While the Autumn budget has pathed the way to the largest tax burden we’ve seen to date in the UK, how the impact of the budget’s broader announcements will affect you depends very much on your individual circumstances. As with any sweeping financial changes, everyone is likely to experience some sort of fallout, whether that’s positive, negative or negligible.
Below is a breakdown of how each of the major budget announcements will likely impact each demographic:
Homeowners
For the most part homeowners and prospective homeowners remain unaffected, with little immediate impact to mortgage rates expected. However the substantial rise in taxation announced overall will likely have a knock-on effect on spending. This increases the probability of further base rate rate cuts, and in turn, mortgage rate reductions going into 2026.
Mansion tax
For those with property worth upwards of £2m, new annual charges will be payable at the rate of an additional £2,500 for property worth £2m and over, and £7,500 for properties worth £5m and over. However, our mortgage expert and Advisor Development Manager, Neil Mulhearn agreed that this would likely not have a significant impact on homeowners at that level, he said “The additional property tax for homes worth more than £2m is not as bad as had been forecast and largely won't impact mortgage lending.
Energy Bill Reductions
The Energy Company Obligation (ECO) scheme and some "green levies" have been removed from energy bills, and are expected to lead to an average annual saving of around £150. This sort of household saving is always helpful to homeowners and renters alike.
Landlords
Landlords will likely be underwhelmed with today’s announcement, a few of which may have a significant impact on their business.
Property Income Tax Increase
A 2% rise in property income tax across all income bands is likely to have the greatest impact on buy-to-let landlords who hold properties in their own name. While there may be a small drop in mortgage rates, particularly on tracker products which tend to be common with landlords, it will not likely balance the impact of these tax surges. Lee Trett, our Director and Co-founder said “The biggest take away from the Autumn budget for our clients is the 2% increase in taxation on rental income. While it’s not a massive increase, it will disproportionately impact individual landlords, and likely lead to even more exiting the rental market.”
Tourist Tax
The power to introduce a local visitor levy (accommodation tax) per night on overnight stays in certain cities across the UK will apply to short-term holiday let providers, such as Airbnb hosts as well as hotels. While this tax is not aimed at them, charging tourists additional fees to stay in certain cities could have an impact on uptake for some hosts.
Business owners and working-age people
One or more of the following changes are likely to impact most people of working age in the UK.
Free Training for under-25s
Training for people aged 25 and under on apprenticeships will be made free for small and medium-sized enterprises. This offers positive change for both struggling SMEs and an increase in the availability of work opportunities for young people.
National Minimum Wage Increase
The National Living Wage will increase to £12.71 per hour for over 21s and £10.85 for 18-20s in April 2026. A welcome change for those on the lowest salaries.
National Insurance (NI) and income tax freeze
While many will welcome a higher minimum wage, combined with a freeze on the income tax and NI thresholds for an extra three years, many more millions of people are likely to be pulled into the higher tax brackets as their wages rise in line. This is known as fiscal drag, and means that in real terms, many people won’t be any better off when their salary increases.
ISA cap
From April 2027 under-65s can only put £12,000 of their £20,000 tax free allowance into an ISA, with the remaining £8000 now reserved for investments. This is likely to deter saving in ISAs at a certain level to avoid taxes and may be particularly impactful on the LISA, which is typically used to fund house deposits.
Pension salary sacrifice cap
A cap of £2000 will be introduced to pension salary sacrifice schemes from 2029, meaning employee pension contributions above this limit will be subject to normal taxation. This may deter many working people from opting for higher pension contributions.
Electric vehicle tax
A new electric vehicle excise duty of 3p per mile for electric cars and 1.5p for plug-in hybrids. Although unlikely to result in determining existing electric car owners, this may put off those looking to switch from petrol engines in 2026, as it eats away at the fuel savings that have appealed to electric car owners until now.
Families
Overall positive news for families, with a £5m investment in school libraries and £18 in school playgrounds. Of course many people in families will also be impacted by other areas of the budget.
Two-child benefit cap scrapped from April 2026
The removal of the two child benefit cap will raise benefit income making life a little bit easier for many larger families. It’s expected to be particularly helpful for those looking to buy a family home, as many lenders will now consider benefit income alongside salary, enabling those looking for a mortgage to increase their borrowing capacity.
Over 65s and disabled people
Over 65s will experience a fairly minor impact, although largely a positive one from this budget. They are not impacted by the cap on ISAs that will limit younger savers, allowing them to continue saving up to £20,000 tax free into their retirement.
State pension increase
A 4.8% rise in the state pension from April 2026 will also likely be a comfort to many older people in the UK.
Prescription Charges in England will be frozen for 2026
While pensioners don’t pay for prescriptions in England, this measure will be welcomed by many younger disabled and chronically ill people who rely on and pay for multiple medications on a regular basis.
Reforms to the Motability scheme
There have been no reductions to the Motability scheme or eligibility for this type of vehicle, however, luxury vehicles will no longer be available through the scheme. This is unlikely to affect people taking part in the scheme, so long as the vehicles are still adapted to their individual needs. It may even result in a more positive public perception of the scheme, which has seen disabled people in the UK under fire in recent months.
Want expert advice about how the annoucements in the Autumn Budget affects you and your finances? Get in touch here and one of our advisers will break it all down for you.