Quick answer: Income Tax, National Insurance and VAT rates did not change. The main changes are higher tax rates on savings income from April 2027, confirmation of the £20,000 ISA limit and a new Pension Tax Allowance for eligible pensioners.
This summary is based on the official Budget 2026 document. Tax is personal: the outcome can depend on your income, savings, pension position, residence and family circumstances.
Savings income from April 2027
From the 2027 to 2028 tax year, the savings basic, higher and additional rates are set at 24%, 44% and 49%. The rates apply to taxable savings income. The Personal Savings Allowance and the starting rate for savings can still matter, so the amount actually taxable depends on your circumstances.
For people holding significant cash outside an ISA, the key question is whether more savings can be sheltered tax-efficiently before the new rates start. This is not a reason to move money without checking access, risk and product terms, but it is worth reviewing.
ISAs and first-time buyers
The cash ISA limit is maintained at £20,000 from 6 April 2027. ISA income and gains remain tax-free, subject to the rules of the product. Budget 2026 also announced a future First Time Buyer ISA to replace the Lifetime ISA for new savers, with primary and secondary legislation planned before a proposed April 2029 launch.
Pension Tax Allowance and inheritance tax
A new Pension Tax Allowance is scheduled from 6 April 2027. It is designed to prevent certain pensioners on low total income from paying Income Tax because the State Pension has caught up with the frozen personal allowance. Eligibility, tapering and interaction with other income matter, so do not rely on a headline summary if you receive private pension, rental or savings income.
Unused pension funds are also due to be brought into scope for Inheritance Tax from 6 April 2027. If a large pension pot forms part of your intended estate plan, take advice before changing nominations, gifts or withdrawals.
Frozen thresholds still matter
The personal allowance remains £12,570 and the Income Tax thresholds remain frozen to April 2031. This can increase the tax paid as wages, pensions or rents rise, even though the headline tax rate has not changed. Review your position after a pay rise, pension change, property income change or a significant withdrawal from savings.
What to check now
- Review taxable savings held outside ISAs and the interest you expect to receive in 2027 to 2028.
- Use the right tax year when assessing the £20,000 ISA subscription limit.
- Check how the Pension Tax Allowance could interact with all of your income, not only your State Pension.
- Review estate planning where unused pensions are a material part of the estate.
- Plan early if you expect a business or asset disposal after 6 April 2027.
Frequently asked questions
Did Income Tax rates go up?
The main Income Tax rates, National Insurance and VAT rates were not increased in Budget 2026. Frozen thresholds can still affect the amount of tax paid as income grows.
Is the cash ISA allowance being cut?
No. The £20,000 cash ISA limit is being maintained from 6 April 2027.
Where can I get advice on my own circumstances?
For personal tax, savings, pension and estate planning questions, see our personal tax service or send an enquiry.
Last updated: 1 November 2026. This article is for general information only and is not personal tax or financial advice.