Autumn Budget 2026: What’s Changed and What It Means for You
In the Autumn Budget 2026 the government has announced a range of changes affecting pensions, savings and business owners.
Castlefield financial planner Michael Owens provides a summary of the main announcements that may affect you and how they could fit into your financial planning.
Cash ISA allowance
The government has decided not to proceed with the planned Cash ISA limit reduction for under 65s. The planned changes delivered in last year’s budget were due to come into effect from April 2027. However, the reversal means people of all ages will continue to be able to contribute up to £20,000 a year in any combination of Cash ISA and Stocks and Shares ISA.
The government will also explore a new incentive for first-time Stocks and Shares ISA investors, with further details to be announced on how this will look in practice.
The State Pension triple lock
The existing triple lock will remain in place until April 2029, meaning the State Pension will continue to rise each year by the highest of 2.5%, inflation or earnings growth.
From April 2030, the calculation will be adjusted. The State Pension will still rise by at least the higher of 2.5% or inflation. If necessary, it will rise by more to maintain its value relative to average earnings over time.
Pension Tax Allowance
The Budget introduces a new Pension Tax Allowance from April 2027 intended to ensure pensioners whose total income is at or below the value of the full new State Pension are not brought into tax solely because of State Pension uprating during this Parliament.
New First Time Buyer ISA and changes to the Lifetime ISA
A new First Time Buyer ISA will be introduced from April 2029 and replace the Lifetime ISA for new savers. It will have an annual contribution limit of £4,000 each year and receive a 25% government bonus, calculated on the account balance when funds are withdrawn for a qualifying first-home purchase costing up to £450,000. Unlike the Lifetime ISA, the new account will have no upper age limit.
For existing Lifetime ISA holders, the withdrawal charge will fall from 25% to 20% from 29th October 2026 where the money is used to buy a first home above the £450,000 property cap. This means the government bonus would be removed, but the saver’s original contributions would be protected.
Business Asset Disposal Relief reduced
From 6 April 2027, the lifetime limit for gains eligible for Business Asset Disposal Relief will reduce from £1 million to £500,000. Business Asset Disposal Relief, formerly Entrepreneurs’ Relief, can reduce the Capital Gains Tax payable when someone disposes of a qualifying business, part of a business, or certain shares in their personal company. Qualifying gains are taxed at 18%, compared with the standard Capital Gains Tax rate of up to 24%.
At the moment, an individual has a £1 million lifetime limit for gains on which they can claim Business Asset Disposal Relief. It's a cumulative lifetime allowance, rather than an allowance for each individual business sale. From 6 April 2027, only up to £500,000 of qualifying lifetime gains will be eligible for the relief.
New Founders Relief
From 6 April 2027, a new Founders’ Relief will offer a reduced Capital Gains Tax rate of 10% on qualifying gains, with a lifetime limit of £10 million per individual. The relief is intended for qualifying founders of high-growth, innovative UK companies. Further details on exactly who and which companies will qualify are currently subject to consultation.
Savings and property tax rates
From 6 April 2027, the income tax rates paid on the property and savings elements of someone’s income will increase to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers. This is a further increase on the 22%, 42% and 47% rates announced at last year's Budget.
Warm Homes Loan Scheme
More details have been announced on the scheme to help households pay for solar panels, battery storage, heat pumps and more. Participating lenders will offer government-backed no- and low-interest loans. The Government say this will enable lenders to offer interest reductions of up to five percentage points compared with regular loans and some, products may be interest-free.
Pension death benefits two-year rule
Under the current rules, most pension death benefits where the pension owner dies before age 75 can normally be paid tax-free (subject to the relevant rules and allowances). However, if certain lump-sum death benefits are paid more than two years after the pension provider was notified of the death, they can instead become subject to Income Tax at the beneficiary’s marginal rate. The government has removed this two-year rule with effect from 28 October 2026, meaning a payment will no longer become taxable solely because it is made outside of that two-year period.
Written by Michael Owens
Sources
HM Treasury: Budget 2026 (HTML)
Tax treatment depends on individual circumstances and may be subject to change. The information above is based on our understanding of the Autumn Budget 2026 announcements at the date of publication. Some measures remain subject to consultation, legislation or further detail. If you are unsure how any of these changes may affect you, please speak to your financial adviser. Correct as at 29.10.2026. Opinions constitute the adviser's judgement as of this date and are subject to change without warning. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.
The contents of this article are not intended to be construed as legal, accounting, tax or investment advice. You should seek independent financial advice if you are unsure whether an investment product is suitable for your personal financial circumstances and appetite for risk.