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Wed, 28 Oct 2026

Wed, 28 Oct 2026 Your pay, energy bills and savings: How the Budget affects you

Changes announced by Chancellor John Healey in his first Budget will affect your finances directly. Here's how.
Economy and Finance
* The UK economy is expected to grow by 1.5% in 2026, down from 2.1% previously predicted.
* Inflation is forecast to be 3.8% this year, higher than the target rate of 2%.
* The Budget predicts a budget deficit of £33bn for 2027. Energy Bills
* A one-off payment of £100 will be made to households to help with energy bills.
* This payment will be funded by a bank tax. Fuel Duty
* There was no reduction in fuel duty, which has been criticized by those who rely on their cars for transportation. Pensions and Benefits
* The state pension will increase by 3.9% in line with average wage increases.
* Pensioners with an income up to the value of the full new state pension will not pay income tax. Student Loans
* There are no changes to student loan rates, although the repayment threshold for Plan 2 student loans is expected to remain at £29,385. First-Time Buyers
* A new First Time Buyer Isa has been announced, which will replace the Lifetime Isa.
* The penalty for withdrawing savings from a Lifetime Isa if you are buying a home above the £450,000 threshold will be scrapped. Carers and Self-Employed Fathers
* Carers will be able to earn more than an existing earnings limit without losing their entire allowance.
* Self-employed fathers will receive two weeks of paternity pay. Tax-Free Mileage Rate
* The tax-free mileage rate for those driving up to 10,000 miles for work has been increased to 55p per mile. Overall, the Budget announcement has been criticized by some as not going far enough to address issues such as fuel duty and student loan repayments.