In the upcoming year of 2026, significant changes are expected to impact personal finances, with various crucial dates to mark on your calendar. These changes range from adjustments in inheritance tax to the removal of the two-child benefit cap. Some changes were previously outlined in the Budget, while others have been in the works for some time.
Regular updates, such as modifications to the Ofgem price cap and important deadlines for self-employed individuals regarding tax payments, are also on the horizon. For instance, the Ofgem energy price cap is set to increase from £1,755 to £1,758 annually starting in January, affecting those with standard energy consumption levels who pay via direct debit. This cap undergoes revisions every quarter, with upcoming changes scheduled for April, July, and October.
On January 21, the first inflation report for the year will be released by the Office for National Statistics. Inflation, indicating price fluctuations over time, is currently measured at 3.6%. Moreover, the Consumer Prices Index (CPI) reflects inflation trends and is closely monitored each month.
For those awaiting their Winter Fuel Payment, contact the Winter Fuel Payment Centre starting January 28. This payment, valued at up to £300, is accessible to individuals beyond the state pension age bracket. However, recipients earning over £35,000 annually must repay the benefit through the tax system.
Self-employed individuals must submit their online self-assessment tax returns by January 31 for the 2024/25 tax year. Missing this deadline incurs a minimum fine of £100, regardless of any tax liability. Outstanding taxes from the previous tax year must also be settled.
In February, alcohol duty is set to rise by 3.66%, in line with Retail Price Index (RPI) inflation. This increase translates to an additional 11p for Prosecco, 13p for red wine, and 38p for gin per bottle, as reported by the Wine and Spirit Trade Association.
The Bank of England is scheduled to convene on February 5 for the first meeting of 2026, during which decisions on interest rates will be deliberated. The current base rate, influencing borrowing costs and savings interest rates, stands at 4%, with rate-setting meetings held every six weeks.
The Household Support Fund will cease operations on March 31, providing local councils with the authority to offer financial aid to residents struggling with bill payments or low incomes. This assistance typically comprises non-repayable cash grants or vouchers for essentials like energy and groceries.
Effective April 2026, the two-child benefit cap will be eliminated, allowing low-income families to claim means-tested benefits for additional children born after April 6, 2017. Furthermore, minimum wage rates are set to rise in April, benefiting workers aged 21 and over, with hourly rates increasing from £12.21 to £12.71.
Council tax bills in England will see a rise of up to 5% in April, with larger increments necessitating a referendum. The average council tax bill for a Band D property in England for the 2024/25 period is £2,280.
While the TV license fee typically increases each April, the exact adjustment for the forthcoming year is pending government confirmation. Water bills are also anticipated to climb in April, following Ofwat’s approval for a 36% average bill increase in England and Wales by 2030.
Car tax rates, excluding new vehicle first-year levies, are set to rise in April in line with RPI inflation. Additionally, adjustments to tax rates and thresholds are expected annually on April 5, marking the end of the tax year.
Benefits will increase by 3.8% starting April 6, with Universal Credit allowances receiving a higher boost of approximately 6.2%. State pensions will rise by 4.8% in adherence to the triple lock commitment.
In April 2026, new inheritance tax regulations for farmers will be implemented, introducing a £2.5 million cap on inherited agricultural assets, with a 50% relief on assets exceeding this threshold.
The dividend tax rates will also increase for basic and higher rate taxpayers as outlined in the Budget, along with new guidelines on price transparency in shops to facilitate better price comparisons.
From September 2026, the 5p per litre cut in fuel duty introduced in March 2022 will gradually revert to pre-cut levels by March 2027. The eligibility criteria for free school meals will broaden to encompass all children in England whose parents receive Universal Credit starting September 2026.
A new duty on vaping products is set at £2.20 per 10ml of vaping liquid from October 2026, alongside adjustments to tobacco duties. Additionally, regulations governing buy now, pay later schemes will be enforced by the Financial Conduct Authority from July 15, 2026.
University tuition fees in England will increase in line with inflation to £9,535 annually. Notably
