John Healey has delivered his first Budget as Chancellor. Here, we explain the key changes and how they could affect your income, savings, pension and estate planning. To talk through what they mean for you, please get in touch with your EQ financial planner.

As expected, it was a quiet Budget, with some cheer for pensioners, first-time buyers and entrepreneurs. Rather than a major overhaul, the Chancellor relied on small, targeted measures to find fiscal headroom. The full spending review and 10-year plan have been pushed back to 2027 and beyond.

Banks will pay a higher corporation tax surcharge, rising temporarily from 3% to 6% on profits above £100 million, on top of the standard 25% rate. It applies from 1 January 2027 to 31 March 2028. The rise was smaller than markets feared, and bank shares rallied.

Here are the key points from a personal wealth planning perspective.

Cash ISA cut reversed 

The cash ISA allowance will stay at £20,000, reversing Rachel Reeves’s plan to cut it to £12,000 for under-65s from 6 April 2027. 

We welcome this. The change was never properly consulted on, and it would have made investing more complicated without tackling the reasons so many people prefer to keep their savings in cash. 

New Starter ISA 

The Chancellor will consult the investment industry on a new Starter ISA to encourage first-time investors. 

New First Time Buyer ISA 

The First Time Buyer ISA will launch in April 2029, replacing the Lifetime ISA for new accounts. It keeps the £4,000 annual limit and 25% government bonus. The £450,000 property cap also stays, despite widespread calls to reflect regional house prices. 

Lifetime ISA 

From 29 October 2026, if you withdraw from a Lifetime ISA to buy a first home costing more than £450,000, the charge will fall from 25% to 20%. This recovers the government bonus without eating into your own contributions. 

We’re less convinced by the new types of ISA, which add complexity, cost and administration for little obvious benefit. 

Your First Home scheme 

A new government-backed equity loan scheme, Your First Home, will launch next year to help first-time buyers get on the ladder with a 2.5% deposit. 

Income tax 

Personal allowances and thresholds stay frozen until April 2031 in England, Wales and Northern Ireland. As wages and prices rise, frozen thresholds pull more people into higher tax bands.  

The Office for Budget Responsibility estimates the freeze will raise over £55 billion in 2030/31 alone. 

Higher tax on property and savings income 

From 6 April 2027, tax on income from property and savings rises by a further 2 percentage points, on top of the 2-point rise announced in 2025. Compared with today’s rates, that means (property income rates may differ in Scotland and Wales): 

• Basic rate: 20% to 24% 
• Higher rate: 40% to 44% 
• Additional rate: 45% to 49% 

The Chancellor said 88% of people will pay no more tax on their savings income, as most savers stay within their tax-free allowances. 

Founders’ relief and support for entrepreneurs 

• Founders’ relief: a 10% capital gains tax rate on lifetime gains up to £10 million for founders of the UK’s most successful companies, to keep entrepreneurs in the UK. 
• Young entrepreneurs’ allowance: a year of living costs for young founders while they build their businesses. 
• Female founders: a new scale-up programme, with the British Business Bank doubling its fund commitments to women-led businesses to £200 million. 
• Trading allowance: the allowance and reporting threshold for trading, casual and miscellaneous income rises from £1,000 to £3,000 from 6 April 2027. 

Capital gains tax unchanged 

Main rates stay at 18% and 24%, following the October 2024 increases. There had been speculation that capital gains tax would be aligned with income tax. But gains often build up over many years, with no relief for inflation, and modelling suggests rates above 24% could hold back investment and entrepreneurship. 

Business Asset Disposal Relief (BADR) 

BADR lets you pay a lower rate of capital gains tax, currently 18%, when you sell or close a qualifying business or sell shares in a trading company.

From 6 April 2027, the lifetime limit halves from £1 million to £500,000.

Contracts agreed before that date will be protected. 

State pensioners shielded from income tax 

The state pension is taxable but paid without tax deducted. Whether you owe tax depends on your total income and allowances. Any tax due is usually collected through the tax code on another pension or job, or through Simple Assessment. 

From April 2027, the full new state pension rises by 3.9% to around £13,036 a year, taking it above the £12,570 personal allowance for the first time. A new pension tax allowance means that if your total income is no more than the full new state pension, you won’t pay income tax for the rest of this Parliament. If your income is higher, the allowance reduces by £1 for every £3 above that level. 

Minimum wage 

The national minimum wage and national living wage will rise by 3.9%. 

As previously announced 

These changes were confirmed in earlier Budgets and go ahead as planned.

Inheritance tax (IHT)

From 6 April 2027, most unused pension funds and death benefits will count towards your estate for inheritance tax. Scheme pensions and death in service benefits are excluded, and the usual exemptions apply if benefits pass to your spouse or civil partner. 

New legislation will also help executors work out whether the reduced rate of IHT applies when part of an estate is left to charity. 

High value council tax surcharge 

The high value council tax surcharge will go ahead from April 2028 for homes in England worth £2 million or more. 

Payrolling benefits in kind 

From 6 April 2027, employers must report and payroll most benefits in kind and taxable expenses through real time information. 

What was missing? 

Despite pressure from MPs and campaigners, there was no change to student loans. Repayment thresholds remain frozen until 2030. 

If you’re helping children or grandchildren with university costs, or thinking about paying off a loan early, your EQ financial planner can help you weigh up the options. 

Further details 

The EQ Investors team will continue to review the changes and their impacts over the coming days and weeks. 

Please do get in touch if you have any questions or would like more information. 

Please remember, this content is provided for information purposes only. Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.