Your pay, energy bills and cash Isa: How the Budget affects you Changes announced by Chancellor John Healey in his first Budget will affect your finances directly. Here's how. Published: 2026-10-28T13:45:04Z Your pay, energy bills and cash Isa: How the Budget affects you Families facing cost-of-living pressures are being offered some assistance, according to Chancellor John Healey. Price rises are forecast to accelerate as energy bills in particular are likely to soar in the new year. So, here's how the key announcements in his first Budget affect you and your money. Help with your energy bill The chancellor has effectively revived cost-of-living payments, by announcing a £100 automatic payment made directly into bank accounts.

He said that 20 million homes in council tax bands A to D in England will receive a £100 "Household Energy Payment", funded by extra tax on banks.

You can find your council tax band by looking on your annual bill, or by looking on the government's website - although that was struggling to cope with traffic after the announcement.

Administrations in Scotland, Wales and Northern Ireland will receive the equivalent funding, and they will decide whether to introduce the same payment.

This is designed to help with soaring energy bills. Tariffs linked to regulator Ofgem's price cap, are forecast to soar by hundreds of pounds a year, to an annual bill of £2,000 or more in January.

A bar chart showing the energy price cap for a typical household on a price-capped, dual-fuel tariff paying by direct debit, from April 2022 to October 2026. The chart starts with a figure of £1,673 for the first two periods from April to September 2022, rises steeply to a high of £3,582 in July 2023, then falls again to a low of £1,414 in July 2024. The figures then undulate between a low of £1,543 and a high of £1,655 from the period covering October to December 2024 and April to June 2025.

They then rise again to £1,584 in January to March 2026, and rise again to £1,663 by July to September 2026, and again to £1,723 for October to December 2026. According to estimates by Cornwall Insight, in January 2027, the price cap will be £1,999 under the new typical household consumption values. The VAT cut on electricity bills, which was introduced in October, will also be extended to July. It was due to end in April. Gas standing charges scrapped Gas standing charges will be scrapped in England, Scotland and Wales, during 2027 "or as soon as possible after", the chancellor said. These fixed daily fees will be shifted onto the price of each unit of energy.

The Treasury calculates that 60% of households will gain an average of £45 a year, with lower users gaining the most - but not until after the projected big rise in bills in January.

Higher users - in the biggest houses but also large, low-income families - will pay more than they currently do. The government wants to extend reforms to electricity standing charges later. Fuel duty help if you drive The 5p "temporary" cut in fuel duty on petrol and diesel, introduced by Rishi Sunak in 2022, will be extended to July. It was scheduled to be phased out from January. It means drivers will still pay the levy at 52p per litre.

Motor fuel prices have risen sharply owing to the continued impact of the Iran war on drivers, with diesel having recently hit new records when it moved above £2 per litre.

The cost of filling a typical family car with diesel has gone up by around £30 since late February. A tankful of petrol costs about £23 more. You can save £20,000 a year in cash tax-free after all The chancellor has scrapped his predecessor's plans to reduce the annual amount people can save tax-free in cash in Individual Savings Accounts (Isas). Rachel Reeves had wanted the policy to encourage personal investment in stocks and shares.

It meant, from April 2027, if you're under 65, you would only be able to save £12,000 a year in cash in an Isa, rather than £20,000. But that plan has now been ditched.

Instead, the government plans to create a new "Starter Isa" for first-time investors. You may get a pay rise Minimum wage rates will rise by 3.9% in April.

However, these figures mean, this time around, there's no progress on Labour's manifesto promise to narrow the gap in minimum wages between older and younger workers.

For all workers, the ongoing freeze in the income bands, or thresholds, at which income tax is paid went unmentioned in the Budget.

But it means any kind of pay rise could drag you into a higher tax bracket, or see a greater proportion of your income taxed than would otherwise be expected. Scotland has its own income tax bands. State pension to rise The triple lock policy means that the state pension will go up in line with average wage increases, at 3.9%. It means: the flat-rate state pension for those who reached state pension age after April 2016 will be £250.70 a week, or £13,036.40 a year, up £488 on now the old basic state pension for those who reached state pension age before April 2016 will be £192.10 a week, or £9,989.20 a year, up £374.40 on now But some pensioners won't be taxed

The government had already committed to not taxing people who only get an income from the state pension. The chancellor said this would be the case until at least 2030, as there will be a new Pension Tax Allowance, so pensioners with an income up to the value of the full new state pension will not pay income tax.

A bar chart titled 'New UK state pension payments may cross tax threshold', showing the current annual payments for the old and new state pensions, and the likely payments from April 2027 based on the triple lock. The current annual value of the old state pension is £9,614, and is expected to rise to £9,989. The new state pension is currently worth £12,547 a year, and is expected to increase to £13,036, which is above the current tax-free personal allowance of £12,570. The figures are based on BBC calculations.

Support to save for your first home The First Time Buyer Isa has been in the planning stages with the government for a while. Healey has confirmed that it is intended to replace the often-criticised Lifetime Isa. Couple buying a home in an estate agent.

Separately, he confirmed the Your First Home equity scheme to allow first-time buyers in England to buy a new-build home with a deposit of 2.5%. It would provide them with a loan worth 20% of their property's value to help pay for the purchase. What we already know is coming Some announcements affecting your finances have previously been made by the government. They include: Tariffs removed from 100 food items such as baked beans and garlic, which it calculates could save households up to £21 per year - or 40p a week - when combined with existing tariff suspensions that were introduced in June Allowing carers to earn more than an existing earnings limit without losing their entire allowance, replacing it with a taper mechanism instead. However, this will not come in until 2030

Giving two weeks of paternity pay to self-employed fathers, who have previously missed out on payments of up to £194 a week for the period Making permanent a 55p per mile tax-free mileage rate for those driving up to 10,000 miles for work, with the rate rising from 25p per mile to 35p above that The prime minister's plan to reinstate the £2 cap on bus fares in England from January to be in effect throughout 2027. Some cities already have caps, and funding is being given to the devolved nations Read the original article on BBC