Winners & Losers commentary
A year ago, following a succession of leaks and U-turns, we heard Rachel Reeves deliver the second Budget for Starmer’s government set on restoring economic growth. Today’s 2026 Autumn Statement delivered by the new Chancellor John Healey, the first for the Burnham government, evaded much of the typical speculation and was kept largely under wraps.
The run up to today’s Budget has instead been characterised by Burnham’s promise to bring radical changes to British politics. The measures announced today, however, feel contrastingly modest as the Chancellor set out a tinkering package of piecemeal measures targeted at easing the cost of living and doing business. His two-pronged strategy is to create “breathing space” for British businesses and “working people” amidst a maelstrom of external geopolitical forces that are pushing up everyday costs, all while reassuring the markets with Labour’s self-imposed commitment to curtail borrowing without the everyday taxpayer footing the bill. This is a precarious juggling act and forces the Chancellor’s hand to decide who will be helped, and who will pay the price. Based on what we heard today, here are the winner and losers.
Winners
Low-income workers – Always a favourite pre-Budget teaser, the government announced yesterday that the minimum wage would increase to £13.20 per hour from April 2027 for those aged 21 and over, a 49p increase on the current rate. The 3.9% increase will, for the first time in recent years, be matched for younger workers aged 18 to 20, despite their hourly rates still trailing behind those of their older counterparts at £11.27 per hour. This will feel like a stagnation after accelerated attempts to align the two rates, particularly compared to the 26% increase younger workers have enjoyed from the Labour government’s previous Budgets. If businesses were hoping for any relief to their rising costs after back-to-back increases in National Insurance and the National Living Wage, they will be disappointed, but likely not surprised, today.
Low-income pensioners – Pensioners with income either at or under the value of the full new State Pension, will not pay income tax from April 2027, following the announcement of a new Pension Tax Allowance. With the Triple Lock in place, the full state pension is now set to rise above the current personal allowance threshold (£12,570) to £13,036, forcing even more pensioners into the first taxable band. The idea is to reduce the administrative burden for both the taxpayer and HMRC for those paying small amounts of tax on incomes just above the personal allowance.
Some businesses and founders – Throughout the Budget, the Chancellor was keen to encourage British entrepreneurship. Included in a package of tweaks and adjustments targeting small businesses and founders, is an increase in the threshold for businesses rates for premises with a rateable value of £12,000 to £18,000 and the tripling of the tax-free trading allowance to £3,000 on self-employment income, from April 2027. The main rate First Year Allowance will increase from 40% to 50% to encourage start-up investment, albeit the main rate of writing allowances will be reduced by 2% to 12% to help cover the lost revenue. Founders looking to extract profits have been spared an increase to dividend tax rates, but the lifetime limit on Business Asset Disposal Relief for CGT will be reduced from £1m to £500,000. In replacement, a new CGT Founders Relief of 10% on up to £10m of lifetime gains for qualifying founders of high-growth, innovative companies is introduced. The Chancellor also clearly has the burgeoning AI and Tech sector in mind as he introduced the new and improved ‘Enterprise Management Incentives 2’ to more generously reward eligible employees.
Some households – Another sneak peek announced this morning also targets living costs, in particular to deliver cheaper energy, with standing charges for gas bills to be lifted for c.23 million households from next year. The Chancellor also announced a one-off £100 Household Energy Payment will be made to all households in England in council tax bands A to D from January 2027, and the cut to VAT on electricity bills from 5% to nil is extended to July 2027. This targeted support on energy bills will come as no surprise as households have grappled with rising energy costs as a by-product of the conflict in the Middle East. This measure is an attempt by the Chancellor to soften the blow, but forces in the energy markets beyond his control will continue to push up the unit costs of gas, likely offsetting savings elsewhere.
Paddington Bear (and other consumers) – Those partial to a marmalade sandwich will be heartened as the Chancellor announced a number of tariff suspensions across a further 100 household food items, including baked beans, garlic and citrus jams (not exclusively from deepest, darkest Peru…). Also included in the package of over 250 tariff suspensions are fertilizer and kerosene heating oil, targeting British farmers and rural communities. By cutting costs for domestic businesses buying these products from overseas sellers, the hope is that savings will be passed on to consumers via falling prices.
