For families on lower incomes, this Budget brings higher pay, help with energy bills and some practical changes for carers and working parents. One long-term cost remains: the frozen tax-free allowance.

Higher pay

The National Living Wage for workers aged 21 and over rises by 3.9% to £13.21 an hour from April 2027. Around 2.3 million low-paid workers will get a pay rise. Pay for 18 to 20-year-olds goes up by the same percentage, to £11.27 an hour.

Energy bills

The fixed daily standing charge on gas bills is being scrapped for 23 million households, and Ofgem aims to do this by the end of 2027. Those costs will move into the price you pay for each unit of gas you use, so how much you save depends on how much gas you use. Around 60% of homes should save about £45 a year, but that isn’t guaranteed for every household.

From January 2027, up to 20 million households in England in council tax bands A to D will get a £100 payment towards heating, which the government says will go straight into bank accounts. Details of how it will be paid are still to come. Scotland, Wales and Northern Ireland get matching funding. The 0% VAT rate on home electricity continues until July 2027, which is worth about £50 a year.

Food and travel

Import tariffs have been removed on more than 100 everyday foods and on heating kerosene, which should help bring shop prices down. Single bus fares in England outside London will be capped at £2 for a year from January 2027.

Carers, parents and savers

At the moment, carers who earn even a penny over the earnings limit lose all of their Carer’s Allowance. From 2030/31, carers who earn over the limit will lose £1 of Carer’s Allowance for every £1 they earn above it, instead of losing the whole benefit at once. From April 2029, self-employed fathers and partners will be able to claim up to £194 a week for two weeks after a birth.

From spring 2028, Help to Save accounts will be offered by banks, building societies and credit unions, where the government adds a bonus to your savings. There is also £430 million to help people sleeping rough, and VAT will be removed on land sold to social housing providers.

The catch

The £12,570 Personal Allowance stays frozen until 2031. As the minimum wage goes up, more part-time and low-paid workers will start paying income tax for the first time. From 2027/28 to 2029/30, people whose only income is the State Pension won’t pay income tax.

The bottom line

Help with bills, plus the £100 payment, will make a real difference this winter. Make sure you claim everything you’re entitled to, and keep an eye on your tax code as your pay rises.