Pensioners, low-paid workers and first-time buyers are among the winners in this year’s Budget. Chancellor John Healey revealed his fiscal plans for the UK and promised ‘breathing room’ for Brits - but who are the winners and losers? In this guide, I’ll explain exactly what was revealed and how it could affect you.
Key takeaways
- Households receive help with energy costs, including a £100 payment for eligible homes and plans to scrap gas standing charges.
- Low-paid workers and first-time buyers benefit through higher minimum wages and a scheme allowing eligible buyers to purchase with a 2.5% deposit.
- Cash savers keep their £20,000 annual ISA allowance, as plans to reduce the limit for under-65s are scrapped.
Winners
Motorists are avoiding a fuel duty rise
The Chancellor moved to extend the fuel duty freeze, giving some release to petrol and diesel drivers.
Keeping the 5p-a-litre cut prevents a planned increase.
Energy bill payers
A new energy payment scheme for 20million households who will get £100 directly into bank accounts. It will be for houses in bands A to D, worth £2.6 billion in total.
Gas standing charges are to be scrapped for millions, helping save an average of around £45 a year
However, the move to fixed costs will push up unit prices, meaning those who use more electricity will pay more. The change is planned for 2027 or as soon as possible afterwards.
Healey also announced that he will extend the freeze on electricity VAT to July 2027 - taking £50 a year off bills on average.
The package of help is designed to help households due to the risk of big rises to energy bills from January.
Help with the weekly shop
Import tariffs are being suspended on more than 100 products, including food, fertiliser and kerosene heating oil, helping reduce costs for businesses.
Along with earlier tariff suspensions, the government says it could save households up to £21 a year on their food shopping. However, actual savings depend on what people buy and whether businesses pass on costs.
Working carers’ benefits cliff-edge scrapped
Carers will no longer lose their entire Carer’s Allowance for earning a penny above the weekly earnings limit under plans announced by the Chancellor.
However, the new taper rules are not due to be implemented until 2030/31, when a new IT system is developed.
Millions to get a pay rise
The National Living Wage for workers aged 21 and over is set to rise from £12.71 to £13.21 an hour in 2027.
That would mean a boost of £956 a year for someone working 37.5 hours a week. The rate for 18 to 20-year-olds is set to increase from £10.85 to £11.27.
Pensioners
The State Pension is set to rise by 3.9% from April 2027 under the triple lock. It means those on the full new State Pension will get an extra £488.80 a year, while those on the basic State Pension will get an extra £374.40 annually.
The government also announced protection for small tax bills for pensioners whose incomes go up to the new full state pension so that they won't pay income tax, known as the Pension Tax Allowance.
First time buyers
Healey said that a new First Time Buyers ISA will replace the Lifetime ISA. The government also confirmed plans for its new Your First Home scheme, which is set to replace Help to Buy.
The scheme gives first-time buyers the chance to buy a home with a 2.5% deposit, using a government-backed equity loan worth 20% of the property's value. A 2.5% deposit on a £200,000 home would be £5,000.
Savers
The government has announced it will scrap plans to cap Cash Isa savings at £12,000 for under-65s before they have to pay tax. It means the annual £20,000 allowance will remain tax-free.
eBay and Vinted sellers
At the moment, you can make up to £1,000 tax-free using the trading allowance without paying tax on it.
However, from April 6 2027, the government is increasing this amount to £3,000 in a bid to support entrepreneurs.
Losers
Workers
Although it wasn’t mentioned in the speech, workers face a stealth tax rise next year. Budget documents reveal that income tax thresholds will stay frozen next year, meaning more of your wages will go towards tax.
Drinkers
The Budget documents revealed an inflation-linked increase to alcohol duty, which adds 2p per pint from next April.
A bottle of red wine could rise by 16p a bottle, while a bottle of white would increase 13p. Of course, it’s up to pubs to decide whether to pass this increase on to punters.
Landlords and savers
Healey announced a 2% rise on tax on rental and savings income from April 2027.
Holidaymakers
Budget documents reveal that Air Passenger Duty will rise in line with the Retail Prices Index RPI from April 2028, which could push up the cost of flights.
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