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Higher minimum wage rates from April 2027, a one-off £100 energy payment for some households in England and an unchanged cash ISA allowance are among the announcements in Chancellor John Healey’s first Budget, presented on 28 October 2026. The package also includes extensions to the fuel duty cut and zero-rate VAT on household electricity. However, not all measures will apply in the same way across the UK.
The announcements mainly concern the months ahead. They do not mean that every change is already in force: some measures still require implementation, while the minimum wage increases are scheduled for next April.
Minimum wage to reach £13.21 for workers aged 21 and over
According to the government statement, the National Living Wage — the statutory minimum hourly rate for eligible workers aged 21 and over — is set to rise by 3.9% to £13.21 an hour. BBC reporting says the new rate will take effect in April 2027.
At the same time, the minimum rate for 18 to 20-year-olds is set to increase to £11.27 an hour. A rate of £8.31 has been announced for 16 and 17-year-olds and apprentices who qualify for the apprentice rate. These are increases to the legal minimum rates for specific groups, rather than a pay rise for every employee.
£100 energy payment will not apply across the whole UK
The BBC reports that, from January 2027, households in England living in properties in council tax bands A to D are to receive a one-off £100 Household Energy Payment. Council tax is the local tax charged on residential properties. The money is to be paid directly into bank accounts and funded through additional taxation on banks.
The geographical distinction matters: the announcement should not be read as an identical payment for every household in the UK. According to the BBC, Scotland, Wales and Northern Ireland will receive corresponding funding, but their administrations will decide whether to introduce similar support.
Separately, the government has announced an extension of zero-rate VAT on household electricity until 30 June 2027. This applies to electricity, not every part of household energy bills. The statement also announces the removal of the 4% tariff on heating oil.
Fuel and savings: existing rates and allowances retained
The 5p fuel duty cut is to be extended until 30 June 2027. The BBC says the rate for petrol and diesel will remain at 52.95p per litre. This is an extension of the reduced tax rate, rather than a further cut to pump prices.
For savers, a key decision concerns cash ISAs — tax-free cash savings accounts. According to the BBC, the government has dropped its plan to reduce the annual contribution limit for under-65s from £20,000 to £12,000 from April 2027. The limit is to remain at £20,000.
The BBC also reports plans for a Starter ISA aimed at people beginning to invest. Detailed eligibility rules and a launch date have not been announced, so this remains a proposed product rather than an available account.
The practical effect of the Budget will depend on each household’s circumstances, including workers’ ages and pay, where they live, and how they use energy and save. The main dates are January 2027 for the planned energy payment in England, April for the new minimum wage rates, and the end of June for the extended electricity VAT and fuel duty measures.
