3 Budget announcements that could hit your wallet this October

Just three months into his new job as Chancellor, John Healey is preparing to set out the Government’s plans for tax, spending and support for households in his first Budget. It’s a tough job, to say the least, as he balances Prime Minister Andy Burnham’s priorities with the financial commitments inherited from his predecessor, Rachel Reeves.

With pressure to ease the cost of living while keeping public finances in check, there’s plenty of ground to cover in his Budget speech. But for everyday people wondering what it could mean for their money, there are three key areas worth paying attention to.

Will the Autumn Budget 2026 include more help with energy bills?

Shortly after he became Prime Minister, Andy Burnham announced some cost of living support measures, including scrapping VAT on electricity bills from October. This was meant to offset the steep rise in energy costs following the conflict in the Middle East.

However, consumer groups like Citizens Advice have warned the cut was not enough as the energy price cap hit a three-year high. Experts are urging the Government to extend the energy bill support to help people make it through the winter.

If more support is announced, experts predict that it will be highly targeted to ensure only those most in need get the support, like linking it with means-tested benefits systems.

Could PIP become means-tested in the Autumn Budget?

In the Budget, Healey is expected to announce plans for welfare spending over the next year, which may include some changes to means-tested benefits.

Means-tested benefits are the type of benefits that take into account what your income, savings and financial circumstances are before allowing you to claim. This includes Universal Credit, Pension Credit, Housing Benefit, Income Support and Council Tax Support.

However, the Labour government has received many suggestions to make other benefits like Personal Independence Payments means-tested too. Currently, the disability benefit is based on how a person’s condition affects their mobility and daily life. It doesn’t consider how much money they already have.

While this means that well-off people who meet the criteria could be receiving money from the state, it also means people on PIP are able to work and contribute to the economy without worrying that it could impact their benefit payment.

An Institute for Fiscal Studies report stated that Labour could save over £8billion by means-testing PIP, and due to Burnham’s commitment to cut the welfare bill there is speculation that he could be actively looking at this option while the Timms Review begins to wrap up. 

Will income tax thresholds and the personal allowance change in the Autumn Budget 2026?

The personal allowance and income tax thresholds have been frozen since 2021 and while it was supposed to be updated in the last Budget, instead, Rachel Reeves extended the freeze until April 2031.

This means that the way income tax is applied to your earnings hasn’t been updated to account for wage increases or inflation over the last five years. And it will continue to fall behind for the next five years unless Healey intervenes.

During Andy Burnham’s campaign for the Makerfield by-election earlier this year, he mentioned being frustrated about the freeze. However, he did also say it would be ‘difficult’ to change the rates given the country’s current financial circumstances.

If the thresholds are increased, it will have an immediate effect for everyday people who will be able to take more money home from the exact same paycheque.   

The personal allowance is a standard amount that most people can earn each year without having to pay income tax on it. Currently it is £12,570 and once you start earning just £1 more, you start paying income tax.

Income tax is separated into three different rates, determined by how much you earn in a year. Once you earn enough to be in the highest tax band, you also lose your personal allowance.

Income tax rate bands:
Basic rate: 20% tax on earnings between £12,571 and £50,270
Higher rate: 40% tax on earnings between £50,271 and £125,140
Additional rate: 45% tax on earnings above £125,140

It’s worth remembering that this is all speculation right now, but even if Healey announces a major shake up tomorrow it will take months to put any changes in place. In fact, most changes announced in the Budget don’t come into play until the new tax year in April so there’s no need to panic or do anything really until the Chancellor takes to the Commons.

It’s worth remembering that, for now, much of what we’re hearing about the Budget is speculation. Even if Healey announces a major shake-up tomorrow, most changes won’t happen overnight. Many tax changes announced in the Budget don't come into effect until the start of the new tax year in April, while other measures can take months to introduce. So there's no need to make any big financial decisions based on rumours before the Chancellor has even taken to the Commons.

That said, there's never a bad time to give your finances a once-over, particularly with winter approaching and household budgets already feeling the squeeze. If you're worried about your energy bills, you don't need to wait for the Government to announce more support. Check whether you're entitled to any existing help, speak to your energy supplier about an affordable payment plan if you're struggling, and make sure you're not paying more than you need to on your current tariff. A few small checks now could help you feel more in control of your money, whatever tomorrow's Budget brings.