What the Autumn Budget means for your money

Rachel Reeves’ second Budget as Chancellor began in dramatic style, with the Office for Budget Responsibility accidentally releasing its forecasts half an hour early.

The broad takeaway was that the UK’s tax burden will rise to a record high by 2030. Reeves insists her plans are “fair” and that while everyone is contributing, those contributions are “as low as possible”.

Here’s a breakdown of the key changes and what they might mean for you, whether you’re saving, retired, or running a business.

If you’re saving for the future

ISAs

• The government plans to cut the annual limit for cash ISAs from £20,000 to £12,000 - the remaining £8,000 can be invested in Stocks and Shares ISAs with a focus on UK businesses. However, over 65s will still be able to use the full £20,000 in Cash ISA savings.

Pension contributions via salary sacrifice

• A major change is that from April 2029, salary-sacrifice pension contributions above a £2,000 threshold will no longer be exempt from National Insurance Contributions (NICs). This is a critical shift for those who rely on this route to tuck away larger pension contributions efficiently.

Dividends and income tax freeze

• Dividend tax rates are increasing by 2 percentage points from April 2026, meaning both basic-rate and higher-rate dividend recipients will pay more tax on dividend income.

• Personal income tax thresholds are being frozen until at least 2030/31, which - combined with wage growth - effectively means many people will be dragged into higher tax brackets over time (known as ‘fiscal drag’).
  

• Important for clients in Scotland: the Budget’s income tax threshold freeze applies to UK-wide thresholds, and this may not translate directly to Scottish tax bands (given devolved income tax settings) so Scottish clients should check their personal tax position carefully.

Mansion tax

• There will be a new tax on houses worth more than £2m. Levied annually at £2,500 for properties worth more than £2m and £7,500 for properties worth more than £5m. The ‘Mansion Tax’ will officially be called a ‘high value council tax surcharge’.

If you’re close to retiring (or already drawing on pensions)

Pension lump sums and allowances

• The Budget didn’t make any major changes to basic pension lump-sum allowances or access rules at this stage - so existing pension withdrawal plans remain unaffected.

State pension

• The government reiterated that the ‘triple lock’ on the state pension remains for now - which will matter more for future retirees drawing state benefits. Basic and new state pension payments will rise 4.8% from April, to around £241.30 per week or £12,547.60 annually.

Expat pension contributions

• Expats will no longer be able to pay class two voluntary National Insurance contributions as the government wants to restrict paying state pensions to people living abroad - so clients thinking of moving abroad should consider reviewing their arrangements now.

Inheritance Tax (IHT)

• The government continues its previous plans to freeze the IHT threshold at £325,00, and tax reliefs on business-related assets (e.g. 100% Business Relief / Agricultural Property Relief) remain under scrutiny. Reforms including pensions being part of the estate from 2027 also remain in place. That means now may be a good time to review your estate planning strategies or the structuring of business assets to maintain efficiency when it comes to IHT.

If you run a business

Wage costs and business cashflow

• The government confirmed an increase in the minimum wage / national living wage (the ‘minimum wage’ for low earners) - which may raise wage bills for employers and impact smaller businesses’ cashflow. The minimum wage for 18- to 20-year-olds rises to £10.85 and the living wage going up to £12.71.

Employer pension costs

• Because the NIC-exemption for salary-sacrifice pensions will disappear for amounts above £2,000, employers could face higher National Insurance costs for pension contributions - which may influence how companies structure benefits packages.

Capital Gains

• Previously, shares sold by business owners could have be entitled to 100% Capital Gains Tax (CGT) relief. Reeves said the scheme is “creating a route that gains go completely untaxed when businesses are sold” and has cut the relief to 50%.

Corporation tax rates frozen

• The Chancellor also confirmed that corporate tax rates will continue to be frozen; new businesses have been given a 40% first year allowance, allowing companies to write off a significant portion of their early investments.

What you can do now

Many of the most impactful changes are not immediate, so there’s no need to panic – there’s plenty of time to review and plan. But this might be a good moment to review pension arrangements - especially salary-sacrifice contributions - and consider whether you should top up via different methods before the NIC exemption changes.

For savers relying on cash ISAs it might be a good idea to assess whether continuing with a cash ISA makes sense, or whether a shift to other wrappers (stocks & shares ISA, pension, etc.) is preferable.

For business owners, you might want to review your estate or business-planning strategies now, especially given looming changes to IHT and dividend tax.

If you hold property investments, your tax situation may look very different going forward. Higher taxes and the Renters' Rights Act could significantly reduce net income. For some landlords, selling underperforming properties or restructuring ownership through a company may now be worth considering.

Finally, uncertainty around the housing market has slowed activity in recent months. Confirmation that there will be no changes to stamp duty or an additional sales tax may help unlock buyer and seller confidence. If you’re considering a move, securing the right mortgage early could help you take advantage of renewed market activity.

As ever, if you have any questions about this, or anything else, please get in touch. We’re always happy to chat.