TL;DR: The 28 October 2026 Budget confirmed a £100 Household Energy Payment for households in council tax bands A to D in England from January 2027, a High Value Council Tax Surcharge of £2,500 to £7,500 a year on homes worth £2 million or more from April 2028, a 3.9% rise in the National Living Wage to £13.21 an hour from 1 April 2027, and the VAT cut on electricity extended to July 2027. Headline rates of income tax, National Insurance and VAT are unchanged and the earlier freeze on thresholds still runs to 5 April 2031, but tax on savings and property income rises by 2 percentage points from 6 April 2027, while the cash ISA limit stays at £20,000. Exact State Pension, benefit and duty rates for April 2027 are not yet in the published documents, so they are marked as pending below.
This guide covers the household money measures confirmed in the Budget 2026 document published by HM Treasury on 28 October 2026, with the OBR Economic and fiscal outlook and HM Treasury factsheets. Each measure links to its source. Where the government has announced something but not yet published the detail, it is labelled details pending. Motoring changes are not covered here.
1. Council tax: £100 energy payment and a new surcharge
£100 Household Energy Payment for bands A to D
Households in England in council tax bands A to D will receive a one-off £100 Household Energy Payment from January 2027. HM Treasury says around 20 million households qualify, about 80% of households in England. The payment is delivered by local authorities through the council tax system, and the Budget document describes it as paid directly into bank accounts. Councils also get £100 million for targeted help for households hit hard by energy bills, including some in bands above D. Source: Budget 2026, section 7.5.
Scotland, Wales and Northern Ireland receive their share of the funding through the Barnett formula, and the Chancellor has asked them to make similar payments. Whether and how they do so is details pending. How each English council will pay the £100 (for example, which bank details it uses and whether there is a claim step) is also details pending.
High Value Council Tax Surcharge from April 2028
Owners (not tenants) of homes in England worth £2 million or more at the April 2026 valuation date will pay a High Value Council Tax Surcharge on top of normal council tax from April 2028. Fewer than 1% of homes are expected to be in scope. Draft bands are due in autumn 2027 and first bills in March 2028. Source: HM Treasury HVCTS factsheet.
High Value Council Tax Surcharge bands
| Property value | Annual surcharge |
|---|---|
| £2.0m to £2.5m | £2,500 |
| £2.5m to £3.5m | £3,500 |
| £3.5m to £5.0m | £5,000 |
| Over £5m | £7,500 |
A deferral scheme will be available if household income is £35,000 or less, capital savings are £16,000 or less, or a household member meets disability criteria. Deferred surcharge is paid when the property changes hands, with interest. Homes left substantially unfurnished and empty for 12 months or more pay a 100% premium. Charges rise with CPI from 2029-30.
What to check on your council tax bill
- Find your band on your current bill or with the GOV.UK council tax band checker. Bands A to D in England qualify for the £100 payment.
- Note which council sends the bill. That council delivers the payment, so watch its website and letters from January 2027 rather than responding to texts or emails asking for bank details.
- If you think your band is wrong, the same GOV.UK page explains how to challenge it. A change of band can affect both your bill and whether you qualify.
- If your home could be worth £2 million or more, expect a draft surcharge band in autumn 2027 and check the deferral criteria above before the first bill in March 2028.
Worked example (surcharge): a home valued at £2.8 million falls in the £2.5m to £3.5m band, so the surcharge is £3,500 a year. Spread over 12 months that is £3,500 ÷ 12 = £291.67 a month, on top of the existing council tax bill.
2. Income tax and National Insurance
The Budget makes no change to the headline rates of income tax, National Insurance or VAT. Source: Budget 2026, section 3.6. The freeze on the Personal Allowance, the basic rate limit and equivalent National Insurance thresholds, announced at Budget 2025, continues until 5 April 2031. Source: HMRC policy paper on maintaining thresholds.
That means the 2026-27 figures on GOV.UK still apply for planning: a Personal Allowance of £12,570 and employee Class 1 National Insurance of 8% on weekly earnings from £242.01 to £967 and 2% above that. Because thresholds stay frozen while pay rises, more of each pay rise is taxed. Your payslip will not change on Budget day itself for earned income.
Other confirmed personal tax changes:
- Savings income: the savings basic, higher and additional rates rise by 2 percentage points beyond the Budget 2025 rise, to 24%, 44% and 49%, from 6 April 2027 across the UK. Source: Budget 2026, section 7.21.
- Property income: the property basic, higher and additional rates become 24%, 44% and 49% from 6 April 2027 in England, Wales and Northern Ireland. Source: Budget 2026, section 7.21.
