Chancellor John Healey delivers his first Budget next Wednesday, 28 October, and the guessing is already well under way. Much of what appears in headlines is speculation, so it helps to separate measures that have been announced from ideas that have merely been reported.
In this article we will discuss what is confirmed, what is only suggested, the money pressures behind the day, and a calm way to follow the announcements when they arrive.
Wednesday 28 October Brings the Chancellor’s First Budget
Healey’s Budget is due on Wednesday 28 October 2026, at around 12:30pm according to HL. The Office for Budget Responsibility, the independent forecaster, publishes its Economic and fiscal outlook on the same day. The OBR gave notice of its forecast date on 31 July and updated it on 10 September.
The most important sentence in this article is a plain one: the Budget is next week, and everything not marked below as announced is speculation. The Chancellor’s measures are not confirmed, and the leaks so far have been vague. Newspapers, think tanks and market commentators are all offering views, and some of them will turn out to be right and some wrong. Where this article mentions a report, it names who made it, so that you can weigh the source.
The OBR forecast matters as much as the speeches. A Budget is the government’s set of tax and spending decisions, but the room to make those decisions depends on the independent forecast for growth, inflation, earnings and borrowing that arrives with it. A change of a few billion pounds in that forecast can shift what looks affordable. For that reason, even the best-informed previews cannot say for certain what the Chancellor will do, because the numbers that constrain him are not yet public.
Readers should also bear in mind that a Budget statement is a summary. The detailed policy costings, effective dates and legal changes appear in the official Budget documents and the OBR outlook, and several measures are often confirmed only in later papers or in legislation. Check those documents on the day, and treat anything you read before then, including this article, as background.
It is also normal for the weeks before a Budget to be noisy. Ministers are asked about tax in every interview, and a refusal to rule something out is often read as a sign that it is coming, when it may just reflect a reluctance to commit before the figures are final. Equally, a firm denial can be overtaken if the forecast turns out worse than hoped. The honest position, a week out, is that outsiders know the date and the already-planned measures, plus a set of hints. Anything beyond that is informed guesswork.
Measures Already Announced or Planned
Several changes have been announced or are planned in advance of the Budget, according to HL and PensionBee. They are not predictions, though the Budget may add detail. The table gives a quick view, and the sections below explain each one.
| Measure | What is planned | When |
| Cash ISA allowance | Falls to £12,000 for under-65s | From April 2027 |
| Lifetime ISA | Replaced by a First Time Buyer ISA | From April 2028 |
| Salary sacrifice pension
contributions |
National Insurance relief reduces on amounts over £2,000 | From 2029 |
| Unused pensions | Many become part of estates for inheritance tax | From April 2027 |
The Cash ISA Allowance
The Cash ISA allowance is due to fall to £12,000 for under-65s from April 2027. A Cash ISA lets you earn interest on savings free of income tax, within an annual limit, and the lower figure reduces how much of your yearly savings can be held in that form. The announced change is limited to under-65s, so the position of older savers depends on how the rules are finally written. If you save regularly in cash, it makes sense to look at how much you put in each year and whether another tax wrapper or ordinary savings would take the overflow.
The Lifetime ISA Becomes a First-Time Buyer ISA
The Lifetime ISA is to be replaced by a First Time Buyer ISA from April 2028. The Lifetime ISA is the account that has paid a government bonus for people saving towards a first home or retirement, and the planned replacement points the product more clearly at first-time buyers. The reports describe the change and its start date, not the full rules, such as the bonus, the limits or what will happen to existing accounts. Those details are the sort of thing the Budget documents or later guidance would need to set out.
Salary Sacrifice and National Insurance
National Insurance relief on salary sacrifice pension contributions reduces from 2029, according to HL and PensionBee, and the reduction applies to amounts over £2,000. Salary sacrifice means you agree to give up part of your pay and your employer pays that sum into your pension instead. Because the money never counts as pay, neither you nor your employer pays National Insurance on it. Under the planned change, the part of your contributions above £2,000 would lose some of that advantage. If you use salary sacrifice, the thing to find out is how much you sacrifice each year compared with the £2,000 line.
