Why it’s important to stay calm ahead of Budget uncertainty

On 26 November, chancellor Rachel Reeves will present this Labour government’s second Autumn Budget since coming into power in 2024.

We might be more than a month away from the announcement itself, but the rumour mill has been hard at work since official confirmation of the Budget date in September.

Since then, commentators have opined at length as to what taxes, allowances, and reliefs they think might be in Reeves’ sights when she steps up to the despatch box in November. So far, some of the fiscal elements reportedly in line for change include:

• The 25% pension tax-free lump sum
• Gifting rules for Inheritance Tax (IHT) purposes
• Property taxes, including Stamp Duty and Council Tax
• Income Tax, extending the freeze currently in place until 2028 on the Personal Allowance and tax bands.

This may all sound rather worrying, and could lead you to think that you need to act quickly to protect your wealth from potential tax increases.

However, history tells us that this may not actually be a sensible course of action. Instead, staying calm and waiting until we know exactly what Reeves has planned is likely to be the most effective path forward.

Find out why, as well as how we’ll help you stay up to date with any changes announced on the day.

This is not the first time that Budget speculation has run amok, and it won’t be the last

Before you start making knee-jerk decisions based on rumours and predictions, it’s worth remembering that this type of speculation follows almost every announcement of this kind.

Looking back to last autumn is enough to see this in action. In the lead-up to the first Budget, Reeves said that she had a £22 billion “black hole” to fill in the public finances.

To do so, the chancellor announced a range of tax rises at her maiden Budget, including:

• Increasing the rate of employer National Insurance (NI)
• Raising the rates of Capital Gains Tax (CGT)
• Bringing pensions into the scope of IHT from April 2027
• Increasing the Stamp Duty surcharge for purchasing second properties.

These are potentially impactful changes. The rises in CGT and Stamp Duty came into effect on the day of the Budget and the day after, respectively, so you might have seen an increase in your tax bill overnight.

Meanwhile, if you own a business, the employer NI rise might have driven up your costs when it came into effect in April 2025.

The changes to pensions and IHT are not yet in effect. But when they are, they could add a 40% tax charge to funds you had earmarked for your family.

Crucially, however, there were many other rumoured changes that didn’t come to pass. Perhaps most notably, commentators suggested that pension tax relief could be reformed to a flat 30% rate for all taxpayers. This didn’t happen.

Even more importantly, there were concerns that the 25% pension tax-free lump sum would be reformed so that pension withdrawals became less tax-efficient. These worries have resurfaced this year.

As Citywire reported at the time, this led many people to withdraw their tax-free cash, fearing that the government would remove this benefit.

However, as the expected outcome failed to materialise, Citywire reported that many savers attempted to cancel their withdrawals. In turn, HMRC told them that these payments could not be undone, and that there was no cooling-off period.

Having acted quickly to get ahead of the changes, these savers instead lost a valuable tax benefit, not to mention reducing their pension fund’s growth potential by withdrawing from it.

Stay calm and wait to see what happens before you act

All this goes to show the value of keeping a cool head and waiting to see what’s actually announced. Otherwise, you might act unnecessarily, or even put yourself in a worse position.

This is not to say that the rumoured changes for this year won’t come to pass. Indeed, the chancellor may very well decide to cap IHT-free gifts or reduce the amount of tax-free cash you can draw from your pension.

But look back to last year, and you can see why staying the course is sensible. The changes might not happen. Even if they do, reforms with such far-reaching consequences take time to put into place – the inclusion of pensions in the IHT net is still 18 months away from implementation even now.

Some changes did take effect last year, and these reforms often required alternative solutions to mitigate them.

For example, although the CGT rates increased on the day of the last Autumn Budget, you still had access to your Annual Exempt Amount, allowing tax-free gains up to that limit. So, strategically using this allowance over the rest of the tax year could still have kept your tax bill to a minimum.

All this to say that no matter what happens on the day, you’ll be able to find alternative planning opportunities amid the changes.

The key point to remember is that your financial plan is built for the long term. So long as you’re still able to achieve your goals and live your desired lifestyle, you might not need to make any drastic changes at all.

We’ll keep you up to date with the announcements in the Autumn Budget

We’re distributing a summary on the afternoon of the Budget, including the major announcements from Reeves’ speech. Where possible, we’ll also provide some insight into what those changes could mean for you.

As long as you’re on our mailing list, we’ll deliver that summary directly to you on 26 November.

In the meantime, if you have any concerns about what the Budget might mean for you, please do get in touch and we’ll be happy to help.

Email contact@caliberfm.co.uk or call 01525 375286 to speak to one of our team today.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.