Key Personal Finance Measures
Budget 2026 introduces several targeted changes to tax thresholds, energy costs and allowances. Income tax bands remain frozen until 2031, meaning a greater proportion of pay will be taxed as wages rise. The salary threshold for Plan 2 student loan repayments will stay frozen at £29,385 for three years from next April. Meanwhile, the national living wage for older workers is set to rise to £13.21 per hour in 2027.
Energy, Pensions and Savings Changes
Households in council tax bands A to D in England qualify for a £100 energy payment, supported by the abolition of standing charges on gas bills and an extended VAT cut on electricity until July. For savers, a planned cut to the annual cash ISA allowance for under-65s has been cancelled. However, the tax rate on savings income for higher earners will increase by 4 percentage points to 24% in April, and unspent defined contribution pensions after death will be included in inheritance tax calculations from April.