The Budget's done. Here's what it actually means if you're under 25
Why it hits youYour pay, your bus fare, your energy bill, your savings and your student loan were all on the table today. Some things got better, some stayed frozen, and the biggest long-term change, to the state pension, lands on your generation.
Chancellor John Healey has delivered his first Budget. The minimum wage goes up, bus fares stay capped, the UK rejoins Erasmus+, and student loan thresholds don't move. Here's what changes for you, when, and how every side sees it.
The Facts
What everyone agrees on
Before anyone spins it. Every one of these is checkable.
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From 1 April 2027 the minimum wage rises 3.9%: to £13.21 an hour at 21 and over, £11.27 for 18 to 20-year-olds, and £8.31 for 16 and 17-year-olds and apprentices. HM Treasury, Budget 2026 ↗
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The tax-free personal allowance stays frozen at £12,570, and student loan repayment thresholds were not changed. Yahoo Finance (Martin Lewis reaction) ↗
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Young people out of work: the Jobs Guarantee for 18 to 24-year-olds on Universal Credit goes ahead, and £100 million over two years lets every mayor run a local apprenticeship service. Big government building projects must have at least 3% apprentices. HM Treasury, Budget 2026 ↗
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The UK will rejoin the Erasmus+ study-abroad scheme from 1 January 2027. HM Treasury, Budget 2026 ↗
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Single bus fares in England outside London will stay capped at £2 for a year from 1 January 2027. HM Treasury, Budget 2026 ↗
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Energy: gas standing charges (about £108 a year for a typical bill) will be scrapped, aiming for the end of 2027. Households in council tax bands A to D in England get a £100 payment from January 2027, and the VAT cut on electricity runs to July 2027. HM Treasury, Budget 2026 ↗
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Saving: the cash ISA limit stays at £20,000, after plans to cut it to £12,000 were dropped. A new First Time Buyer ISA replaces the Lifetime ISA for new savers from April 2029: up to £4,000 a year with a 25% government bonus, and no upper age limit. HM Treasury, Budget 2026 ↗
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Alcohol duty rises with inflation, the gambling tax on high-stakes machines goes up from 20% to 25%, and vape shops in England lose their business rates discounts from April 2027. HM Treasury, Budget 2026 ↗
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The extra tax banks pay on profits doubles from 3% to 6% for 15 months from January 2027, to help pay for the energy support. HM Treasury, Budget 2026 ↗
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The pension triple lock stays until April 2029. From April 2030 it will be adjusted so the state pension tracks earnings over time. The government says that will save £15 billion a year by the late 2030s and £50 billion a year by the late 2040s. HM Treasury, Budget 2026 ↗
Every Side · 1 of 3
The government's case
Breathing space now, and a first job instead of a benefit
The government says this is a Budget for “breathing space” after the energy shock. It says it “refuses to write off” the nearly one million young people not in education, work or training, and points to the Jobs Guarantee for 18 to 24-year-olds on Universal Credit, £100 million so every mayor can run a local apprenticeship service, and a 3.9% minimum wage rise worth £910 a year to a full-time worker on the adult rate. It's also keeping bus fares at £2, rejoining Erasmus+, and paying for help with energy bills partly by doubling a tax on bank profits for 15 months. And it says changing the pension triple lock from 2030 will put the state pension “on a sustainable footing” for future generations.
- HM Treasury
- Chancellor John Healey
What do “left” and “right” mean?
They're shorthand for two broad sets of political views. People on the left tend to put more weight on equality and on government stepping in to fix problems. People on the right tend to put more weight on tradition, personal freedom and keeping government smaller. The centre sits in between, and most people mix views from all three.
Side labels are our editorial calls for now. How we'll rate lean
Photo: Bengt Oberger / Wikimedia Commons, CC BY-SA 4.0 ↗
Every Side · 2 of 3
The opposition's case
“Not good enough, not strong enough, not bold enough”
Conservative leader Kemi Badenoch said the country remains “overspent, over-borrowed, overtaxed and drowning in an out-of-control welfare system”, and that the Budget was “not good enough, not strong enough, not bold enough”. But she welcomed one thing that directly affects young people: she thanked the Chancellor for “breaking Labour's pledge on the minimum wage for young people”, by not moving 18 to 20-year-olds faster towards the adult rate, which the Conservatives say will make employers more willing to hire them.
