2026 Autumn Budget: A temporary tax rise for banks
In the end, the increase was much lower than many feared and it will be temporary. For the 15 months from 1 January 2027 to 31 March 2028, the banking surcharge will rise from 3% to 6%.
Commenting on the change, Carlota Estragues Lopez, Equity Strategist at SJP, said: “The UK government has increased the bank surcharge by 3%, taking it to 6%, but stopped short of the more significant increase some lenders had feared. The decision reflects recognition of the banking sector’s importance to the UK economy and the risk that a heavier tax burden could weigh on growth and investment. While the UK tax regime remains relatively uncompetitive internationally, markets welcomed the more measured approach, with major UK bank shares rising 3–4% following the announcement.”
According to chancellor Healey, the temporary increase was required to fund help for families struggling in the current energy crisis. Money raised through the increased surcharge will help pay for the £2.6 billion scheme to help struggling households with rising energy costs. It will see households in England in council tax bands between A to D receive a £100 payment direct to their bank accounts.
Other tax rises included an increase in the rate of tax on savings and property income by two percentage points across all bands from April 2027. This is on top of the increases announced in the 2025 Budget. It means that from April the rate of tax payable will rise by four percentage points overall.
SJP Approved 30/10/2026