- Self Assessment payments on account: from April 2029, people who make payments on account will pay smaller, more regular amounts through the year. Detailed design is details pending. Source: Budget 2026, section 3.7.
How to rerun your take-home pay
- Open the Headway take-home pay calculator and enter your current salary, pension contribution and student loan plan.
- Run it again with any pay rise you expect from April 2027. The tax and National Insurance thresholds stay the same, so the change you see comes from your pay, not from new rates.
- If you earn savings interest or rental income, add the extra tax from the worked examples below to your yearly plan, because the calculator covers employment income.
3. Pensions and the triple lock
- Triple lock: the State Pension continues to rise each April by the highest of earnings growth, CPI inflation or 2.5% up to April 2029. From April 2030 the triple lock is adjusted, so the State Pension rises by the highest of 2.5%, inflation or the amount needed to keep its value relative to earnings at the April 2029 level. Source: Budget 2026, section 6.3.
- Pension Tax Allowance: from 6 April 2027 to 5 April 2030, people over State Pension age whose total income is at or below the full new State Pension will not pay income tax caused by State Pension rises. It is tapered away for incomes just above that level. Source: Budget 2026, section 7.16.
- Death benefits: beneficiaries are no longer taxed just because a tax-free pension lump sum death benefit is paid more than two years after death, for payments from 28 October 2026. Source: Budget 2026, section 7.21.
- The exact weekly State Pension rate from April 2027 is details pending. It is normally confirmed by the Department for Work and Pensions after the September inflation and earnings figures.
4. Minimum wage and benefits
From 1 April 2027 the government accepted the Low Pay Commission recommendations in full. The accommodation offset rises to £11.53 a day. Source: Budget 2026, section 7.13.
Minimum wage rates
| Rate | Now (from April 2026) | From 1 April 2027 |
|---|---|---|
| National Living Wage (21 and over) | £12.71 | £13.21 |
| 18 to 20 | £10.85 | £11.27 |
| 16 to 17 and eligible apprentices | £8.00 | £8.31 |
Current rates are from GOV.UK National Minimum Wage and National Living Wage rates.
Worked example (pay rise): a worker aged 21 or over on the National Living Wage for 35 hours a week gets (£13.21 − £12.71) × 35 hours × 52 weeks = £0.50 × 1,820 = £910 more gross pay a year, matching the Treasury figure. Their yearly pay becomes £13.21 × 1,820 = £24,042.20, which is inside the basic rate band, so the extra £910 is taxed at 20% income tax plus 8% National Insurance. They keep about £910 × 72% = £655.20, or roughly £54.60 a month. Universal Credit claimants will see part of this offset by the earnings taper.
Other confirmed support:
- Carer’s Allowance: the earnings limit becomes a taper rather than a cliff edge, during 2030-31. Source: Budget 2026, section 4.5.
- Parental pay: eligible self-employed fathers, partners and adopters in Great Britain can access parental pay from April 2029. Source: Budget 2026, section 4.5.
- Child Benefit: HMRC will automatically offset Child Benefit overpayments against the High Income Child Benefit Charge. Source: Budget 2026, section 7.16.
- April 2027 rates for Universal Credit, Child Benefit and other benefits are details pending.
5. Energy bills
- VAT on electricity: the VAT cut on domestic electricity that started on 1 October 2026 is extended to July 2027. HM Treasury expects it to take around £50 off the annual Ofgem price cap in April 2027. Source: Budget 2026, Box 3.A.
- Gas standing charges: the government has asked Ofgem to abolish standing charges on domestic gas bills in Great Britain, aiming for the end of 2027 or as soon as possible after. Costs move onto the unit rate. HM Treasury says the typical standing charge is £108 a year and around 60% of account holders could save about £45 a year. Sources: Budget 2026, section 7.5 and HM Treasury announcement. The exact start date is details pending.
- Energy debt: a one-off targeted debt relief scheme for eligible households launches next year. Eligibility is details pending.
- Heating oil: tariffs on kerosene heating oil are suspended from 26 November 2026 until 31 December 2028. Source: Budget 2026, section 7.5.
- The planned Gas Shipper Obligation levy on gas bills will not go ahead.
6. Savings, ISAs, housing and duties
- Cash ISA: the annual cash ISA limit stays at £20,000, reversing the planned cut. Source: Budget 2026, section 7.21.
- Lifetime ISA: from midnight on 29 October 2026, withdrawing for a first home above the £450,000 price cap carries a 20% charge instead of 25%. Source: Budget 2026, section 7.20.
