Budgets can bring a lot of information at once and this year’s Autumn Budget is no exception. Between wage increases, frozen tax thresholds, pension changes and new property measures, it can be tricky to work out what actually affects you.
So we’ve pulled everything together in one place, in a clear and digestible way, without the jargon or panic. The aim is simple, help you understand the key changes and what they might mean for your income, business or household.
If anything leaves you unsure, we’re always here to talk it through with you.
1. Minimum Wage Increases (from April 2026)
One of the headline announcements is a rise in the National Living Wage and National Minimum Wage:
- 21+: from £12.21 to £12.71 per hour
- 18–20: from £10 to £10.85 per hour
- 16–17 & apprentices: £7.55 to £8.00 per hour
This is positive news for workers and provides much-needed support during a period of rising living costs. Employers, especially those in hospitality, retail and care, may want to review payroll budgets early to manage the increase.
2. Income Tax Thresholds Frozen Until 2030–31
The Government has extended the freeze on income tax thresholds for an additional 3 years. Although tax rates are not increasing, thresholds staying still means more people will be pulled into paying higher levels of tax as wages rise.
This “fiscal drag” effect is significant. The Office for Budget Responsibility estimates that by 2029–30 this freeze will lead to:
- 780,000 more basic-rate taxpayers
- 920,000 more higher-rate taxpayers
- 4,000 more additional-rate taxpayers
It’s worth checking what this means for your take-home pay and financial planning, especially if you’re close to a threshold.
3. National Insurance Thresholds Also Frozen
National Insurance thresholds remain unchanged too. This works similarly to income tax thresholds, as earnings increase, more of your income becomes subject to NI.
This will impact:
- Employees whose wages rise over the coming years
- Company directors, especially those drawing a tax-efficient salary
- Employers managing NI costs across their workforce
Small businesses should take this into account when forecasting future payroll costs.
4. Salary Sacrifice Pension Contributions Changing (from April 2029)
A notable shift for those using salary sacrifice: Pension contributions made through salary sacrifice above £2,000 per year will attract National Insurance.
You can still sacrifice more than £2,000 if you wish, this isn’t a cap on contributions but anything above that threshold will lose its current NI exemption and therefore become less tax-efficient.
If salary sacrifice forms part of your remuneration strategy or your approach to pension planning, it’s worth reviewing your numbers ahead of time to understand how this may affect take-home pay and employer costs.
5. National Insurance for People Living Abroad (from April 2026)
If you spend time living or working abroad, listen up! From April 2026, voluntary Class 2 contributions for periods overseas will no longer be available. Instead, a new Class 3 contribution will apply, but only for individuals who have 10 years of continuous UK residency or National Insurance history.
You can still make voluntary NI payments for years before 2026/27 under the current rules. If you’re planning time abroad or rely on voluntary contributions to protect your State Pension entitlement, this is an important change to be aware of.
6. Dividend Tax to Increase (from April 2026)
Dividend tax rates will rise from 6 April 2026, increasing the tax burden for company directors and anyone receiving dividend income.
The new rates will be:
- Ordinary rate: increasing by 2% to 10.75%
- Higher rate: increasing by 2% to 35.75%
- Additional rate: remaining at 39.35%
Nothing changes about how dividend income is reported, only the rates themselves are increasing.
If you take income through dividends, this could affect your personal tax bill from the 2026/27 tax year onward. It may be helpful to revisit your salary–dividend mix and year-end planning ahead of the change.
7. Savings Income Tax Rates Rising (from April 2027)
There are also changes coming to the tax rates applied to savings income, such as interest earned on savings accounts.
From 6 April 2027, the rates will be:
- Savings basic rate: increasing to 22%
- Savings higher rate: increasing to 42%
- Savings additional rate: increasing to 47%
Again, there are no changes to how savings income is reported, only the rates being charged. This means you don’t need to take action with HMRC, but it may influence how you structure your savings, use allowances, or plan interest-bearing accounts over the coming years.
