The Autumn Budget 2026 has arrived, bringing a number of announcements that could affect individuals and their finances.
We’ve picked out the key points and outlined what these changes could mean for you and your tax planning in the months ahead.
Tax bands and rates
The basic rate band remains at £37,700, with the higher rate threshold remaining at £50,270.
The additional rate threshold remains at £125,140. The freeze of these thresholds will continue until 5 April 2031.
The National Insurance contributions (NICs) Primary Threshold and Lower Profits Limit remain at £12,570. The NICs Upper Earnings Limit and Upper Profits Limit will remain aligned to the higher rate threshold at £50,270 up to 5 April 2031 as well.
Other employer NICs relief thresholds aligned to the Upper Earnings Limit will also be maintained at this level. The additional rate for non-savings and non-dividend income will apply to taxpayers in England, Wales and Northern Ireland.
The additional rate for savings and dividend income will apply to the whole of the UK.
The Personal Allowance
The Income Tax Personal Allowance is fixed at the current level of £12,570 and will remain frozen until 5 April 2031.
There is a reduction in the Personal Allowance for those with ‘adjusted net income’ over £100,000. The reduction is £1 for every £2 of income above £100,000. This means that there is no Personal Allowance where adjusted net income exceeds £125,140. The government will increase the Married Couple’s Allowance from 6 April 2027 by the CPI rate for September 2026 of 3.5%. The government will increase the Blind Person’s Allowance from 6 April 2027 to £3,370.
Tax on savings income
Savings income is income such as bank and building society interest.
The Savings Allowance applies to savings income and the available allowance in a tax year depends on the individual’s marginal rate of Income Tax. Broadly, individuals taxed at up to the basic rate of tax have an allowance of £1,000.
For higher rate taxpayers the allowance is £500. No allowance is due to additional rate taxpayers.
Savings income within the allowance still counts towards an individual’s basic or higher rate band and so may affect the rate of tax paid on savings above the Savings Allowance.
Some individuals qualify for a 0% starting rate of tax on savings income up to £5,000. This will remain at £5,000 until 5 April 2031.
However, the rate is not available if taxable non-savings income (broadly earnings, pensions, trading profits and property income, less allocated allowances and reliefs) exceeds £5,000.
From 6 April 2027, the government is increasing the previously announced 2% increase in the applicable tax rates by a further 2%.
The basic rate will increase to 24%, the higher rate will increase to 44% and the additional rate will increase to 49%.
Tax on dividends
These rules apply to the whole of the UK.
Currently, the first £500 of dividends is chargeable to tax at 0% (the Dividend Allowance). This £500 Dividend Allowance is retained for 2027/28.
Dividends received above the Dividend Allowance will be taxed at the following rates for 2027/28:
- 10.75% for basic rate taxpayers
- 35.75% for higher rate taxpayers
- 39.35% for additional rate taxpayers.
Dividends within the allowance still count towards an individual’s basic or higher rate band and so may affect the rate of tax paid on dividends above the Dividend Allowance.
To determine which tax band dividends fall into, dividends are treated as the last type of income to be taxed.
