UK Budget raises the National Living Wage by 3.9 per cent and adds a Household Energy Payment

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UK Budget raises the National Living Wage by 3.9 per cent and adds a Household Energy Payment

28 October 2026

HM Treasury published the Budget 2026 document on GOV.UK. It raises the National Living Wage and the National Minimum Wage by 3.9 per cent. It brings in a £100 Household Energy Payment for households in council tax bands A to D in England. The cut in VAT on electricity runs on to July 2027, and so does the 5p cut in fuel duty. The Government also plans to abolish gas standing charges. Headline rates of income tax, National Insurance and VAT are left unchanged, and the planned cut to the cash ISA allowance is reversed. From April 2028 electric vehicles come under a new mileage-based charge, known as eVED. Pubs, music venues and social clubs get a 20 per cent cut in business rates.

National Living Wage rise: 3.9 per cent Household Energy Payment: £100, council tax bands A to D in England Electric vehicle charge: eVED, a mileage-based charge from April 2028 Business rates cut: 20 per cent for pubs, music venues and social clubs

Why it matters for exams: The UK Budget 2026 raised the National Living Wage by 3.9 per cent, created a £100 Household Energy Payment for council tax bands A to D in England, and announced eVED, a mileage-based charge on electric vehicles from April 2028.

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28 October 2026 Source: GOV.UK (HM Treasury)

In plain words

eVED Electric vehicle excise duty — The mileage-based charge on electric vehicles announced in the UK Budget 2026, to start from April 2028.

National Living Wage National Living Wage — The legal minimum hourly pay for older workers in the United Kingdom.