8. Tax on Rental Income Increasing
Landlords will face higher tax on rental profits from 6 April 2027, with rates rising by 2% across all income bands. This means rental income will be taxed above the standard rates of income tax:
- Basic rate landlords: Tax on rental income will rise from 20% to 22%
- Higher rate landlords: Tax will increase from 40% to 42%
- Additional rate landlords: Tax will rise from 45% to 47%
This change will reduce net returns for many property owners, especially those with multiple properties or higher borrowing costs.
If you let out property, this is a good moment to check in on your long-term plans, cash flow and whether your property structure still works for you.
9. Capital Gains Tax Changes for Employee Ownership Trusts (from November 2025)
For business owners considering selling to an Employee Ownership Trust (EOT), Capital Gains Tax relief is changing.
From 26 November 2025, the current 100% CGT relief will be reduced to 50% on qualifying disposals with additional technical updates will be introduced to tighten the rules.
If you are exploring an EOT as part of succession planning, these changes may influence the timing or structure of your plans.
10. Fuel Duty to Rise in Stages (from September 2026)
Fuel duty, frozen since 2011 and cut by 5p in 2022, will begin increasing again from September 2026. The rise will be gradual, spreading the impact over several years.
Motorists and businesses that rely heavily on travel may see costs increase over time, so it’s worth building this into future budgeting.
11. Electric Vehicle Road Tax (from April 2028)
Electric vehicle drivers will face a new 3p-per-mile tax from April 2028, rising annually with inflation.
However, the Government is still supporting EV adoption by adding:
- £1.3bn to the EV purchase grant scheme
- Up to £3,750 off the cost of a new EV
- £200m for additional charging points
If you’re considering switching to an EV, the incentives may still outweigh the new tax depending on your usage.
12. New Council Tax Surcharge on Homes Over £2 Million
Properties valued above £2 million will face a new council tax annual surcharge of £2,500 from 2028.
This is expected to raise £0.4bn by 2029–30 and will increase annual costs for those with high-value homes or those planning a purchase in this bracket.
13. Rail Fares and Prescription Charges Frozen
Two welcome freezes to help ease day-to-day costs:
- Rail fares will not rise, saving some commuters over £300 per year.
- NHS prescriptions in England remain at £9.90.
These freezes will be particularly helpful for regular commuters and those with ongoing medical needs.
14. Tourist Tax Powers Given to Local Mayors
Local mayors will now have the power to introduce a tourist tax on overnight stays, including hotels, guest houses, holiday lets and B&Bs.
This is particularly relevant for areas like ours, Cornwall, where tourism is a major part of the local economy.
If introduced locally, it could slightly increase accommodation costs for visitors and may have knock-on effects for hospitality, holiday-let owners and tourism-dependent businesses.
It’s worth keeping an eye on how Cornwall’s local authorities respond in the coming months, we will be sure to do so.
15. Sugar Tax Extended
The sugar tax will now apply to certain pre-packaged drinks, such as bottled milkshakes, flavoured coffee drinks and sweetened yoghurt drinks. Drinks prepared fresh in cafés remain exempt.
This may increase the cost of some supermarket products and forms part of wider public health efforts to reduce sugar intake.
16. Two-Child Benefit Cap Removed
The long-standing two-child benefit cap is being removed. This is a major policy shift expected to provide increased support for many families and will cost an estimated £3bn by 2029–30.
If you were previously affected by the cap, you may receive additional entitlement once the change takes effect.
17. Possible Reduction to the Cash ISA Limit
It has been reported that the annual allowance for Cash ISAs may drop from £20,000 to £12,000.
If you use ISAs as part of your savings strategy, this is something to watch closely as more detail emerges.
What Should You Do Now?
You don’t need to react immediately but taking a moment to understand how these changes affect your personal or business finances can help you stay ahead.
A few helpful next steps:
- Review payroll budgets early
- Check how frozen thresholds could impact take-home pay
- Revisit your dividend or pension strategy if relevant
- Reassess rental property plans if you’re a landlord
- Keep an eye on local decisions around tourism tax in Cornwall
And if you’re unsure about any of it, or if you want help looking at the numbers, we’re always here to guide you through the options.