We are pleased to share the following summary from our trusted member JM Finn (Part of Delen Private Bank), outlining their Wealth Planning team’s initial thoughts on the UK Budget 2026 and the potential implications for individuals, families and their financial plans.
The summary highlights the key announcements across Income Tax, ISAs, Inheritance Tax, pensions and other areas of personal financial planning.
Please see below for JM Finn’s full overview and recommendations.
Following this week’s Budget, we wanted to write to share our Wealth Planning team’s initial thoughts on how the announcements could affect you and your financial plans.
We would stress the importance of seeking qualified advice before deciding to make any adjustments to your financial arrangements.
Our team would be happy to discuss how the Budget could impact you and your family. If you have any questions, please contact us.
Income Tax
- Rates remain unchanged for earned income, although the thresholds will remain frozen until April 2031. As earnings and investment income rise, fiscal drag will push more individuals into higher bands. Action: Review your projected income and consider tax-efficient strategies such as pension contributions, using spouses’ allowances and charitable gifting.
- Savings income: Repeating a step from last year’s Budget, the tax on savings income (including cash interest) will rise by a further 2% from April 2027 to 24%, 44% and 49% for basic, higher and additional rate taxpayers respectively. Action: Maximise tax-free wrappers (ISAs, pensions), utilise personal allowances, and reassess cash held outside of these arrangements.
- Rental Income: Aligning with the tax rates for savings income, property income tax rates will also rise by 2% from April 2027 to 24%, 44% and 49% for the respective tax bands. These rates will apply across England, Wales and Northern Ireland. Action: Property owners may wish to review property-related cash flow and ownership structures.
- Pension Tax Allowance: From April 2027, the Government will introduce a new ‘Pension Tax Allowance (PTA),’ designed as a protective tax measure to prevent pensioners who solely rely on the full state pension from facing an income tax bill as the State Pension exceeds the Personal Allowance. Action: If applicable, ensure the correct tax is being paid.
- Self-Assessment Tax Returns: From April 2029, the Self-Assessment Payments on Account system will be reformed. Those already making payments on account will move to smaller, more regular payments throughout the year, bringing tax payments closer to when income is earned and helping to reduce the risk of unexpectedly large tax bills. Action: Those affected should review their cash flow ahead of the changes.
- Trading Allowance: From April 2027, the Income Tax Trading Allowance will increase from £1,000 to £3,000, meaning more individuals with modest trading or ‘side hustle’ income may fall within the allowance. Action: Individuals with additional trading income should review whether the increased allowance applies to them.
ISA
- Cash ISA: Following previous proposals to reform Cash ISAs, the Government has confirmed that the annual Cash ISA allowance will remain at £20,000 for those aged 18 and over.
- Stocks & Share ISA: The Government will explore an incentive for first-time investors into a Stocks and Shares ISA. Further details are yet to be announced.
- Lifetime ISA: Existing Lifetime ISA holders can continue under the current rules. From 29 October 2026, the withdrawal charge for purchasing a property above the £450,000 Lifetime ISA property cap will reduce from 25% to 20%. The 25% charge will continue to apply to other unauthorised withdrawals.
- First Time Buyer ISA: From April 2029, the First Time Buyer ISA will replace the Lifetime ISA for new savers. It will allow annual contributions of up to £4,000 with a 25% Government bonus, subject to a maximum Government bonus of £20,000, towards a first-home purchase. The £450,000 property limit will apply and there will be no upper age restriction. Action: Continue to use your ISA allowance and keep the arrangement under review as the new rules are introduced.
Inheritance Tax (IHT)
- No changes to thresholds; the Nil Rate Band remains at £325,000. Action: Consider estate planning strategies such as use of exemptions and reliefs, lifetime gifting and trusts to mitigate future IHT exposure.
- Inheritance Tax and Trusts: From 28 October 2026, the Government is changing the treatment of certain liabilities associated with trust property for Inheritance Tax purposes. The measures are intended to restrict the use of liabilities to reduce the value of assets subject to IHT. Action: Clients with trusts and more complex estate planning arrangements may wish to review these arrangements with their tax or legal adviser.
Pensions
- Pension death benefits: From 28 October 2026, the Government is removing the two-year rule relating to the taxation of pension and lump sum death benefits. This removes the adverse tax consequences that could previously arise where certain death benefits were not designated or paid within two years of the scheme administrator becoming aware of the member’s death. Action: Review beneficiary nominations and expressions of wishes to ensure they remain up to date.
Business Asset Disposal Relief
- From 6 April 2027, the lifetime limit of gains that can qualify for Business Asset Disposal Relief will reduce from £1 million to £500,000. Action: Business owners considering a future sale may wish to review their plans with their tax advisers ahead of the change.
Founders’ Relief
- From 6 April 2027, a new relief will be introduced for founders of qualifying high-growth and innovative companies. Eligible founders will potentially benefit from a reduced 10% Capital Gains Tax rate on up to £10 million of qualifying lifetime gains when disposing of shares in their business. Detailed eligibility requirements remain subject to technical consultation. Action: Business owners considering a future sale should review whether they may qualify for the Founders’ Relief and consider the timing of any disposals with their tax and legal advisers.
State Pension
- From April 2027, the State Pension will rise by 3.9% under the triple lock. Full entitlement will be £13,036.40 per annum. Action: Check your State Pension forecast via https://www.gov.uk/check-state-pension.
- From April 2030, an adjusted Triple Lock will be introduced, designed to maintain the State Pension’s value relative to earnings while continuing to provide protection against inflation.
Please note: This summary reflects our initial interpretation of the Autumn Budget announcements. The measures outlined may be subject to change following consultation and detailed legislation.
The information provided is of a general nature and is not a substitute for specific advice with regard to your own circumstances. You are recommended to obtain specific advice from a qualified professional before you take any action or refrain from action.