The changes affect everyone from self-employed workers to drivers, as well as anyone who pays off a mortgage or is paying household bills.
22 money changes for UK households in 2026 – from TV Licence to council tax
22 money changes coming for UK households in 2026 have been revealed – from energy bills and the BBC TV Licence to council tax, water bills, and HMRC self-assessments.
The changes affect everyone from self-employed workers to drivers, as well as anyone who pays off a mortgage or is paying household bills. There are changes to inflation, interest rates and Department for Work and Pensions (DWP) benefits expected.
It comes off the back of it being announced UK households have endured a punishing 2025, with essential bills rising by an average of £1,254 over the course of the year. Costs increased in across almost every area of household spending, new analysis by Uswitch has found.
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Uswitch spokesman Sabrina Hoque said: “Pressure points have been widespread. Energy debt hit an eight-year high in October, with households now owing £780million to their suppliers.
“The strain is so severe that more than two million homes say they will not turn on their heating this winter, a fifth higher than last year.”
Ofgem energy price cap rises – January 1
From 1 January to 31 March 2026 there will be a small monthly increase of 28 pence on the price of energy for a typical household who use electricity and gas and pay by Direct Debit.
Compared to the level between January and March 2025, it is 1% or £20 higher.
Year on year when adjusted for inflation the new cap is 2% or £37 lower than the same period in 2025.
The annual cost for people who use electricity and gas and pay by Direct Debit would be £1,758 per year (0.2%).
Inflation updates – throughout year
The UK’s Consumer Prices Index (CPI) inflation rate was 3.2% in the 12 months to November 2025, a decrease from the 3.6% recorded in October 2025. The rate has fluctuated throughout the year, remaining above the Bank of England’s 2% target.
The official inflation data for January 2026 has not yet been released. The Office for National Statistics (ONS) is scheduled to publish the UK’s Consumer Prices Index (CPI) report for January 2026 on Wednesday, February 18, 2026.
Interest rate decisions – throughout year
The expectation is that interest rates will continue to fall further next year. This is partly because inflation is predicted to ease off.
The Bank of England uses interest rate rises as a lever to curb borrowing and spending when inflation gets too high, so when inflation is falling, this gives it headroom to reduce rates.
Currently at 3.2 per cent, the CPI rate of inflation is expected to average about 2.5 per cent next year, according to the Office for Budget Responsibility (OBR), before returning to the Bank’s 2 per cent target in 2027.
Winter Fuel Payment deadline – January 28
Most £300 Winter Fuel Payments are made automatically in November or December. You should get a letter telling you:
how much you’ll getwhich bank account it will be paid into – this is usually the same account as your State Pension or other benefits
If you do not get a letter or the money has not been paid into your account by 28 January 2026, contact the Winter Fuel Payment Centre.
Self-assessment tax deadline – January 31
The Self Assessment tax deadline for submitting your online tax return for the 2024/2025 tax year and paying the tax you owe is midnight on January 31, 2026.
HM Revenue and Customs (HMRC) must receive your tax return and any money you owe by the deadline.
If you do not know your profit for the whole tax year, you still need to send a tax return. The last tax year started on 6 April 2024 and ended on 5 April 2025. The deadline for earlier tax returns has passed and you may have to pay a penalty. Send your tax return or payment as soon as possible to avoid further penalties.
Alcohol duty rises – February
As announced at Budget 2025, the government will uprate all alcohol duty rates in line with the Retail Price Index (RPI) at 3.66%.
It will also increase the cash discount provided to small producers to maintain the relative value of Small Producer Relief (SPR), compared to the main rates. SPR provides lower alcohol duty rates for small producers — provided those products are below 8.5% alcohol by volume (ABV), not produced under licence, and are made on small producer premises producing below 4,500 hectolitres of pure alcohol per year.
Consistent with the wider uprating, the government will also increase the simplified duty rates used for calculating excise duty on alcoholic products brought into Great Britain for personal use.
Household Support Fund ends – March 31
The UK Government has provided funding of the Household Support Fund to local authorities for the period 1 April 2025 to 31 March 2026.
Two-child benefit cap axed – April
The two-child benefit cap will be scrapped in full from next April, Chancellor Rachel Reeves has said.
The policy, introduced under the Conservatives in 2017, means parents can only claim universal credit or tax credits for their first two children.
Announcing the move, which is estimated to cost £3bn a year by 2029-30, Reeves said her party did “not believe that the solution to a broken welfare system is to punish the most vulnerable children”.
However, the Tories have criticised the decision, arguing people on benefits should have to make the same financial choices about having children as everyone else.
Minimum wage increase – April
Millions of people are set to get a pay rise from April due to an increase in the minimum wage, the government has announced ahead of Wednesday’s Budget.
