# Budget 2026 Savings Accounts UK: ISA Limits, Interest and What Changed

URL: https://www.walletwiseeu.com/blog/budget-2026-savings-accounts-uk
Published: 14 October 2026
Topic: Tax & Finance
Author: WalletWiseEU Editorial Team

> Budget 2026 savings accounts UK guide: cash ISA drops to £12,000, personal savings allowance unchanged, rates above 4.5 percent.

## imits, Interest and What Changed

Budget 2026 savings accounts UK households need to understand have changed in several ways. The cash ISA allowance for under-65s is confirmed to drop next April, savings rates remain well above historical norms, and the personal savings allowance is unchanged despite millions of savers now paying tax on interest for the first time in years. Beyond savings, the budget locked in income tax thresholds, confirmed the pension inheritance tax change arriving in 2027, extended fuel duty relief, and upheld the state pension triple lock. This guide covers each announcement in plain English, with the numbers behind every change and what it means for your finances going into 2027.

### Budget 2026 Savings Accounts UK: ISA Limits and What Changed

The autumn budget confirmed the cash ISA allowance reduction for under-65s that was announced previously. From 6 April 2027, the annual subscription limit for cash ISAs drops from £20,000 to £12,000 for savers under 65. The allowance for over-65s remains at £20,000.

The stocks and shares ISA allowance stays at £20,000. No new British ISA or Pension ISA product was announced, despite ongoing consultations throughout 2025 and 2026. The Chancellor confirmed that further consultation would continue into 2027.

The personal savings allowance was not changed. Basic-rate taxpayers continue to receive £1,000 of tax-free savings interest. Higher-rate taxpayers receive £500. Additional-rate taxpayers receive nothing. With easy-access savings rates still above 4.5 percent and fixed deals above 5 percent in many cases, even modest savings balances are generating taxable interest. For the budget 2026 savings accounts UK picture to make sense, savers need to know their allowance and check their position before the tax year ends in April 2027.

Our full guide to the [personal savings allowance UK 2026](https://www.walletwiseeu.com/blog/personal-savings-allowance-uk-2026) explains how the allowance works and what to do if your interest income exceeds it.

### Income Tax and National Insurance

The personal allowance remains at £12,570 for 2027/28. The higher-rate threshold stays at £50,270. Both freezes, in place since April 2021, continue as announced, with the planned uplift still on track for April 2028.

The freeze continues to pull workers into higher tax bands as wages rise. A basic-rate taxpayer earning £35,000 in 2021 who now earns £42,000 after pay rises has moved closer to the higher-rate threshold without any deliberate rate change. This fiscal drag generates around £25 billion per year for the Treasury by 2028.

| Area | 2026/27 | 2027/28 (from April 2027) |
| --- | --- | --- |
| Personal allowance | £12,570 | £12,570 (frozen) |
| Basic-rate band | Up to £50,270 | Up to £50,270 (frozen) |
| Higher-rate band | £50,271 to £125,140 | £50,271 to £125,140 (frozen) |
| Additional rate | Above £125,140 | Above £125,140 |
| Employee NI (main rate) | 8% | 8% (no change) |

National Insurance rates were not changed. The main rate for employees remains at 8 percent above the primary threshold. Employer NI remains at 15 percent on earnings above the secondary threshold.

### Capital Gains Tax: No Further Rate Increase

No further changes to CGT rates were announced. The rates introduced in October 2024 (18 percent for basic-rate taxpayers, 24 percent for higher-rate taxpayers on most assets) remain in place. The annual exempt amount stays at £3,000.

Business Asset Disposal Relief completed its phased increase, moving from 14 percent to 18 percent in April 2026 as previously announced. The £1 million lifetime limit on qualifying gains is unchanged. No reduction to the BADR rate or lifetime limit was announced, and no further increases were trailed.

### Inheritance Tax: Pension Change Confirmed for April 2027

The nil-rate band remains frozen at £325,000 until April 2030. The residence nil-rate band stays at £175,000, giving an effective threshold of £500,000 per person and up to £1 million for married couples and civil partners.

The April 2027 change bringing defined contribution pension pots into the IHT calculation was confirmed. HMRC published guidance on how pension providers will be required to report unused pension funds. No exemption threshold for pension assets was announced, meaning the full value of unspent DC pots will be included in the estate calculation from April 2027.

Changes to agricultural property relief and business property relief, which capped full 100 percent relief at £1 million of combined qualifying assets from April 2026, were not modified. Calls to reverse or extend the relief were rejected.

Our detailed guide to [inheritance tax changes 2026](https://www.walletwiseeu.com/blog/inheritance-tax-changes-2026) covers the full impact with worked examples.

### Fuel Duty, Benefits and Household Bills

The 5 pence fuel duty cut was extended for a further 12 months. Fuel duty remains at 52.95 pence per litre with the cut applied. This costs the Treasury approximately £2 billion in foregone revenue but avoids an increase at the pump ahead of winter.

Benefits will increase by the September 2026 CPI rate from April 2027. The state pension triple lock is maintained. The state pension will rise by the highest of earnings growth, inflation, or 2.5 percent from April 2027. The exact figure will be confirmed once October earnings data is released.

The household support fund receives a further 12-month extension. No new universal cost of living payment was announced.

### Budget 2026 Savings Accounts UK: Your Next Steps

The key actions from the budget, specifically on budget 2026 savings accounts UK matters and beyond:

1.

Maximise your cash ISA before 5 April 2027. With the under-65 allowance dropping to £12,000 next tax year, this is the last opportunity to shelter £20,000 in a single year. Opening or topping up a cash ISA now locks in the higher limit.
2.

Review your pension nominations and estate plan before April 2027. The confirmed inclusion of defined contribution pension pots in IHT calculations is the most significant estate planning change in years for many families. Modelling the combined impact of your pension, property and other assets is the priority step before next spring.
3.

Check your savings interest against your personal savings allowance. Rates above 4.5 percent on easy access mean even modest balances can generate taxable interest. Know your position before the tax year ends in April 2027.
4.

If you are considering a business or property disposal, note that CGT rates did not rise in this budget. The current 18/24 percent structure and BADR at 18 percent are confirmed for the near term. For anyone holding back a sale because of uncertainty about rates, that question is now settled.

The autumn budget 2026 was not a dramatic tax-raising budget, but its confirmation of existing changes, particularly the pension IHT rules arriving in April 2027 and the cash ISA limit reduction, means the practical impact on household finances over the next 18 months is still significant. Responding to those changes now, rather than in the weeks before they land, is the clearest advantage available.

_This article is for informational purposes only and does not constitute financial advice. Always seek independent financial guidance before making money or estate planning decisions._

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General information only, not financial, tax or legal advice. Source: https://www.walletwiseeu.com/blog/budget-2026-savings-accounts-uk