The Chancellor has delivered the latest budget. Here is a quick summary of the key changes and how they might affect you.
Updates to your ISA
- Cash ISA allowance: Plans to lower the Cash ISA allowance for people under 65 have been scrapped. You keep your full £20,000 tax-free allowance.
- Starter ISA: The government announced a new ‘Starter ISA’ to help first-time investors. We will share more details once they are clear.
- First Time Buyer ISA: A new account will be launched to help people save for a house deposit.
- Lifetime ISA rules: If you use a Lifetime ISA to buy a first home worth more than £450,000, the withdrawal charge drops from 25% to 20%. This means you will get back roughly what you paid in.
Tax on property and savings
- Tax increases: From April 2027, you will pay 2 percentage points more tax on income from savings and property. This is on top of the 2% rise announced in the previous 2025 Budget.
- Savings: From 6 April 2027, the savings basic rate will be 24%, the higher rate 44% and the additional rate 49%. This applies to interest above your Personal Savings Allowance.
- Property: From 6 April 2027, the property basic rate will be 24%, the higher rate 44% and the additional rate 49% (rates confirmed for England and Northern Ireland).
Other confirmed changes
- Pensions and your estate: From April 2027, unused pension pots will count towards your estate for inheritance tax.
- Salary sacrifice: As previously announced, from April 2029, National Insurance relief on pension salary sacrifice will be removed for amounts over £2,000 a year.
- Ruled out: There are no changes to stamp duty. Income Tax, National Insurance, and VAT main rates will not change.
What to do next
At Octopus Money Direct, we are here to help you feel confident in your financial decisions. You can easily manage your Stocks and Shares ISA, Investment Account, or Pension by choosing to sign in to Online Service. If you want to make a one-off payment to boost your investments, you can do this online today.
If you are not registered for Online Service yet, you can set up your access here.
If you need more support to build a clear path for your future, Octopus Money can help you with full financial planning and wealth advice. You can explore our advice services here.
We hope the information in this article is useful, but it isn’t financial, personal or tax advice. If you’d like advice, Octopus Money can provide professional help. Remember, the value of investments can go up and down, so you may get back less money than you put in.
You should think of investing as a medium to long-term commitment – so be prepared to invest your money for at least five years. Tax depends on your individual circumstances and the regulations may change in the future.
