Chancellor John Healey has announced a raft of new headline-making policies, from a state pension tax exemption to a £100 handout for energy bills.
But hidden among the Budget 2026 documents slipped out by the Treasury on Wednesday afternoon are several nasty surprises which are set to cost taxpayers money in 2027 and which were not given any fanfare.
Tax hikes include alcohol duty, savings tax rates and property income taxes as well as frozen thresholds.
While the Chancellor pledged to hand ‘breathing space’ to households to fight the cost of living, there are several hidden hikes set to choke middle income earners and those with extra savings and property in particular.
Here’s a rundown of the key nasty surprises hidden in the Autumn Budget 2026 plans and what they mean for your money.
Income Tax thresholds
Income Tax thresholds have been frozen in place again, with no increase to the 20%, 40% or 45% tax bands. 20% is staying at £12,570, 40% at £50,270 and 45% at £125,140. Although the rate of tax in each band remains the same as before, ‘fiscal drag’ will mean that more households will be pushed into paying more tax, as inflation and wage increases for inflation increase wages but the thresholds stay the same. Amazingly, we are only about 16 years away from minimum wage hitting the 40% tax threshold.
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Tax-free Personal Allowance frozen
The tax-free Personal Allowance for state pensioners is an effective £13,037 rate following the introduction of a new tax exemption for anyone of state pension age. However, the personal allowance of £12,570 will not be increased for anyone else. Again, thanks to fiscal drag, it means more and more people will end up paying more and more tax as incomes move above the threshold.
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Alcohol duty
Alcohol duty was not mentioned in John Healey’s speech, but in Budget documents released after the speech, it was confirmed that alcohol duty will be increased in line with Retail Price Index (RPI) inflation. September’s inflation figure was 3.9%, so if this stays at the same level when the final tax is implemented, it will add 2p a pint to beer, 13p to a bottle of red wine and 37p to a bottle of whisky.
(Image: Getty)
