UK Budget 2026: What Changed for Take-Home Pay, Savings, Landlords and Pensions
The Chancellor did not raise the headline rates of Income Tax, National Insurance or VAT. The main new changes for personal finances are higher rates on taxable savings and property income from 6 April 2027, the Cash ISA limit staying at £20,000, and new support for some pensioners and first-time buyers.
What matters most:
• Salary: no increase to headline Income Tax or employee National Insurance rates was announced in this Budget.
• Savings: from 6 April 2027, taxable savings income rates are scheduled to be 24%, 44% and 49%.
• Landlords: property-income rates in England, Wales and Northern Ireland are scheduled to be 24%, 44% and 49% from 6 April 2027.
• Cash ISA: the annual Cash ISA limit stays at £20,000, reversing the planned reduction.
• Pensioners: a new Pension Tax Allowance starts on 6 April 2027 for eligible people above State Pension age.
UK Budget 2026: confirmed changes at a glance
| Area | Confirmed announcement | When it applies |
|---|---|---|
| Income Tax on wages | No increase to headline Income Tax rates announced in Budget 2026. The standard Personal Allowance for 2026/27 remains £12,570. | Current tax year: 6 April 2026–5 April 2027 |
| Employee National Insurance | No increase to the headline employee NIC rates announced in the Budget. | Current rules continue; personal circumstances can change deductions |
| Taxable savings income | Basic rate 24%; higher rate 44%; additional rate 49%. | From 6 April 2027; rates apply UK-wide |
| Property income | Basic rate 24%; higher rate 44%; additional rate 49% under the announced property-income regime. | From 6 April 2027 in England, Wales and Northern Ireland |
| Cash ISA | Annual Cash ISA subscription limit retained at £20,000. | From 6 April 2027 |
| Pension Tax Allowance | New allowance to prevent eligible pensioners with income up to the full new State Pension from being brought into paying Income Tax. | 6 April 2027–5 April 2030 |
| First Time Buyer ISA | New product with a 25% government bonus; replaces the Lifetime ISA for new savers. Existing Lifetime ISA holders can continue under existing rules. | From April 2029 |
| National Living Wage | Increases by 3.9% to £13.21 per hour; the 18–20 National Minimum Wage rises to £11.27. | From 1 April 2027 |
The dates above are the announced implementation dates, not a claim that every proposal has already completed its legislation. Refer to the official documents for implementation details and any later amendments.
Will the Budget change your take-home pay? 2026/27 estimator
For a typical employee paid through PAYE, Budget 2026 did not announce a rise in headline Income Tax rates or employee National Insurance rates. That does not mean every payslip stays the same: salary changes, tax codes, frozen thresholds, pension arrangements, student loans and other deductions can still affect net pay.
Estimate annual and monthly pay after standard Income Tax and employee National Insurance for a single employed earner in the 2026/27 tax year.
Estimate only. Assumes standard employee NI category and no other deductions or tax reliefs.
What this calculator includes and leaves out
It estimates Income Tax using the 2026/27 Personal Allowance and regional rates, then applies standard employee National Insurance at 8% between the £12,570 primary threshold and £50,270 upper earnings limit, and 2% above that limit. Scotland has different Income Tax bands, but employee National Insurance thresholds are not Scottish Income Tax bands.
Savings tax changes from April 2027
From 6 April 2027, the government plans to raise the Income Tax rates applied to taxable savings income by a further two percentage points. The published 2027/28 savings-income rates are 24% basic, 44% higher and 49% additional, and apply across the UK.
| Tax band | 2026/27 standard rate | Published 2027/28 savings rate |
|---|---|---|
| Basic | 20% | 24% |
| Higher | 40% | 44% |
| Additional | 45% | 49% |
Example: on £1,000 of savings interest that is fully taxable at the basic rate after applicable allowances, 24% would mean £240 tax rather than £200 at a 20% rate. Compared with the 22% savings rate already scheduled before this Budget, the additional two-point rise announced now is £20 per £1,000 of taxable interest. Your actual bill can be lower because of the Personal Savings Allowance, the starting rate for savings or tax-free ISA interest.
