Higher tax on savings and property income – Autumn Budget 2026

The Budget on 28 October 2026 announced a further two-percentage-point increase in the income tax rates on savings and property income, on top of the increases announced last year.

From 6 April 2027, the basic, higher and additional rates for both types of income will be 24%, 44% and 49% respectively. These replace the previously announced rates of 22%, 42% and 47%.

The savings rates apply across the UK. The announced property rates apply in England, Wales and Northern Ireland. Scottish taxpayers with property income should check the applicable rules rather than assume the rates quoted here will apply.

The changes concern income, not the value of the underlying asset. For savers, the relevant amount is taxable interest. For landlords, it is taxable property income calculated under the applicable rules. The new rates will therefore affect the amount retained after tax where income is taxable.

Savers should review how much interest they expect to receive and which allowances apply to them. Interest received within an ISA is tax-free. The suitability of an ISA depends on contribution rules, access needs and the type of savings or investment chosen; tax should not be the only consideration.

Landlords should revisit their forecast tax bills and cash flow, taking account of allowable expenses and the treatment of borrowing costs. Do not assume that every payment relating to a property can be deducted in full. Any proposal to change ownership or move a property into a company needs a wider review of taxes, costs and practical consequences.

Dan Mundroina, Private Client Tax Partner, commented: “These higher rates of tax make it important to understand the income you are likely to retain after tax. Review your savings and rental income before the changes take effect, consider the use of appropriate allowances, tax-advantaged wrappers such as ISAs, and if you’re married, the ownership of income generating assets. Avoid making major investment or property decisions solely to reduce one tax charge: the right approach depends on your wider financial position.”

If the Budget has raised any questions for you, book your place on our question time webinar this Friday at 9:30am. Alternatively, if you would like any further information or guidance on this topic, get in touch with your usual Kreston Reeves contact or contact us here.