Key takeaways
- The Budget on 28 October 2026 is confirmed. The OBR was commissioned in July 2026 to produce its forecast that day, and every tax measure below is dated commentary rather than policy.
- One more year of frozen income tax thresholds costs £78 at £30,000 of income, £390 at £80,000 and £234 at £150,000, priced on 3.1% CPI.
- Capital gains tax charged at 20%, 40% and 45% would add £3,570 to a £20,000 gain for someone on £150,000, against £340 for someone on £30,000.
- HMRC's own ready reckoner puts a 10 percentage point rise in the higher capital gains tax rate at a £3,565 million net loss in 2028 to 2029.
- Capping tax-free cash at £100,000 would remove the shelter from £168,275, but only for someone whose pension pot reaches £1,073,100.
What the Autumn Budget 2026 predictions would cost at four incomes
You want to know what the speculation means for your own tax bill. Here's the short answer, before the caveats.
Five measures dominate the Autumn Budget 2026 predictions now in circulation. Extending the income tax threshold freeze, aligning capital gains tax with income tax, capping pension tax-free cash, restricting pension tax relief to the basic rate, and reforming lifetime gifting for inheritance tax. None of them is announced. Priced on the rates in force for the 2026 to 2027 tax year, this is what each would take from a household at four levels of income.
| Reported option | Basis | £30,000 | £50,000 | £80,000 | £150,000 |
|---|---|---|---|---|---|
| Threshold freeze runs one more year | Per year, at 3.1% CPI. | £78 | £78 | £390 | £234 |
| Capital gains tax at income tax rates | Per year, on a £20,000 gain. | £340 | £2,682 | £2,720 | £3,570 |
| Tax-free cash capped | One-off, per £10,000 that loses the shelter. | £2,000 | £3,946 | £4,000 | £4,500 |
| Pension relief restricted to 20% | Per year, per £10,000 contributed. | £0 | £0 | £2,000 | £2,500 |
| Gift caught by inheritance tax | One-off on the estate, per £10,000 gifted. | £4,000 | £4,000 | £4,000 | £4,000 |
Two things fall out of that grid straight away. The freeze is the smallest number and the only one nobody has to legislate, because it's already law. The capital gains row is the largest, which is why it draws the most commentary and the sharpest argument about whether it would raise anything at all.
Only the Autumn Budget 2026 date is settled, and that shapes how you read the rest
The Office for Budget Responsibility published the date in July 2026. Its wording is flat: "The Chancellor has commissioned the OBR to produce our next forecast on Wednesday 28 October 2026." In September 2026 it confirmed the Economic and Fiscal Outlook would appear that same day, alongside the Budget.
The second confirmed fact is the freeze itself. HMRC's policy paper says the Personal Allowance and basic rate limit "will be maintained at their current levels until 5 April 2031". The Personal Allowance is set at £12,570 and the basic rate limit at £37,700 for the tax years 2028 to 2029, 2029 to 2030 and 2030 to 2031. The higher rate threshold stays at £50,270 throughout. That was announced at Budget 2025 and is already legislated.
Everything else here is attributed commentary with a date on it. City AM, in a piece by Ali Lyon and Maurício Alencar dated Tuesday 25 August 2026, reported that equalising capital gains tax rates with income tax was under consideration. Charles Russell Speechlys wrote on 11 August 2026 that the Chancellor "may seek to further increase these rates, whether incrementally or more radically by aligning CGT with income tax". BDO's Autumn Budget 2026 predictions page, updated 8 September 2026, said that "Talk of equalising capital gains tax with income tax has seemingly quieted down". Those two readings disagree, and both carry a date. That's the honest state of the evidence.
One more year of frozen thresholds costs £78 at £30,000 and £390 at £80,000
Here's the mechanism, because a freeze isn't a tax rise in the ordinary sense. HMRC's paper is explicit that the legislative default is for both figures "to increase in line with the Consumer Price Index", from 6 April 2028 onwards. The freeze disapplies that default. Extending it means another year in which those two figures don't move while pay does.
