MoneyMagpie Editor and financial expert Vicky Parry warns readers about all the planned upcoming financial changes in 2026 and what they could mean for you
The Mirror rounds up all the big money changes for 2026(Image: )
The economy seems constantly in the news and 2026 is set to be a big one when it comes to financial changes.
Some planned changes, like those to Personal Independence Payment, have either been U-turned upon or delayed by the Government, but keep reading to find out what the current financial roadmap looks like.
Are you going to save money this year or will the purse strings get tighter?
Wage rises
The good news is that the National Living Wage is going up in April 2026, so you could have more money in your pocket each month.
The biggest wage increase will be for 18-20 year olds, with an 8.5% increase to £10.85 an hour. Apprentices and 16-17 year olds benefit second-best, with a 6% rise to £8 an hour, while the National Living Wage for those aged 21 and over will rise by 4.1% to £12.71 an hour.
For a full-time employee aged over 21, that means an extra £900 a year. It’s the second minimum wage hike for over-21s and 18–20s in two years.
However, the income tax rates have been frozen at their current levels until 2031, when it was due to change in 2028. This means that many people on the boundary of a threshold could be pushed into the next tax bracket in the next few years, if they get a promotion or their wages rise with inflation.
Increased dividend taxes
If you pay yourself in dividends from your Limited Company, or you earn dividends from investments, this one could have a big impact.
From 6th April 2026, the dividend allowance – currently £500 – will remain but the tax paid on anything over the allowance will change. The amount you pay depends on the tax bracket you are in.
The basic tax rate payer will pay 10.75% on dividends over £500, compared to the current 8.75%. Upper rate payers see an increase from 33.75% to 35.75%, while the additional rate tax payer will see their dividend rate frozen at 39.35%.
Making Tax Digital for over £50k
Making Tax Digital is a newer approach to managing taxes, and while companies paying VAT and larger corporations have already made the transition, it affects far more people from April 2026 as those who turn over £50,000 or more as sole traders or from property income will need to adhere to the new system.
This includes submitting quarterly reports as well as the Self Assessment by January in the following year. There will be penalties and fines for each late quarterly filing rather than on just the annual tax return.
People must also keep digital records and use HMRC-approved third-party software. There are free and cheap options but some people may prefer to hire an accountant to help guide them through.
This change extends to those with an income over £30,000 from April 2027, then £20,000 in 2028. This means most people who are self-employed or earn some money from property will need to stick to Making Tax Digital rules by April 2027.
Even if it doesn’t apply to you in the next tax year, it is worth learning about it with online webinars or reading information to prepare yourself, as this change has been coming for a while and this is the final stage of the rollout.
Older age for state pension
The State Pension age rise to 67 begins from this April. That means anyone born after April 1981 will need to be at least 67 years old before they can claim their State Pension. This age could rise in the future, too.
The State Pension age changes are set in law and will happen. However, with the continuing changing landscape for the social security financial burden on the state, it could mean that the future pension may be means-tested, age eligibility could rise further, or the amount could freeze outside of inflation.
So, 2026 should also be the year people equip themselves with basic pension knowledge to ensure they are building a secure future for their retirement without relying on the State Pension for an income when they retire.
Final year for ISA allowance
There is no change to the £20,000 Individual Savings Account (ISA) allowance in the 2026/27 tax year. However, it is notable here because it is the final year that you can choose where to allocate your full allowance.
At the moment, you can put the full £20,000 in a Cash ISA, if you want to. But from April 2027, this will be slashed to £12,000. Your full allowance remains £20,000, which means you must put the remaining £8,000 into investment ISAs, such as a Stocks and Shares ISA, instead of cash.
This change will not affect those over the age of 65, who can still allocate their allowance as they wish. Money already in ISAs will not change; the new rules only apply to new money paid into ISA accounts.
The aim is to get more people putting their cash into investments, to stimulate markets and encourage more people focus on planning for long-term savings growth. However, it will make things difficult for those who need access to large amounts of tax-free cash, such as people saving for a home.
That means people saving up for a house deposit might benefit from putting the majority of their allowance into a Cash ISA this year, while they can choose to put the full allowance in.
Rail fare freeze
For the first time in three decades, rail fares in England are frozen. That means people who commute to work or travel at peak times will not see an increase in their ticket prices.
Ticket prices in Scotland, Wales, and Northern Ireland may change, as will those in England which do not fall under a ‘regulated fare’ category.
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