Today, the Chancellor of the Exchequer, John Healey delivered his Autumn Budget 2026 today, with a number of measures affecting individuals, property owners, savers, pensioners and families.
Autumn Budget 2026: What does it mean for individuals and families?
While there was no single headline change to the taxation of employment income, the Budget continues the trend towards taxing income from accumulated wealth more heavily.
In particular, savings and property income will face higher income tax rates from April 2027, while there are further changes affecting pensions and Inheritance Tax (IHT).
For private clients, the key announcements are summarised below.
Savers and landlords face higher rates of Income Tax
From 6 April 2027, higher rates of Income Tax will apply to savings and property income, representing an overall increase of four percentage points compared with the current rates.
The new savings income tax rates will apply across the UK, while the separate property income tax rates will apply in England, Wales and Northern Ireland. The Government has also provided Scotland and Wales with powers to set their own property income tax rates.
These changes will be particularly relevant to individuals holding significant cash savings or investments generating taxable interest outside tax-efficient wrappers, as well as private landlords receiving taxable rental profits.
The increases build on measures announced in the Autumn Budget 2025, which introduced a two percentage point rise in savings and property income tax rates from April 2027. The Autumn Budget 2026 has announced a further two percentage point increase, bringing the total rise to four percentage points across all three tax bands.
A significant change for smaller amounts of trading income
The Trading Allowance will increase from £1,000 to £3,000 from 6 April 2027.
The Self Assessment reporting threshold for trading income will also increase to £3,000. Where the allowance covers all relevant income before expenses, individuals choosing to use the relief will no longer need to declare or pay tax on that income.
This should simplify matters for individuals receiving relatively small amounts of trading or miscellaneous income.
Self Assessment Payments: Moving towards more regular tax payments
From April 2029, individuals within Income Tax Self Assessment who currently make Payments on Account will be required to make more regular payments during the year towards their final tax liability. The payments will be automated, with eligible taxpayers also able to choose to make payments through PAYE.
The change represents a move away from the current system of making two Payments on Account towards a more regular pattern of paying tax closer to the period in which income arises. The Government has consulted on the proposals, but importantly, the detailed design and implementation arrangements are still being developed with taxpayers and other stakeholders.
For the self-employed and others with significant income outside PAYE, the change could mean adapting to a different pattern of cash flow and tax payments from April 2029. Further detail will therefore be important before taxpayers can assess precisely how the new regime will affect them.
Further changes to Inheritance Tax and trusts
The Government is tightening the rules governing the deduction of liabilities when calculating the value of settled property for IHT purposes.
New legislation will provide a statutory rule governing liabilities properly incurred by trustees and will extend existing restrictions and anti-avoidance provisions. In particular, certain liabilities funded from value originating in a beneficiary’s own estate will not be capable of reducing IHT charges. The changes apply to deaths and other chargeable events on or after 28 October 2026.
This is a potentially important change for clients with trust arrangements involving borrowing or other liabilities, and existing structures may need to be reviewed.
Pension and death benefits
There are several changes to the taxation of pension death benefits.
The Government will introduce a new standalone process for HMRC to assess tax where a member dies before age 75 and their available lump sum and death benefit allowance is exceeded. Instead of the excess being treated as pension income of the individual beneficiaries, beneficiaries will face a tax charge on their share of the excess based on their marginal Income Tax rate for the year in which it was paid.
The legislation will also preserve Income Tax relief where a benefit is subject to both IHT and Income Tax, with the changes concerning the interaction with IHT applying to deaths from 6 April 2027.
Separately, the Government is removing the pension death-benefit two-year rule. Tax-free pension and lump-sum death benefits will no longer become taxable solely because payment takes place more than two years after the scheme administrator knew, or could reasonably have been expected to know, about the member’s death. This applies to payments made from 28 October 2026.
Terminal illness and pension access
The rules allowing access to a serious ill-health pension lump sum will be amended so that it can be paid where the member is reasonably expected to live for less than one year, applying to uncrystallised pension rights irrespective of whether the individual has reached age 75.
The rules will also allow medical evidence to be provided by an overseas medical practitioner where the pension scheme member lives in the country in which that practitioner works. The changes will take effect from Royal Assent of Finance Bill 2026-27.
Pension Tax Allowance
A new Pension Tax Allowance, originally announced at Budget 2025, will operate for the 2027/28, 2028/29 and 2029/30 tax years.
It is designed to prevent pensioners whose total income is no more than the full new State Pension having to pay small amounts of Income Tax through Simple Assessment. For individuals above that income level, the allowance will be withdrawn by £1 for every £3 of additional income.
High-value residential property
The previously announced High Value Council Tax Surcharge will proceed from April 2028 and will apply to residential properties worth £2 million or more.
The measure follows the announcement at Autumn Budget 2025 of an additional council tax charge applying to higher-value residential property. For individuals holding higher-value homes, this introduces another factor to consider alongside the existing tax costs of owning and transferring residential property.
Capital Gains Tax
The Budget contains some significant Capital Gains Tax (CGT) changes, particularly for entrepreneurs and business owners.
