On 26 November, the Chancellor delivered her much-anticipated Autumn Budget. While headlines have focused on the broader economic picture, the real impact lies in the finer details. We examine some of the key measures and what they could mean for you.
Income Tax: stealth rise
As expected, Income Tax rates remain unchanged. However, all income tax band thresholds will be frozen until April 2031. This extended freeze means that as earnings and investment income grow, more individuals will be drawn into higher tax bands – a process known as ‘fiscal drag.’
What to consider: Review your projected income structure for the coming years and explore tax-efficient strategies to mitigate the impact. Potential options
include pension contributions, using spousal allowances, and charitable gifting.
Savings, dividend and rental income: higher taxes ahead
From April 2027, tax on savings income, including bank interest, will rise by 2%, to 22%, 42%, and 47% for basic, higher, and additional rate taxpayers, respectively. Tax on rental income will also increase by the same margin.
Dividend tax rates will rise earlier, from April 2026, by 2%, bringing rates to 10.75% for basic rate taxpayers and 35.75% for higher rate taxpayers. The additional rate will remain at 39.35%.
What to consider: Maximise tax-efficient wrappers: Ensure ISA and pension allowances are fully utilised, as interest and dividends within these remain tax-free. Reassess cash allocation by considering whether excess cash could be better deployed within tax shelters or investments. Portfolio restructuring: review asset distribution between spouses to optimise allowances and minimise exposure to higher rates. Property planning: revisit rental property ownership structures and cash flow to manage the impact of higher tax rates.
Inheritance Tax: continued freeze
The Nil Rate Band (£325,000) and Residence Nil Rate Band (£175,000) remain unchanged, with no new measures announced. This continued freeze means that as property and asset values rise, more estates will fall within the scope of Inheritance Tax. Any unused portion of the new £1 million cap on 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) will be transferable between spouses and civil partners – even if the first death occurs before 6 April 2026, when the cap comes into effect. Relief above £1 million will be available at 50%.
What to consider: Early and proactive estate planning is more important than ever. Review the use of lifetime and regular gifts, ensure you are making full use of available exemptions and reliefs, and consider trust structures for asset protection.
ISAs: new rules
The overall annual ISA allowance remains at £20,000. However, from April 2027, the annual Cash ISA limit will be reduced to £12,000, with the remaining £8,000 allowance available for Stocks and Shares ISAs. Savers aged 65 and over will retain the full £20,000 Cash ISA allowance. Transfers from Stocks & Shares ISAs to Cash ISAs will be restricted from April 2027, preventing savers from moving large sums into Cash ISAs after the cap is introduced. Transfers from Cash ISAs to Stocks & Shares ISAs will still be permitted.
What to consider: continue to maximise your ISA allowance each year. Plan ahead for the rule changes in 2027. Keep an eye on developments regarding the new first-time buyer ISA.
Pensions: Salary Sacrifice and State Pension change
From April 2029, Salary Sacrifice pension contributions above £2,000 per annum will no longer be exempt from National Insurance (NI). Contributions over this limit will attract both employee and employer NI charges. Meanwhile, the State Pension will rise by 4.8% from April 2026 under the triple lock, taking the full entitlement of the new State Pension to £12,547.60 per annum.
What to consider: continue to use Salary Sacrifice while fully exempt, and review pension funding strategies ahead of the 2029 change. Check your State Pension forecast via the Government Gateway: www.gov.uk/check-state-pension.
Council Tax surcharge: ‘Mansion Tax’
From April 2028, a new council tax surcharge, dubbed the ‘Mansion Tax’, will apply only in England in addition to existing council tax. This surcharge will be levied on property owners, not occupiers. A consultation will address complex ownership structures such as trusts and businesses.
It is important to note that many of these proposals will be subject to lengthy consultations before implementation. We recommend seeking advice from a qualified Financial Planner before making adjustments. If you would like to discuss how these changes may affect you, please contact our Wealth Planning team.
This summary reflects our initial interpretation of the Autumn Budget announcements. The measures outlined may be subject to change following consultation and detailed legislation. The information provided in this article is of a general nature and is not a substitute for specific advice with regard to your own circumstances. You are recommended to obtain specific advice from a qualified professional before you take any action or refrain from action.
