Nine Financial Changes Impacting UK Households This February
UK households face a series of significant financial changes throughout February 2026, with several updates already taking effect. These developments span multiple sectors, from consumer goods to banking services, and could have substantial implications for personal finances.
Alcohol Duty Increases Take Effect
Since February 1st, alcohol duty rates have risen across the United Kingdom. This tax, applied to drinks produced or imported into the country, typically results in higher prices for consumers. The increase follows the Autumn Budget announcement from November 2025, which confirmed alcohol duty would rise in line with the Retail Price Index at 3.66 per cent.
Industry leaders have expressed concern about the impact on hospitality businesses. Allen Simpson, chief executive of UKHospitality, stated that while operators don't pay the duty directly, they face potential price pressures if suppliers pass on the increased costs. Miles Beale of the Wine and Spirit Trade Association added that the complexities of the new system, particularly for wine which is now taxed by strength, create additional administrative burdens for businesses already grappling with multiple cost pressures.
Bank of England Maintains Base Rate
The Bank of England's Monetary Policy Committee held its opening meeting of 2026 on February 5th, deciding to maintain the base rate at 3.75 per cent. This rate influences savings and mortgage products across the financial sector, providing some stability for borrowers while potentially disappointing savers seeking higher returns.
Banking and Financial Service Updates
Several banking changes are affecting consumers this month. Virgin Money increased monthly fees for its Club M packaged accounts from February 1st, marking the first price rise since February 2021. The bank attributes this adjustment to rising costs from third-party insurers providing benefits like travel and gadget insurance.
Meanwhile, self-assessment taxpayers who missed the January 31st deadline face an immediate £100 penalty, with additional daily charges of £10 potentially accumulating after three months, reaching a maximum of £900 for prolonged delays.
Savings Rate Reductions
Nationwide implements interest rate reductions across 37 different savings products from February 10th, affecting regular savings accounts, children's options, limited access products, and instant access accounts. This follows the mutual's confirmation that many customers will see diminished returns on their savings.
Adding to savers' challenges, NS&I reduces interest rates on its Direct Saver and Income Bonds from February 12th. This marks the first rate cut on these accounts since March 2025, following the Bank of England's base rate reduction in December.
Mobile Price Increases
Sky Mobile customers face a £1.50 monthly bill increase from February 14th, equating to £18 annually. The company notes this is their first in-contract price rise in over seven years and remains lower than similar increases announced by other major providers. Sky has committed to keeping social tariff prices frozen and maintaining stable out-of-tariff costs.
Inflation Figures and Smart Meter Compensation
The Office for National Statistics will release January's Consumer Price Index inflation figures on February 18th, providing crucial insight into the UK's economic trajectory.
Finally, from February 23rd, smart meter customers experiencing installation delays or problems may qualify for £40 compensation under new Ofgem rules. Melissa Giordano, Ofgem's deputy director of systems and processes, emphasized that these regulations establish clear expectations for suppliers while protecting consumers when installations don't proceed smoothly.
These nine financial changes collectively represent significant developments affecting household budgets throughout February, highlighting ongoing economic pressures across multiple sectors of the UK economy.
