Key Budget 2026 Measures & Promises

Frozen tax thresholds & “stealth”

rise

The government will freeze the thresholds for income tax and National Insurance until April 2031.
Because wages tend to rise over time, freezing thresholds effectively pushes more people into higher tax bands (“fiscal drag”). According to official forecasts, by 2029-30 this change alone will raise around £8 billion for the Treasury.
Total new tax-raising measures announced amount to about £26 billion per year by 2029-30.

New tax on expensive homes (mansion tax) & property-related changes

The Budget introduces a new annual “mansion levy” for homes valued over £2 million (in 2026 prices), payable from April 2028.
There are also tweaks to business investment allowances, capital-gains and corporate taxation rules to influence business property and investment decisions.

Cuts/Freezes to selected household costs

To help with the cost of living, the government pledges to cut around £150 from the “average household energy bill” from April 2026, by removing certain levies.
There's a freeze on fuel duty (extended until September 2026) and on rail fares, prescription charges, and other regulated costs.

Social welfare & public spending increases (notably child- and benefits-related)

The government is ending the two-child benefit cap from April 2026 — a move expected to help low-income families, lifting an estimated 450,000 children out of relative poverty over time.
There’s a rise in the National Minimum Wage / National Living Wage (in 2026) — helping lower-paid workers cope somewhat with inflation and higher living costs.
Additional spending commitments are aimed at public services — for example, new funding for health, welfare, and support for vulnerable people.

Governance, Debt & Fiscal Outlook

The government claims this Budget meets its fiscal rules: it intends for day-to-day spending to be matched by revenues by 2029-30.
The independent watchdog Office for Budget Responsibility (OBR) forecasts that the Budget’s changes raise the government’s “headroom” (the buffer against a fiscal shock) to about £22 billion — up from ~£9 billion earlier in the year.
However, some analysts warn that extra spending (especially on welfare and public services) is being committed relatively soon, while much of the tax revenue increase is “back-loaded” — i.e., it comes in later years.

What It Means for Different Groups

For working-age households / wage-earners

Over time, many people — even with modest income growth — are likely to pay more in income tax (or get pushed into higher bands), due to threshold freeze.
People on lower incomes or with children may benefit from welfare changes (two-child limit scrapped, higher minimum wage), plus small savings via lower energy/fuel and frozen transport/utility costs.
If you own an expensive home (£2 M +) — you may face a new annual levy.

For businesses and investors

New taxes and higher effective tax burdens could reduce disposable incomes and consumption — potentially depressing demand.
On the other hand: incentives like a 40% first-year allowance for certain business investments are retained (though with some restriction), which may help firms investing in assets.
Property investors or high-value landlords may face greater uncertainty because of mansion tax and possible future levies.

For public services & long-term social goals

Increased spending on welfare, minimum wage, child support, healthcare, etc., may help reduce child poverty, improve living standards, and ease pressure on services.
If the government can deliver on its fiscal plans, the higher “headroom” offers a buffer against future economic shocks — but this depends on growth and inflation staying within forecasts.

Risks, Criticisms & Uncertainties

Because many tax changes are “stealthy” (e.g. threshold freeze), many people may not immediately notice the extra burden — but over time, it adds up. Some critics argue this is a “tax on work.”
Some of the promised savings (e.g. lower energy bills) depend on political/market conditions (e.g. wholesale energy prices, inflation) — which remain volatile. If energy prices spike again, gains may be eroded.
Long-term commitments (welfare spending, public services funding) may be vulnerable to shifting economic outlook or future governments altering priorities.
The balance between new taxes and added public spending depends heavily on future economic growth and public finances — there’s political and economic risk if things don’t go to plan.

Outlook / What to Watch For in 2026 & Beyond

Implementation: Will thresholds remain frozen until 2031? Will the mansion tax and other property/wealth levies go ahead on schedule?
Inflation and interest-rate moves: If inflation stays high or interest rates fluctuate, cost-of-living benefits may be offset by higher borrowing costs or price rises.
Public services & welfare: Whether increased spending on welfare, child poverty and NHS support delivers improved outcomes depends on effective policy delivery and demand pressures.
Behavioural responses: Households may change spending/saving habits; businesses may delay investments; property market dynamics may shift — all with wider economic effects.

If you would like further personal advice or help for Tax Return and accounts, please contact our team:

Expert tax advice you can trust – Amin & Co Accountants, Manchester.