How the budget affects you

The latest government budget was announced by Chancellor John Healey on 28th October 2026. Healey described it as an opportunity for ‘breathing space’¹ in the face of rising financial pressures. The budget encompasses a range of measures that aim to bring relief in areas such as energy, fuel, wages, savings and the state pension.

Help with energy costs

Those living in England in a home that is within council tax bands A to D are set to get a one-off £100 Household Energy Payment from January onwards. ¹ This will be paid directly into bank accounts. Though this measure will mitigate some of the cost of increasing energy bills, it will only cover a small portion. 

Gas standing charges will be eliminated entirely in England, Scotland and Wales. ¹ This cost will be added to the price per unit instead. The Treasury has stated that this measure will mean that 60% of households will save £45 each year. Reduced VAT on electricity bills was set to end in April but will be extended until July.

Fuel duty cuts and tax-free mileage rates

The temporary 5p cut in fuel duty on petrol and diesel will continue until July. ¹ Those who drive long distances for work will benefit from increased tax-free mileage rates. People who drive up to 10,000 miles while making a living will see the 55p per mile rate made permanent, and those who go over that amount will see the rate increase from 25p to 35p.²

Living wage to increase

The National Living Wage for eligible employees aged 21 and over will increase from £12.71 per hour to £13.21.¹ However, income tax thresholds will continue to be frozen, so pay rises may have less of an impact than people expect.

Savings to be impacted

The plan to lower the limit that people under 65 can put into an ISA to £12,000 per year has been shelved: the limit will continue to be £20,000.¹ There will be a 2% increase in tax on savings above tax-free allowances from April.²

A first-time buyer ISA is set to be introduced ² and is currently in the planning stages. First-time buyers will benefit from a new equity scheme for the purchase of new builds, in which they can invest in a home with a deposit of 2.5%. The penalty for withdrawing savings from a Lifetime ISA for those buying a property above the £450,000 threshold will be removed.¹

State pension set to rise

The state pension will rise by 3.9%.¹ The new flat-rate pension will go up by £488 per year from April, and the previously existing basic pension will increase by £374.40. 

Other groups who will benefit from the budget

Those who work as unpaid carers previously lost their whole Carer’s Allowance if they earned over £204 per week after tax. A taper rate will be applied instead, potentially allowing them to keep more of their earnings. Parental allowances will be offered to self-employed fathers and parents within same-sex partnerships.²

Sources:
¹ https://www.bbc.co.uk/news/articles/cr0j05vxlwjzo
² https://www.bbc.co.uk/news/articles/c6x2zrjl7kjno

All the information in this article is correct as of the date of publishing. The opinions expressed in this publication are those of the authors Euxton Mortgage Market. The information provided in this article, including text, graphics and images does not, and is not intended to, substitute advice; instead, all information, content and materials available in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

November 2026