Budget 2026 – 4% hike in income tax on savings and property

Budget 2026 – 4% hike in income tax on savings and property

Savers and landlords face higher tax on savings and property income as planned increase doubles to entry rate of 24% up to 49% for top earners

The Budget sets out increases in income tax rates on savings and property income by a total of 4%, up from the originally anticipated 2% hike effective from April 2027.

From the 2027-28 tax year, the rates of income tax applicable to savings income will rise but the current tax-free savings allowances will remain unchanged.

Under the new plan, the savings and property basic rate will be 24%, higher rate 44%, and additional rate will be 49%. The savings rate is UK wide.

The government will introduce legislation in the Finance Bill 2026-27 to increase the rates of income tax on savings and property income.