HM Treasury announces five everyday cost measures ahead of the Budget
HM Treasury announced five cost-of-living policy changes on 26 October 2026 ahead of the upcoming Budget. These measures cover travel costs, parental pay, unpaid carer allowances, food import tariffs, and parcel drop boxes. For drivers who use personal vehicles for work, HM Treasury is keeping the tax-free rate at 55p for the first 10,000 miles and raising the rate for additional miles from 25p to 35p. Paternity pay will expand to cover more than 150,000 extra parents each year, offering two weeks of support worth up to £194 per week. The government is also replacing the strict income cliff edge on Carer's Allowance with a gradual reduction of £1 for every £1 earned over the limit. Import tariffs on more than 100 goods, including specific foods, heating oil, and fertiliser, will be removed. Finally, the Post Office will install 1,000 self-service parcel drop boxes and upgrade 600 branches by the end of the financial year.
What was announced
HM Treasury published a set of five measures on 26 October 2026 to ease household expenses.
First, HM Treasury set mileage rates for workers who drive their own vehicles. The tax-free allowance stays at 55p per mile for the first 10,000 business miles, while the rate for miles beyond that rises from 25p to 35p.
Second, the government expanded statutory parental pay to over 150,000 additional parents annually, including self-employed fathers and partners. Eligible parents will get two weeks of support worth up to £194 a week.
Third, Work and Pensions Secretary Pat McFadden confirmed a taper for Carer's Allowance. Instead of losing the full allowance after exceeding the weekly earnings limit, carers will lose £1 of benefit for every £1 earned over the limit.
Fourth, HM Treasury removed import tariffs on over 100 items. These items include baked beans, chocolate, gherkins, garlic, sweets, kerosene heating oil, and fertilisers.
Fifth, the government is expanding Post Office parcel drop boxes to 1,000 and upgrading 600 branches by the end of the financial year. A Warm Homes loans scheme was also launched, offering low-interest or interest-free loans for solar panels, batteries, and heat pumps.
What it means
Around three million workers could save money through the revised mileage rates. HM Treasury calculated that someone driving 15,000 business miles a year receives up to £300 in extra tax savings.
The tariff cuts could save households up to £21 on annual food bills when combined with earlier tariff suspensions. HM Treasury expects the two tariff packages to lower consumer costs by £245 million to £595 million annually.
For unpaid carers, the new taper replaces a rule where earning one penny over the weekly earnings limit, set at 16 hours of National Living Wage, stopped all payments. The change aims to prevent carers from taking on fewer hours to protect their allowance.
What the announcement does not tell us
The document does not state when the new Carer's Allowance taper will start. It also leaves out the start date for the expanded parental pay rights.
The text does not name the precise interest rates for the Warm Homes loans scheme. Nor does it state which lenders will offer these loans or when homeowners can apply.
Finally, the release lists sample food items, but it does not supply the full list of all 100 products affected by tariff cuts.
How this was written
This analysis was written with AI from the official announcement below, using only facts that announcement states. The quoted wording is gov.uk: HM Treasury’s own. Always check the original before acting on anything here.
Chancellor unveils five everyday fixes to ease household costs, support working families and end the Carer’s Allowance cliff edge ahead of Wednesday’s Budget.
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