UK Autumn Budget 2026: Need-to-knows

The Autumn Budget 2026 keeps the £20,000 annual Cash ISA allowance, sets out new ISAs for a new First-Time Buyer ISA from April 2029 and proposes a new incentive to encourage first time investors, alongside measures to help households manage everyday costs.

By Caragh Medlicott

New

Created on: 11/11/2026

Reading time: 4 mins

Key takeaways

The annual allowance for Cash ISAs will now remain at £20,000 for under 65s.
The government has said it will introduce ‘Starter ISAs’ for first-time investors.
A First Time Buyer ISA is planned to replace the Lifetime ISA for new savers from April 2029.
A £100 energy payment, an extended electricity VAT cut and changes to standing charges aim to ease household costs.
A new Pension Tax Allowance will help protect pensioners on lower incomes from income tax.

The Autumn Budget 2026 has brought some important changes for savers, investors, pensioners and households across the UK. Chancellor of the Exchequer, John Healey, has outlined measures aimed at easing the cost of living, supporting first-time buyers and helping people build their savings.

One notable announcement is a U-turn on the previously proposed Cash ISA allowance cut, meaning savers can continue to enjoy the full £20,000 annual allowance. But there are other changes worth knowing about, too.

Cash ISA allowance stays at £20,000

Last year's Autumn Budget proposed reducing the annual Cash ISA allowance from £20,000 to £12,000 for people under 65, from April 2027. The aim behind this was to encourage more people to invest rather than keep their money in cash savings.

However, the government has now reversed this decision. The annual Cash ISA allowance will remain at £20,000, giving savers more flexibility over how they use their tax-free savings allowance.

This means you can pay up to £20,000 into eligible ISAs each tax year. You can put it all into a Cash ISA, an Investment ISA (such as a Stocks and Shares ISA), or split it between the two – depending on your needs and circumstances.

But what does this actually mean for savers? Wealthify’s Portfolio Manager, Tomos Russell, shares his thoughts:

“Keeping the £20,000 Cash ISA allowance allows savers to retain greater flexibility in how they put their money aside. Cash has an important role to play, especially as a buffer when creating an emergency fund, but if you have longer-term goals, investing could still be an important option in helping your money grow.”

What about the proposed 22% charge on interest earned on cash held in Investment ISAs?

Alongside the proposed Cash ISA limit, last year's 2025 Budget announced measures designed to prevent people from bypassing the new ISA allowance rules. These included a flat 22% charge on interest earned on cash held in Stocks and Shares ISAs, Innovative Finance ISAs and Stocks and Shares Lifetime ISAs, and a ban on transferring Stocks and Shares ISAs into Cash ISAs. Both measures were due to start in April 2027.

With the £12,000 limit now dropped, these restrictions have been dropped too. HMRC has confirmed that the reduced Cash ISA limit and the associated anti-circumvention rules announced at the 2025 Budget will not take effect, and the regulations that introduced them will be revoked.

The government has also said it will work with the industry on a new ISA incentive for people investing in a Stocks and Shares ISA for the first time, with the details still to be designed.

A new Starter ISA for first-time investors

The government plans to work with the investment industry to create a new Starter ISA designed to reward people investing for the first time.

The aim is to make investing more accessible and encourage more people to consider investing for the long term, rather than relying solely on cash savings.

However, the details are still to be confirmed. The government hasn't yet outlined how the Starter ISA will work, who will be eligible or when it will become available, so it's not a product you can open just yet.

At Wealthify, it’s always been our mission to make it really simple to start investing by having our investment team manage everything for you. If you're new to investing, you can learn more about the basics in our other blogs.

First Time Buyer ISA replacing the Lifetime ISA

The government will introduce a new First Time Buyer ISA from April 2029, replacing the Lifetime ISA for new savers from 6 April 2029.

Under the plans, people will be able to contribute up to £4,000 a year and receive a 25% government bonus when the money is used towards a qualifying first home costing up to £450,000. Unlike the Lifetime ISA, the new product will have no upper age limit. The bonus will be paid when the money is withdrawn for an eligible house purchase, removing the need for a withdrawal charge.

For existing Lifetime ISA holders, from 29 October 2026, anyone buying a home above the Lifetime ISA’s £450,000 property price cap can withdraw their savings for an otherwise qualifying purchase with a reduced withdrawal charge of 20%. The Budget says this protects the value of the individual’s contributions.

However, the bonus rate, annual savings limit and property price cap are still to be confirmed.

Existing Lifetime ISA holders will be able to continue using their accounts under the existing rules.

The government is also proposing that they can use funds from both their existing Lifetime ISA and a new First Time Buyer ISA towards the same property purchase, subject to the scheme's rules being formally outlined.

Household cost-cutting initiatives

The Autumn Budget includes several measures designed to ease pressure on household budgets and everyday expenses – these include:

£100 Household energy payment. Eligible households in council tax bands A-D in England are set to receive £100 from January 2027, providing some extra help with energy costs. Devolved governments (Scotland, Wales and Northern Ireland) will receive additional funding, and their governments will decide how best to use it to provide similar support based on local needs.
Gas standing charges. The government has asked Ofgem to abolish domestic gas standing charges by the end of 2027, or as soon as possible afterwards. However, suppliers will be able to recover these costs through higher unit rates, so the overall impact will depend on your usage.
Electricity VAT cut. The temporary VAT cut on domestic electricity will be extended until July 2027. The government expects this to reduce the annual energy price cap by around £50 in April 2027.
Fuel duty. The 5p-per-litre fuel duty cut will be extended until 1 July 2027, helping drivers manage petrol and diesel costs.

These measures could leave some households with more money to spare, which could go towards savings or investments.

Pensions: what's changed?

The Budget also includes measures intended to protect pensioners on lower incomes.

From April 2027, a new Pension Tax Allowance will help ensure that pensioners whose total income is at or below the value of the full new State Pension aren't brought into paying income tax simply because their State Pension increases.

The full new State Pension is set to rise by 3.9% to £13,036 a year. The new allowance is designed to reduce the administrative burden of paying small amounts of tax for eligible pensioners.

The allowance is planned to apply until April 2030, with the government considering arrangements beyond that date in the usual way.

What should you do now?

The short answer? There's no need to rush into making changes to your finances.

The government has confirmed that the annual Cash ISA allowance will remain at £20,000.

You can pay up to £20,000 into ISAs in total during the current tax year, which ends on 5th April 2027. You can split your allowance between cash and investments in a way that suits your financial goals and attitude to risk.

The Autumn Budget is also a useful reminder to review your savings, investments and wider financial plans. If you're considering investing, take time to understand the risks and think about your longer-term goals rather than making decisions based on the latest headlines.

For more information, explore Wealthify's investment options and our guides to saving and investing.

Investing offers potentially higher returns than cash savings, although performance varies and returns aren’t guaranteed.

Tax treatments depend on your individual circumstances and may change.

Wealthify does not provide advice. If you're not sure whether investing is right for you, please speak to a financial adviser.