Budget 2026 winners and losers revealed from energy bill payers to state pensioners

John Healey promised “a Budget for the working people of Britain” with help for rising energy bills and a fuel duty freeze for drivers - but who are the winners and losers? Low-paid workers were also handed a pay rise, though the tax-free personal allowance remains frozen - which means people get dragged into paying tax for the first time, or pushed into higher tax rates, when their wages go up. However, it was announced that state pensioners will be shielded from paying income tax as the state pension is set to rise above the personal allowance for the first time next year.

Stay up to date with everything announced in our Budget 2026 live coverage . To see more of the stories you love from The Mirror and to find them easily in Google then make us your preferred source. Free and easy-to-do, just click on the link here to find more from The Mirror at the top of your feed. Pensioners Low income state pensioners will be protected from paying income tax, with their personal allowance set to match the full state pension.

The state pension is set to rise to £13,036 a year from next April, in line with the triple lock. This means it will be above the £12,570 tax-free personal allowance. By increasing the personal allowance for state pensioners, it means anyone who only claims the state pension and no other sources of income will not have to pay tax. But those that have a private pension or a higher state pension - for example, through additional payments or if you deferred your state pension claim - will still be hit with a tax bill.

Low-paid workers The minimum wage will increase by 3.9% for 2.3 million workers. The minimum wage for workers aged 21 and over is currently £12.71 an hour and this will rise to £13.21, while the rate for workers aged ‌18 to 20 will go up from £10.85 an hour to £11.27. However, as the tax thresholds remain frozen, it means more of your income risks getting pushed into a higher tax bracket, depending on how much you earn. Energy bill payers A new £100 payment has been announced for 20 million households living in council tax band A to D properties, to help with rising energy bills.

This money will be paid into people's bank accounts from January. The government has also announced new measures to cut energy bills today. It was confirmed that standing charges on gas bills are being axed, in a move that is expected to save 60% of households an average of £45 off their annual bill. But the cost will be shifted to the unit rates, which means high-usage households could end up paying more. This will come into force "in 2027 or as soon as possible after".

It comes after the Prime Minister removed VAT on electricity bills this month, though the saving was swallowed up by higher wholesale costs. The VAT cut had been due to end in March 2027, but this has now been extended until July 2031. Drivers Drivers have seen the price of petrol and diesel soar since the start of the Iran war, with diesel hitting £2 per litre last month. In response to this, fuel duty has been frozen for a 16th year running.

Fuel duty is a tax on petrol, diesel, biodiesel and bioethanol and is included in the price you pay for every litre of fuel you buy. It had been due to rise by 3p in January, then by another 2p in March - reversing a 5p cut that had been in place in 2022. The 5p will now not be reversed until July 2027. The headline fuel duty rate is 52.95p per litre. Savers The planned cut to the cash ISA allowance from £20,000 a year to £12,000 has been axed, in a boost for savers.

The cut had been due to happen next April for savers under the age of 65. The cutting of the cash ISA allowance was announced in the 2025 Budget by then-Chancellor Rachel Reeves , with government hoping that it would encourage younger savers to invest in the stock market instead. However, in not-so good news for savers, the tax on income from savings will rise to 24% for basic rate taxpayers from April 2027. It had been scheduled to rise to 22%.

The savings higher rate will be 44%, and the savings additional rate will be 49%. First-time buyers A new first-time buyer scheme called Your First Home scheme will help people get on the property ladder with a deposit of just 2.5%. The Government would then provide a loan worth 20% of the property value to help pay for the purchase. This equity loan will initially be interest-free. However, critics have warned of the risk of buyers falling into negative equity - when the amount of money you owe on your mortgage is greater than the current market value of your house - if the value of the property falls.

The Lifetime ISA penalty is also being reduced from 25% to 20%. This means you will get back roughly what you have saved, plus interest, though not your bonus, instead of part of your original savings being wiped out. The Lifetime ISA allows you to save £4,000 a year and you get a £1,000 bonus from the government - but the money has to be used for your first home or retirement. There is also a new First Time Buyer ISA planned, which is replacing the Lifetime ISA.

The bonus with the First Time Buyer ISA will only be paid out on completion of a property and this ISA cannot be used for your retirement. Small businesses The threshold for small business rate relief for retail hospitality and leisure businesses will be increased from £12,000 ⁠to £18,000. The the shift takes an estimated 70,000 additional businesses completely out of paying business rates. In order to qualify for this relief, your business must occupy primarily one property.

Taxpayers The tax thresholds remain frozen, which mean as your salary increases, a larger portion of your income gets pushed into higher tax bands. This is something which is known as fiscal drag. The personal allowance - which is how much most people can earn before they start to pay income tax - is £12,570. It is currently set to be frozen at this level until 2031. You pay 20% tax on earnings between £12,570 and £50,270, then 40% on earnings between £50,270 and £125,140 and 45% on earnings over £125,140.

Smokers and vapers Vape shops will be excluded from business rates relief starting from April 2027. This means shops may have to increase prices to absorb the extra costs. As of this month, all vaping products are now subject to a new Vaping Products Duty. This change saw a flat rate tax of 22p per millilitre added onto vaping liquid, costing someone who buys a 10ml bottle of e-liquid an extra £2.20 in duty. Cigarettes also went up this month, in line with RPI inflation plus an additional 2 percentage points.

Tobacco duty is normally increased at the Budget, but it was moved forward in line with the vape tax. Drinkers The government will increase alcohol duty rates by 4.55% from next February. It means tax on alcohol will go up by 14p on a bottle of prosecco, 18p on a bottle of 14.5% ABV red wine and 49p for a bottle of gin, according to the Wine and Spirit Trade Association. In the last three years, the tax on a bottle of wine has gone up by £1.32 and tax on a bottle of gin has increased by £1.65.

However, the Chancellor also announced £10million in alcohol duty relief for around 2,000 small brewers and cider makers. Gamblers An increase in taxes on gambling companies was announced, which will impact companies such as Ladbrokes and William Hill. The Chancellor announced he will increase Machine Games Duty, a tax on the net takings from some slot machines, to 25% from 20%. Landlords The tax landlords pay on profits from renting out homes will rise from next April.

The basic rate will be 24%, the higher rate will be 44%, and the additional rate will be 49%.