£100 energy payment and fuel duty freeze in the Burnham-era Budget

Chancellor John Healey has delivered the first Budget of the Andy Burnham era, announcing £100 payments for millions of households to combat soaring energy bills. According to the Mirror ^[1], the new funds will be paid into bank accounts from January to those in council tax bands A to D.

The Guardian ^[2] reported that income tax thresholds remain frozen, a move that keeps many workers trapped in higher tax brackets through fiscal drag. Despite this, the minimum wage is set to rise by 3.9% for 2.3 million workers, with the rate for those aged 21 and over climbing to £13.21 an hour.

Drivers will breathe a sigh of relief as fuel duty has been frozen for a 16th consecutive year. The Mirror ^[1] noted that this decision follows price surges linked to the Iran war, preventing the scheduled 3p and 2p hikes that would have added to the cost at the pumps. Additionally, the VAT cut on electricity bills, originally due to end in March 2027, has been extended until July of next year.

In a significant reversal, the planned cut to the cash ISA allowance has been scrapped. The Independent ^[3] confirmed this undoes Rachel Reeves’ proposal to reduce the limit from £20,000 to £12,000. However, basic rate taxpayers will see the tax applied to their savings interest increase to 24% starting in April 2027.

The state pension will increase to £13,036 a year next April, surpassing the £12,570 personal allowance for the first time. The Mirror ^[1] clarified that those relying solely on the state pension will not face tax bills, as the personal allowance for this group will rise in line with payments. However, those with private pensions or deferred state pensions may still face tax liabilities.

First-time buyers are set to benefit from a new "Your First Home" scheme, requiring just a 2.5% deposit alongside a 20% government equity loan. Experts warn of negative equity risks if property values fall. Meanwhile, the Office for Budget Responsibility has cut the UK’s 2027 growth forecast to 1% from 1.6%, according to the Independent ^[3], citing the impact of the Iran war on oil prices.