How the Autumn Budget 2026 could affect your money

Cash ISA and Lifetime ISA under review

The annual ISA allowance for under 65s will stay at £20,000.

In last year’s Autumn Budget, Rachel Reeves announced she would reduce the Cash ISA annual allowance for under 65s from £20,000 to £12,000. This has now been scrapped, which will give you the freedom to choose how you use your annual allowance. There are also proposals for a new ‘Starter ISA’, aimed at first-time investors.

Changes for first time buyers

For those with a Lifetime ISA, the 25% withdrawal charge is being reduced to 20%. This applies if you want to buy a home above the £450,000 price cap, or before age 60. From April 2029, the Lifetime ISA will be replaced by the First Time Buyer ISA. The 25% penalty and upper age limit will be removed, the bonus capped at £20,000 and paid when you withdraw the money, and an equity loan scheme may be introduced.

Pension Tax Allowance

State Pension and Pension Credit will rise by 3.9%

From April 2027, the new State Pension will rise by 3.9% to £13,037 per year. That means the State Pension will be above the personal allowance of £12,570 for the first time. To protect people who rely solely on the State Pension, the government will make sure that they will not pay income tax on earnings over their personal allowance, up to £13,319. Pension Credit will also rise by 3.9%. 

Triple Lock will become an adjusted Triple Lock

There has been a lot of talk about the Triple Lock over the last few months. It’s a guarantee that the State Pension will increase each year as the cost of living becomes more expensive. It will rise by the highest of three possible figures: 

• inflation
• 2.5%
• average earnings

From April 2030, there will be an adjusted Triple Lock, rising by the highest of these possible figures:

• inflation
• 2.5%
• the amount required to return or maintain the value of the State Pension relative to earnings

This means that the State Pension will rise in line with average earnings over time, rather than consistently growing faster than wages.

Cost of living

• If you’re a fan of gherkins, soya milk and garlic you could see the cost of your food shop go down. That’s on top of pasta, fruit juice and tuna, which already came under the import tariff suspension in last year’s Autumn Budget.
• Many will get support with their energy bills. Gas standing charges will be removed, £50 will be taken off the annual price cap throughout winter and spring, and 20 million households in council tax bands A-D will receive a £100 energy payment directly.
• Minimum wage and national living wage will both increase 3.9%. This will bring national living wage to £13.20 an hour, around £27,500 a year if you’re working 40 hours per week.
• From April 2029, paid parental pay has been extended to an extra 150,000 parents each year, including self-employed fathers and partners who previously missed out. That’s worth up to £194 a week.
• Planned for 2030/31, unpaid carers won’t lose their entire allowance for earning over the Weekly Earnings Limit. So if you’re an unpaid carer currently receiving Carer’s Allowance, you’ll no longer lose your benefits if you work a paid job over 16 hours of the National Living Wage. Instead, you’ll see a reduction of the financial support you receive based on your earnings. For every £1 you earn above the weekly earnings limit, your Carer’s Allowance will reduce by £1.
• From 1 January 2027, single bus fares will be capped at £2 until the end of 2027 (outside of London - those living in London can enjoy a £1.85 price cap from 1 November). Those with a disabled bus pass will also be able to travel for free on buses all day, removing the time restrictions currently in place.