What does the Autumn Budget 2026 mean for family law?

In the Autumn Budget, a number of measures were announced which could have an impact on pensions, child and spousal maintenance and financial settlements.

Here, our director, Henry Venables, explains the upcoming changes detailed in the Budget and what it could mean for our family law clients.

Pensions 

Changes to pensions are most likely to have a family law impact when it comes to pension sharing on divorce, valuing pension assets and what happens to pension benefits when a spouse dies.

Prior to the Budget announcement, it had already been confirmed that from April 2027, most unused pension funds and death benefits will form part of the estate for Inheritance Tax purposes. This is an important consideration for ongoing financial settlements where pension offsetting is proposed, as it could require a reassessment of whether an asset split remains fair if the pension's long-term value changes. As such, retirement income, tax and access to capital will also need to be factored in to ensure a fair outcome.

The Chancellor also announced that the State Pension will increase by 3.9% from April 2027 and that those dependent solely on the State Pension should not pay income tax just because their income exceeds the personal allowance. From 2030, the Triple Lock is also set to be adjusted, meaning that State Pension increases will be based on the higher of inflation or 2.5%.

Given the rise of ‘grey divorce’, whereby more people are choosing a fresh start later in life, these changes could become relevant for long-term needs calculations involving spouses approaching retirement.

Spousal maintenance

Changes impacting tax, wages and other household costs could affect both those paying spousal maintenance and those receiving it. Income may change if one spouse benefits from the 3.9% increase to the National Minimum Wage and the announced energy support for households may reduce living costs; however, the impact of this is likely to be minimal.

In certain circumstances where one spouse has significant caring responsibilities, updates to the Carer’s Allowance could influence net income. Additionally, if one spouse receives rental income, this could reduce as a result of the announced increase to the income tax surcharge on property income.

Overall, whether there is a need to vary a maintenance order will depend on each individual case and whether there is genuine change in financial circumstances for either party. In cases where maintenance has not yet been agreed, the changes should be taken into consideration when assessing each person’s income, needs and resources.

Child maintenance 

As with spousal maintenance, changes to household costs and the National Minimum Wage could have an impact in children cases. Lower-earners could see an increase in income from the 3.9% minimum wage increase and may benefit from lower bills as a result of the abolition of the gas standing charge and the £100 payment for households in Council Tax Bands A-D. Where child maintenance is dealt with through the CMS, the statutory calculation remains the starting point rather than simply applying any wage changes directly to an existing payment.

The extension of parental pay to more than 150,000 additional parents is also being implemented alongside measures announced in the Budget. This includes self-employed fathers, who were previously excluded and provides support of up to £194 per week for two weeks. In cases involving very young children and parental leave, this could be relevant.

When it comes to child maintenance, the most important exercise will still be establishing the paying parent’s post-tax income, particularly when this comes through a company, investments or other sources outside of employment.

Financial settlements

In ongoing cases where a financial settlement is yet to be decided, energy measures and changes to business taxation should be factored into assessments. Green levies are being shifted from bills to general taxation, VAT on electricity remains at zero until July 2027 and the gas standing charge is being abolished, which are all likely to reduce household costs.

For business owners, the Chancellor announced that the threshold at which retail, hospitality and leisure businesses pay business rates will increase from £12,000 to £18,000. Where either party owns a business, the changes should be taken into account before finalising valuation, maintainable income and liquidity evidence.

Summary 

In summary, the implications of the Budget will depend on each person’s individual situation. Whilst the majority of the measures announced are unlikely to have a hugely significant impact, they do need to be factored in when calculating child and spousal maintenance and ensuring a fair and accurate settlement in divorce that provides financial security for the future.

If you’re thinking about a divorce or going through the process and would like to understand more about what the Budget means for you, get in touch with our team of expert family solicitors to find out how we can help.

Article by Henry Venables, director, Maguire Family Law.