The UK has a new Prime Minister: Andy Burnham — what it means for your money

Published 21 July 2026 · 5 min read

Britain has a new Prime Minister. Sir Keir Starmer resigned on 20 July 2026, and Andy Burnham — the former Greater Manchester mayor, who returned to Parliament as MP for Makerfield in June — has taken over after winning the backing of 379 of Labour's 403 MPs. This is a change of leader within the governing Labour Party, not a general election, so there is no change to who is in power overall — but a new Prime Minister means a new Cabinet and, potentially, new priorities for your household finances.

Here's a plain-English look at what has actually been announced so far, and what to watch next.

The headline money pledges

In setting out his early priorities, Burnham has focused heavily on the cost of living. The commitments most relevant to your money are:

VAT scrapped on electricity bills His first major announcement removes VAT from domestic electricity bills from 1 October 2026, expected to take around £45 a year off a typical household's Ofgem price-capped bill. We cover this in detail in our VAT electricity cut explainer.

No rise in the main rates of Income Tax or National Insurance Burnham has said he will keep Labour's election pledge not to raise the main rates of Income Tax or National Insurance. This covers the headline Income Tax rates — 20%, 40% and 45% — and the National Insurance rates. It does not, by itself, change the frozen thresholds that quietly raise many people's tax bills over time.

He has also signalled broader ambitions — greater public control of the water and energy sectors and building more council houses — though these are longer-term aims rather than immediate changes to your finances.

What hasn't changed (yet)

For now, the tax rates and thresholds for the 2026/27 tax year are unchanged. The personal allowance is still £12,570, the higher-rate threshold £50,270, and those thresholds remain frozen — so the "fiscal drag" effect we explain in our 2026/27 tax thresholds guide still applies. If you want to see your own position under the current rules, our calculators use the live 2026/27 figures.

What to watch next: the Budget

The government has been clear that the electricity VAT cut is funded only for the current financial year, and that any longer-term tax and spending decisions will be set out at the Budget, alongside an independent OBR forecast and within the government's fiscal rules. The Budget is therefore the moment to watch for anything that could change your take-home pay, pension or savings — from threshold decisions to duties and allowances.

As with any change of government, plans can shift quickly. We'll update our calculators as and when official rates change, and always show figures sourced from GOV.UK.

See where you stand under today's rules: Take-Home Pay Calculator and Income Tax Calculator.

Sources
GOV.UK — Ministerial Appointments: July 2026
UK Parliament — His Majesty's Government: The Cabinet
The Labour Party — The Cabinet
BBC News — Who's in Andy Burnham's cabinet?

This article is general information, not financial or political advice, and Tallyfigures is not affiliated with any political party or government body. It reports publicly announced information as at 21 July 2026; government roles and policies can change quickly — always check GOV.UK for the latest. Where we mention tax figures, they are based on 2026/27 rates published by GOV.UK.