UK Budget: Key Announcements and What They Could Mean for Your Finances

This afternoon, Chancellor John Healey delivered the UK Budget, the first under Prime Minister Andy Burnham.

During his hour-long statement, the Chancellor outlined a range of measures that could affect household finances, businesses and the property market. Below, we’ve summarised the key announcements that may have an impact on you.

Key Budget Announcements

• Energy bill support: Households in Council Tax bands A–D will receive a one-off £100 payment to help with higher energy bills this winter.
• Parental leave: Self-employed partners will become eligible for parental leave payments.
• First Homes Scheme: Launching in spring 2027, this equity loan scheme aims to help first-time buyers purchase a new-build property.
• New First-Time Buyer ISA: A new ISA will be introduced to replace the existing Lifetime ISA.
• Gas standing charges: Standing charges on household gas bills will be removed from next year.
• Electricity VAT: The reduction in VAT on electricity bills will remain in place until July next year.
• National Minimum and Living Wage: Both will increase by 3.9%.
• Business rates relief: Small business rates relief for the retail and hospitality sectors will increase from £12,000 to £18,000, potentially taking up to 70,000 businesses out of paying business rates.
• Cash ISA allowance: The annual tax-free Cash ISA allowance will remain at £20,000, reversing the previously planned reduction to £12,000.
• Landlords tax increase: Landlords to pay a further 2% in tax on income received from land and property.
• Banking surcharge: Banks will pay an additional 3% surcharge on profits from January 2027 for 15 months, helping fund energy bill support.

Our Director’s View: Jack’s Budget Commentary

“Following this afternoon’s Budget, there were few major surprises, with many of the announcements having already been reported in the media. However, the £100 payment towards household energy bills is likely to be one of the key takeaways for many households.

There was also further clarity around support for the housing market, with confirmation of the new First Homes Scheme. This equity loan initiative is designed to help first-time buyers get onto the property ladder by purchasing a new-build home.

“In addition, a new First-Time Buyer ISA will be introduced to replace the existing Lifetime ISA. Further details on both schemes are expected in due course. As with any new government policy, it will be important to understand the eligibility criteria, terms and conditions, and the finer details before making any financial decisions.”

What Happens Next?

While the Budget has outlined several measures that could affect household finances, prospective homebuyers, employees and business owners, further details will be needed to understand the full implications of some of the announcements.

We’ll continue to monitor developments and share updates as more information becomes available.