On November 26th, 2025, the UK Government announced its Autumn Budget. Here is a breakdown of what it means for individuals:

Personal Allowance & Income Tax (UK Rules)

The UK-wide personal allowance stays at £12,570 in 2026/27.

It is:

• Tapered away once income exceeds £100,000, and
• Fully removed when income passes £125,140.

The 2026/27 Scottish rates were not yet published when this summary was prepared, so final bandings will depend on the Scottish Budget.

UK-wide tax on savings & dividends

From April 2026, dividend tax will rise by 2 percentage points for most taxpayers:

Band (using UK tax bands)	Dividend tax 25/26	Dividend tax 26/27
Basic rate	8.75%	10.75%
Higher rate	33.75%	35.75%
Additional rate	39.35%	39.35%

From April 2027, tax on savings income will increase to:

Band	Savings income 27/28
Basic	22%
Higher	42%
Additional	47%

Your savings allowance and dividend allowance remain:

• Savings allowance:
  • £1,000 (basic rate)
  • £500 (higher rate)
  • £0 (additional rate)
• Dividend allowance: £500

 

National Insurance for Self-Employed & Voluntary NICs

Class 4 NICs (self-employed) – unchanged rates

For 2026/27:

• 6% on profits between £12,570 and £50,270
• 2% on profits above £50,270

Thresholds are frozen until 2030/31, which means more people will pay more NICs over time as incomes rise.

Voluntary NICs

From 6 April 2026:

• Class 2 NICs: £3.65 per week
• Class 3 NICs: £18.40 per week

Further changes:

• People living abroad will no longer be able to pay voluntary Class 2 NICs
• To pay voluntary NICs from overseas, you’ll need a 10-year UK connection (up from 3 years)

 

ISAs (Individual Savings Accounts)

• Overall ISA allowance remains £20,000 in 2026/27

From 6 April 2027:

• Under-65s will have a £12,000 annual cash ISA cap (within the £20,000 total)
• Those aged 65 and over can still save £20,000 a year into a cash ISA

Any mix of cash and stocks & shares within the overall limit remains tax-free.

 

Pensions & Tax Relief

• Income tax relief on qualifying pension contributions remains unchanged and continues to be a key planning tool for higher earners.

There is also an important change for inheritance planning (see Pensions & IHT under “Property, land & estate planning” below).

 

Child Benefit & High-Income Child Benefit Charge (HICBC)

Unchanged for 2026/27:

• If your income is over £60,000, and Child Benefit is paid in respect of a child who lives with you, you may face the HICBC
• Only the higher earner in a couple is liable, regardless of who actually receives the Child Benefit

The charge is:

• 1% of Child Benefit for every £200 of income above £60,000
• Child Benefit is fully clawed back when income reaches £80,000

 

Qualifying Care Relief

For foster carers and shared lives carers, relief will rise by 3.8% from April 2026, in line with inflation (September 2025).

 

Self Assessment Penalties (Individuals)

From 6 April 2027, a new system will apply to self-assessment penalties:

• Late filing penalties will be more lenient
• Late payment penalties will be tougher and higher

 

Property, Land & Estate Planning (for Individuals)

High-Value Council Tax Surcharge (“Mansion Tax”)

A new council tax surcharge will apply to homes valued above £2 million in England.  We will know whether this will apply in Scotland after the Scottish Budget in January, as council tax is a devolved matter.

Key points:

• Charged in addition to existing council tax
• Expected to range between £2,500 and £7,500, depending on property value
• Applied to the homeowner, not necessarily the person who pays the day-to-day council tax bill

Combined with rising property and income taxes, this may put extra pressure on landlords and, in turn, on rents.

 

Inheritance Tax (IHT)

Key allowances:

• Nil rate band: £325,000
• Residence nil rate band: £175,000 (where the main home is left to direct descendants)
• Above these, IHT is usually charged at 40%

Both nil rate bands are frozen until 2031.

The residence nil rate band is tapered away at £1 for every £2 that the estate exceeds £2 million.

In straightforward cases, a married couple or civil partners can still pass on up to £1 million free of IHT (depending on their circumstances and estate structure).

 

Paying IHT by Instalments

From April 2026, the option to pay IHT in interest-free instalments over 10 years will be extended to all property which qualifies for APR or BPR

This will help estates that are asset-rich but cash-poor (for example, farms, trading businesses or large landholdings).

 

Pensions & IHT – Important Change

From April 2027, the value of any unused pension funds will be included in the deceased’s estate for IHT purposes, even if the pension has been written into trust.

This is designed to stop pensions being used purely as a tax-efficient wealth transfer vehicle, rather than as a way to fund retirement.

If you’ve been treating your pension as your “IHT shelter”, it will be worth revisiting your plan.