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Budget 2026: What it means for families, from energy bills and parental pay to wages and house prices

Budget 2026: What it means for families, from energy bills and parental pay to wages and house prices

From cheaper energy bills to more parental pay and help for first-time buyers, here's how Budget 2026 could affect your family.

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Ruairidh Pritchard

Published: October 28, 2026 at 3:37 PM

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If you're wondering whether this year's Budget will actually make family life more affordable, there are some changes worth knowing about, particularly if you're juggling childcare, rising household bills and the cost of getting around.

Chancellor John Healey has announced a package of measures aimed at easing everyday costs, including energy bill support, an increase in the minimum wage, extended parental pay and help for first-time buyers.

October half-term money saver: 40+ places where kids eat free or for £1 this half term

But not everything will happen immediately, and the Office for Budget Responsibility (OBR) has warned that inflation could remain higher than previously expected. Here's what the announcements on 28 October 2026 could mean for your family's finances.

Energy bills: Some families could get £100 off in 2027

Detail of electricity bill with light bulb, energy theme

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One of the biggest announcements for households is a new £100 Household Energy Payment in 2027.

The payment will be available to up to 20 million households living in Council Tax bands A to D in England, with funding provided for similar support elsewhere in the UK.

The government is also extending the temporary VAT cut on electricity until 1 July 2027, which it says will reduce Ofgem's annual energy price cap by around £50 in April 2027.

For eligible families, these measures could provide some welcome relief, although the exact saving will depend on your circumstances.

There are also plans to remove gas standing charges and incorporate those costs into unit rates instead. This could benefit households that use less gas, although it won't necessarily mean lower bills for everyone.

Parental pay: More dads and partners could qualify

Father cradling his sleeping newborn baby in his arms standing in kitchen

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For parents planning a baby, one of the most significant announcements is an extension of parental pay.

The government says more than 160,000 additional parents will become eligible, including self-employed dads and partners who have previously missed out.

This could make a meaningful difference to families trying to share caring responsibilities during those first few weeks and months.

However, the announcement doesn't yet provide full details about payment amounts, eligibility rules or when the changes will begin.

Minimum wage: A pay rise from April 2027

Parents earning the National Living Wage will see their hourly rate increase by 3.9%, from £12.72 to £13.21, on 1 April 2027.

According to the Treasury, this means an additional £910 a year in gross earnings for a full-time worker on the National Living Wage.

For families balancing nursery fees, food shopping and household bills, that extra income could help, although take-home pay will depend on tax, National Insurance and individual working hours.

Petrol and diesel: Fuel duty relief extended

A cheerful scene at a gas station showing a woman fueling her car while smiling warmly. In the foreground, a young child enthusiastically washes the car’s windshield with a squeegee, adding a playful dynamic to the setting. The bright blue fuel pumps and surrounding trees provide a vibrant and lively backdrop, creating a wholesome depiction of an everyday family errand.

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If your family relies on the car for school runs, nursery drop-offs or commuting, there's some relief on the way.

The existing 5p-per-litre fuel duty cut will continue for another six months, while a planned inflation-linked increase has been postponed until 1 July 2027.

The Treasury estimates its fuel duty decisions across this Parliament will save the average car driver £230 compared with previous plans.

Electric vehicle drivers who rely on local, lower-powered public chargers could also benefit from changes designed to save an average of £150 annually.

First-time buyers: New help with deposits and mortgages

Families hoping to move out of rented accommodation or buy their first home could benefit from several housing announcements.

The new Your First Home Scheme aims to help 70,000 people onto the property ladder, with the government suggesting eligible buyers could save hundreds of pounds a month.

A new First Time Buyer ISA is also planned to help people save for a deposit.

Meanwhile, the Lifetime ISA withdrawal charge will fall to 20% from 28 October 2026. This means first-time buyers purchasing properties above the existing £450,000 cap will face a smaller penalty when accessing their savings.

Food shopping: Could supermarket bills get cheaper?

Person Putting Bananas On Conveyor At Store Checkout

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The government is removing tariffs on more than 100 products, including everyday favourites such as baked beans and chocolate.

Lower import costs could eventually help reduce prices on some supermarket shelves, although there's no guarantee retailers will pass on the full savings to shoppers.

The bigger picture: Why families might still feel squeezed

Despite the support announced, the OBR's latest forecast suggests household finances will remain under pressure.

It expects inflation to reach 3.5% in 2027, compared with the 2% previously forecast, before returning to 2% in 2028.

The OBR also predicts no real earnings growth in 2027, meaning average wages are unlikely to increase faster than prices.

Frozen income tax thresholds could also leave some working parents paying more tax as their earnings rise.

What should parents take away from Budget 2026?

For families, the most immediately relevant announcements are the energy support, fuel duty extension and changes to Lifetime ISAs.

The minimum wage increase and expansion of parental pay could also make a difference, particularly for lower-paid workers and families preparing for a new arrival.

But many measures won't arrive until 2027, and with inflation expected to remain elevated, the impact on individual household budgets will vary.

The key takeaway? There is some targeted help on the way, but families shouldn't assume that all their everyday costs will start falling straight away.

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Authors

Ruairidh PritchardDigital Growth Lead

Ruairidh is the Digital Lead on MadeForMums. He works with a team of fantastically talented content creators and subject-matter experts on MadeForMums.