Overview
- Chancellor Rachel Reeves has extended frozen income tax and National Insurance thresholds to 2031, with CPS estimating a worker on £50,000 today would be about £505 worse off in real terms by 2030–31.
- Pensioners are projected to gain in real terms due to the triple lock, with CPS estimating around £306 better off by the end of the decade, rising to £537 if a state‑pension‑only tax exemption indicated by the Chancellor is implemented.
- From 6 April 2026, most benefits rise by 3.8%, the State Pension increases by 4.8%, and Universal Credit standard allowances receive an above‑inflation uplift of roughly 6.2% as part of a planned ‘rebalancing’.
- The two‑child cap on benefits will be removed at the start of the new financial year, legacy benefits will be closed and migrated to Universal Credit by late March/early April 2026, and the LCWRA element is set lower for new UC claimants with protections for existing recipients.
- HMRC will switch to digital‑by‑default communications from April 2026, and pensioners with total income above £35,000 will automatically repay Winter Fuel Payments through tax‑code adjustments.