Please find below our response to the Autumn Budget 2026.

ISA cuts scrapped

One of the most anticipated announcements was the future of the Cash ISA.

Following proposals announced in the 2025 Budget to reduce the Cash ISA allowance from £20,000 to £12,000 for those under age 65 from April 2027, the Chancellor has now reversed course. The Cash ISA allowance will remain at £20,000.

Alongside this, the government announced plans to work with the investment industry on a new incentive designed to encourage first-time investors to use Stocks & Shares ISAs, although full details have yet to be confirmed.

Lifetime ISA changes

The government has announced further reforms to support first-time buyers. From April 2029, a new First Time Buyer ISA will be introduced for new savers. The account will broadly replicate the current Lifetime ISA benefits, allowing contributions of up to £4,000 each year and providing a 25% government bonus towards the purchase of a first home. Unlike the current Lifetime ISA, there will be no upper age restriction. Existing Lifetime ISA holders will be able to continue using their accounts under current rules.

In addition, from 29 October 2026, Lifetime ISA investors purchasing a qualifying first property costing more than £450,000 will face a reduced withdrawal charge of 20% rather than 25%, protecting the value of their own contributions.

Savings Interest

Whilst savings remain tax-efficient when held within an ISA, the government announced a further increase in tax rates on savings income from April 2027. Savings tax rates will increase by a further 2% to:

• Basic rate taxpayers: 24%
• Higher rate taxpayers: 44%
• Additional rate taxpayers: 49%

This follows the increases previously announced in the 2025 Budget and reinforces the value of using ISA wrappers and other tax-efficient investment arrangements wherever possible.

Capital Gains Tax (CGT)

Investors will welcome the absence of any further Capital Gains Tax changes.

The Chancellor confirmed there will be no changes to the main Capital Gains Tax rates applicable to investment assets and no changes to the annual CGT exemption.

For many investors this provides valuable certainty and allows long-term investment planning to continue without the need for immediate restructuring.

Dividends

It was announced that dividend taxation remains unchanged.

There are no further changes to dividend tax rates, and the dividend allowance remains at £500. ISAs continue to offer an important shelter for those generating dividend income from investments.

Pensions

The pension system was largely untouched by this year's Budget, providing welcome certainty for retirement planning.

There were no changes to:

• The £60,000 Annual Allowance
• Pension tax relief
• The Lump Sum Allowance (£268,275)
• Tax-free cash rules

Jonathan Watts-Lay, Director, WEALTH at work, comments:

"This was largely a Budget of continuity rather than change. The good news for many savers and investors is that key pension tax allowances remain unchanged and there were no further increases to Capital Gains Tax or dividend tax rates.

“However, the increase in savings and property taxation reinforces the importance of making the most of tax-efficient savings and investment opportunities. While tax is an important consideration, it should not be the sole driver of financial decisions. Individuals should take a long-term approach to saving and investing and make full use of available tax-efficient vehicles, such as ISAs and pensions, where appropriate.

“The decision to retain the £20,000 Cash ISA allowance will be welcomed by savers. People value simplicity, and Cash ISAs have proved to be an easy and effective way to save. However, people should not lose sight of the potential for greater long-term growth through investing in a Stocks and Shares ISA.

“For many younger people, trying to get on the property ladder can feel like one of the most difficult financial goals to achieve. Any initiatives to help encourage more people to start saving earlier for their first home, has to be a good thing. However, it will be important that savers understand how the different options work and how they fit into their broader financial goals.

“Employers play a pivotal role as a trusted source of support. Through initiatives such as financial education, guidance programmes and Workplace ISAs, they can help employees build financial resilience, develop positive saving habits and make informed decisions about their savings, investments and future finances."