- Kemi Badenoch, Conservative leader
- The Conservatives
Side labels are our editorial calls for now. How we'll rate lean
Photo: Mike Peel / Wikimedia Commons, CC BY-SA 4.0 · Westminster, 2025 ↗
Every Side · 3 of 3
The money experts' view
Help with bills, but the freezes that hit young people stay
Martin Lewis welcomed the end of gas standing charges, which he has long campaigned against. But his verdict on tax was blunt: “fiscal drag (and double fiscal drag for plan 2 students) stays”. That means the frozen tax-free allowance and the frozen Plan 2 student loan threshold keep quietly taking more as wages rise. The Budget watchdog, the OBR, now expects growth to slow to 1.0% next year, and expects the country to pay an average of £14 billion a year more in debt interest than it forecast in the spring.
- Martin Lewis, MoneySavingExpert
- Office for Budget Responsibility
Side labels are our editorial calls for now. How we'll rate lean
Photo: Tilman2007 / Wikimedia Commons, CC BY-SA 4.0 · Whitehall, June 2025 ↗
The Blindspot · what the headlines skip
Will the minimum wage rise start your student loan repayments? It's right on the line
On the newest student loans (Plan 5) you repay 9% of what you earn over £25,000. The new £13.21 adult rate works out at about £25,760 a year for a 37.5-hour week, or £27,480 for 40 hours. But the £25,000 threshold is due to start rising every year from April 2027, the same month the wage rise lands, and the new figure hasn't been published. So whether a full-time worker on the minimum wage starts repaying depends on a number nobody has announced yet. On the older Plan 2 loans the threshold stays frozen at £29,385 until 2030, which Martin Lewis calls “double fiscal drag”.
Student Loan Calculator (independent site) ↗GOV.UK ↗Yahoo Finance ↗
File photo: Tim Green / Wikimedia Commons, CC BY 2.0 · University of Bradford, July 2016 ↗The Blindspot · what the headlines skip
The pension change is really about your generation
Today's pensioners keep the triple lock. The change starts in 2030 and saves the most money in the 2040s, when today's under-25s are paying the taxes that fund pensions. Supporters, like the Resolution Foundation, have argued the triple lock pushed pensions up while support for young people was cut. The flip side: your own state pension will rise more slowly than it would have.
HM Treasury, Budget 2026 ↗Resolution Foundation (Sept 2026) ↗
The Blindspot · what the headlines skip
The gap for 18 to 20-year-olds grows
Because both rates rise by the same 3.9%, an 18 to 20-year-old will be paid £1.94 an hour less than someone aged 21 from April, up from £1.86 now. The Conservatives welcomed that. Labour's manifesto had promised to end these age bands.
The Blindspot · what the headlines skip
The big plan for young people out of work still isn't here
The Budget says a White Paper on getting young people into work will come “early next year”, after Alan Milburn's review. So today's measures are mostly ones already announced in the spring. College leaders noted there was no new money for further education colleges.
The Blindspot · what the headlines skip
The Lifetime ISA “penalty cut” is narrower than it sounds
The withdrawal charge drops from 25% to 20% only if you're buying a home worth more than £450,000. Take your money out for anything else and you still lose 25%.
The Blindspot · what the headlines skip
Almost nothing changes today
Most of what was announced starts later: the bus fare cap and energy payment in January 2027, the wage rise in April 2027, the end of gas standing charges by late 2027, the new ISA in 2029 and the pension change in 2030.
Your Call
- The government's case: not yet
- The opposition's case: not yet
- The money experts' view: not yet
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Photo: Ewan Munro / Wikimedia Commons, CC BY-SA 2.0 · The Holborn Whippet, London ↗Receipts
Every source, one tap away
Don't take our word for it. This is everything the breakdown is built on.
Hero image: File photo: UK Parliament / Wikimedia Commons, CC BY 3.0 · House of Commons chamber, 2012 ↗
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