Autumn Budget 2026: what's changing for savers

On 28 October 2026, Chancellor John Healey delivered the Autumn Budget 2026, setting out the government's latest tax and spending plans. There have been quite a few headlines since, so we've pulled together the announcements we feel matter most to our members and policy holders. 

The Autumn 2026 Budget at a glance

Here's a quick summary of the changes coming to ISAs and savings in the coming years. We explain each change in more detail below.

For full details, see the Autumn Budget documents on GOV.UK.

The cash ISA limit is staying at £20,000

In last year's Autumn Budget, the government announced plans to reduce the cash ISA limit to £12,000 for savers under 65 from April 2027. That change is no longer going ahead.

The government will keep the cash ISA limit at £20,000 per tax year for all savers aged 18 and over. The overall ISA allowance is also staying at £20,000 per tax year. As in previous years you can split this across different types of ISA, such as a cash ISA, a Stocks and Shares ISA, Innovative Finance ISA and a Lifetime ISA (up to £4,000 per tax year).

Lifetime ISA: lower withdrawal charge for homes over £450,000

To support Lifetime ISA customers looking to buy a home worth more than £450,000, from 29 October 2026, purchasing a first home above the £450,000 property cap will no longer incur the standard 25% unauthorised withdrawal charge. Instead, a 20% charge will apply. The charge for all other unauthorised withdrawals will remain at 25%.

This change came into effect only one day after the 2026 Autumn Budget.

The property cap is still £450,000. Nothing else about how the Lifetime ISA works has changed.

Tax on savings interest is going up

From 6 April 2027, the income tax rates on savings income outside of any tax-free allowances or ISAs, such as interest from non-ISA savings accounts, will rise. This replaces the smaller increase proposed in last year's Budget for the 2027/28 tax year.

There is no impact to the Personal Savings Allowance which lets basic-rate taxpayers earn up to £1,000 of interest tax-free per tax year, and higher-rate taxpayers up to £500. Additional-rate taxpayers don't get a Personal Savings Allowance.

This only affects interest on savings held outside an ISA, and goes over your tax-free allowances. Interest and returns in any ISA remain free from UK tax.

Tax rules can be complex and depend on your circumstances. You can find more on GOV.UK’s Tax on savings interest page.

A new First Time Buyer ISA is on the way

Earlier this year, the government shared that a new first-time buyer product was on its way. The Budget has now confirmed more details.

The government will introduce a new First Time Buyer ISA. The product is due to replace the Lifetime ISA for first-time buyers. It will provide a 25% government bonus on the final account balance up to a maximum bonus of £20,000, paid on withdrawal, towards a purchase of a first home worth up to £450,000.

The government will provide further details before the product launches which is due in April 2029.

A new incentive for first-time investors

The UK government have announced that it will work with the investment industry to explore a new incentive for first-time Stocks and Shares ISA investors. 

No further details have been shared, including what the incentive will look like, who will be eligible or when it may start.

If you're curious about investing in the meantime, our guide to Stocks and Shares ISAs explains how they work.

What this may mean for you

Budgets bring a lot of news at once, and most of these changes won't take effect until 2027 or later. Rather than reacting to headlines, it may help to take a step back and think about:

●    Your goals: What are you saving for?
●    Your time horizon: When might you need the money? 
●    Access to your money: How easily would you need to access your savings?
●    Your attitude to risk: How would you feel if the value of an investment went down?

One potential starting place could be to review your existing savings account and finances. It's important to not that everyone's situation is different, so what may suit one person might not suit another. If you're unsure what's right for you, you may want to speak to a regulated financial adviser. You can find one through Unbiased.co.uk.

We're here to help

We can't provide individual guidance, but our friendly team is always happy to answer questions about your account or explain how our products work.

You can visit our Help & Support page, call us on 0161 214 4650, or email insure@unitymutual.co.uk.

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