Pricing it needs an inflation number. The ONS reported that the Consumer Prices Index "rose by 3.1% in the 12 months to August 2026, up from 2.9% the previous month". The statutory uprating uses the September figure from the preceding year, which isn't published yet, so 3.1% here is illustrative and nothing more.
Apply it. A Personal Allowance of £12,570 would rise by £389.67. A basic rate limit of £37,700 would rise by £1,168.70. The gap between paying tax on the frozen figures and paying it on the uprated ones is the cost of one more freeze year. The chart above plots that gap at each of the four incomes.
- £30,000 and £50,000. Both are basic rate. Only the allowance bites, at 20%, so each pays £78.
- £80,000. The allowance is worth 40% here, and the basic rate limit shifts £1,168.70 of income from 40% down to 20%. Together that's £390.
- £150,000. Just £234, and the reason is the next section.
If you want the underlying bands and allowances in one place, our table of UK investment tax rates and allowances sets out what each of these figures is calculated from.
The £150,000 earner loses less to a freeze than the £80,000 earner
That looks wrong, and it isn't. The Personal Allowance is withdrawn above £100,000, by "£1 for every £2 that your adjusted net income is above £100,000". By £125,140 it's gone. Uprating an allowance you no longer receive is worth nothing to you.
So for someone on £150,000 only the basic rate limit moves, shifting £1,168.70 from 40% to 20%. That's £233.74, which rounds to £234. The £80,000 earner gets the allowance effect as well, and pays £390. Fiscal drag isn't monotonic in income, and the taper is why.
The aggregate is not small. HMRC's impact table puts the exchequer effect of the 2028 to 2031 freeze at £3,365 million in 2028 to 2029, £7,780 million in 2029 to 2030 and £12,435 million in 2030 to 2031. The same paper says the measure "is expected to bring 700,000 individuals into Income Tax by 2030 to 2031, compared to if these thresholds were indexed with CPI from 2028 to 2029 onwards". Among budget predictions for 2026 that reach pensioners, this is the one already on the statute book. HMRC estimates that people over State Pension Age make up "around 20%" of the affected population in 2030 to 2031, and they don't pay employee National Insurance on earnings, so only the income tax half of the freeze touches them.
Aligning capital gains tax with income tax is the biggest number on the page
Today's rates are 18% where the gain falls inside your unused basic rate band and 24% above it, with an annual exempt amount of £3,000 for the 2026 to 2027 tax year. The reported alternative is three bands. Charles Russell Speechlys described "three bands of CGT introduced, at 20%, 40% and 45% of the increase in profit made on selling an asset". City AM put the same structure at "about £14bn a year", citing the Centre for the Analysis of Taxation.
On a £20,000 gain, after the £3,000 exemption, £17,000 is taxable. The four households diverge sharply:
- £30,000 income. £20,270 of basic rate band is unused, so the whole gain sits at the lower rate. It moves from 18% to 20%, costing £340.
- £50,000 income. Only £270 of band is left. Almost the entire gain jumps from 24% to 40%, costing £2,682.
- £80,000 income. No band left, so the full £17,000 moves from 24% to 40%. That's £2,720.
- £150,000 income. The gain sits above £125,140 and moves from 24% to 45%, costing £3,570.
The £50,000 household is the one worth noticing. It pays basic rate on its salary and close to the top marginal rate on its gain, because £270 of headroom is all that separates the two. The same cliff edge drives the payback maths on a bed and ISA transfer.
HMRC's own ready reckoner says a large capital gains rise could lose money
This is where the case against the biggest row in the table gets its best shot, and it comes from the Treasury's own arithmetic. HMRC publishes a ready reckoner of illustrative tax changes, updated 24 June 2025. It estimates the effect of raising the higher capital gains tax rate by 1 percentage point at minus £15 million in 2026 to 2027, £80 million in 2027 to 2028 and minus £30 million in 2028 to 2029.