- First Time Buyer ISA: replaces the Lifetime ISA for new savers from April 2029, with up to £4,000 a year, a 25% bonus capped at £20,000 and a £450,000 home price cap. Source: Budget 2026, section 7.20.
- Your First Home equity loans: 20% equity loans for first-time buyers in England with a 2.5% minimum deposit, household income caps of £110,000 (£140,000 in London), pre-registration by the end of December 2026, applications from February 2027 and first loans from April 2027. Source: Budget 2026, section 6.1 and Your First Home.
- Stamp Duty: Stamp Duty Land Tax on rent paid under assured tenancies in England is removed, effective from 1 May 2026. The Budget document lists no change to residential Stamp Duty rates for home buyers. Source: Budget 2026, section 7.20.
- Alcohol duty: rises with RPI from 1 February 2027. The new rates per product are details pending. Source: Budget 2026, section 7.19.
- Food prices: tariffs on over 100 imported food products are suspended from 26 November 2026 until 31 December 2028. Source: Budget 2026, section 4.5.
- Tobacco duty rates are details pending, as HMRC’s detailed tax documents for Budget 2026 were not yet published at the time of writing.
Worked example (savings tax): a basic rate taxpayer whose wages are above £17,570 (so the starting rate for savings does not apply) earns £2,000 interest a year outside an ISA. The Personal Savings Allowance covers £1,000, leaving £1,000 taxable. Today that costs £1,000 × 20% = £200. From 6 April 2027 it costs £1,000 × 24% = £240, so £40 more a year. Moving that money into a cash ISA, still capped at £20,000 a year, keeps the interest tax-free.
Worked example (rental income): a basic rate landlord in England with £10,000 of taxable rental profit pays £10,000 × 20% = £2,000 today and £10,000 × 24% = £2,400 from 6 April 2027, an extra £400 a year, or £33.33 a month to set aside.
What changes and when
Budget 2026 household changes at a glance
| What changes | By how much | From when | Source |
|---|---|---|---|
| Household Energy Payment (England, bands A to D) | £100 one-off | January 2027 | Budget 7.5 |
| High Value Council Tax Surcharge (England, £2m+) | £2,500 to £7,500 a year | April 2028 | HVCTS factsheet |
| Income tax, NI and VAT headline rates | No change; thresholds frozen | Freeze to 5 April 2031 | HMRC |
| Savings income tax rates | 24%, 44%, 49% | 6 April 2027 | Budget 7.21 |
| Property income tax rates (E, W, NI) | 24%, 44%, 49% | 6 April 2027 | Budget 7.21 |
| National Living Wage | £12.71 to £13.21 (3.9%) | 1 April 2027 | Budget 7.13 |
| Pension Tax Allowance | No tax from State Pension rises at or below full new State Pension | 6 April 2027 | Budget 7.16 |
| Triple lock adjusted | Tracks earnings level reached in April 2029 | April 2030 | Budget 6.3 |
| VAT cut on electricity extended | Around £50 off annual price cap | To July 2027 | Budget Box 3.A |
| Gas standing charges abolished | Typical £108 a year moved to unit rate | Aim: end of 2027 | HM Treasury |
| Cash ISA limit | Stays £20,000 | Ongoing | Budget 7.21 |
| Lifetime ISA charge above £450,000 cap | 25% to 20% | 29 October 2026 | Budget 7.20 |
| Alcohol duty | Up with RPI | 1 February 2027 | Budget 7.19 |
Practical steps for your budget
- Now: confirm your council tax band and note the £100 as expected income from January 2027, not money to spend before it arrives.
- Before April 2027: rerun the take-home pay calculator with your expected April pay, then update your monthly plan in the budget planner.
- If you save outside an ISA: estimate your interest for 2027-28 and compare the tax at 24% with moving money into a cash ISA. Track the target in the savings goal calculator.
- Payslip timing: minimum wage rises apply from 1 April 2027, so the first higher payslip depends on your pay date and pay period. The new savings and property income tax rates start with the tax year on 6 April 2027.
- Each month: use the safe-to-spend calculator after bills, so one-off payments such as the £100 do not hide a shortfall.
Still waiting for details
Exact April 2027 State Pension and benefit rates, tobacco and alcohol duty rates, how each council pays the £100, what Scotland, Wales and Northern Ireland do with their share, the gas standing charge start date and the energy debt relief eligibility rules. This page will be updated when HMRC’s detailed tax documents and the Department for Work and Pensions uprating figures are published on GOV.UK.
This guide explains published government measures and is not personal financial or tax advice.