UK Budget 2026 backs household relief and AI investment

Chancellor John Healey unveiled a Budget combining cost-of-living support with investment in technology, housing and defence. Measures include a £100 Household Energy Payment for up to 20 million households in England, an extended electricity VAT cut and continued fuel duty relief. The National Living Wage will rise to £13.21 per hour on 1 April 2027.

A £700 million AI package includes an additional £120 million for the AI Security Institute and £40m for a national capability to investigate and respond to agentic security incidents. Further investment will address cyber and biological threats, while funding for the AI Economics Institute will support assessments of effects on jobs, productivity and living standards.

The Sovereign AI Unit will receive an additional £140 million to help domestic companies scale and retain a meaningful UK presence. Another £30m will fund local AI adoption pilots across participating Yorkshire authorities. A new Data Centre Covenant will require strategic projects seeking enhanced government support to meet conditions covering community investment, energy costs, British industry, jobs and national security.

Wider business measures include founder tax relief, changes to skilled-worker visas and expanded access to finance. The National Wealth Fund and British Business Bank will receive an additional £20.4 billion. A temporary increase in the Bank Corporation Tax Surcharge will help fund household support, while capital budgets will be reprioritised for defence. The government says the Budget meets its fiscal rules, with £15 billion of stability-rule headroom in 2029-30.