Budget 2026: What To Expect If You’re A Saver

UK savers face a whirlwind of changes from April 2027 but what else could be unveiled when Chancellor of the Exchequer, John Healey, delivers his financial plans in the Autumn Budget?

From potential changes to capital gains tax to a reduction in the tax-free Cash ISA limit, we share what’s already on the cards and what you might need to look out for.

What has already been announced?

Some of the changes that savers can already expect will be coming from April 2027. These include

• Cash ISA tax-free reduction

From April 2027, the tax-free limit for Cash ISAs will fall from £20,000 to £12,000 for people under the age of 65.

This change was announced in the Autumn Budget 2025 by then-chancellor Rachel Reeves in an attempt to encourage more people to invest ‘which, historical trends suggest, provides better returns for savers.’

In April 2025 alone, savers added a total of £14 billion into ISAs, the highest amount since records began in 1999, according to the Bank of England’s Money and Credit report.

Cash ISA balances rose significantly from £286bn in October 2022 to £437bn in October 2025, estimates from the Bank of England show.

• Restrictions on cash savings held in Stocks and Shares ISAs

Investors with a Stocks and Shares ISA will still be able to hold cash in their account, however any interest earned on the uninvested cash will be subject to a 22% tax charge.

That means you won’t be able to use a Stocks and Shares ISA as a loophole to store cash tax-free.

What could change from 28 October?

The government could announce more details on their plans to introduce a simpler ISA scheme for first-time buyers.

Currently, the Lifetime ISA offers people aged between 18 and 39 years old to save for their first home or retirement. You can put in up to £4,000 each tax year until you are 50.

However, the scheme has faced controversy over its heavy penalties. For example, You can only use a Lifetime ISA for:

• A deposit on a first home worth up to £450,000.
• Retirement income once you hit 60 years old.
• Extreme circumstances e.g. you become terminally ill or pass away.

You’ll have to pay a 25% penalty if you withdraw money for any other reason.

What is unlikely to change?

The government is unlikely to raise income tax, National Insurance or VAT on working people as thresholds have already been frozen until 2031.

The table below shows the current income tax rates:

However, due to inflation, many people are being pulled into higher tax rates due to fiscal drag.

If you’d like to estimate how frozen tax thresholds might affect you, use our free fiscal drag calculator.

What can you do now?

Think carefully about strategies to help preserve your returns and grow your savings sustainably.

With the tax-free Cash ISA limit falling to £12,000 for under-65s from April 2027, it’s important to think about the best ways to manage your savings.

Investing could be worth considering if you don’t need to access the money you invest for at least 5 years.

However, it might be the best tool depending on your circumstances. If you’re concerned about how to manage your savings, speaking with an independent FCA-regulated financial adviser could help you better understand the right next steps for your money.

Sources
GOV.UK
Bank of England