Autumn Budget 2026: what might we see in Chancellor John Healey’s speech on 28 October?

Chancellor John Healey will deliver his first Budget on Wednesday 28 October.

Healey was appointed Chancellor after Andy Burnham took office as Prime Minister in July. It’ll be his job to lay out the government’s spending plans and priorities for the coming year.

The Prime Minister’s been keen to address the cost of living in the UK, already announcing measures to lessen some of the pressure on our purse strings. That includes:

We may well see similar measures in this Budget to support individuals and households.

Meanwhile, gilt yields - a measure of how much it costs the government to borrow money - have surged in recent weeks. 

That’s further squeezed the public finances, potentially opening the door to spending cuts. It could also mean tax rises, although the Prime Minister previously committed to Labour’s general election pledge not to raise Income Tax, National Insurance (NI) on individuals, nor VAT.

The government’s been tight-lipped so far, trying to keep leaks to a minimum. As a result, it’s worth taking anything discussed before the date with a pinch of salt.

That said, what might we see when Healey steps up to the despatch box on 28 October? Here are a few things worth keeping an eye on. 

Income Tax thresholds and the Personal Allowance

Income Tax thresholds have been frozen since 2021. As it stands, they’ll remain the same until 2031.

Frozen thresholds don’t raise tax rates. Instead, they slowly pull you into paying higher tax over time as your income rises - an effect called ‘fiscal drag’.

These thresholds could be in Healey’s sights, especially the Personal Allowance - that’s the tax-free band for Income Tax, standing at £12,570 in 2026/27. 

The full new State Pension’s set to be above the Personal Allowance from next tax year for the first time. It’s expected to pay £13,036 a year (2027/28).

However, the Pensions Minister, Torsten Bell, has confirmed that pensioners whose only income is from the State Pension will be exempt from paying tax.

Healey’s expected to set out how this will work in practice, perhaps increasing the Personal Allowance or exempting State Pension income from tax.

Property taxes

The so-called ‘mansion tax’ is set to come into effect in April 2028. When it does, properties valued at £2 million or more in England will face an additional annual tax charge. The table below shows you the proposed tax rates.

It was previously thought that Healey may reduce the threshold at which this kicks in from £2 million to £1.5 million, pulling more homes into its scope. However, the Chancellor has reportedly ruled this out.

Still, we may see further details or changes to this plan.

Inheritance Tax

Inheritance Tax (IHT) applies if your money and assets - your ‘estate’ - go over certain thresholds when you die. In 2026/27, that’s up to £325,000. You can pass on up to a further £175,000 if you pass your main residence to your direct descendants.

IHT’s been a focus of this Labour government. We’ve already seen plans to bring pensions into the IHT net from April 2027. Plus, we’ve seen reforms to agricultural and business property reliefs, a change that attracted the ire of farmers in particular.

The pension changes are set to come into effect from next April. So, we may see more information and greater clarity for both pension savers and providers as to how this will work in practice. 

We might also see a change to the tax-free IHT thresholds. The main tax-free threshold has been fixed at £325,000 since 2009, and is frozen until 2031. 

Meanwhile, the additional threshold for your main residence has been £175,000 since 2020. That’s also frozen until 2031.

Those frozen thresholds have dragged a growing number of estates into paying IHT over time. The Chancellor may look to address that, especially as Conservative Party leader Kemi Badenoch has already pledged to remove family homes from the IHT net.

Capital Gains Tax

One long-touted strategy for this government is for Healey to equalise Capital Gains Tax (CGT) rates with Income Tax.

This would see CGT rates rise from:

Individuals have a tax-free CGT exemption in each tax year. In 2026/27, that’s £3,000.

After that, you might face CGT on gains made when you sell assets such as:

This change could affect investors, business owners, and landlords, making it more expensive to access the gains they’ve achieved. 

Other talking points

Alongside some of the areas we could see covered, there are a few other key talking points worth watching out for.

What we’d like to see

For pension savers, what matters now is simplicity and stability. 

Over the past couple of years, we’ve seen various rule changes that are set to make pensions more complex in the near future.

That includes bringing pensions into the IHT net from 2027, and reducing the NI benefit on contributions made via salary sacrifice from 2029. 

So, it’d be good to see greater certainty and clearer guidance from the government, not more rule changes that make it harder for savers to plan their financial futures.

It’d also be a welcome shift to see support for people who fall outside of Auto-Enrolment, such as carers and invisible workers. Those individuals could be at risk of reaching retirement without enough to support themselves in later life.

Whatever’s announced in the Budget, it’s important not to react before considering the wider implications of policy changes, especially ones that you can’t undo.

You could end up making choices that aren’t suitable for your circumstances to try and get ahead of the rules.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.