Unused Pensions and Inheritance Tax
From April 2027, many unused pensions will become part of estates for inheritance tax. Until now, pension pots left unspent have generally sat outside the estate for that tax, which made them a favoured way to pass wealth on. Bringing them into the estate would change the maths for families who planned to spend other assets first and leave the pension to last. This is an area where a regulated adviser or a solicitor can help, since the right move depends on the size of the estate, the spouse position and the other assets involved.
What the Dates Tell You
Notice that every start date in the table falls after this Budget, ranging from April 2027 to 2029. None of these measures changes your position this winter, and none requires a rushed decision in the next week. The sensible reading is that they are planning dates. A saver, a pension member or a homebuyer has time to look at the effect on their own plans, and the Budget may supply detail, such as exact rules and transition arrangements, that is missing from the current reports. Where a sheet of figures is not yet published, assume it is not final.
Headroom Looks Thin, According to the IFS
Behind every Budget sits a question of how much room the Chancellor has, and that room is rarely generous. A government that wants to cut a tax, raise a benefit or fund a service needs either spare capacity in the forecast or a matching saving or tax rise elsewhere. The picture painted by XTB on 15 October is a tight one. The deficit was 4.2 percent of GDP in the last fiscal year, and headroom against the fiscal rules was £22 billion at the last Budget. Headroom is the margin by which the forecast meets the government’s rules, and it can disappear with a small change in the outlook.
The IFS Estimate
The Institute for Fiscal Studies, as reported by XTB, says headroom could be around £20 billion, compared with £24 billion forecast in March. It adds that headroom could fall as low as £10 billion if earnings growth weakens. Earnings matter because income tax and National Insurance receipts follow pay, so weaker pay growth means less revenue even if tax rates do not change. These are the IFS’s estimates, and the OBR forecast on the day will decide the real figure.
Spending Pressures
The pressures on the other side are large. According to the report, protecting departmental budgets from inflation could cost more than £25 billion, and defence spending could rise by £10 billion. The IFS thinks the Chancellor may face a gap of up to £35 billion. As an invented round-number illustration of how this works, if headroom were £10 billion and pressures were £35 billion, the Chancellor would need to find £25 billion through tax rises, spending choices or changes to plans. That is only an illustration of the arithmetic, not a forecast of what will happen.
Signals from the IMF and the Government
The International Monetary Fund warned against more borrowing in this Budget and said any energy support should be targeted and time limited. XTB summarised the message as meaning there is not much money for giveaways. Meanwhile, the Chancellor and the Prime Minister, Andy Burnham, say they will stick to the fiscal rules.
These signals pull in different directions. Sticking to the rules limits how much can be borrowed, while the pressure for spending is large. The likely consequence, if the IFS picture holds, is that any giveaway has to be paid for by something else. That reading is a general one drawn from how the rules work and not a prediction of specific policies.
Why the Forecast Day Matters So Much
Headroom is a forecast of a forecast. The government’s fiscal rules are tested against the OBR’s projections several years ahead, so a small change in expected growth, inflation or earnings can move the answer by billions. That is why the IFS gives a range and not a single number, and why XTB repeats that the OBR forecast decides the real headroom. A Chancellor may plan a package before seeing the final forecast and adjust it in the last days. For readers, the lesson is to treat any preview number as provisional until the official forecast is out.
Reports and Ideas That Remain Unconfirmed
Beyond the announced measures there is a long list of suggestions, and several of them pull the Chancellor in opposite directions: some would raise money, others would spend it. Because the sources behind them differ in kind, it is worth taking each in turn. None of the following is confirmed, and each should be read as a report, a proposal from an outside group, or a hint from a politician. If a measure here appears in the Budget, it will be because the Chancellor chose it, not because a preview said so.
