John Healey unveils Budget 2026 with cost of living and housing measures

Chancellor John Healey has delivered his economic statement to Parliament on Wednesday, 28 October 2026, introducing a series of interventions aimed at easing household finances amidst an ongoing global economic downturn. Against a backdrop of increased borrowing costs and tighter fiscal headroom, the government's measures span targeted cost-of-living payments, energy market reforms, and structural shifts in property taxation.

The headline-grabbing fiscal measure is the £2.6 billion Household Energy Payment. Treasury sources note the scheme will cover roughly 80 percent of fuel-stressed households and 88 percent in the bottom three income deciles. Concurrently, the temporary reduction in VAT on domestic electricity bills has been extended through the winter and spring until July, which the Chancellor stated will knock £50 off the annual price cap.

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Energy reform extends further into the domestic market. Martin Lewis reported that gas standing charges—currently costing typical households around £108 annually—will be scrapped in 2027, though consumer groups warn that costs will be transferred to unit rates. According to Aol, this adjustment could mean that roughly 60 percent of people pay less while 40 percent pay more, depending on household consumption patterns.

To help pay for high street and household support packages, the Chancellor announced targeted tax hikes elsewhere. Banks will face an additional three percentage point increase on their profit surcharge, pushing the combined rate to 31 percent, a move noted was less severe than the anticipated jump to 33 percent. Gambling taxes are also climbing, with higher-stakes machine games duty rising from 20 percent to 25 percent.

Property and housing announcements dominated the legislative package. As detailed by the Manchester Evening News, the government is abolishing the Lifetime ISA penalty for properties valued above £450,000, allowing buyers to reclaim at least their principal contributions. A new First Time Buyer ISA, permitting contributions up to £4,000 per year with a 25 percent bonus, will replace the existing product in April 2029. Meanwhile, the £4.7 billion Your First Home equity loan scheme will launch next spring, allowing first-time buyers with deposits as low as 2.5 percent to access support without relying on family assistance.

Further developments and implementation dates will be monitored closely across the Cost of Living coverage. Carers will see the removal of the rigid earnings cliff-edge on Carer's Allowance, transitioning to a gradual taper. Motorists benefit from the extension of the 5p fuel duty cut through July 2027, and savers retain the £20,000 cash ISA allowance. Pensioners stand to receive a 3.9 percent increase under the triple lock starting next April, alongside a new tax allowance ensuring those on the full new State Pension avoid income tax liabilities during this Parliament.