Chancellor Rachel Reeves set out the Budget on 26 November after the Office for Budget Responsibility (OBR) accidentally published its Economic and Fiscal Outlook early. The Treasury proceeded with the statement, confirming a package centred on freezing personal tax thresholds, raising taxes on income from assets, targeted welfare reforms, and transport and energy bill interventions. The OBR has apologised for the premature release.
Personal tax thresholds will remain fixed until April 2031. HM Treasury confirms the Personal Allowance stays at £12,570 and the higher‑rate threshold for England, Wales and Northern Ireland at £50,270 from April 2028 to April 2031; the additional rate threshold remains £125,140. National Insurance thresholds aligned to the Upper Earnings/Profits Limits are also held until 2031. Scotland continues to set its own non‑savings, non‑dividend rates, but the UK‑wide Personal Allowance applies, and the freeze covers savings and dividend thresholds across the UK.
The Budget increases taxes on income from assets in two stages. From April 2026 the ordinary and upper rates of dividend tax rise by 2 percentage points, while the additional dividend rate is unchanged. From April 2027 the government creates separate property income tax rates of 22%, 42% and 47%, and raises the savings income rates by 2 percentage points across all bands (bringing them to 22%, 42% and 47%). The Treasury notes that over 90% of taxpayers do not pay savings tax.
ISA rules will be tightened from April 2027. The overall annual ISA allowance remains £20,000 but, for those aged under 65, only £12,000 may be subscribed to cash, implicitly reserving £8,000 for stocks and shares. Savers aged 65 and over will retain the full £20,000 cash ISA allowance. The Starting Rate for Savings stays at £5,000 to 2031. The government will consult in early 2026 on a new first‑home ISA to replace the Lifetime ISA, and will make Help to Save permanent with expanded eligibility from April 2028.
From 6 April 2029, National Insurance relief on salary‑sacrifice pension contributions will be capped at the first £2,000 per employee per year. Contributions above that via salary sacrifice will attract employee and employer NICs; full income tax relief on pension contributions continues. HM Treasury says this shields most basic‑rate users of salary sacrifice and addresses a rapidly rising cost.
A High Value Council Tax Surcharge (HVCTS) begins in April 2028 for homes in England valued at £2 million or more (values assessed using a targeted exercise based on 2026 prices). Charges are set at £2,500 for £2.0–£2.5m, £3,500 for £2.5–£3.5m, £5,000 for £3.5–£5.0m and £7,500 for over £5m, uprated by CPI from 2029–30. Fewer than 1% of properties are expected to be in scope; the surcharge is levied on owners in addition to council tax, with consultation on support and exemptions to follow.
Regulated rail fares in England will be frozen for one year from March 2026, holding season tickets, peak commuter returns and off‑peak inter‑city returns at current prices until March 2027-the first such freeze in 30 years. This sits alongside the £3 single bus fare cap, which the government says is extended to March 2027 and covers around 5,000 routes.
Motoring tax is being re‑based. An Electric Vehicle Excise Duty (eVED) mileage charge starts in April 2028 at 3p per mile for battery electric cars and 1.5p for plug‑in hybrids, with rates indexed to CPI from 2029–30. HM Treasury’s consultation confirms no in‑car trackers; mileage will be declared alongside VED and verified annually (e.g., via MOT data). Separately, the 5p fuel duty cut is extended to 31 August 2026, then reversed in steps on 1 September 2026 (+1p), 1 December 2026 (+2p) and 1 March 2027 (+2p), before RPI indexation resumes from April 2027.
Energy policy changes lower bills from April 2026. Funding 75% of the domestic share of the legacy Renewables Obligation from the Exchequer and ending the Energy Company Obligation on bills will remove around £150 on average from annual household energy costs, with Warm Home Discount expansion continuing this winter. HM Treasury estimates the measures cut CPI inflation by over 0.2 percentage points in 2026–27.
Minimum wage rates rise in April 2026 following Low Pay Commission advice. The National Living Wage for workers aged 21+ increases by 4.1% to £12.71 per hour, worth roughly £900 a year to a full‑time worker on that rate. The 18–20 rate increases to £10.85, and the 16–17 and apprentice rates to £8.00; the accommodation offset moves to £11.10 per day.
Social security changes are significant. The two‑child limit in Universal Credit will be removed from April 2026; the Treasury and OBR say this lifts around 450,000 children out of poverty once fully in effect. Working‑age benefits covered by the annual uprating process will rise by 3.8% from April 2026, in line with September CPI, with separate changes underway to the Universal Credit standard allowance and health element under existing legislation.
The state pension will be uprated by 4.8% in April 2026 under the triple lock. HM Treasury notes this is worth up to £575 a year depending on entitlement, taking the full new State Pension close to the frozen income tax Personal Allowance. The government will also ease administration for pensioners where the state pension exceeds the allowance, so small amounts will not be collected via Simple Assessment from 2027–28.
For households, the practical timeline is staggered: dividend rate rises arrive in April 2026; savings and property income changes in April 2027; ISA reforms in April 2027; the rail fares freeze runs March 2026 to March 2027; energy bill reductions start in April 2026; and eVED begins in April 2028. This sequencing matters for cash‑flow planning and, for savers, for how and when to use ISA allowances before and after April 2027.
Devolution and scope vary across measures. The rail and bus fare interventions and the High Value Council Tax Surcharge apply in England. Personal tax threshold freezes apply UK‑wide for the Personal Allowance and for savings and dividend income, while Scotland sets its own rates and thresholds for non‑savings, non‑dividend income. Welfare and pensions measures, including the two‑child limit removal and triple lock uprating, are GB‑wide where reserved.