Taxes on Banks
Britbrief, citing unnamed reports, says there may be higher tax on bank profits. The Trades Union Congress backs reversing the cut in the bank surcharge from 8 percent to 3 percent, which it says could raise £2.25 billion a year. The TUC is a campaigning body, and its figure is its own estimate. No government source quoted in the reports confirms that a bank tax change is coming.
A Tax on Online Sales
The Institute for Public Policy Research, known as the IPPR, has proposed a 2 percent tax on online sales and a 1 percent tax on click and collect. This is a proposal from a think tank, not a government plan. Any such tax would raise practical questions, such as who pays it and whether retailers would pass it on, and those questions would need answers before anyone could judge the effect on shoppers.
Fuel Duty
Prime Minister Burnham has left open stopping a planned January rise in fuel duty, saying the government would consider every possible measure. That is not a commitment. Whether the January increase goes ahead is therefore an open question, and nothing about it has been confirmed.
Cost-of-Living Ideas
Reports mention cost-of-living ideas such as bus fare caps and a VAT cut on energy bills. HL attributes these to the government, but whether they are extended, changed or newly added on Budget day is not confirmed, so treat any version you read before the speech as unconfirmed. The reports do not give costs or dates for these ideas.
How to Weigh a Report
Not every report deserves the same weight. A statement from the Chancellor or Prime Minister, quoted directly, is stronger than an unnamed source, and an unnamed source is stronger than a comment from a campaign group that wants a particular outcome. A proposal from a think tank or a trade union tells you what is being argued for, not what will happen. A market analyst’s forecast is an expectation of how investors will behave, which is a different thing from a plan.
When you read a preview, ask four things. Who said it, and is it named? Is it a decision, a hint, a proposal or a guess? Does the figure come from the government’s own costing or from the author’s? And is there a date attached? Most of the items in this section fail at least two of those tests, which is exactly why they sit under the heading of unconfirmed.
Frozen Thresholds and Signals on Rates
A Budget is as much about what stays the same as what changes. The long freeze on tax thresholds already shapes bills, and several comments from ministers and commentators bear on rates.
Thresholds That Are Already Fixed
Income tax thresholds are frozen until 2031, according to the sources, with the personal allowance at £12,570 in 2026/27. Inheritance tax thresholds are also frozen until 2031, at £325,000 plus £175,000 for a home passed to direct descendants. When thresholds stay still while wages and prices rise, more income falls into higher bands and more estates cross the inheritance tax line, a process often called fiscal drag. These freezes are announced, not speculative, and unlike the rest of this article they do not depend on what the Chancellor says on the day.
As a simple illustration with invented round numbers, imagine a worker whose pay rises by £2,000 while the thresholds stay put. The whole rise lands on income that is already above the point where tax applies, so the tax bill grows even though no rate has changed. The same effect works on inheritance tax when property values rise but the thresholds do not. Whether a particular Budget adds to or eases this is something to read from the documents, not to assume.
National Insurance
Healey has hinted at reversing some National Insurance increases, especially for youth workers, but has given no details. A hint is not a policy, and which workers, how much and from when remain unknown. Readers who employ young people, or are young workers themselves, may want to watch the Budget documents for any employer or employee changes. National Insurance is paid by both employees and employers on earnings, so a cut aimed at one group of workers could take several forms, such as a lower rate, a higher threshold or a relief for employers hiring younger staff. The reports do not say which, if any, is intended, and it would be unwise to assume.
Capital Gains Tax: Two Differing Reports
Reports differ on capital gains tax. XTB says the Chancellor has ruled out equalising capital gains tax with income tax, and that the market still expects an increase in capital gains tax. Britbrief, by contrast, says Healey has reportedly ruled out a rise. Because the two accounts do not agree, the position should be treated as open until the Budget documents settle it. Capital gains tax is the tax on the profit when you sell certain assets, such as shares outside an ISA or a second property, and it is a perennial candidate for change in any Budget. The cautious reading is that no rise has been announced, while investors are watching closely. Neither source gives a rate or a date, so there is nothing yet to plan around, and selling assets in a hurry to beat a rumoured change could trigger a tax bill or a poor price for no benefit.
