The Autumn Budget 2026 has been regarded as largely uneventful with no large surprises announced. However, there are still a few key takeaways for investors that are worth noting.
Cash ISAs
Rachel Reeves announced in her 2025 Autumn Budget that the cash ISA allowance would reduce from £20,000 to £12,000 for those under 65 from April 2027. This was an attempt to encourage the younger population in the UK to invest particularly in the UK markets. However, in this budget, John Healey has reversed those plans meaning the full £20,000 cash ISA allowance will remain available to everyone regardless of their age. The Chancellor stated that he preferred to encourage investment over saving with a carrot, not a stick.
Plans were also announced to incentivise first investors into stocks and shares ISAs through a ‘Starter ISA’. The financial services industry is to be consulted on how this will work in practice but no timeframe was given for a launch.
The Lifetime ISA or LISA is to be replaced with a First Time Buyer ISA to be introduced from 2029. The finer details of this are still to be announced but what we know so far is that people saving for their first home through the First Time Buyer ISA will be able to save up to a certain limit per year, which will count towards their ISA allowance. It will only pay the government’s 25% bonus at the time money is withdrawn to buy a first property and if the funds are withdrawn for another purpose because an individual’s circumstances have changed, the full amount the individual has paid in can be withdrawn without penalty.
There were no changes announced for investors already investing within stocks and shares ISAs.
Pensions
The only change announced to pensions was that the triple lock which currently applies to the state pension is proposed to end from 2030 and be replaced by the double lock if Labour win the next general election. This would mean that the state pension, from 2030, would rise each April by whichever is the higher of inflation (CPI) or 2.5%. This removes the average earnings growth trigger and is predicted to save an estimated £50 billion by 2050.
The fear that pensioners whose only income is the state pension would suddenly enter the income tax pool was removed by the introduction of a new pension tax allowance from April 2027. These pensioners will have a tax-free allowance of £13,037 which directly aligns with the full state pension which is rising by 3.9% to £13,036 from April 2027. Unlike the standard personal allowance which is frozen until 2030/31, this allowance will increase annually in line with future state pension increases.
Savings and rental Income
In the 2025 Budget, Rachel Reeves announced a 2% increase on income tax on money received as savings interest above the personal allowance and rental income received from properties in England, Wales and Northern Ireland. Healey announced a further 2% increase on this which will take effect from April 2027.
This means that savers and landlords who are basic rate taxpayers will pay 24% income tax on interest and rents, higher rate tax payers will be taxed at 44% and additional-rate taxpayers will be taxed at 49%.
As dividend tax rates did not increase, those holding large amounts in cash accounts may be more heavily taxed on any interest earned from April 2027, and consequently may look to diversify into stocks and shares as a sensible consideration from a tax point of view. However, like all financial planning decisions, tax is only one piece of the puzzle and there are other factors to consider before making this move.
What should investors do now?
While there were no huge changes for investors announced in the 2026 budget, it is a good opportunity to take stock of your current financial strategy and ensure that it still remains appropriate. The biggest shake up for investors in recent years is still to take effect from April 2027 which will see unspent funds in a pension enter an individual’s estate to be assessed for inheritance tax. As financial landscapes and legislation is ever-changing, it is becoming increasingly important to regularly review financial strategies and seek professional advice.
How Anderson Strathern Asset Management can help
With further changes due from April 2027, now is a good time to consider whether your current approach to pensions, ISAs, savings and investments remains appropriate for your long-term goals.
If you would like to discuss how the Autumn Budget 2026 may affect your financial planning, please contact Anna Gratwick or a member of the Anderson Strathern Asset Management team.
Tax treatment depends on individual circumstances and all tax rules may change in the future.
Anderson Strathern Asset Management Limited are not authorised to provide tax advice, and information supplied should not be relied upon for tax, accounting or legal advice.
Anderson Strathern Asset Management Limited is authorised and regulated by the Financial Conduct Authority