Here’s what the Autumn Budget will mean for your wealth plans

Rachel Reeves’ second budget as Chancellor provided something many have been craving: clarity. And despite the gloomy headlines, there’s much to celebrate about what didn’t change – from a financial planning perspective that is.

There were no changes to tax-free cash from pensions, no changes to annual allowance or tax relief on personal contributions, and no further changes to the reforms announced in last year’s budget to include pensions as part of an estate from 2027 for inheritance tax purposes. Capital gains tax also remained unchanged. And crucially, there’s no restriction on gifting if you’re looking at inheritance tax planning – you can still gift to any level.

For anyone who’s been holding off on making decisions while waiting for more clarity, that wait is over. The lack of dramatic changes gives you peace of mind to plan for the future with confidence.

What this means if you’re nearing retirement

If retirement is on the horizon, now is the time to think about diversification – not just in your underlying investments, but in your tax wrappers too.

With no changes to the annual contribution limit to stocks & shares ISA rules, and continued significant tax relief on pension contributions (which often surprises people with just how generous it can be), you have powerful tools at your disposal. And with taxes likely to increase in general over the coming years, making full use of these pension and ISA tax breaks becomes even more important.

The key questions to answer when it comes to retirement planning are twofold. Firstly: do you have enough to retire comfortably and maintain the lifestyle you want? But equally important is the second question: do you have your wealth in the most tax efficient places? For example, perhaps you were planning to pass your pension onto your loved ones on your death – the reforms announced in last year’s budget mean that from April 2027, pensions will now form part of your estate, which means it might be worth reviewing this if you want to mitigate inheritance tax. For example, there are gifting strategies to consider that could reduce your eventual IHT – as mentioned, the gifting rules weren’t affected by the Budget.

Let’s take a look at some of the changes that were introduced:

Crackdown on salary sacrifice

One of the most significant announcements on pensions was capping salary-sacrifice contributions. From 2029, the maximum you can pay into a pension without paying National Insurance is £2,000. The Chancellor said what was ‘a small part’ of the pensions system was set to treble in costs.

Higher taxes

Freezing income tax thresholds until 2031 means many more will be pushed up into the next income tax band. By 2030/31, according to the Office for Budget Responsibility, the UK’s tax-take will be at an all-time high, at 38% of national income.

Cuts to cash ISAs

The UK has some of the lowest levels of retail investment in the G7, says Reeves, and she wants to fix it. From April 2027, the annual cash ISA limit will be cut from £20,000 to £12,000 for anyone under 65. The remaining £8,000 of the ISA allowance will be ‘exclusively for investing’.

And a premature end for the Lifetime ISA

The Lifetime ISA, which was only introduced in 2017 and had a limit of £4,000 for home purchases and long-term savings, is also going to be replaced. The government will consult in 2026 on replacing it with a simpler ISA, focused solely on helping first-time buyers.

The ‘Mansion Tax’ is confirmed

The Chancellor confirmed the introduction of the high-value council tax surcharge for homes that are worth more than £2 million. Split into four price bands, the charge, dubbed a ‘mansion tax’, will start at £2,500 and rise to £7,500 for properties valued at £5 million or more. The charges will go up each year in line with the consumer price index and, unlike standard council tax, the revenue will go directly to the central government. This move only applies to England and Wales (in Scotland, a mansion tax was proposed by Scottish Green politicians earlier in 2025).

Minimum wage

Wage bills for some businesses could increase as the minimum wage for 18- to 20-year-olds rises to £10.85 and the living wage goes up to £12.71.

Support for entrepreneurs

The budget included policies such as expanding entrepreneurial investment schemes and relief for UK stock market listings, with a three-year exemption from stamp duty. New businesses have a 40% allowance on corporation tax in their first year, allowing them to write off some of their early investments.

Meanwhile, corporation tax stays at 25%. The budget also includes reforms to venture capital schemes, increasing the amount of capital Venture Capital Trusts (VCT), Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) firms can receive. However, income tax relief on investments into VCTs is also cut from 30% to 20%.

The power of holistic financial planning

Regardless of these changes, there are opportunities if you know where to look. For example, with more people potentially facing exposure to IHT, one interesting approach is combining life insurance written in trust with other strategies – on death, this creates liquidity that can be paid tax-free to cover IHT costs.

This is where financial planning comes into its own – it’s about looking at everything holistically and piecing together a solution that makes your money work as hard as possible for you. It’s about taking stock of what you have, understanding your lifestyle needs and goals, and then making sure you maximise your use of pensions, ISAs and other tax wrappers to make your capital last longer.

Time for action

Many of the policies announced won’t come into effect for one or two years. But even though they’re not all happening at once, now is the time to start looking at your financial planning arrangements to make sure you’re prepared for any changes.

The quicker you start thinking about this, the more options you’ll have. And if you’re not sure where to begin, that’s where we can help. It’s important to note that all comments made in the budget are subject to consultation.

For more detailed information on all the Budget announcements, please see our Autumn Budget guide. Or get in touch with our experts who can show you the next steps for your specific circumstances.