Key takeaways:
- The 2026 Autumn Budget was delivered on October 28th 2026.
- The Budget was lighter than many anticipated, with few key points directly impacting personal finances.
- John Healey has reversed the previous Chancellor’s decision to cut the tax-free cash ISA limit to £12,000. The limit will remain at £20,000 for all ages.
- Income tax on property and savings will increase by 2% on top of the 2% raise announced at the previous Budget for April 2027.
- Pensioners with an income up to the full value of the new state pension will be protected from paying income tax.
- The Business Asset Disposal Relief threshold will reduce from £1 million to £500,000.
On 28th October 2026, Chancellor of the Exchequer John Healey delivered the Labour Government’s first Autumn Budget under the new administration. Among the measures announced were the abolishment of the change to Cash ISA limits, a 2% increase to income tax from property and savings, and a reduction in Business Asset Disposal Reliefs (BADR) thresholds from £1 million to £500,000.
Whether you are building your wealth, planning for retirement or thinking about your family’s financial future, changes to tax and financial policy could affect the decisions you make today and your plans for the years ahead. In this article, we explore the key Budget announcements that may impact your personal finances and what they could mean for you and your loved ones.
What did the Chancellor announce at the Autumn Budget?
Changes to Cash ISA limit abolished
Chancellor John Healey has confirmed that previously announced plans to reduce the annual Cash ISA allowance from £20,000 to £12,000 will no longer go ahead.
Under plans announced by former Chancellor Rachel Reeves, the amount savers under 65 could contribute to a Cash ISA was due to be reduced, while the overall annual ISA allowance remained at £20,000.
Following today’s announcement, the planned reduction has been scrapped, meaning savers will continue to be able to contribute up to the full £20,000 annual ISA allowance to a Cash ISA.
This decision provides greater flexibility for savers when deciding how to use their annual ISA allowance, allowing individuals to continue choosing between cash and investments based on their own circumstances, objectives and attitude to risk.
An increase in Income Tax for property and savings
The chancellor announced that income generated via property or savings will be subject to an additional 2% income tax. This is in addition to the 2% increase announced at the previous Autumn Budget due to come into effect from April 2027.
Speaking on this change, Associate Director of Wealth Management, Oliver Tolman, said:
“This change doesn’t come as a surprise and follows several previous policies aimed at disincentivising landlords. It appears the underlying aim is to stimulate the housing market, providing greater access for First Time Buyers and freeing up mid-level homes for young families.
Ultimately, while unwanted news for landlords and property investors, there are always solutions, and while many have been considering an exit from the property market for some time, those looking to maintain their position should seek professional advice as soon as possible.”
Low-income pensioners shielded from Income Tax
With the continued annual increase of the state pension, there was concern that those receiving only the state pensions would become subject to income tax from 2027/28.
During his budget, the Chancellor announced that low-income pensioners will be shielded from income tax for the duration of the current parliament.
Reduction in the threshold for Business Asset Disposal Relief (BADR) in Capital Gains Tax
The Chancellor confirmed that he will be reducing the threshold for Business Asset Disposal Relief in Capital Gains Tax from £1 million to £500,000 from April 2027.
In his announcement, he stated that this will mean “no change for three in four claimants.”
Speaking on this announcement, Associate Director of Cooper Associates Wealth Management, Christo Nation, said:
“The reduction in BADR from £1 million to £500,000 was disappointing as it is a valuable relief for those that have risked their capital in companies typically more aligned to growth. These companies form a valuable part of the British economy although the announcement of Founder’s Relief is a welcome addition which someone offsets this impact for many eligible.”
Founder’s Relief
The Chancellor also unveiled a new CAG relief, announced under the name “Founder’s Relief”.
Founder’s Relief is a 10% rate on lifetime gains of up to £10 million, aimed for support the “founders of our most successful businesses.”
Our thoughts
Speaking on the Budget as a whole, Simon Dawes, Managing Director of Cooper Associates Wealth Management, said:
“Generally the sentiment of the budget was positive, with no major fiscal changes. The changes for business founders who sell their business was positive, however BADR allowances have reduced which was disappointing.
I was pleased to see the reversal to the cash ISA allowances due in April 2027. We did see a further increase in the tax rate for property and savings income, further highlighting the importance of investing outside of those asset classes.”
What changes are being implemented from 2027 onwards?
Despite a relatively light 2026 Autumn Budget, there are still several key changes on the horizon, announced at previous Budgets, which will likely have a significant impact on many.
Below, we revisit the key changes and when they are each expected to take effect.
A cap on National Insurance relief for pension salary sacrifice
From April 2029, the National Insurance treatment of pension contributions made through salary sacrifice will change. Only the first £2,000 of pension contributions made through salary sacrifice each year will benefit from the existing National Insurance exemption.
Contributions above this threshold will be subject to National Insurance Contributions (NICs) for both employers and employees. The current employee NIC rate is 8% between £12,571 to £50,270 and 2% on earnings over £50,270.
Until the change takes effect, pension contributions made through salary sacrifice can continue to reduce the earnings on which employee and employer NICs are calculated. However, when implemented the change may reduce some of the National Insurance benefits currently associated with making larger pension contributions through salary sacrifice.
A continued freeze on personal tax thresholds
Chancellor John Healey has also confirmed the continuation of the freeze on key Income Tax thresholds until 2030/31 tax year.
The current thresholds for 2026/27 are:
| Tax Band | Taxable Income (above the personal allowance) | Tax Rate |
| Personal allowance | £12,570 | 0% |
| Basic rate | £12,571 – £50,270 | 20% |
| Higher rate | £50,271 – £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Keeping these thresholds frozen means they will not increase in line with inflation. As wages rise, this can result in more people paying Income Tax or moving into higher tax bands, even if the tax rates themselves remain unchanged. This is commonly referred to as “fiscal drag”.
Inheritance Tax treatment of pensions
Another significant change taking effect from April 2027 is the inclusion of unused pension funds and death benefits within an individual’s estate for Inheritance Tax (IHT) purposes.
Pensions have traditionally sat outside of an individual’s taxable estate for IHT purposes. From April 2027 however, pension assets will be included when determining the value of an estate and may therefore become subject to Inheritance Tax.
The standard IHT rate is currently 40% on the portion of an estate above the relevant available thresholds, rather than 40% automatically applying to the full pension value.
This change could have significant implications for estate planning, particularly for individuals who had previously intended to preserve pension wealth to pass on to their beneficiaries. Understanding how pensions interact with other assets, available allowances and your wider estate will therefore become increasingly important ahead of April 2027.
How can Cooper Associates Wealth Management help?
The Autumn Budget can have implications beyond the headline announcements with changes to taxation and financial policy potentially affecting your savings, investments and longer-term plans.
This article covers the key measures affecting your personal finances, but you may also want to explore our related articles to understand ‘how the Budget could affect your mortgage’ and ‘how the Budget could affect your tax position’.
If you have questions or feel concerned about today’s changes and what they could mean for you, our team of expert financial advisers are here to help. Get in touch today to arrange a no-obligation consultation and discover how we can help you make the most of your finances and plan for the future with confidence and clarity.
