John Healey used his first budget as chancellor on Wednesday to give 20 million households £100 towards energy bills, paid for partly by a temporary rise in tax on banks.
Here is what the main measures mean, starting with the changes most likely to reach your wallet.
Who gains
Energy bills. Every household in council tax bands A to D will get a £100 “household energy payment” this winter, according to AOL’s budget summary, which put the cost at £2.6bn. The Guardian reported that the money is guaranteed in England from January, with funding for the other UK nations to do the same.
Gas standing charges are due to be scrapped from 2027 “or as soon as possible after”, the Treasury said. PA’s key points put the saving at £45 a year for the average household. The 5p fuel duty cut is also extended until July.
Pensioners. The full new state pension rises to £13,036 a year from April 2027. That is £466 above the frozen £12,570 personal allowance, GB News reported. Without a change, a pensioner on the full amount and nothing else could have faced a bill of about £93.
Instead, a new matching allowance will apply. MoneyWeek’s analysis of the budget documents says the extra allowance then tapers away between £13,037 and £13,319 of total income. Above that, normal basic-rate tax applies. Nearly a million pensioners are expected to be protected, GB News said.
Savers and buyers. Savers under 65 will keep the current cash Isa allowance. Healey dropped the previous government’s plan to cut it from £20,000 to £12,000. A new incentive for first-time investors in stocks and shares is still to be announced.
First-time buyers can use a scheme called Your First Home to buy a newbuild with a deposit of as little as 2.5%. Household income must be under £140,000 in London or £110,000 elsewhere in England.
Other winners include self-employed fathers, who get two weeks of paternity pay from April 2029. Tariffs are being removed from more than 100 products, including marmalade.
Who pays
Savers outside Isas. Tax on savings interest rises again in April. Once the tax-free allowance is used up, basic-rate taxpayers will pay 24%, higher-rate taxpayers 44% and additional-rate taxpayers 49%, the Guardian said. That is two points more than previously announced. Landlords face the same rates on property income, with different rules in Scotland.
The Office for Budget Responsibility warned that the higher landlord taxes could push rents up steadily, the Guardian reported.
Students. There is no relief for people on plan 2 loans. The repayment thresholds will be frozen from April.
Banks. The surcharge on bank profits, paid on top of the 25% corporation tax rate, doubles from 3% to 6% for 15 months from January, ITV News reported. Healey told MPs: “I am looking to our banks to help fund breathing space for British families.”
City AM reported that the OBR expects the rise to raise about £1.5bn. Shares in Lloyds, Barclays and NatWest rose by between about 2% and 4%, because some investors had feared a surcharge of 8%.
Betting shops. Machine games duty goes from 20% to 25% on higher-stake machines from April 2027, with the Guardian putting the threshold at stakes of £1 or more. The Treasury said pubs and seaside arcades would be protected, AccountingWeb reported. Adult gaming centres and vape shops will lose access to some business rates relief.
Gambling shares also rose, as the increase was smaller than feared. One market report said Rank gained 11% and Entain 6%.
Households that miss out. Because the £100 payment follows council tax bands, the Resolution Foundation says 1.4 million of the poorest families in bands E and above will not get it.
The bank surcharge rise starts in January and ends 15 months later. The gambling duty change follows in April 2027.
Sources: The Guardian, ITV News, City AM, GB News, MoneyWeek, AccountingWeb
This story was compiled by the MDW Newsdesk with AI-assisted tools, using the reporting credited above.