Scale it up and it gets worse, not better. A 10 percentage point rise is costed at minus £540 million, minus £2,060 million and minus £3,565 million across those same three years. The publication spells out why: "Very large tax rate rises can reduce exchequer yield due to taxpayer behavioural impacts." On the signs it is blunt, saying that "Negative signs are used in the CGT illustrative tax changes to indicate net losses."
An independent estimate lands in almost the same place. Charles Russell Speechlys reports that the Centre for Policy Studies "suggested that a 10 percentage point increase on the higher rate of CGT would lead to a £3.6bn reduction in revenue by 2028/29". A think tank and the Treasury's own model, working separately, both put a large rise at roughly minus £3.6 billion in the same year.
So one dated source says about £14bn a year and two others say a net loss. They are measuring different behavioural responses to different designs, and the ready reckoner applies "a CGT elasticity estimated on HMRC data" to a fixed baseline. A reader should know the disagreement exists, because it's the single largest uncertainty in the table. What none of them disputes is the household row: if a gain is realised and the rate is 40% rather than 24%, that household pays £2,720 more on £17,000.
Capping tax-free cash is a one-off, and it starts at a £1,073,100 pot
GOV.UK states the rule: "You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take is £268,275." That cap only binds once a pot reaches £1,073,100, which is four times £268,275 and also the lump sum and death benefit allowance.
Rathbones, in a piece by Faye Church dated 4 September 2026, wrote that the entitlement is "Currently capped at £268,275" and that "Abolishing or reducing this entitlement could raise up to £2bn a year". Financial Times reporting quoted by Henry Tapper on 23 September 2026 lists the same option, describing a possible cut to "the 'lump sum' of 25 per cent, up to a limit of £268,275, that individuals can take out of their pensions free of income tax".
A cap at £100,000, used here purely to illustrate, would remove the shelter from £168,275. That money would then be taxable on withdrawal. Per £10,000 losing the shelter, the cost is £2,000 at £30,000 of income, £4,000 at £80,000 and £4,500 at £150,000. The £50,000 case is the odd one again at £3,946, because £10,000 of extra income crosses the £50,270 threshold and most of it lands at 40%. This is a one-off charge on a withdrawal rather than an annual bill, and it reaches nobody whose pot falls short of £1,073,100. Spreading a large withdrawal changes the number, which is the subject of our piece on tax on a pension lump sum withdrawal.
Restricting pension relief to 20% costs nothing below £50,270
Relief today follows your marginal rate. GOV.UK describes the top-up beyond the basic 20% as "20% up to the amount of any income you have paid 40% tax on" and "25% up to the amount of any income you have paid 45% tax on". The Financial Times reporting quoted by Henry Tapper on 23 September 2026 puts restriction to the basic rate first among the pension options, and says it "could raise as much as £22bn a year, according to a 2025 report by the IFS".
The arithmetic here is the cleanest on the page. Per £10,000 of gross contribution, a basic rate payer loses nothing, because 20% relief is what they already receive. A 40% taxpayer pays £2,000 more and a 45% taxpayer £2,500 more.
The size of the hit depends entirely on what you contribute, and for a default saver that's capped. Automatic enrolment sets a total minimum contribution of 8% on earnings "between £6,240 and £50,270 a year before tax". That's £1,900.80 a year at £30,000 of salary and £3,522.40 at £80,000, because the qualifying band stops at £50,270. Anyone contributing above the minimum scales the cost up in £2,000 steps per £10,000. The band-by-band comparison behind that sits in our guide to ISA vs pension at each tax band.
