Autumn Budget 2025 predictions: what policies are being speculated? 

Labour's second Autumn Budget is scheduled for 26 November, and there’s intense speculation about what policies and changes chancellor Rachel Reeves could announce to fill a £30 billion shortfall in the public finances.  

There is much concern ahead of this Budget, with Unbiased finding that 51% of advice seekers feel more pessimistic, while one in five (21%) decided to seek expert advice due to the speculation.

While Reeves refused to rule out breaking Labour’s manifesto pledges on tax in a pre-Budget speech, these plans were recently dropped.

Before we explore the speculated policies in the Autumn Budget, it’s worth stressing that these are only rumours - and there’s no guarantee these will happen in their suggested form.  

Last year, there was a surge in people making rash, potentially irreversible decisions, such as accessing their tax-free pension lump sums in response to rumoured rule changes that never materialised.  

Whether it relates to investments, pensions, taxes, or estate planning, you should get expert financial advice when making any changes to your finances.  

What is the Autumn Budget?  

The Autumn Budget assesses the state of the economy and announces government spending decisions.  

Following the Spring Statement earlier this year, in which there were no tax increases, the Autumn Budget will be different, with major policies expected to be revealed.  

The Autumn Budget is taking place later than usual this year on 26 November and typically involves questions from the shadow chancellor and MPs. 

Reeves will also address the Office for Budget Responsibility’s (OBR) economic and fiscal outlook, which is released on the same day.  

What are the proposed changes in the Autumn Budget?  

We’ll now explore some of the speculated changes.  

It's worth noting that some of these rumoured policies may be dropped ahead of the Budget.

For example, there was speculation that the 25% pension tax-free lump sum (£268,275) would be capped, but the Treasury recently ruled this out.

If you are concerned about the proposed changes, it’s worth seeking expert advice.  

Pension tax relief 

There has been speculation that pension tax relief, currently 20%, 40%, or 45%, depending on your income, could be cut to 30%.

This would be good news for basic-rate taxpayers earning under £50,270, but bad news for higher earners as they’ll have less tax relief. 

Inheritance tax  

You currently don’t pay inheritance tax (IHT), which is currently a flat 40% rate, on pensions. 

However, Reeves announced in the last Autumn Budget that inherited pensions will be brought into IHT from April 2027. She also announced the introduction of IHT on agricultural holdings from April 2026. 

These are major changes, but they might not be the last for IHT. 

One area being looked at is the IHT gifting rules, whereby the amount of time you need to live for a gift to be IHT-free could potentially increase from seven to 10 years. 

If the person giving the gift dies between three and seven years after making it, taper relief applies, which could be adjusted. No IHT is due if the person making the gift lives for at least seven more years. 

Taper relief is currently: 

• 32% in the three to four years between the gift and death 

• 24% in the four to five years between the gift and death 

• 16% in the five to six years between the gift and death 

• 8% in the six to seven years between the gift and death 

Alternatively, a lifetime cap could be imposed on gifts, as you currently only need to live for seven years after giving a gift to ensure it’s free from IHT. The freeze on the nil-rate band of £325,000 (the threshold at which estates must pay IHT) could be extended beyond 2030.   

ISA allowance 

Earlier this year, the government decided to review individual savings accounts (ISAs). 

Savers can currently pay in up to £20,000 across various ISAs (maximum limits are lower for junior and lifetime ISAs), which allow them to earn interest, income, and capital gains tax-free. 

According to media reports, as the chancellor wants to encourage more people to invest, she is considering reducing the annual allowance to £10,000. 

This would mean that people can save less before they have to pay any tax on their funds.  

Salary sacrifice schemes 

Salary sacrifice schemes could be scaled back, according to media reports.  

With a salary sacrifice scheme, employees give up part of their salary to increase their contributions to their pensions. 

One of the key benefits of this scheme is that both workers and employers pay no income tax or NI on pension contributions, so it’s tax-efficient.  

According to reports, the amount that can be given up via a salary sacrifice scheme may be capped, which could impact higher earners, or the tax exemptions may be removed. 

National insurance on rental income 

Landlords currently pay income tax on rental income, but not national insurance.  

If the government decided that landlords need to pay NI on rental income, it would need to decide whether to implement the same rates paid by employees or the self-employed. 

Employees currently pay NI at 8% when they earn more than £12,570 in a year, and 2% on earnings over £50,270.  

The self-employed pay 6% on income between £12,570 and £50,270 and 2% on income above £50,270.  

Property taxes 

There have been many media reports that the government may reform property taxes. 

This includes replacing council tax with a new property tax based on the current value, or replacing stamp duty with a new levy on the sale of properties worth over £500,000. 

Other proposals include spreading stamp duty payments over several years to boost the housing market, introducing higher council tax bands, and implementing capital gains tax (CGT) when people sell their homes for over a certain amount.  

Wealth tax 

There have been rumours of a wealth tax, although it has not been popular among cabinet ministers, and there has been some dispute over how to implement it. 

A wealth tax is a direct levy on an individual’s total assets, so it looks at accumulated wealth instead of annual income. 

There have been suggestions from Tax Justice UK of a 2% tax on assets worth over £10 million, which would raise £24 billion a year. However, there are concerns that it could impact investment in the UK.  

Capital gains tax (CGT) 

At the last Autumn Budget, the government hiked CGT rates - and could do so again this year. 

Alternatively, they could reduce the annual CGT allowance, although it has already been reduced significantly from £12,300 to £3,000.  

Get expert financial advice 

It can be a stressful time waiting for the Autumn Budget and not knowing what to do amid all the intense speculation. 

However, it’s worth considering what to do beforehand and avoiding any rash and potentially irreversible decisions.  

Whether you’re self-employed, retired, or own your own business, getting expert financial advice can help. 

Unbiased can quickly match you with a qualified financial adviser.