Autumn Budget 2025: What does it mean for my money?

When our team sat down on 26th November to watch Rachel Reeves deliver her Autumn Budget, to be quite honest, we all ended the afternoon a little deflated. All the pre-Budget media speculation turned out to be unfounded. The rumoured changes to pensions and income tax were nowhere to be seen. Anyone who panic-amended their arrangements in anticipation of what was coming may have felt, well, a little aggrieved.

These events underline the importance of never acting on rumour and speculation. The best course of action to keep your future financial health secure is to ignore the scaremongers and rely on the trusted guidance of your Independent Financial Adviser. Sometimes making snap decisions can cause more damage than good.

At HWIFM, we are always by your side. We have analysed the detail of the Chancellor’s announcement, so you don’t have to. This post outlines the main changes that may affect our clients and what they could mean for your money.

The good news…

First and foremost, there was some good news around pensions. After much speculation there will be no changes to the 25% tax-free lump sum you can take from your pensions. The amount you can pay into your pension has also stayed the same.

Venture Capital Trusts (VCTs)

From April 2026, tax relief on VCTs will reduce from 30% to 20%. This is a significant change as VCTs are higher risk investments. The tax relief gave a good incentive for individuals to make investments that ultimately benefit UK businesses. The size of businesses that VCTs can invest in was increased, so it remains to be seen how this might impact VCTs going forward and if it will reduce their volatility.

What this means:

• After April 2026, you will receive less tax back from your VCT investment, e.g. for every £10,000 invested, you will receive £2,000 in tax relief instead of £3,000.
• VCTs are still a good investment choice, especially for individuals with high incomes that have their pension allowances restricted.

Business Property Relief and Agricultural Property Relief

In the 2024 Autumn Budget statement the government announced it would restrict the inheritance tax relief available for agricultural and business property. The changes will come into effect, as planned, on 6^th April 2026.

In an update to this, in her November 2025 statement the Chancellor confirmed the £1m allowance per person will now automatically be shared between spouses.

What this means:  

• Couples don’t need to change their Wills to ensure their £1m allowance passes to their spouse following their death. If the deceased hasn’t already used their allowance, it will transfer automatically.

Cash ISAs

The Chancellor announced changes to ISA rules effective from April 2027. The amount that under-65s can put into a Cash ISA will be capped at £12,000 a year. The remainder of the £20,000 annual allowance will be reserved for investments.

What this means:

• The current ISA allowance of £20,000 per person per tax year will not change, but the type of ISA investment will. A combination of cash and stocks and shares ISAs will be required for under-65s to fully utilise the £20,000 allowance.
• If you are under 65 and want to invest in cash,you should take advantage of your full Cash ISA allowance for the current 2025/26 and 2026/27 tax years, if you are able.

Pensions

The salary sacrifice tax break on workplace pensions will be restricted. From 2029, contributions exempt from employer and employee National Insurance will be capped at £2,000 per year. Contributions over and above this new limit will count towards your normal taxable earnings.

What this means…

• People will start paying National Insurance on salary sacrifice contributions over £2,000 per year from 2029.
• Increases in National Insurance paid by both employers and employees.

Increased protection for your savings

It’s not technically part of the Autumn Budget statement, but we wanted to finish with more positive news. On 1^st December the Financial Services Compensation Scheme (FSCS) protection limit for eligible deposits increased from £85,000 to £120,000.

This means that, should your bank or building society get into difficulty and be unable to give you access to your money, savings of up to £120,000 per person per institution are now protected by the scheme. This is reassuring news for savers.

Always by your side

Our team of Independent Financial Advisers is here to help. If you have any questions on the highlighted changes and what they could mean for your future finances, please get in touch and start the conversation.