Landlord tax changes from April 2027
Property-income tax rates in England, Wales and Northern Ireland are scheduled to become 24% for the basic rate, 44% for the higher rate and 49% for the additional rate from 6 April 2027. These are rates applied to taxable property income, not the gross rent received: allowable expenses and the person’s tax position matter.
For a simple illustration, £1,000 of net taxable rental income taxed entirely at 24% would produce £240 of tax. That is £40 more than applying the 20% standard basic rate for 2026/27, and £20 more than the 22% basic property-income rate already expected before the latest Budget. This example is not a personalised landlord tax calculation.
Scotland has a separate Income Tax system for non-savings, non-dividend income. Scottish property owners should check the final rules that apply to their own circumstances rather than automatically using the England/Wales/Northern Ireland property-rate table.
Cash ISA limit: £20,000 retained
The government has decided not to reduce the annual Cash ISA subscription limit. It remains £20,000 from 6 April 2027. The wider annual ISA subscription limit also remains £20,000. This is a confirmed reversal of the planned Cash ISA reduction, not a new tax charge.
The decision is relevant if you use a Cash ISA to earn interest without paying Income Tax on that interest. Non-ISA savings interest may still be taxable above the allowances available to you. The government also said it will explore a new ISA incentive for people investing in a Stocks and Shares ISA for the first time; detailed design is still to be developed with industry.
Pension changes: what is new?
1. Pension Tax Allowance for eligible pensioners
From 6 April 2027 to 5 April 2030, the new allowance is intended to stop people above State Pension age with total income up to the full new State Pension from being brought into paying Income Tax because of the way the State Pension is uprated. People just above the threshold receive a tapered allowance.
For 2027/28, the published figures are a full-allowance threshold of £13,037 and a point at which the allowance is fully withdrawn of £13,319. The taper is £1 of allowance for every £3 of income above the eligibility threshold.
2. Pension lump-sum death benefits
The Budget removes the two-year rule for taxation of pension and lump-sum death benefits. The change applies to payments made on or after 28 October 2026, with legislation to be introduced in Finance Bill 2026–27. It means beneficiaries should not become taxable solely because qualifying tax-free benefits are paid more than two years after the member’s death.
3. Inheritance Tax on unused pensions: a previous policy
Separately, most unused pension funds and pension death benefits are already scheduled to come within the value of a deceased person’s estate for Inheritance Tax purposes from 6 April 2027. This was announced at Autumn Budget 2024 and legislated for in Finance Act 2026; it is not a new measure announced on 28 October 2026. Exemptions apply, including registered pension-scheme death-in-service benefits and certain dependant’s scheme pensions.
Personal representatives may have reporting and payment responsibilities. Check HMRC’s technical note for the detailed rules and exceptions.
Not the same as pension contribution relief: the new Pension Tax Allowance is aimed at eligible pensioners receiving State Pension income. It is not a general increase in tax relief on workplace or private pension contributions.
First-time buyers: new ISA and Lifetime ISA change
A new First Time Buyer ISA is scheduled for April 2029 and will replace the Lifetime ISA for new savers. The announced design includes contributions of up to £4,000 a year and a 25% government bonus paid when funds are withdrawn for a qualifying first-home purchase of up to £450,000. The maximum government bonus is £20,000, and the new product has no upper age restriction.
People who already have a Lifetime ISA can continue contributing to and using it under the existing rules. From 29 October 2026, the withdrawal charge for an otherwise qualifying first-home purchase above the £450,000 property-price cap falls from 25% to 20%. The 25% charge remains for unauthorised withdrawals.
Other confirmed changes worth knowing
National Living Wage
From 1 April 2027, the National Living Wage rises by 3.9% to £13.21 an hour. The National Minimum Wage for 18–20-year-olds rises to £11.27, and the rate for 16–17-year-olds and eligible apprentices rises to £8.31. The effect on take-home pay depends on hours, Income Tax and National Insurance.
