Autumn Budget 2025: What does it herald?

Autumn Budget 2025: What does it herald?  

In the world of wealth management, the day of the Budget is always a key date in the financial calendar. The much-anticipated proposals, delivered by Chancellor Rachel Reeves on Wednesday 26th November, outlined a range of changes that will affect UK citizens this year and beyond. 

To learn more about the potential implications, David provides his insight into this year’s Autumn Budget below:   

“The Chancellor opened her speech to the House of Commons on Wednesday by chastising the OBR for the accidental early release of its forecasts, calling it “disappointing” and a “serious error”. 

“The body’s forecast for UK economic growth in 2026 has been slashed to 1.4% from the 1.9% expected in March. However, growth this year is estimated at 1.5%, up from 1% previously estimated, thanks to a stronger than expected start of the year.” 

The impact on income tax and wealth planning  

David shares his thoughts on how these measures may affect clients, particularly in relation to income tax: 

“The majority of the new taxes are not likely to impact clients’ affairs. Much of this damage was done in the Budget last year, specifically around private pensions being brought within inheritance tax valuation from April 2027. 

“It is important that clients with large private pension funds seek advice on  the options they have to mitigate their pension scheme values. The freeze on income tax allowances will result in more people being pulled into higher rate tax as their salaries increase with inflation.  

“More income tax will also be paid by the vast majority of people on basic rate taxes, as they obtain increases in pay only to see more of the increase not passed on due to income tax.” 

Reflections on Inheritance Tax (IHT) 

David also reflects on the potential changes to IHT: 

“It was a relief not to see any changes to IHT limits or rates. However, there were again amendments to entrepreneurs’ relief tax rates and agricultural property relief in the last Budget, hence why we saw tractors on Westminster the day of the Budget.” 

The road ahead for the UK economy 

David shares what he believes today’s measures mean for the broader UK economy:  

“Overall, I see a difficult environment for equity returns for UK-based funds, particularly due to the frozen tax allowances and capture of more of the middle-class wages in income tax. This will further hamper the UK environment for growth versus alternatives in other geographical locations such as the USA, where taxes are significantly lower by comparison.  

“I also anticipate further increases in UK unemployment, as higher taxes act as a drag on UK economic performance.” 

Significant changes are always unveiled on the day of the Budget and understanding their impact is essential. If you have any concerns or would like tailored wealth management guidance, book a discovery meeting with David here.