The latest UK budget brings a wide range of tax, spending, pension and welfare measures that will affect households, savers and businesses over the coming years. This article summarises the key announcements and their potential financial impact.

For anyone reviewing their long-term plans, a financial adviser offering the best service and transparent fees can help you understand how these changes affect your goals, whether related to your pension, savings or family protection. (book a meeting with an adviser)

Opening Priorities and Economic Direction

The government’s fiscal update focused on economic rebuilding, increased public investment, updated fiscal rules and a continued intention to support working households. Themes included the cost of living, investment-led growth and maintaining public services. While commentary surrounding early document releases drew attention, the budget itself aimed to emphasise stability.

Personal Taxes

Income Tax and National Insurance

Thresholds for income tax and national insurance will remain frozen until 2028. While headline tax rates stay the same, more people will gradually move into higher tax bands due to wage growth. The government states that wealthier households will contribute proportionately more through other tax measures.

For individuals reviewing post-tax income or retirement planning, speaking with a financial advisor who can help you find financial adviser support from an independent adviser may help clarify the best approach.

Property and Council Tax

The basic and higher rates of tax on property, dividend and savings income will rise by two percentage points.
From April 2028, properties valued above £2m will incur a high-value council tax surcharge, increasing for properties over £5m.

Pensions and Savings

Pension Contributions

From April 2029, a £2,000 cap will apply to pension contributions made through salary sacrifice that are exempt from national insurance. Amounts above that level will be taxed similarly to standard employee pension contributions. This is expected to raise significant revenue and may influence how higher earners structure their retirement saving.

Anyone assessing how these changes affect retirement planning may wish to consult a financial adviser or certified adviser specialising in pension strategy. (book a meeting with an adviser)

ISA Reform

From April 2027, the annual cash ISA limit will be reduced to £12,000, although the stocks and shares ISA allowance remains unchanged at £20,000. A simplified ISA structure for first-time homebuyers will be consulted on in 2026. Savers over 65 are exempt from the reduction in cash ISA allowance.

Energy and Cost-of-Living Measures

The Energy Company Obligation (ECO) insulation programme will end, with the government stating that scrapping the scheme will reduce energy bills by £150 next year. While welcome to many households, concerns remain that ending insulation support removes long-term savings for low-income families.

Welfare and Income Support

Two-Child Benefit Limit

The two-child limit for universal credit and tax credit will be abolished—one of the budget’s most significant welfare changes. This aims to reduce child poverty and improve opportunities for affected families.

National Minimum Wage

From April, the minimum wage for 18- to 20-year-olds will rise to £10.85, and the national living wage will rise to £12.71. This provides support to low-income workers but will increase staffing costs for some businesses.

Other Consumer and Health-Related Taxes

Sugar Levy Changes

Milkshakes and certain dairy-based drinks will now be included in the sugar tax, with thresholds tightened. This aims to reduce consumption of high-sugar products among younger people.

Fuel Duty

Fuel duty will remain frozen until September 2026 before rising in line with inflation. A future increase remains possible depending on economic conditions.

Electric Vehicles

Electric car owners will face a new excise duty—3p per mile for fully electric vehicles and 1.5p for plug-in hybrids—to help fund road maintenance.

Public Services: Education and the NHS

Funding will include:

-£5m for secondary school libraries

-£18m for playground improvements

-£4.9bn in efficiency savings redirected to increase nursing capacity and GP appointments

-£300m invested in healthcare technology

-250 new local patient health centres

These measures aim to strengthen essential services without returning to previous austerity efforts.

Business, Enterprise and Regional Investment

Key initiatives include:

-Expansion of entrepreneurial investment schemes

-A three-year stamp duty holiday on shares in newly listed UK companies

-A 40% investment allowance for business expenditure

-Lower business rates for retail, hospitality and leisure firms, funded by higher charges on large commercial properties

-New customs duty rules on all parcel values

-Additional funding for devolved governments and new regional employment zones, including AI-focused growth areas

Energy and North Sea Policy

New nuclear energy investment will be supported through reduced regulatory barriers. In the North Sea, new offshore fossil fuel projects may proceed when linked to existing fields.

Gambling and “Sin Taxes”

From April 2026:

-Remote gaming duty will rise from 21% to 40%

-Online general betting duty will increase to 25%

-Bingo duty will be abolished

-Casino gaming duty bands will remain unchanged

The measures aim to raise over £1bn annually by 2031.

Borrowing, Inflation and Growth Forecasts

Borrowing is forecast to decrease steadily from £138bn in 2025–26 to £67bn by 2030–31. Growth forecasts are modest, with gradual expansion predicted until 2030. Inflation is expected to ease toward 2% in the medium term but will remain slightly higher in the near term.

Closing Direction

The budget emphasised “choices” centred around avoiding austerity, managing borrowing responsibly and supporting the cost of living through targeted tax and welfare decisions. Improvements for lower-income households, stable headline tax rates and support for public services were key themes.

For anyone wanting personalised guidance on how these tax and pension changes impact their future plans, speaking with a financial advisor who can help you find financial adviser support through an independent adviser experienced in both pension and family protection matters is recommended. (book a meeting with an adviser)

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