What’s changed since Andy Burnham became Prime Minister?

Since becoming Prime Minister on 20 July 2026, Andy Burnham has put the cost of living at the centre of his government’s early agenda. Changes and announcements so far include removing VAT from household electricity temporarily, protecting people whose only income is the State Pension from Income Tax, capping many bus fares at £2, reducing business rates for pubs and live music venues, and introducing further consumer protections. Some measures are already confirmed, while others are still taking shape ahead of the Autumn Budget.

A change of Prime Minister tends to bring a rush of headlines.

For your finances, the more useful question is simpler: what has actually changed?

Andy Burnham has moved quickly since entering Downing Street on 20 July. His first few weeks have focused heavily on household costs, with measures covering energy, transport, pensions and the high street. He has also promised further action, while acknowledging that the government has limited room to spend.

For households, investors, retirees and business owners, there’s plenty to digest. But there’s no need to respond to every announcement immediately.

Here, we’ll separate the confirmed changes from the political direction of travel, explain what they could mean for your finances, and look at what’s still worth watching as the new government approaches its first Autumn Budget.

What has Andy Burnham changed since becoming Prime Minister?

Burnham’s early measures have concentrated on easing everyday costs. The biggest financial announcements include temporary VAT relief on household electricity, State Pension Income Tax protection, a £2 bus fare cap and targeted business rates relief.

The first few weeks have been busy.

These measures give us a useful sense of the new government’s priorities. They don’t yet give us the full economic picture.

The Autumn Budget on 28 October is likely to tell us considerably more.

What’s changed for pensioners?

Burnham’s government has committed to preventing people whose only income is the basic or new State Pension from paying Income Tax. This addresses concerns that rising State Pension payments combined with frozen tax thresholds could pull more pensioners into the tax system.

One of the most significant early announcements concerns the State Pension.

The Personal Allowance has remained frozen at £12,570 since 2021. Meanwhile, State Pension payments have continued to rise.

That combination matters.

As income rises while the tax threshold stays still, more people can gradually become liable for tax without any change to the headline Income Tax rate. This is sometimes described as fiscal drag.

Under the previous position, there had been growing concern that pensioners relying solely on the State Pension could eventually find themselves with an Income Tax liability.

Burnham’s government has said that people whose only income is the basic or new State Pension will not have to pay Income Tax.

For somebody living entirely on the State Pension, that offers some reassurance.

For people with other retirement income, however, the picture is different.

Income from sources such as:

• private pensions
• workplace pensions
• investments
• savings
• property

can still affect your overall tax position.

This is an important distinction. The announcement shouldn’t be read as a wider exemption from Income Tax for pensioners.

If you draw income from several places in retirement, it remains worth looking at them together.

→ [Internal link: New Tax Year, New Opportunities: What You Should Know About Your Pension]

What’s changed with energy bills?

The government plans to remove the 5% VAT charged on household electricity for six months from October 2026. The government estimates that this could save an average household around £45.

Energy has been another immediate focus.

That will be welcome for many households, particularly heading into winter.

There is, however, some important context.

Energy bills depend on much more than tax. Wholesale energy prices and Ofgem’s energy price cap can have a considerably larger influence on what households ultimately pay.

The House of Commons Library has noted that wholesale gas prices could push the energy price cap higher in October, potentially offsetting some of the benefit from the VAT reduction.

In other words, your electricity bill could receive a tax cut while your overall energy costs still move in the other direction.

It’s a useful reminder that individual government measures rarely operate in isolation.

What’s changed for transport costs?

Burnham brought one particularly recognisable policy from his time in Greater Manchester into his early national agenda: capped bus fares.

A £2 cap on many bus journeys forms part of the government’s initial package of cost-of-living measures.

For households that rely regularly on public transport, small reductions in everyday costs can add up.

It also tells us something about the broader philosophy behind Burnham’s government.

His first speech as Prime Minister promised a government more focused on practical improvements to everyday life, while his subsequent announcements have concentrated heavily on household bills and public services.

For your long-term finances, these measures are unlikely to transform a financial plan individually.

