Cost of living changes by Prime Minister Andy Burnham: Every announcement so far and how much you could save

New Prime Minister Andy Burnham has made tackling the cost of living one of his top priorities, as households up and down the country deal with squeezed budgets.

He has wasted no time in introducing new measures to slash household bills, transport and energy costs.

Here we round up all his latest policy announcements and what they mean for your money, as the other schemes the Prime Minister is predicted to put in place.

£2 bus fare cap

Millions of bus passengers across England will see the cost of travelling fall after Andy Burnham announced it will chop the cap on single bus fares from £3 back to £2.

The Prime Minister confirmed the move as part of his first week in office, saying the cheaper fares will help with the cost of living by making everyday travel more affordable.

The new £2 bus fare cap will come into force on 1 January 2027 and remain in place until the end of the year.

The £2 cap will apply to participating bus operators in England outside London.

London has its own fares system set by Transport for London (TfL), so the cap doesn't affect buses in the capital.

VAT scrapped on electricity bills

Millions of households across the UK will see their electricity bills fall from October after Andy Burnham announced he will remove VAT from domestic electricity bills.

The move is expected to save the average household around £45, with suppliers expected to pass the savings on automatically.

The change will take effect from 1 October, just in time for the next energy price cap.

Most households currently pay VAT on their energy bill at a rate of 5% but under the changes this will fall to 0%.

The exact amount you could save will depend on your usage and much your bill is.

Free bus travel for children in August

Andy Burnham is keeping previous chancellor Rachel Reeve's Great British Summer Savings initiative, which includes free bus travel for children aged 5 to 15 throughout August 2026.

The scheme aims to take some of the financial pressure off families during the summer holidays.

Every child in that age group can travel free on participating local buses from 1 to 31 August, with no registration required and no fares to pay. The government has committed more than £100 million to fund the scheme.

Will Andy Burnham cut income tax?

There are rumours that Andy Burnham and his new Chancellor John Healey may look at the income tax personal allowance which has been frozen at £12,570 since 2021.

The personal allowance is the amount you can earn before you start paying income tax.

Increasing this threshold would be a major move and put more money back into the pockets of households.

A £500 increase in the personal allowance would cut income tax bills by £100 for most basic-rate taxpayers, according to calculations by savings platform AJ Bell.

The frozen allowance gradually erodes the wealth of households when it fails to move with inflation. AJ Bell says the allowance would now be £16,000 if it had moved with the cost of living over the past five years.

An increase to the personal allowance benefits everyone earning more than £12,570 a year including pensioners. However, lower income households tend to feel the biggest benefit because the tax cut is worth more as a proportion of their total income.

It's likely such a measure would be revealed in the Chancellor's first budget which is expected to take place in October - though a date has not yet been set.

Will Andy Burnham keep the State Pension triple lock?

The state pension triple lock is a long favoured policy among those in retirement.

It refers to the current policy which raises state pension payouts by the highest of earnings growth, inflation or 2%.

Andy Burnham has previously indicated that he would keep the triple lock in place if he became prime minister.

Removing the policy would be a deeply unpopular move and it's unlikely he'd make such a move in a hurry.

As a result of policies announced by ex-Chancellor Rachel Reeves, pensions are due to brought into inheritance tax.

This policy is set to take effect from 6 April 2027, so there is time for Burnham and new Chancellor John Healey to make a u-turn.

There has been plenty of speculation around whether the government could end the tax-free 25% lump sum that can currently be taken from a pension.

This is an area that will need to watched closely ahead of the budget.