Higher minimum pay, help for some pensioners and new support for parents feature in the Budget. Here is what the announcements mean in everyday language.
Whether you work for an employer, run your own business, have children or are retired, today’s Budget includes changes worth knowing about.
Some start next year. Others are further away. An announcement today does not necessarily mean extra money tomorrow.
Workers: the minimum hourly rate is going up
From 1 April 2027, the legal National Living Wage will rise by 3.9% to £13.21 an hour.
If you are paid this rate, your hourly pay will increase. What you take home will depend on your hours, tax and other deductions.
This does not mean everyone will receive a 3.9% pay rise. It concerns the legal minimum rates employers must pay.
Pensioners: protection from small income-tax bills
From April 2027, a new Pension Tax Allowance will protect people above State Pension age whose total income is no more than the full new State Pension.
People with income just above that level may receive some protection too.
This does not make every pensioner’s income tax-free. Income from work, private pensions, savings or other sources can affect the position.
Parents: parental pay for more self-employed people
Eligible self-employed fathers, partners and adopters in Great Britain will be brought into the parental-pay system from April 2029.
For someone who currently loses income when taking time away from their business to welcome a child, this could provide useful support.
But it is a future change. It does not create a new payment that parents can claim today.
People earning money on the side: a higher trading allowance
From 6 April 2027, the trading allowance will rise from £1,000 to £3,000.
This could help people earning small amounts through activities such as selling goods or providing services alongside another job.
The allowance concerns income before expenses, not simply profit. Other income and reporting rules can still matter, so check the conditions before assuming you no longer need to tell HMRC about your earnings.
Small businesses: help with business rates
Some eligible shops, cafés, restaurants and leisure businesses in England will receive more relief from business rates—the tax on business premises.
The government says around 70,000 additional properties will pay no business rates under the changes.
Owners should check whether their premises qualify and when the relief applies. The announcement does not remove every small business’s rates bill.
First-time buyers: a new savings account is planned
A new First Time Buyer ISA is planned for April 2029, offering a government bonus towards an eligible first home.
It will replace the Lifetime ISA for new savers. Existing Lifetime ISA holders will be able to continue under the current rules.
For younger adults saving towards a deposit, this is worth following—but it is not an account you can open today.
Savers: the cash ISA limit stays at £20,000
The planned cut to the annual cash ISA limit will not go ahead.
The limit will remain £20,000, subject to the overall ISA rules. A cash ISA lets you earn interest without paying tax on it; the allowance is not a government payment.
Households: £100 towards energy costs
Eligible households in council tax bands A–D in England are set to receive £100 from January 2027. Funding will go to the devolved governments for similar support elsewhere in the UK.
The temporary 0% VAT rate on domestic electricity will also continue until July 2027.
Separately, the government plans to remove gas standing charges and move the costs into the price of gas used. That means some households could save, while others may not. The change is intended for 2027 or as soon as possible afterwards.
Drivers: fuel-duty relief continues
The 5p fuel-duty cut will continue until July 2027, with a planned increase delayed.
That prevents a tax increase at the pump. It does not guarantee cheaper petrol or diesel, because other costs also affect prices.
What should you do now?
Start with the changes that match your circumstances. Check the starting date and eligibility before changing your plans.
For some readers, the biggest difference may come through their wages. For others, it may be a smaller tax bill or lower business costs. The real test is what changes in your own pocket.
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