What does the Chancellor’s 2026 Autumn Budget mean for families?

In his first Budget Statement on 28 October 2026 Chancellor John Healey stated that the government continues to be focused on the 10-Year Plan for Britain, and the Spending Review next year.

The official forecasts show that the wars in the Ukraine and the Middle East are having an impact on what had been predicted at the time of the previous Budget. Inflation was due to fall but has now risen, mainly driven by the higher oil and gas prices. For households this has meant higher prices at the pump, higher energy bills and higher mortgages. For businesses, it means higher running costs and more expensive loans

The Office for Budget Responsibility (OBR) has announced that inflation for September 2026 was 3.5%, up from 3.1% the previous month. The OBR is also predicting inflation to be 3.5% into 2027, well ahead of the government’s 2% target which had previously been predicted.

This is unwelcome for households and families who are seeing rises in the cost of living and higher interest rates. However, the Chancellor made his statement at a time of great uncertainty and instability due to the conflict in the Middle East and the impact this has already had on oil and gas prices. The UK economy as a whole is not immune to the effects of this, and in particular households in Northern Ireland have seen a significant increase in the cost of home heating oil with no sign of this easing over the coming winter months.

Key points from the 2026 Autumn Budget

Here are some of the key points from the Autumn Budget at a glance:

• Freezing the rates of Income Tax, National Insurance Contributions and VAT
• Universal Credit Standard allowance and other elements increasing by 3.5%
• National Living and Minimum Wage increasing by 3.9%
• State Pension increasing by 3.9%
• Pension Tax Allowance: removing income tax liability for those on State Pension
• £100 Household Energy Payment to help with current high energy costs for certain households

There is uncertainty whether the £100 in support for households through the Household Energy Payment will be made to households in Northern Ireland due to lack Budget having been agreed by the NI Assembly.

As previously announced there will be no change in the rates of income tax and a continued freeze in the tax-free personal allowance and the thresholds at which earners start to pay basic and higher rates of income tax until April 2028. This means that more people will be paying tax and more will be paying tax at a higher rate, the only welcome exception to this is pensioner who will be protected from having to pay income tax, through the Pension Tax Allowance, if their State Pension is higher than the tax-free personal allowance.

Note: However, the announcement on income tax changes applies in England, Wales and Northern Ireland only. Scotland has different taxation rules to the rest of the UK. The Scottish government set out its tax and spending plans for 2027-28 in its Budget Statement on 3 December 2026.

Northern Ireland

As a result of this Budget Statement announcements, Northern Ireland, through the Barnett Consequential, will receive £270 million for the NI Executive to spend on public services. It is up to the Executive to decide when and how this money will be allocated across the government departments, but we would wish to see a significant portion ring-fenced to support the delivery of short-term financial support for families and the childcare sector.

In relation to the £100 Household Energy Payment, the Secretary of State Chris Bryant has warned that the equivalent cost of living payment cannot be made in Northern Ireland until the NI Executive budget is agreed, potentially affecting 340,000 households who may otherwise be eligible.

We are here to help you

We know it can be difficult to work out what financial support is available for your family and to interpret what changes announced in the Spring Budget mean for you. We want to make sure all families are receiving everything they are entitled to. For free, impartial and confidential advice, contact our Family Benefits Advice Service at fbas@employersforchildcare.org.