Other Rates and the Council Tax Surcharge
XTB’s author expects no change to VAT, income tax or corporation tax. That is one commentator’s expectation, not an announcement. The Chancellor has ruled out lowering the 2028 high-value council tax surcharge threshold to £1.5 million from £2 million, a change XTB describes as a mansion tax. Statements of this kind are firm only for as long as the Chancellor stands by them, which is why the written Budget documents carry more weight than any preview.
Taken together, the picture on rates is one of signals without detail. A hint on National Insurance, a rule out on the council tax surcharge, a disputed account of capital gains tax and one analyst’s view that the big three taxes will not move do not add up to a package. They are pieces that may or may not fit together once the numbers are published, and the sensible response is patience until the documents land.
A Sensible Way to Follow Budget Day
Most households do not need to react to a Budget in the minutes after it is announced. A plan helps, though, because the day is crowded with figures and commentary, and the first headlines are often incomplete.
Before the Day
Avoid making large, hard-to-reverse money moves on the basis of rumours. Reports that a tax might change are not a reason to move savings, sell assets or alter pension contributions this week. If something truly concerns you, such as the effect of the planned inheritance tax change on a pension, write down the question and take it to a regulated adviser or the relevant agency. General information, including this article, cannot take account of your circumstances.
On the Day
Read the official Budget documents and the OBR’s Economic and fiscal outlook, not only the commentary. The official papers show what was decided, from when and at what cost. Look closely at effective dates, since many tax changes start the following April and some, such as those described above, take effect years later. Note, too, any measure that the speech promises but leaves for consultation.
In the OBR outlook, the headline figures to look for are the forecasts for growth, inflation, earnings and borrowing, because they set the room the Chancellor has. Compare them with the IFS and XTB figures quoted above and see whether the headroom came out nearer £20 billion or nearer £10 billion. If it is thin, expect the government’s own papers to emphasise how choices were paid for. If it is larger, expect more detail on what was added. Either way, the official numbers replace the previews.
Afterwards
A Budget announcement is not the same as law. Many changes need legislation, and details can shift as it is drafted. Expect guidance to follow from the tax authority and other agencies. If a change touches your savings, pension, home or business, check the official guidance once it is published, and consider speaking to a professional before you act. Nothing in this preview is financial advice.
Questions Worth Bringing to a Professional
If you have savings, a pension or a family home that may be affected, a short list of questions makes any appointment more useful. How much do I put into cash savings each year compared with the new lower limit? If I use salary sacrifice, how much of it is above the £2,000 line? Would my pension now count towards an estate, and what does that do to my plans for passing money on? Am I saving for a first home, and how would the planned First Time Buyer ISA affect that? A regulated adviser, or a free guidance service, can give answers tailored to you once the Budget documents are out, and they will be better placed to do so than any preview.
Frequently Asked Questions
When is the Autumn Budget 2026?
The Budget is on Wednesday 28 October 2026, at around 12:30pm according to HL. The OBR publishes its Economic and fiscal outlook on the same day.
Has the Chancellor confirmed any tax rises?
No. The Chancellor’s Budget measures are not confirmed, and the leaks so far have been vague. Only the changes already announced or planned, such as the lower Cash ISA allowance, are firm, and even those may gain detail on the day.
Is capital gains tax going up in the Budget?
Reports differ. XTB says the Chancellor has ruled out equalising it with income tax while the market still expects an increase, whereas Britbrief says he has reportedly ruled out a rise.
Which product replaces the Lifetime ISA?
A First Time Buyer ISA is planned to replace the Lifetime ISA from April 2028. The reports do not give the full rules, so details such as limits and any bonus are still to come.
Will the Cash ISA limit really fall to £12,000?
It has been announced for under-65s from April 2027, according to HL and PensionBee. That is a planned change rather than something decided on Budget day, so check the official documents for any change to the detail.
Where can I read the official Budget documents?
HM Treasury publishes the Budget documents on the day, and the OBR publishes its Economic and fiscal outlook alongside them. Use the official government and OBR pages rather than summaries.
