Chancellor Rachel Reeves is set to deliver an Autumn Budget on 26 November that could significantly impact the finances of pensioners and savers across the UK. With just days to go, financial experts are urging immediate action to protect personal wealth from a expected series of tax-raising measures.
What to Expect in the November Budget
The Treasury has reportedly abandoned plans to increase income tax rates, a move that would have broken a key Labour manifesto pledge. This U-turn follows improved economic forecasts from the Office for Budget Responsibility. However, the government continues to pursue what insiders describe as a "smorgasbord" approach to revenue generation through multiple smaller tax changes.
Among the anticipated measures are a freeze on income tax thresholds for an additional two years and potential new levies on high-value properties. The Chancellor had previously warned that without such measures, the alternative would be "deep cuts" to essential public services.
Protecting Your Savings and Pensions
Laura Purkess, Personal Finance Expert at Investing Insiders, has outlined crucial steps savers should consider before the Budget announcement. "Strong rumours suggest the Cash ISA allowance could be cut from £20,000 to £10,000," she warned. Savers who haven't maximised their current year's allowance are advised to do so immediately to avoid potential future tax liabilities.
For pension planning, attention is focusing on possible restrictions to salary sacrifice schemes, which might be capped at £2,000 annually. This would reduce the National Insurance savings currently available to those contributing to pensions through this method.
Practical Steps for Financial Protection
Financial experts recommend four key actions:
First, ensure you've utilised your full £20,000 ISA allowance for this tax year if possible. If the allowance is reduced, future tax-free savings opportunities will be limited.
Second, review your savings accounts to secure the best available interest rates. Top easy-access accounts currently offer around 4.5%, significantly boosting returns compared to standard accounts.
Third, conduct a thorough pension review. Locate any lost pension pots and consider consolidation to benefit from compound growth. Increasing contributions beyond the auto-enrolment minimum of 8% can provide additional employer contributions and valuable tax relief.
Finally, avoid making panic decisions based on speculation. "Nothing good will come from making major financial decisions based on rumours," cautions Purkess, referencing last year's unfounded speculation about pension changes that never materialised.
For those with substantial assets, consulting a qualified financial adviser may provide personalised strategies to navigate the upcoming changes. However, most measures under consideration will primarily affect those with significant savings or high-value assets.