Drivers – Employees who use their own car (or van) for work will be getting more relief for their motor costs with a permanent 55p/mile tax-free mileage rate for up to 10,000 miles, and a 10p increase in the rate to 35p/mile for any mileage above this. The freeze in fuel duty at the 5p discount, introduced by the Tories in 2022, will once again be maintained, this time to July 2027. Not extending the freeze would throw Healey into the political fire as the conflict in the Middle East continues to push fuel prices higher, but drivers today hoping for further cuts to fuel duty will be disappointed.
First-time buyers – As young people increasingly struggle to get on the property ladder, today’s Budget set out further detail on Burnham’s ‘Your First Home’ scheme, designed to support eligible first-time buyers in England by allowing them to buy new-build homes with a deposit of only 2.5%, with the government providing a top-up loan of 20%. The Lifetime ISA is also being replaced with a new First Time Buyer ISA from April 2029, with a maximum value of the 25% government bonus capped at £20,000. Penalties on withdrawing from existing LISAs have also been removed for house purchases above the former £450,000 cap.
Losers
Banks – To foot the bill for the support offered to households, Healey is putting big banks back on the target board with an additional 3% increase to 6% on the surcharge banks pay on their profits on top of the usual 25% corporation tax rate. Banking executives will certainly view this as a kick in the teeth but many will be breathing a sigh of relief as rumours of a 5% additional surcharge circulated ahead of the Budget. This will certainly win the Chancellor brownie points with his Party as the announcement reverses a cut to the surcharge from 8% to 3% by the Tories in 2023. The Chancellor has imposed this as a time-limited increase for 15 months, starting in January 2027. Whether this will be later extended, time will tell.
Savers – After the double whammy in Rachel Reeve’s Autumn 2025 Budget of increasing tax rates on savings income and reforms to the ISA allowances, Healey announced a somewhat contradictory signal to savers today by reversing the ISA allowance changes and in the same breath announcing a further 2% tax on savings income. While all taxpayers can now continue to invest in their cash and/or stocks and shares ISAs in whichever split they see fit, those saving above the £20,000 annual ISA allowance will now face higher savings tax rates at 24%, 44% and 49% on the interest from April 2027.
Landlords – If landlords had not been hit hard enough this year with Renters Rights Act and the introduction of Making Tax Digital, Healey went one step further today with an addition 2% increase to the basic, higher and additional income tax rates on rental property income. This will apply from April 2027 in addition to the 2% increase announced by Rachel Reeves last year. The two-fold hit on investors today with the increases to both the savings and property income tax rates, coupled with the additional reliefs awarded to small businesses, will likely see a rise in landlords incorporating their rental businesses. Collateral damage may therefore include tenants, who may find their landlords increasing rents, or selling up, in response to yet more punitive property tax changes.
Online marketplaces – The Chancellor is also looking to fund the reliefs announced today by combatting VAT non-compliance for online marketplaces, who will now be responsible for collecting VAT on sales by UK VAT-registered businesses and any other UK businesses with a minimum annual sales threshold per platform of £90,000.
Gamblers – Slot machine players may see a hit on their payouts as the rate of Machine Games Duty increases from 20% to 25% on machine games with stakes over £1 or prizes over £100. The measures are designed to specifically target higher-risk machines while protecting pubs and seaside arcades.
Beer drinkers – Those who enjoy a pint down the pub may feel somewhat vindicated today as alcohol duty is increased in line with RPI from 1 February 2027, which breweries and manufacturers will likely pass on to consumers with increased prices. The Chancellor did, however, announce a £10m package to smaller British breweries through reforms to the Small Producer Relief, which tapers the standard duty rates based on ABV percentage.
Graduates – Those on Plan 2 student loans, which have been under fire over the past year for impossibly high interest charges and repayment terms, hoping for a lifeline today will be left frustrated. In the last Budget, Rachel Reeves confirmed that she would freeze the repayment salary threshold at £29,385, instead of increasing it with inflation. This is a stealth move that means more graduates will start repaying their loans earlier or repaying more. The government’s inaction on student loans presents an additional squeeze on graduates’ already stretched budgets.