The 2026 Spring Budget has landed. Delivered against a backdrop of slowing growth, persistent inflation pressures, and a public still reeling from the cost of living crisis, the Chancellor faced the impossible task of satisfying everyone while pleasing no one.
The Key Changes at a Glance
Income tax thresholds remain frozen until 2028 — meaning millions of workers will continue to be dragged into higher tax bands as wages rise. The personal allowance stays at £12,570 and the higher rate threshold at £50,270.
National Insurance contributions for employees were cut by half a percentage point, from 8% to 7.5%, offering modest relief worth around £150 per year for the average worker. For a household with two working adults both earning around the median wage, that's roughly £300 back annually.
Benefits and Welfare
The benefit cap was uprated by 3.2%, roughly in line with inflation. Universal Credit standard allowances received the same uplift. Disability benefits — the subject of considerable pre-Budget speculation — were protected in cash terms, though critics argue inflation-linked increases fall short of genuine protection.
Child Benefit has been extended to cover 16-19 year olds in approved education or training for the first time, reversing a decade-long policy that left hundreds of thousands of families worse off when children remained in full-time education.
Housing
The stamp duty threshold for first-time buyers was raised from £425,000 to £450,000, reflecting house price growth since the threshold was last reviewed. In practice this means limited benefit outside major cities where entry-level properties already exceed that figure in many areas.
What It Means For You
For a single earner on £30,000, the NI cut saves around £113 per year. For a household earning £60,000 combined, the saving approaches £260. These are welcome amounts but modest against the backdrop of bills that remain significantly higher than three years ago.
"The Budget does more for higher earners than lower ones. That's a political choice as much as an economic one." — Institute for Fiscal Studies
The Bigger Picture
The Office for Budget Responsibility revised growth forecasts upward slightly to 1.4% for 2026, from 1.1% previously. Borrowing remains higher than the government's own targets but within range of its fiscal rules, which have themselves been loosened in the past year.
Britain's public debt continues its slow upward march. The decisions being deferred today will require harder choices in future Budgets.
