Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
An account already exists for this email address, please log in.
John Healey’s first Autumn Budget: what was announced?
The chancellor made major defence funding commitments in his first Autumn Budget, while pledging to help struggling households with a higher cost of living and energy bills.
Chancellor John Healey put the focus on addressing rising living costs when he announced the first Autumn Budget of his tenure.
Nestled within the Budget document and his speech on 28 October were a number of measures to help households with a higher cost of living and energy bills.
A series of policy changes affecting businesses were also confirmed including targeted support for the ailing high street, while measures will be introduced to encourage entrepreneurship and innovation.
Start your trial of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
The government has committed to fully funding the £15 billion Defence Investment Plan, including £4.7 billion which was previously unfunded.
It means spending on defence spending will be worth 2.7% of Gross Domestic Product (GDP) in 2027/28.
The chancellor also pledged over £10 billion in additional economic and military support to Ukraine.
While the government will work with manufacturer Rolls-Royce on a joint 10-year £2.5 billion programme to develop gas turbine technology for civil and aerospace defence.
Taxes on businesses
A surcharge charged to banks on their profits will rise from 3% to 6% for 15 months, starting in January 2027.
Meanwhile the threshold at which high street shops start paying business rates in England will be increased from £12,000 to £18,000 from April 2027.
Vape shops and adult gaming centres in England will also no longer benefit from business rates relief from the same date as part of government efforts to “clean up” the high street and ensure support is targeted at shops, pubs and cafes, as well as other businesses.
Taxes on gambling machines will also be hiked from 20% to 25% for higher stakes machines, which allow gamblers to make larger bets, from next April.
The government has said it wants to close a tax loophole which allows foreign firms to sell services to some UK businesses without accounting for UK VAT.
Taxes on savers and landlords
Tax rates paid on income made from property or savings held outside tax-wrappered accounts will rise by a further 2% from April 2027.
The basic rate will go up to 24%, the higher rate to 44% and the additional rate to 49%.
Budget documents say 84% of income tax payers will be unaffected by the change, with the revenue raised from the move expected to come from the top 10% of households.
Energy bill and cost of living support
A £100 ‘Household Energy Payment’ will be made in the form of a council tax rebate to up to 20 million households in England from January 2027. The rebate will be issued to households in council tax bands A to D.
A further £100 million will be distributed among councils in England to provide targeted support to households most impacted by rising energy bills, some of whom are in council tax bands above A to D.
The VAT cut on electricity bills, which had already been announced by the government and was due to end on 31 March 2027, will be extended to 1 July 2027, taking £50 off the average energy bill.
From April 2027, over 10,000 energy-intensive businesses will have their energy bills cut by as much as 25% through the British Industrial Competitiveness Scheme (BICS).
Healey also confirmed the gas standing charge will be ditched, with the government hoping it can be abolished by the end of next year.
The National Living Wage will be increased by 3.9% to £13.21 an hour from the same date, adding £910 to workers’ annual wage.
The 5p freeze to fuel duty has also been extended to 1 July 2027 while the Gas Shipper Obligation, a new planned levy on gas bills to fund hydrogen projects, will be removed from energy bills and be funded by the government, subject to its commitment to the obligation.
Income tariffs on over 100 everyday food and drink products will be reduced, which the government says will save households up to £21 on their grocery shop per year.
Encouraging investment and entrepreneurship
The National Wealth Fund and British Business Bank will receive an additional £20.4 billion in government funding to boost investment and business growth in the UK. The National Wealth Fund will receive a further £15.4 billion.
The trading allowance, available to those making trading or miscellaneous income, will be tripled from £1,000 to £3,000 from April 2027.
Healey also said the government will launch a new ‘young entrepreneurs allowance’, which will cover a year of living costs for young business founders.
From next April, a new ‘Capital Gains Tax Founders’ Relief’ scheme will be introduced, offering a reduced 10% CGT rate on up to £10 million of lifetime gains.
Few details have been published, but Budget documents say venture capital schemes will be improved so founders can raise capital with “greater certainty”.
Housing
The government has committed to putting £4.7 billion towards the Your First Home scheme for first-time buyers which it estimates will help 70,000 people onto the property ladder.
Meanwhile £1.5 billion in funding will be put towards building social and affordable housing.
A further £432 million will be pumped into ending rough sleeping, one of the major pillars of Burnham’s premiership so far, over the next two years.
Plans have also been unveiled for a new first-time buyer ISA, while from today the Lifetime ISA withdrawal charge will be reduced from 25% to 20%.
Support for low-income pensioners
A new pension tax allowance will be introduced meaning some pensioners will pay less income tax.
From April 2027, if pensioners’ total income is more than the £12,570 personal allowance but less than the value of the full new state pension (£13,037), they will not pay income tax.
If their income is between £13,037 and £13,319, they will receive some allowance and pay some income tax, but less than they would have before the change.
Total income classes as income received from the state pension, private pensions, earnings from work, savings and property or dividend income, or a combination of some or all of these.
Cash ISA changes reversed
Healey ditched his predecessor Rachel Reeves’s proposal to reduce the annual cash ISA limit for under 65s from £20,000 to £12,000 from April 2027.
He also said he will work with the sector to create a new starter ISA to reward first-time investors.
Sign up for MoneyWeek's newsletters
Join more than 165,000 subscribers and keep yourself informed with the latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
