Government revenue spending for 2026/27 is budgeted at £1.47 billion, representing £18,280 for every person on the Island.
An extra £45m in additional funding will be available to the Department of Health and Social Care to fund improvements in our NHS, including reducing waiting times, embedding early intervention initiatives and improving care for older adults.
Funding to support services for children and young people through the Department of Education, Sport and Culture will rise by £4.4m, with £2m available to maintain and replace building and property.
The Department of Home Affairs has been provided with an extra £5.8m to bolster Island security while additional funding of £2.8m will be available to the Department of Infrastructure for the continued provision of vital services, including off-Island connectivity.
Improving Government performance
Departments will receive below-inflation uplifts for pay and non-pay. This approach aligns with the drive for greater efficiency across the Isle of Man Government and is anticipated to generate savings of around £5.6m.
The Transformation Fund will see a further £2.5m available to departments to implement schemes that are aimed at achieving efficiencies through cost savings and streamlining services.
A further £5m injection into the Digital Projects Fund will continue to provide funding for targeted digital modernisation projects under £500,000 to improve the delivery of public services.
Tax
Personal tax allowance:
- Will increase by £2,250 for individuals and £4,500 for jointly-assessed couples
- Will rise to £17,000 for individuals and £34,000 for jointly-assessed couples
- The changes mean that the higher rate of income tax — frozen at 21% — will become payable on income over £23,500 and will lift around 3,600 taxpayers out of the tax net. A worker covering up to 35 hours a week on the new minimum wage rate — recently agreed by Tynwald and coming into effect in April — would earn a maximum of £23,400 over a year
The permitted maximum tax deduction for nursing expenses will increase from £12,500 to £15,000.
There’ll be more help for people who provide TT Homestay this year as the tax allowance will rise from £2,350 to £2,500.
National insurance
Increasing National Insurance Class 1 Primary and Secondary Thresholds and Class 4 Lower Profits Limit by 4.8% will mean workers keep more money through starting to pay NI on earnings of £176 a week rather than £168. Class 2 and 3 thresholds will also increase by 4.8%.
There will be no change to employers’ National Insurance contributions for the new financial year, enabling businesses to plan with confidence and support their employees.
The National Insurance Holiday Scheme will continue for returning Manx students.
Benefits and pensions
Supporting our community through increases to benefits and pensions will cost £13.8m.
Most benefits will increase in line with inflation at September 2025 – reciprocal benefits with the UK by 3.8% (UK CPI) and all others by 2.9% (Isle of Man CPI).
Pensioners will continue to benefit from the Triple Lock commitment and will see an increase of 4.8% in their pensions. The Basic State Pension will increase to £184.90 a week and the Manx State Pension to £263.55 a week.
Community investment
The Housing Deficiency Fund will receive £8.5m each year for the next five years to support local authority housing schemes, while the Housing and Communities Fund will receive an additional £1m to support the work of the Housing and Communities Board.
The Project Development Fund will receive a further £2m to enable Departments to complete full design and feasibility activities to more accurately scope and cost capital projects.
Existing funds focussing on transforming the health service and supporting our agriculture industry will both increase by £5m.
Capital projects
A capital programme of £90.2m in 2026-27 will support the local construction sector and provide much needed improvements to critical national infrastructure.
More than £2.6m will be spent over three years upgrading and modernising facilities at the National Sports Centre. The running track (£900k), all-weather pitch at the Bowl (£850k) and mechanical and electrical systems in the main building (£880k) will all see investment for use by our community year-round and in preparation for hosting the 2029 Island Games.
Maintaining community safety is a key priority of this administration and is supported by a £4.1m investment over the next two years in vehicles for our Police and Fire and Rescue Service, plus £1.9m in our Ambulance fleet. A further £2.5m funding is being committed over five years to replace equipment essential to the safe and modern delivery of services provided by Police, Fire and Rescue, and Civil Defence.
Isle of Man Airport will see investment aimed at improving comfort for passengers and protecting the resilience of facilities. This will include £660k towards the modernisation and refurbishment of the main terminal building, £335k for maintenance and improvements in the tower, plus £200k to address airfield drainage. A further £200k is available in development funding to progress plans to extend the passenger holding area.
Investment in modern digital systems will improve public services and support the wider Government efficiencies programme.
Five-year plan
The Isle of Man Government will continue to reduce its reliance on reserves over the next five years.
The medium-term financial plan allows the use of £126m to balance the budget in 2026-27, gradually reducing to £35.8m in 2030-31. The actual impact on reserve levels will be lower once income from reserve interest is taken into account.
The Island’s reserves are forecast to grow from £1.95 billion in the coming financial year to £2.22 billion in 2030-31.
