UK Autumn Budget 2024: how the financial advisory industry is reacting 

Last week, Labour’s first Budget in 14 years introduced several significant changes to fill the £22 billion financial ‘black hole.’  

As the dust begins to settle, consumers and businesses alike are taking stock of what chancellor Rachel Reeve’s Budget means for them.  

We have gathered insights from a number of expert financial advisers nationwide to provide a sense of how the financial advisory industry is reacting.  

Here are some of the reactions and insights from your colleagues to some of the changes introduced: 

Pensions and inheritance tax 

During the Budget, chancellor Rachel Reeves announced that from April 2027, inherited pensions will be brought under inheritance tax (IHT).  

This change is one that the majority of advisers got in touch about, with many believing the proposed changes will fundamentally change the way people save for retirement.  

Many advisers emphasised the need for more integrated and sophisticated planning to navigate the new rules. 

David Swaby of Continuum (Financial Services) LLP stated the changes will make a significant difference to past advice provided to clients and bring more people into the IHT realm. 

“I've made a caveat for years with clients on the long-term viability of pensions forming part of someone's estate for IHT which is now due to come in April 2027 […] As such, this will make pension, investments and inheritance tax planning much more of an important area to work on vs the current situation and will bring far more people into the realm of inheritance tax going forward.” 

Nick Moules of Wren Sterling agrees, stating that “some announcements have created financial planning challenges and opportunities for our clients.”  

While he states these can be worked through, he doesn’t shy away from the complexities they create. 

“As ever, with pensions and IHT, the devil is in the detail and these changes add another layer of complexity to an already difficult area to navigate. Often, decisions in this area of financial planning cannot be reversed, so the value of working with an independent financial adviser is arguably even higher now.” 

As referenced by Moules, another key theme advisers are seeing in the complexity of the new rules is the underscoring of the importance of professional financial advice to navigate the changes effectively. 

Both Irina Mart of Arcus Wealth and Alistair Cunningham of Wingate Financial Planning further highlight how even more important professional financial advice will become.  

“It’s disappointing that the government has yet to take action to ensure individuals receive financial advice when accessing their defined contribution pensions. Without this support, more retirees may find themselves lacking sufficient funds for a comfortable retirement.  

“Such a measure would not only help to safeguard people’s long-term financial wellbeing but also reduce the number of individuals falling prey to pension scams, offering an extra layer of protection for their hard-earned savings,” Mart said.  

Cunningham agreed, stating his team would be addressing his concerns on the change to the consultation before it closes.  

“Clients with significant pension savings will need to consider how this impacts beneficiaries and may benefit from reassessing their plans accordingly. 

“Notably, there are several clear issues with the implementation of these rules, and we will be providing a detailed response to the consultation paper ahead of its closure in January 2025 to address these concerns,” he said.  

Stamp duty 

Stamp duty land tax (SDLT) for second homes, buy-to-let residential properties, and companies purchasing residential properties rises from 3% to 5%.   

This has proved an unpopular change.  

James Carter of Independent James Ltd stated the changes have left several of his clients with “some serious thinking to do in the last few days.” 

“Some are renegotiating, and others have chosen to absorb the additional 2% (5% in total).  

“Where they are going to sell their existing residence in due course, it is more a question of cashflow. However, for some landlords that were perhaps reconsidering their strategies, this may be the final nail in the coffin. 

“In London and the South East in particular, purchasing costs may now take several years to recoup, so it really is a long-term investment,” he expanded.  

Oliver Reece of Bright Future Mortgage Advisors also disagrees with the increase, calling it “undeniably unfair.”  

He goes on to state that the move has created “significant distress among buyers who were in the midst of transactions. This sudden change has disrupted countless property chains, causing unforeseen financial strain and delaying completions.” 

Doug Miller of Lansdown Financial Services also commented on the first-time buyer stamp duty exemption, which was not extended in the chancellor's Budget. This means from April 2025, the 0% stamp duty threshold will back down to £300,000 from £425,000.  

He said:  

“Many people have also not realised the impact of the stamp duty changes in April next year, especially for first-time buyers. 

“A first-time buyer purchasing a property for £400,000 before 1 April would pay no stamp duty; however, beyond this date, they would pay £5,000 in SDLT. Someone moving home and buying for £400,000 would see their stamp duty costs rise by £2,500 as well.      

“With property prices already rising again, according to Rightmove's latest report in October, first-time buyers wishing to purchase their first property are in a more difficult position than ever.” 

Capital gains tax 

Capital gains tax (CGT) for basic-rate taxpayers rises from 10% to 18% and from 20% to 24% for higher-rate taxpayers. This came into effect on 30 October 2024.   

Speaking about the increase, Rohan Badenhorst of Financial Executives Group emphasised the importance of providing clients with proper planning and guidance. 

“Although the widely speculated CGT rates increase did materialise in the Autumn Budget, the increased rates were not as severe as had been expected.       

“There is a considerable amount of detail to consider in the announcement, and each CGT case will rest on its own merits in providing proper planning and CGT computation guidance to clients,” he stated.  

National insurance 

In her Budget, Reeves announced a number of changes to how employers pay national insurance (NI). 

Firstly, it was announced that the employer NI rate will rise from 13.8% to 15% from April 2025, with the threshold when employers start paying NI will be lowered from £9,100 to £5,000. This means employers will be paying NI on a larger portion of their employee's salary. 

To somewhat soften the blow, Reeves also announced the employment allowance will double from £5,000 to £10,500, and the £100,000 employer NICs liability threshold will be removed.  

Speaking about these changes, Leon Stevens of Blue Tick Tax Advisers & Accountants said: 

“The combined effect of these changes is expected to be significant. 

“For instance, an employer with an employee earning £20,000 annually will see their NICs bill increase by £746 (nearly 50%) in the 2025-26 tax year. However, the expanded employment allowance may help offset some of these costs for smaller firms.  

“While the increased employment allowance offers some relief, small business owners should start planning now for these impending changes. 

“It's advisable to review staffing structures, pricing strategies, and overall business models to adapt to the new NIC landscape coming in April 2025.” 

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