Collectively, however, changes to transport, energy and other regular expenses can affect household disposable income, particularly where budgets are already stretched.

What’s changed for business owners?

Pubs, clubs and live music venues are due to receive a 20% reduction in business rates from the 2027/28 tax year. Burnham has also indicated that the wider cost of doing business will be considered as the government prepares its Budget.

Business owners should be paying attention too.

Government estimates suggest around 32,000 venues could benefit, with an average saving of approximately £1,100.

That’s a targeted measure rather than a wholesale reform of business taxation.

But Burnham has since acknowledged the wider pressure businesses are facing and indicated that business rates will be part of the conversation heading into the Budget.

For business owners, that makes the next few months particularly important.

Decisions around:

• taking income
• pension contributions
• investment
• dividends
• business succession
• selling or exiting a company

shouldn’t be made based on speculation about what the Budget might contain.

But if you’re already considering a significant financial decision, it can be sensible to understand which parts of the tax landscape may be moving.

→ What most founders get wrong about exit planning

What’s Burnham doing about everyday consumer costs?

Some of the newest announcements are smaller individually but potentially relevant to a much wider group of people.

On 9 August, the government announced what it called a series of “everyday fixes” aimed at practices that can make household spending unnecessarily expensive or difficult to manage.

That includes action on subscription contracts, with plans designed to make cancelling subscriptions easier, alongside measures targeting misleading discounts.

These aren’t changes that require a rethink of your investment strategy or retirement plan.

They do fit the wider pattern, though.

The early focus of Burnham’s government has been firmly on reducing everyday financial pressure, rather than beginning with large structural changes to personal taxation.

Whether that remains the priority once the government has to make harder fiscal decisions is another question.

Is the Personal Allowance going to increase?

This is one to watch rather than plan around.

The Personal Allowance currently stands at £12,570 and has been frozen since 2021.

That freeze has become increasingly important as wages, pensions and other incomes have risen.

An increasing number of people have therefore moved into Income Tax or higher tax bands without the government needing to increase the tax rates themselves.

There had been speculation that Burnham could increase the Personal Allowance.

So far, that hasn’t happened.

The Prime Minister has instead indicated that the issue could be considered as part of the Autumn Budget.

Until we know more, it’s worth resisting the temptation to build financial decisions around speculation.

Could taxes still rise under Andy Burnham?

Possibly.

This is where the early cost-of-living announcements meet a more difficult reality.

Tax cuts and spending commitments need to be funded, while the government has also committed to maintaining its fiscal rules.

The Office for Budget Responsibility and other economic commentators continue to highlight the constraints facing the public finances.

Burnham has pledged not to raise taxes on working people, but that doesn’t tell us what will happen across every part of the tax system.

There could still be changes affecting areas such as:

• wealth
• property
• pensions
• businesses
• investments
• estates and inheritance

None of these should be treated as predictions.

For now, the important date is the Autumn Budget on 28 October 2026.

That’s when we should get a much clearer picture of how the government intends to balance its ambitions with the money available to deliver them.

What could the new government mean for investors?

Political change naturally creates uncertainty.

And uncertainty can make even experienced investors feel they should respond.

A new Prime Minister arrives. Tax policy changes. Markets react. Headlines speculate about what comes next.

The temptation is to adjust investments before you feel you’ve missed something.

Usually, your long-term objectives deserve more weight than the political cycle.

Government decisions can influence:

• inflation
• gilt yields
• interest-rate expectations
• sterling
• business confidence
• particular sectors of the UK market

But your investment strategy should already be built with the expectation that governments, tax regimes and economic conditions will change over time.

This is where having a financial plan can be reassuring.

You don’t need to predict every political decision correctly. You need a plan with enough flexibility to cope when circumstances change.

→ How to make good financial decisions, even under pressure

What should you review now?

Most people don’t need to make significant changes simply because there’s a new Prime Minister. It may, however, be a useful time to check your tax position, retirement income and any major financial decisions planned around the Autumn Budget.

If you’re wondering whether you should be doing anything differently, start with your own circumstances rather than the headlines.