The gifting option is the only one that ignores what you earn
Inheritance tax runs off the estate, not the income. The nil rate band is £325,000, "The standard Inheritance Tax rate is 40%", and the threshold "can increase to £500,000" where a home passes to children or grandchildren. Gifts carry an annual exemption of £3,000, and "No tax is due on any gifts you give if you live for 7 years after giving them". Taper relief cuts the rate to 32% at 3 to 4 years, 24% at 4 to 5 years, 16% at 5 to 6 years and 8% at 6 to 7 years, as our guide to the inheritance tax threshold sets out.
BDO's page of 8 September 2026 is the dated hook. Discussing social care funding, it said any new measure "would inevitably have to come with complex anti-avoidance rules", naming "some reform of the lifetime gifting rules" among them. No specific reform has been set out. What can be priced is the consequence: each £10,000 of gift that becomes chargeable at the 40% rate costs £4,000, at every income in the table.
One pension change in this area is already law rather than speculation. From 6 April 2027 most unused pension funds and death benefits fall inside the estate for inheritance tax. HMRC estimates that "of around 213,000 estates with inheritable pension wealth in 2027 to 2028, 10,500 estates will have an Inheritance Tax liability where previously they would not", and that "Approximately 38,500 estates will pay more Inheritance Tax than would previously have been the case". For comparison, the ready reckoner costs a 1 percentage point rise in the standard inheritance tax rate at £290 million in 2028 to 2029. Changing what falls inside an estate moves far more money than changing the headline rate does.
What these figures cannot tell you
Every number above is arithmetic on rules in force, driven by a parameter we chose. The £20,000 gain, the £10,000 contribution and the £100,000 cap are illustrations, not forecasts. The freeze row scales almost linearly with CPI, so an uprating of 2% rather than 3.1% pulls the £390 down by roughly a third.
The ready reckoner carries its own limitation, stated on the page. Its figures were "updated in line with the latest economy and fiscal forecasts" from the Office for Budget Responsibility, published on 26 March 2025, and "Information which came to light after this date is not factored into the estimates in this publication". A model built on a March 2025 forecast is being asked about an October 2026 Budget.
The table also assumes you do exactly the same thing under both regimes. That assumption is what the behavioural elasticities in the ready reckoner exist to break, and it's precisely why the capital gains row is contested. Scotland sets its own income tax rates and limits, so the income tax rows describe England, Wales and Northern Ireland. And none of this is a sample of anything. It's a calculation, so it can be wrong about the world without being wrong about the maths.
Most of all, none of the five Autumn Budget 2026 predictions is policy. The Institute for Government's Thomas Pope and Jill Rutter argued on 7 September 2026 that the Chancellor should "lay out a tax strategy" rather than leave options in play, which is itself an acknowledgement that they are, for now, only in play.
What would change these numbers
Thresholds moving the other way. Grant Thornton's page of 16 Sep 2026 cites the Institute for Fiscal Studies, which "has estimated that resuming indexation from April 2027 would reduce revenues by around £8.4 billion per year under current inflation forecasts". That's the freeze row with its sign reversed, and the same page notes that "Thresholds are frozen until April 2031".
A different capital gains design. The £3,570 at the top of that row assumes bare alignment. Charles Russell Speechlys notes that a substantial rise might bring "pressure to reintroduce some form of indexation allowance or taper relief to account for inflation". Either would cut the figure, and the negative numbers in the ready reckoner suggest the yield depends more on design than on the headline rate.
The fiscal starting point. The Resolution Foundation noted on 22 September 2026 that "Borrowing was £18.3 billion in August 2026", which it called "the second highest August on record". Borrowing reached £77.3 billion in the financial year to August, "£8.1 billion above forecast". A wider gap makes the larger options harder to avoid. A narrower one makes the freeze extension, which raises money without a new rate, the path of least resistance.
The document that settles it is the Economic and Fiscal Outlook published alongside the Budget on 28 October 2026. Until then, the useful thing to know is which of these rows your own position sits in, and how far your realised gains, pension contributions and lifetime gifts sit from the thresholds above. LedgerTouch tracks the first two continuously; a spreadsheet and the rates on this page do the same job once a year.