UK Autumn Budget 2025: what speculated changes should financial advisers be aware of? 

When is the Autumn Budget 2025? 

The Autumn Budget 2025 will take place on Wednesday 26 November.  

As always, it will kick off around 12.30pm, immediately following Prime Minister’s Questions (PMQs) in the House of Commons. 

This marks one of the latest Autumn Budgets in recent years, with it traditionally taking place in late October or early November.  

During her Budget speech, chancellor Rachel Reeves will deliver the government’s plans for taxation, public spending, and the economy, alongside the publication of an economic and fiscal forecast from the Office for Budget Responsibility (OBR).   

What are the speculated changes in the Autumn Budget 2025? 

Speculation is rife on what the Autumn Budget may include, with Reeves putting the country on notice that tax rises are coming.  

Here’s a breakdown of the key areas expected to see changes:  

Income tax 

Labour’s election manifesto promised not to raise income tax, national insurance (NI), or VAT. Speculation that this promise will not be kept has been dispelled, with the Financial Times stating that the plans have been dropped.

Another speculated decision is the extended freezing of income tax thresholds. 

The current income tax freeze is due to be lifted in 2028.  

However, by extending the freeze on the tax threshold beyond 2028, more earners would move into higher tax brackets. 

This would be a stealth tax, meaning more people would pay tax, as their wages would likely rise, but the tax threshold would not.  

Pensions  

Rumours about a lower cap on the 25% tax-free lump sum withdrawals from a pension resurfaced this year, after they didn’t come to fruition in 2024.  

The current cap is £268,275.  

However, according to The Telegraph, officials confirmed that Reeves will leave the 25% tax-free pension lump sum withdrawal limit in place 

Salary sacrifice is also in the spotlight this Budget.  

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.  

For advisers, it’s essential to be vigilant against any kind of activity from your clients that could have lasting consequences. It’s important to calm their nerves around Budget speculation so they don’t make rash decisions.  

ISAs 

In the Spring Statement, the government announced it would review individual savings accounts (ISAs).  

This has led to widespread speculation about changes to ISAs, which could start to be implemented in the upcoming Autumn Budget.  

One of the major speculated changes is a reduction to the annual allowance adults can save into cash ISAs. Currently, a maximum of £20,000 per year can be saved into tax-efficient ISAs, including the stocks and shares ISA, cash ISA, or a mix.  

According to media reports, as the chancellor wants to encourage more people to invest, she is considering reducing the annual allowance to £12,000, slightly higher than the £10,000 limit previously speculated. 

Inheritance tax  

Inheritance tax (IHT) has already undergone huge changes, with inherited pensions being brought into IHT from April 2027 and IHT on agricultural holdings from April 2026.  

However, more change may be afoot, specifically around gifting.  

Currently, gifts made more than seven years before death are fully exempt. Those made between three and seven years are subject to taper relief, with the rate decreasing from 32% to 8% the closer you get to the seven-year mark:  

• 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  

Changes being speculated include revising these rates or introducing a lifetime cap on how much can be given away IHT-free.  

The freeze on the nil-rate band of £325,000 (the threshold at which estates must pay IHT) could also be extended beyond 2030.  

Capital gains tax 

Last year, the capital gains tax (CGT) rates increased from 10% and 20% to 18% and 24%, respectively.  

Changes could happen again this year, with reports suggesting the chancellor could raise rates again or further reduce the annual CGT allowance, which currently stands at £3,000.  

Property tax 

Property tax is another area that could be set for change.  

One proposal reported is the replacement of stamp duty and council tax with a levy on homes with a value above a certain threshold. 

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

How to prepare for the Autumn Budget 2025 

Financial advisers can take several proactive steps to prepare for the Autumn Budget: 

• Stay informed: Review updates from reliable financial news sources and the government regularly. Understanding the implications of proposed changes will equip you to provide the best advice to your clients. 

• Evaluate client portfolios: Begin reviewing client investments and financial strategies in light of potential changes. Consider how adjustments in tax regulations may impact their financial positions and plans. 

• Communicate with clients: Talk to your clients about potential changes in tax laws. Ensure they understand the implications and prepare them for any necessary adjustments to their financial strategies. 

• Update financial plans: Based on the announcements in the Autumn Budget, be ready to update financial plans accordingly. This may include revising tax strategies, investment approaches, and estate plans. 

Want to work with Unbiased?  

With the Autumn Budget 2025 approaching rapidly, advisers must stay informed about potential changes.  

According to research of over 100 advisers on the Unbiased platform, this is already the case, with 93% of advisers feeling prepared to advise their clients on potential changes.   

When asked which speculated policies they believe will most likely affect their clients, ‘tax-free pension withdrawals and tax relief’ topped the list, with 24% of advisers listing it as a concern.   

Advisers can help clients navigate the shifting financial landscape smoothly by keeping them informed, reviewing their portfolios, and adjusting strategies as needed.  

Staying proactive now will ensure clients are ready for whatever updates the chancellor announces. 

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