The hourly rate for over-21s will rise by 50p to £12.71, with workers aged 18-20 seeing an 85p rise to £10.85, and under-18s and apprentices getting 45p more to £8 an hour.
Chancellor Rachel Reeves said 2.7 million people will benefit from the increases, which will take effect from April next year.
Council tax rises – April
Council tax bills increased by an average of five per cent across most English local authorities, which is the maximum rise permitted without triggering a local referendum.
Several councils were granted special permission to raise council tax beyond the usual limit, including Birmingham, Bradford, Newham, Somerset, Trafford and Windsor & Maidenhead.
These increases formed a substantial part of the overall pressure on household finances, representing a fixed cost that cannot be reduced or avoided.
TV licence fee could rise – April
Culture Secretary Lisa Nandy has published a consultation document setting out a series of options for the future funding of the BBC. It is believed the TV Licence will rise AGAIN in April 2026.
The licence fee raised £3.8bn in the year ending March 2025 – 65% of the BBC’s total income – but the number of households which pay it is falling.
The government’s green paper is part of the process to renew the BBC’s charter – the corporation’s rulebook and licence to exist – which expires in 2027.
The BBC licence fee – currently £174.50 a year – is guaranteed until 31 December 2027, when the current BBC charter expires.
Water bills rise – April
Water bills rose by an average of £123 in 2025, the largest increase since the sector was privatised in 1989.
Water bills are rising significantly in 2025/26 (affecting bills from April 2025) and further increases are planned for 2026/27 and beyond, with an average of around 26% (about £123) increase expected for 2025/26 in England and Wales to fund huge infrastructure investments, though exact amounts vary by supplier, with some seeing over 30% jumps to improve services, reduce spills, and tackle underinvestment, meaning bills will continue to climb over the next five years.
Car tax rises – April
Car tax also rose by £5 for drivers paying the standard rate, as drivers of electric vehicles faced higher costs after the exemption from car tax was removed.
Tax year ends – April
The current UK tax year (2025/2026) began on 6 April 2025 and will end on 5 April 2026. The new tax year sees the implementation of changes announced in the 2024 Autumn Budget, including increases to employer National Insurance contributions and the National Living Wage.
State pension and benefits rise – April
Benefits typically rise with inflation annually but Rachel Reeves confirmed an additional 2.3% increase to universal credit from April 2026.
This means a single claimant will receive an extra £6 per week, or £312 per year, resulting in an overall above-inflation rise of 6.2%.
The basic and new state pension will be increased by 4.8%, from April 2026 in line with average weekly earnings up to an additional £575 per year to pensioners depending on their entitlement.
Someone on a full new state pension will see their weekly payment rise to £241.30 per week while someone on the full basic state pension will see their weekly payment boosted to £184.90 per week.
In 2025 the UK Government said it will continue its commitment to the triple lock for the duration of this parliament.
The triple lock guarantees that the state pension increases annually by the highest of inflation, average earnings growth, or 2.5%.
Inheritance tax hike
Labour has announced that the level of the Agricultural and Business Property Reliefs threshold will be increased from £1m to £2.5m when it is introduced in April 2026. This allows spouses or civil partners to pass on up to £5m in qualifying agricultural or business assets between them before paying inheritance tax, on top of existing allowances.
Following the reforms to Agricultural and Business Property Reliefs announced at Budget 2024, the government has listened to concerns of the farming community and businesses about the reforms.
Work from home tax relief cut – April
From April 6, 2026, employees who work from home will no longer be able to claim tax relief from HMRC for extra, non-reimbursed household costs, such as gas and electricity.
New buy now, pay later rules – July
The FCA has published Consultation Paper 25/23 proposing new regulations for Buy Now, Pay Later (BNPL) services, now termed deferred-payment credit (DPC), with rules coming into force on 15 July 2026.
The new regulations will apply to third-party lenders providing DPC through merchants, introducing requirements for creditworthiness assessments, precontract information, complaints handling and a temporary permissions regime.
Free school meals eligibility expanded – September
Over half a million additional pupils will become eligible for Free School Meals under the new eligibility criteria. The change means that all households receiving Universal Credit, above the current £7,400 income cap, will qualify for this support.
Vape rules – October
From 1 October 2026, you must pay Vaping Products Duty on vaping products and attach a vaping duty stamp on all your retail packaging — in this instance, each individual vaping product.
You must also continue paying VAT on vaping products.
Deadline to register for self-assessment – October
You must tell HMRC by 5 October if you need to complete a tax return for the previous year and you have either:
not sent a tax return beforeregistered before but did not need to send a tax return for the tax year 2023 to 2024
You can tell HMRC by registering for Self Assessment.
Deadline to file paper self-assessment tax return – October
HMRC must receive your paper tax return by 11:59pm on 31 October 2025 or you’ll get a late filing penalty.
You can send it any time on or after 6 April 2025 as long as HMRC receives it by the deadline.