A look at some of the key outlays that are likely to cost you more in 2026, as well as a few things that might actually cost less.
It hasn’t been an easy year for our finances, to say the least.
So what could 2026 have in store for things like Council Tax, energy bills and borrowing costs?
We take a look at what's on the horizon for our battered budgets, starting with the bad news.
Things going up in price
Flights
The amount of tax you have to pay just to fly on a plane is set to rise next year.
It’s the result of a lesser-known Budget announcement made by Rachel Reeves back in her 2024 Budget speech.
From April 2026, Air Passenger Duty for short-haul flights will rise by £2, while long-haul flights will attract up to £14 more tax per ticket.
To put that into context, a family of four planning a holiday to the United States will have to hand over an extra £64 in flight taxes.
Council Tax
Council Tax looks set to jump once again in 2026.
Local authorities have been given the go-ahead by the Government to raise core Council Tax by 3% and the adult social care precept by 2% for 2025 to 2026.
So this means that many households will be looking at an above-inflation hike in bills next year, averaging around £100 more per year for Band D taxpayers.
Under the current cap, local authorities are only allowed to increase bills by up to 5% without getting permission from the Government or holding a local referendum on the issue.
Many local authorities are currently struggling with financial or debt problems and have had to cut back on many essential local services.
What to do about it
The sad truth is that most of us are powerless to prevent the huge annual hikes.
However, some people may be able to reduce theirs, either by claiming the Single Person discount if they live alone or, if data suggests they’re likely to be successful, challenge their current Council Tax banding.
You can learn more in our guide to cutting Council Tax.
Water bills
Millions of households in England and Wales may be unimpressed to see their water bills increase next year, considering the poor performance of many of the water companies in 2025.
Leaky pipes and years of neglect of the infrastructure have led to flooding, polluted rivers and customers being left without safe drinking water in some instances.
Despite all this, Ofwat, the water regulator, had agreed to bills rising by an average of £19 per year between now and 2030.
Remarkably, numerous water companies challenged Ofwat’s decision, saying they wanted to hike bills even further.
Having taken the case to the Competition and Markets Authority, the five water companies – Anglian, Northumbrian, Southern, Wessex and South East – were given permission to hike their bills even further.
The Consumer Council for Water provides this handy breakdown for how much bills are likely to rise over the coming years, based on who your provider is.
Broadband
Millions of households will be facing an annual bill hike of up to £48 on their broadband in 2026.
Numerous providers, including BT, Virgin, TalkTalk, EE and Vodafone, have already informed customers to expect price hikes of up to £4 a month from April.
These regular Springtime hikes might not be anything new, but they are galling.
Especially as it means many households will see their bills rise well in excess of the rate of inflation.
What to do about it
There is no single strategy for everyone here.
If you’re outside of your initial contract, you should be able to switch providers penalty-free (ideally before the hikes kick in).
Some providers, like Sky and Now Broadband, will allow you to leave even if you are mid-contract, provided you do so within 30 days from when they are notified of hikes.
Petrol/diesel?
It’s hard to say what is going to happen to pump prices in 2026.
Some analysts are predicting wholesale oil prices might fall next year, while others are predicting hikes.
So we’ll steer clear of speculating on that front.
However, one thing we definitely do know is that we’ll pay more Fuel Duty from September.
Back in 2022, the Government introduced a 5p cut to this tax in response to sky-high oil prices.
This will be gradually phased out between September 2026 and March 2027.
Once fully reintroduced, this will add roughly £3 to the cost of filling up your tank.
Things that will get cheaper in 2026
We’ll be honest, there weren’t an awful lot of things to choose from for this section.
But we’ll do our best to strike a note of optimism for the year ahead.
Borrowing
One area that seems certain to improve over the course of 2026 is the cost of mortgages and personal loans.
The Base Rate of interest, which currently sits at 4% and has a broad influence on savings and borrowing rates, is expected to fall to 3.75% later this month.
Analysts are also predicting a further two cuts across 2026, taking the rate down to 3.25%.
This would be good news for many mortgage holders.
If you’re on a tracker mortgage, any reductions will be directly passed on to you in the form of cheaper monthly payments.
Similarly, anyone who’s planning to remortgage in the coming months to a fixed-rate mortgage should have access to deals that are at least slightly cheaper than the current offerings.
Energy bills
It looks like energy bills will be cheaper next year compared to 2025.
This is largely thanks to the Government announcing it will scrap some of its green levies, which it estimates will strip £150 off the typical energy bill.
At the time of writing, it looks like these savings will also be passed on to households locked into fixed-rate energy tariffs, meaning no one loses out.
In addition to this good news, many energy suppliers are forecasting a 5% drop in the Energy Price Cap come April, which would wipe around £90 off energy bills, more than offsetting the minor 0.2% (£3) increase coming in January.
There are some caveats to be aware of. For starters, we face some additional charges on our energy bills next year.
Energy analysts at Cornwall Insights have already warned that households face an extra £30 on their bills from April as a result of increasing costs to maintain the electricity transmission network.
What’s more, we just don’t know what will happen to wholesale oil prices in the Summer and beyond.
With those caveats in place, we still look on course for a year of cheaper energy.
Electric and hybrid cars
In what could be described as a silver lining to a cloud, anyone looking to snap up an electric or hybrid vehicle may well get a slightly lower price than in 2025.
In her latest Budget speech, Chancellor Rachel Reeves announced that she would be introducing a 3p-per-mile tax on electric vehicles (EVs) and a 1.5p charge on hybrid vehicles.
While it’s only due to come into effect in 2028, many in the industry believe the announcement has made both types of vehicles less attractive overnight.
They cite case studies from other countries to have introduced similar taxes, where demand for such vehicles fell as a result.
Lower demand will, in turn, mean lower prices for prospective buyers.
Of course, it’s very much a double-edged sword as the vehicles will be more expensive to run from 2028.
However, if you don’t cover much mileage each year and want to switch to an EV or hybrid, this could be good news for you overall.