Natalie Kempster is Chief Client Director at Purposeful Group (formerly Finitor Wealth) our parent company. She has a wealth of experience in Financial Planning and is herself a Fellow of the Personal Finance Society. Here are her thoughts about the upcoming budget.
As the Autumn Budget approaches, speculation is everywhere: Will the Chancellor cut higher-rate pension tax relief? Will Capital Gains Tax be aligned with income tax? Could ISA allowances be reduced? These headlines can feel unsettling, but history shows that most predictions never materialise. Acting on rumours can lead to costly mistakes and unnecessary stress.
Instead of reacting to speculation, focus on what you can control today: maximise current allowances, plan strategically, and keep your long-term goals in sight. Here are five smart steps to prepare for the Autumn Budget, without making hasty decisions.
1. Avoid Knee-Jerk Reactions
It’s tempting to act on rumours, but history proves this is risky. In 2024, speculation ran wild that the government would cut the 25% tax-free pension lump sum. Many people rushed to withdraw funds early, only to find the rule remained unchanged. Those withdrawals triggered unnecessary tax bills and disrupted retirement plans.
2. Maximise Current Opportunities
Use the allowances and reliefs available now. Waiting for certainty can mean missing out.
- Capital Gains Tax (CGT): The annual exemption has already fallen from £12,300 to £3,000 in recent years. Further cuts are possible, so consider realising gains within the current allowance.
- ISAs: The £20,000 annual limit remains generous—make sure you use it.
3. Bed and ISA
This strategy, selling investments and repurchasing them inside an ISA, helps you:
- Lock in gains within your CGT allowance
- Shelter future growth from tax
With speculation about ISA reforms, now is the time to make full use of the current rules.
4. Pension Contributions
If you have surplus funds, consider topping up your pension, especially if you’re a higher-rate taxpayer.
Why now? For years, headlines have predicted the abolition or severe reduction of higher-rate tax relief on pension contributions. For example, in the run-up to the 2020 and 2021 Budgets, there was widespread talk of moving to a flat rate of 20–25%.
In reality, no such change occurred. In fact, the government increased the Annual Allowance in 2023 from £40,000 to £60,000 and scrapped the Lifetime Allowance (LTA) in 2024, moves that were the opposite of the predicted tightening. Still, it makes sense to use what is available now if you can.
5. Focus on Long-Term Planning
Your financial plan should outlast any single Budget. Avoid short-term panic moves and instead:
- Review your goals annually
- Stress-test your plan for tax changes
- Speak to your financial adviser for tailored advice
Final Thought
The Autumn Budget may bring surprises, but the fundamentals of good planning never change; use your allowances, diversify, and keep your eyes on the long term.
If you have any concerns or want to review your financial plan ahead of the Budget, contact us today.
The above article is intended for information purposes only and should not be taken as advice.
The value of investment units can fall as well as rise, and you may not get back all of your original investment.
The tax treatment is dependent on individual circumstances and may be subject to change in future.
A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Advice on Inheritance Tax and Tax Planning are not regulated by the Financial Conduct Authority.
The content of this article was accurate at the time of writing. While information is considered to be true and correct at the date of publication, changes in circumstances, regulation, and legislation after the time of publication may affect the accuracy of the content.