Trading allowance
From 6 April 2027, the annual Trading Allowance is scheduled to rise from £1,000 to £3,000 for qualifying trading and miscellaneous income. Eligibility and the choice between the allowance and actual expenses matter.
Household energy support
For 2027, the government announced a £100 Household Energy Payment for up to 20 million households in council-tax bands A–D in England, with funding for similar support elsewhere in the UK. It also extended the temporary VAT cut on electricity bills until 1 July 2027.
Fuel duty
The temporary 5p-per-litre fuel duty cut is extended for a further six months to 1 July 2027, and the planned RPI increase is deferred until that date.
Who is most likely to be affected?
- Employees: no new headline Income Tax or employee NI rate increase was announced, although ordinary payroll factors and existing threshold policy still influence take-home pay.
- Savers outside tax-free accounts: check how much interest is taxable after your Personal Savings Allowance and any other allowances.
- Landlords: model taxable property profit under the rates due from April 2027; do not apply the new rates to gross rent without deducting relevant expenses.
- Cash ISA users: the £20,000 limit is retained, so the planned reduction is not going ahead as previously expected.
- Pensioners near the tax threshold: check eligibility for the new Pension Tax Allowance from April 2027.
- First-time buyers: the new ISA is not due until 2029; existing Lifetime ISA rules continue, subject to the announced withdrawal-charge adjustment.
UK Budget 2026 questions answered
Did the UK Budget 2026 increase Income Tax on salaries?
No increase to the headline Income Tax rates on earnings was announced in Budget 2026. The standard Personal Allowance remains £12,570 for 2026/27. Other existing rules, thresholds and personal circumstances can still affect the amount taken from a payslip.
When do the new savings tax rates start?
The announced 24%, 44% and 49% rates for taxable savings income are scheduled to take effect on 6 April 2027. These rates apply across the UK. Applicable allowances and tax-free ISA interest can change the amount of tax actually payable.
Is the Cash ISA allowance being cut to £12,000?
No. Budget 2026 confirms that the annual Cash ISA limit will remain £20,000 from 6 April 2027. The planned reduction is not going ahead.
Who qualifies for the Pension Tax Allowance?
The allowance is intended for people above State Pension age whose total income is up to or just above the full new State Pension. It is scheduled to apply from 6 April 2027 to 5 April 2030, with a taper for people just above the eligibility threshold. Check the official explainer for the full eligibility rules.
Will the First Time Buyer ISA be available immediately?
No. It is scheduled to launch in April 2029. The announced design includes a 25% government bonus towards a qualifying first home worth up to £450,000, with a maximum bonus of £20,000. Existing Lifetime ISA holders can continue under the current rules.
Does the take-home calculator include pension contributions or student loans?
No. It estimates Income Tax and standard employee National Insurance only. Pension contributions, salary sacrifice, student-loan repayments, benefits, multiple jobs and personal tax-code adjustments can change actual take-home pay.
Official sources and methodology
This page prioritises primary government documents. Future measures can be subject to legislation and further guidance; use the official pages below for the latest legal wording.
- HM Treasury: Budget 2026 (full HTML document). Primary source for the Budget announcements, implementation dates and policy details.
- HMRC: Budget 2026 Overview of Tax Legislation and Rates. Tax-policy measure details and legislation timetable.
- HMRC: Annex A, rates and allowances. Published personal tax rates and allowances, including the Pension Tax Allowance thresholds.
- GOV.UK: Income Tax rates and Personal Allowances. Current 2026/27 Income Tax rates and thresholds.
- HMRC: Rates and thresholds for employers, 2026/27. PAYE and employee National Insurance thresholds used for this estimate.
- Scottish Government: Scottish Income Tax rates and bands, 2026/27. Regional tax bands used in the calculator.
- HM Treasury: Pension Tax Allowance explainer. Eligibility and operation of the new allowance.
- HMRC: Inheritance Tax on Pensions, Technical Note 2. Details of the already-legislated April 2027 pension Inheritance Tax changes.
Editorial note: Ultimate Info Guide is an independent information website and is not affiliated with HM Treasury or HMRC. This page is general information, not personal tax, investment, mortgage or pension advice.