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Budget 2026 - What is known?
Before the speculation begins, let's look at what we already know.
As attention turns to the forthcoming Budget, there will inevitably be rumours about further tax rises, spending decisions and possible changes to allowances.
But much of what will affect households, investors and business owners over the next few years has already been announced, with several measures now in legislation.
Here is what we know so far:
🔹 April 2026 – Dividend Tax: Rates increased by 2 percentage points for basic and higher-rate taxpayers, to 10.75% and 35.75% respectively.
🔹 April 2026 – Business Asset Disposal Relief: The Capital Gains Tax rate on qualifying disposals increased to 18%.
🔹 October 2026 to March 2027 – Energy Bills: VAT on domestic electricity in Great Britain has been temporarily reduced to 0%. Gas remains at 5%.
🔹 April 2027 – Cash ISAs: The annual Cash ISA limit will reduce to £12,000 for those under 65, while the overall ISA allowance remains £20,000.
🔹 April 2027 – Inheritance Tax and Pensions: Most unused pension funds and pension death benefits will be brought within the scope of Inheritance Tax, subject to exemptions.
🔹 April 2027 – Savings and Property Income: Tax rates will increase by 2 percentage points across the basic, higher and additional-rate bands.
🔹 April 2028 – High-Value Properties: An additional annual charge is planned for owners of residential properties in England valued at £2 million or more. The detailed legislation remains outstanding.
🔹 April 2029 – Pension Salary Sacrifice: The National Insurance exemption will be limited to the first £2,000 of annual employee pension contributions made through salary sacrifice.
🔹 Until April 2031 – Frozen Tax Thresholds: Key Income Tax and National Insurance thresholds will remain frozen, potentially bringing more earnings into higher tax bands as wages increase.
And what about the reduction in electricity VAT?
The temporary cut is worth approximately ÂŁ45 a year to a typical household on an annualised basis.
However, despite this reduction, Ofgem's energy price cap for October to December 2026 has risen by approximately 4%, to ÂŁ1,723 for a typical dual-fuel household.
Whether the electricity VAT reduction continues beyond March 2027 remains a decision for the Government.
The key point?
We do not need to rely on rumours to recognise that significant changes to personal finances, pensions, investments and taxation are already taking shape.
The Budget may bring further announcements, but understanding the measures already confirmed is an important starting point for effective financial planning.
The question is not simply what the Chancellor might announce next, but whether we are adequately preparing for the changes we already know are coming.
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