The Autumn Budget 2026 has brought a mix of changes for savers, homeowners and those planning for the future. While a key takeaway for savers is the government’s confirmation the £20,000 annual cash ISA allowance will remain unchanged, tax on savings income is set to increase from April 2027.
The Budget also included first-time buyer help, landlord tax hikes and changes to inheritance tax, alongside measures intended to help households manage the cost of living.
Here’s a breakdown of the key changes that could affect your savings and an overview of some other highlight announcements.
Cash ISA limit remains at £20,000
One of the most significant announcements for savers is the decision to scrap the planned reduction in the annual cash ISA allowance. The government had previously announced plans to reduce the amount people aged under 65 could pay into a cash ISA from £20,000 to £12,000 a year from April 2027. However, the Chancellor of the Exchequer, John Healey, said these ISA changes would be scrapped, meaning the cash ISA allowance will remain at £20,000 for everyone.
This is good news as per current tax rules, savers can continue to put up to £20,000 a year into a Cash ISA completely free of income tax allowing you to earn more interest tax-free.
Tax on savings income to increase
For those savers that have money outside of an ISA, from April 2027 there will be an increase in the rates of income tax applied to savings income which goes above your Personal Savings Allowance (PSA).
The Autumn Budget 2026 also included an increase on tax rates on savings income by two percentage points across all three bands from 6 April 2027:
- Basic rate taxpayer: increasing to 24%
- Higher rate taxpayer: increasing to 44%
- Additional rate taxpayer: increasing to 49%
The Personal Savings Allowance (PSA) will remain frozen. This tax-free allowance will stay at £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. Additional-rate taxpayers continue to receive £0 allowance.
These new rates will therefore be most relevant to people whose taxable savings interest exceeds their available allowance. For savers who may fall into this category, understanding how much interest their savings generate will continue to be an important factor when deciding where to place their money.
Autumn budget 2026 inheritance tax updates
The Chancellor included some technical changes to inheritance tax (IHT) rules in the Autumn Budget 2026. These changes include how debts linked to assets held in trust are treated for IHT. The new rules are designed to make it harder to use certain debts to reduce an inheritance tax bill unfairly. For example, some debts may no longer be allowed to reduce the value of an estate or trust when calculating IHT. There were also some technical changes to the tax treatment of certain pension death benefits. More tax-related information is available on the Gov.uk website.
First-time buyer ISA available from April 2029
The new savings product is aimed at supporting aspiring homeowners. Savers will still receive a 25% government bonus on contributions of up to £4,000 per tax year as long as the account balance when withdrawn is used to purchase a qualifying first home worth up to £450,000. Find out more.
There’ll be no upper age restrictions or charges on withdrawals, unlike the Help to Buy ISA which savers can contribute to until November 2029 and claim their bonus by December 2030.
For those who already have money in a Lifetime ISA, the withdrawal charge will be reduced from 25% to 20% for purchases of a home above the £450,000 price cap, provided they meet the other requirements, from 29 October 2026. This means those savers won’t lose any of their individual contributions.
'Your First Home' scheme also introduced
More good news for those looking to take their first steps onto the property ladder. The new government-backed equity loan scheme called ‘Your First Home’, is designed to support first-time buyers.
The government will provide up to £4.7 billion in lending with the aim of supporting 70,000 first-time buyers to purchase a new-build home in England by using an equity loan worth 20% of the purchase price, alongside a repayment mortgage and a deposit of at least 2.5%.
You can find out more in the government’s Your First Home scheme guide.
Other Autumn Budget 2026 summary announcements which could affect UK households
- Eligible households in Council Tax bands A to D in England will receive a £100 Household Support payment. Payments are expected from January 2027. The Welsh Government will provide a matching payment. Scotland and Northern Ireland will decide their own arrangements.
- The temporary zero rate of VAT on domestic electricity has been extended until July 2027. This means households will continue to pay no VAT on their electricity bills until then.
- The National Minimum Wage and National Living Wage will rise. Many workers across the UK will benefit from higher pay.
- Tax rates on savings income and rental profits to rise by four percentage points from 6 April 2027
- Income tax, employment taxes and pension taxes as well as National Insurance will stay the same. No changes have been announced.
How will the 2026 Autumn Budget affect your savings?
For savers, keeping the £20,000 Cash ISA allowance means there is no need to change existing savings plans. However, planned changes to the tax paid on savings interest from April 2027 mean it is important to understand how much interest your savings earn. This will help you work out whether you may need to pay tax on your savings income.
The Budget also includes changes that could affect long-term financial plans. This is especially relevant for first-time buyers, landlords and people with more complex estate planning needs.
As with any Budget, the impact will depend on your personal circumstances. Keeping up to date with the changes can make it easier to understand your options and make informed decisions about your money.
Tax treatment depends on individual circumstances and may change in the future. This information is for general information only and does not constitute financial or tax advice.
This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.
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