You might want to review:

• Your retirement income: particularly if you receive the State Pension alongside other pensions or investment income.
• Your tax position: frozen thresholds can affect you even when tax rates themselves don’t change.
• Your investments: check that they still reflect your goals and appetite for risk rather than short-term political expectations.
• Your business plans: particularly if you’re considering a sale, significant investment or changes to how you take income.
• Your cashflow: understand whether changing energy and household costs materially affect your wider position.
• Any decisions you’re considering before the Budget: there may be value in getting advice before making an irreversible move.

Sometimes a review leads to a change.

Sometimes it gives you confidence that you don’t need one.

Both are useful outcomes.

Why is it worth avoiding knee-jerk financial decisions?

Political change can make financial decisions feel more urgent than they really are.

There’s a very human reason for that.

We tend to feel uncertainty more acutely when something changes outside our control. A new government, a potential tax rise or a volatile market creates a gap in our knowledge, and taking action can feel like a way of regaining control.

But action and progress aren’t always the same thing.

Selling an investment because of a political headline, changing a pension strategy in anticipation of an unconfirmed tax rule or bringing forward a major financial decision can create consequences that are difficult to undo.

A little patience can be valuable.

Understand what has actually changed. Work out whether it affects you. Then decide.

What happens next?

Burnham has been Prime Minister for less than a month.

We therefore know considerably more about the direction of his government than we do about its long-term tax and economic policy.

The early priorities are clear: household costs, public services, transport and support for businesses.

The bigger financial questions are still ahead.

The Autumn Budget on 28 October 2026 should tell us more about taxation, borrowing and spending, and how the government intends to pay for its programme.

Until then, you don’t need to predict what happens next.

You can make sure your finances are ready for different possibilities.

Talk to Finura

Changes in government can create plenty of noise around your finances.

Our role is to help you work out which changes genuinely matter to you.

At Finura, we look at your investments, pensions, tax position and longer-term goals together, so you can make considered decisions as circumstances change without losing sight of the plan you already have.

Frequently asked questions

What has Andy Burnham changed since becoming Prime Minister?

Since taking office on 20 July 2026, Burnham’s government has announced measures including temporary removal of VAT from domestic electricity, protection from Income Tax for people whose only income is the basic or new State Pension, a £2 bus fare cap and a 20% business rates reduction for eligible pubs, clubs and live music venues.

Further consumer measures targeting subscription traps and misleading discounts have also been announced.

Will pensioners pay less tax under Andy Burnham?

The government has said people whose only income is the basic or new State Pension won’t have to pay Income Tax. If you receive income from other pensions, investments, savings or property, your wider tax position can still be different.

Has Andy Burnham increased the Personal Allowance?

No. The Personal Allowance remains £12,570. Burnham has indicated that tax thresholds could be considered at the Autumn Budget, but no wider increase has yet been confirmed.

Is VAT being removed from energy bills?

The government plans to remove the 5% VAT from domestic electricity bills for six months from October 2026. This applies to electricity rather than all household energy costs.

Are taxes going to rise in the Autumn Budget?

We don’t know yet. The government faces tight fiscal constraints while also making new spending and tax commitments. Until the Budget is delivered, potential changes to other taxes should be treated as speculation rather than something to plan around.

When is Andy Burnham’s first Autumn Budget?

The first Autumn Budget under Prime Minister Andy Burnham and Chancellor John Healey is scheduled for 28 October 2026.

Should I change my financial plan because there’s a new Prime Minister?

Usually, a change of government alone isn’t a reason to overhaul a long-term financial plan. It’s more useful to understand whether specific tax or policy changes affect your circumstances and make adjustments where they genuinely improve your position.

Sources and further reading

• GOV.UK — Andy Burnham’s first speech as Prime Minister, 20 July 2026
• House of Commons Library — Economic update: the new Prime Minister, inflation and the cost of living
• GOV.UK — PM starts rollout of ‘everyday fixes’ on the cost of living
• St. James’s Place — A new prime minister and a week of announcements
• St. James’s Place — Burnham’s Britain: economic priorities to consider?
• Reuters — Burnham promises business support amid difficult financial outlook, 12 August 2026
  

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Date written: 11/08/2026