings income and property profits across all tax bands starting in April 2027, however they’re also repealing their previous proposal to limit the amount of the annual ISA allowance that could be invested in Cash ISAs for those under the age of 65. This means the original £20,000 allowance remains available to fully invest in cash ISAs if a saver chooses, helping offset rising taxation on general savings interest.

What are the main announcements for households?

The UK Government is offering a £100 relief payment in January 2027 for around 20 million homes in Council Tax bands A to D, to help offset the rising cost of energy bills. They have extended VAT relief on domestic electricity and continued the fuel duty cut and freeze into next year.

Alongside these developments, state pensions are set to rise by 3.9%, and the national minimum wage will increase to £13.21 per hour.

What changes were announced for savings income tax?

Basic rate taxpayers, with an annual income of £12,571 to £50,270, will see an increase from 20% to 24% tax.

Higher rate taxpayers, earning £50,271 to £125,140 per year, will see an increase from 40% to 44%. And additional rate taxpayers, who are defined as earning more than £125,140 a year, will see an increase on their savings and property tax from 45% to 49%.

What does the retained £20,000 Cash ISA allowance mean?

The Government was previously planning to divide the ISA allowance for savers under 65 in 2027 from an overall £20,000 limit to just £12,000 for cash contributions and the remaining £8,000 reserved only for non-cash options such as a Stocks and Shares ISA.

As this plan has now been scrapped for the 2027 tax year, it allows savers to continue to make the most of their Cash ISA options without having to invest in Stocks and Shares ISAs, which may offer higher returns but involve investment risk and the possibility of losses.

When do the Budget measures take effect?

The vast range of Budget measures announced have a timeline that stretches from the next few months all the way to 2030, so the key immediate changes to be aware of are The Government’s energy relief of £100 in January 2027, as well as tax changes set to kick off at the start of the 6 April 2027 tax year. The increases in savings and property tax, new pension allowances, inheritance tax on pensions and business rates relief.

Autumn Budget 2026 savings summary

To summarise:

• The Government is now offering a £100 relief payment to around 20 million households in January 2027 to help offset the rising costs of energy bills.
• The previously planned ISA division scheme has been scrapped, meaning UK savers retain their full £20,000 allowance during the 2027 tax year for use in Cash ISA accounts should they choose.
• Savings income tax, as well as profits from property tax are set to climb by several percent in 2027.
• A new ‘Your First Home’ scheme is set to help lower-income first-time buyers of new-build homes achieve their purchases with deposit levels as low as 2.5%, with the help of a 20% Government-backed equity loan.

Frequently asked questions

What were the main announcements in Autumn Budget 2026?

Energy cost relief from The Government will come in a £100 payment in January 2027, for around 20 million UK homes in bands A to D. The Government’s planned ISA division has been scrapped, and tax on savings and property income will increase by 2%.

Do the Budget savings tax changes take effect immediately?

The Budget’s changes will go into effect in the April 2027 tax year, giving you time to plan your financial future in the months before the shift.

Is the Cash ISA allowance staying at £20,000?

Yes, the Cash ISA allowance is staying at £20,000, as The Government cancelled its earlier plans to divide this allowance between cash and stocks contributions starting in 2027.

Are existing savings accounts affected by the announced tax changes?

There have been tax increases on savings by 2% for each tax band, meaning non-ISA savings accounts will incur more tax on their interest than before.

Is interest in a Cash ISA affected by the savings tax announcement?

Interest earned in Cash ISAs remains consistent, allowing savers to earn tax-free** interest on their cash.

What other savings and first home measures were announced?

Households in energy bands A to D will receive a £100 subsidy from The Government towards their energy bills following energy cost hikes.

Also, a new ‘Your First Home’ scheme is set to help lower-income first-time buyers of new-build homes achieve their purchases with deposit levels as low as 2.5%, with the help of a 20% Government-backed equity loan.

Where can I check the official Budget announcements?

You can check Budget announcements here: Read the official Budget 2026 announcements

Next steps

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*The measures outlined are based on announcements made in the Autumn Budget 2026 and are subject to change before implementation.

**This article reflects Government announcements as of 28 October 2026. ISA rules and tax treatment may change in future and depend on individual circumstances.

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