Business Asset Disposal Relief (BADR)
From 6 April 2027, the lifetime limit for gains qualifying for Business Asset Disposal Relief (BADR) will be reduced from £1 million to £500,000. Special rules will apply to certain contracts entered into before 6 April 2027 but completed afterwards, and to certain share reorganisations and exchanges of securities.
This is an important change for shareholders contemplating a business disposal. Where a transaction could qualify for BADR, the timing and structure of the disposal may therefore become increasingly important ahead of April 2027.
New Founders' Relief
Alongside the reduction in BADR, the Government has announced a new Founders’ Relief, aimed at founders and early investors who have made a significant long-term contribution to the creation and development of some of the UK’s highest-growth and most innovative companies.
The relief is intended to provide a lower rate of CGT on qualifying disposals of shares and securities made on or after 6 April 2027. However, the detailed design is not yet final. A technical consultation is now underway and closes on 30 November 2026, after which legislation is expected to be introduced through amendments to Finance Bill 2026-27.
For now, therefore, business owners should be cautious about assuming that they will qualify until the final conditions of the new relief are known.
Property Disposal reporting
There is also a welcome administrative change for individuals disposing of residential property. The Government is amending the late-filing penalty rules applying where someone fails to submit a UK property disposal return within the statutory deadline.
From 28 October 2026, those penalties will stop continuing to accrue where the disposal is subsequently reported through the individual’s Self Assessment return.
Individual Savings Accounts (ISAs)
ISAs: changes for savers and first-time buyers
There are also some important announcements affecting ISAs, although several of the changes will not take effect immediately.
Cash ISA limit retained at £20,000
The Government has confirmed that the Cash ISA limit will remain at £20,000 for savers aged over 18 from April 2027. It will also work with the savings and investment industry to explore a new incentive for people investing in a Stocks and Shares ISA for the first time, although the detail of that incentive has yet to be developed.
This is particularly relevant given the decision to increase Income Tax rates on savings income from April 2027. For clients holding substantial cash savings outside ISAs, making effective use of ISA allowances may therefore become increasingly important.
New First Time Buyer ISA
A new First Time Buyer ISA will be introduced from April 2029, replacing the Lifetime ISA for new savers. Existing Lifetime ISA holders will, however, be able to continue contributing to and using their existing accounts under the current rules.
Under the new First Time Buyer ISA, the Government will provide a 25% bonus on the final account balance, up to a maximum balance of £20,000, with the bonus paid on withdrawal towards the purchase of a first home costing up to £450,000.
Immediate change to the Lifetime ISA withdrawal charge
There is also an earlier change for existing Lifetime ISA holders.
From 29 October 2026, the withdrawal charge where funds are used to purchase a property above the Lifetime ISA property price cap will reduce from 25% to 20%. The 25% charge will continue to apply to other unauthorised withdrawals.
What should individuals and families take away from Budget 2026?
For many individuals, the key message from this Budget is that the source and structure of personal income will increasingly matter. From April 2027, higher rates will apply to savings and property income, increasing the importance for savers and landlords of reviewing how investments and assets are held and making effective use of available tax-efficient allowances and wrappers.
Business owners should also pay particular attention to the Capital Gains Tax changes. The reduction in the BADR lifetime limit from £1 million to £500,000 from 6 April 2027 could affect the tax cost of a future business disposal, while the proposed new Founders’ Relief may provide a valuable 10% CGT rate for qualifying founders. The detailed Founders’ Relief rules remain subject to consultation, so eligibility should not yet be assumed.
For wealthier families, the changes to IHT, trusts and pension death benefits reinforce the importance of considering estate, trust and pension planning together rather than in isolation. In particular, existing trust arrangements involving liabilities or borrowing may warrant review in light of the new IHT rules applying from 28 October 2026.
There is also some welcome simplification, including the increase in the Trading Allowance to £3,000 from April 2027 and the removal of the pension death-benefit two-year rule.
Real people. Real support.
Our Services
Accounts Soltutions
Our accountancy & business advisory services are tailored to your company’s needs. We give your business actionable insights and practical advice to elevate your company, and help you reach the next level.
Digital Transformation
Adopting cloud-based solutions for accounting, stock control, collaboration, HR, and marketing can automate work, enhance efficiency, and save costs for businesses integrating technology.
Audit & Assurance
We can adapt to meet all your auditing needs, from statutory to interim and heavily bespoke audits. We aim to remove this pressure with minimum disruption to your everyday business.
Taxation
Our tax planning services help minimise tax liabilities while ensuring compliance with laws and regulations. We assist with basic tax compliance to complex issues like Group Restructuring.
Corporate Finance
Whether you require support for an MBO, business valuation or are looking to exit your business, our team combine significant accounting, banking and taxation expertise to support you through the process.
Payroll
We deliver the feel of a personal in-house payroll function in an accessible and down-to-earth way.
Our services help employers improve efficiency, accuracy and performance, allowing you to focus on making the right business decisions for your company.