Chancellor John Healey unveiled the government's 2026 Budget, introducing a series of measures aimed at easing household costs and supporting businesses. The first Budget since Andy Burnham became prime minister includes a one-off £100 payment for up to 20 million households in England, with equivalent funding allocated for Scotland, Wales, and Northern Ireland.

The government is set to remove standing charges from household gas bills in England, Scotland, and Wales, shifting these costs to the unit rate. The VAT cut on electricity bills will also be extended until July. Furthermore, a green levy, the Gas Shipper Obligation, will be removed from energy bills and absorbed into general taxation, providing further relief for consumers.

In a move to support working individuals, the tax-free mileage rate for employees driving for work will be made permanent at 55p per mile for the first 10,000 miles, with a higher rate of 35p for distances exceeding this. For businesses, a new scheme will offer energy-intensive companies a 25% reduction on electricity bills starting in April, with costs backdated for this year.

The Budget also introduces a 2% increase in income tax on savings and property rental profits from April 2027. However, the annual limit for tax-free cash ISAs will remain at £20,000, and a previous proposal to lower this limit for individuals under 65 has been abandoned. A surcharge on bank profits will rise from 3% to 6% for a 15-month period beginning in January.

To support high street businesses, the threshold for paying business rates in England will be raised from £12,000 to £18,000, meaning smaller businesses operating from properties with a rateable value below this new threshold will no longer be liable for these taxes. However, adult gaming centres and vape shops will be excluded from certain business rates relief schemes.

The state pension is set to increase by £488 annually from April, a rise of 3.9% consistent with the triple lock policy. The basic state pension will see an increase of £374.40. A new tax-free allowance will be introduced for low-income pensioners, ensuring those receiving up to the full new state pension will not be subject to income tax. The legal minimum wage will also rise by 3.9% in April.

Significant changes are also being made to support for unpaid carers and parental leave. Unpaid carers will no longer forfeit their entire Carer's Allowance if their earnings exceed £204 per week after tax; a taper rate will be introduced. Parental pay provisions are to be extended to self-employed fathers and parents in same-sex couples.

Additionally, a new scheme will be launched in England to assist first-time buyers earning less than £110,000 (or £140,000 in London) with government-backed loans. The initiative to end rough sleeping by Christmas also receives an additional £432 million in funding.