Autumn Budget 2025 ‘Watchlist’: What might change and what you can do now

With the Autumn Budget fast approaching, many are watching closely for potential shifts in tax policy, especially around pensions, inheritance, capital gains, and property. Following Rachel Reeves’ pre-Budget speech, speculation is mounting that tax rises may be on the table. While nothing is confirmed, this guide explores the most talked-about possibilities and offers practical steps to help you prepare. 

The most important thing you can do is not rush into making financial decisions you could later regret. SPW can advise you on the various considerations discussed in this article. 

You might not see a change in the tax rates themselves, but you could still end up paying more. That’s because income tax thresholds have been frozen since 2021, and reports suggest this freeze could be extended to 2030. This means that more of your income could be taxed at higher rates simply because your earnings have gone up. This is known as fiscal drag, and it’s a quiet but powerful way the government increases tax revenue.

How to prepare

• Check your income trajectory: If you’re expecting a pay rise or bonus, consider how it might affect your tax band.
• Use salary sacrifice: Redirecting part of your income into pensions or other benefits could reduce your taxable income, but be mindful of how this could impact any benefits linked to your salary.
• Maximise tax-efficient wrappers: ISAs, pensions, and other vehicles could help shelter your savings from additional tax.

There’s growing speculation that the government may introduce a flat-rate pension tax relief, potentially around 30%, replacing the current system where relief is based on your income tax band. This could mean that higher earners receive less relief than they do now. Additionally, from April 2027, unused pension pots will be included in your estate for inheritance tax (IHT) purposes marking a significant shift from current rules.

There is also speculation that the government may review the pension triple lock, potentially softening future increases to state pensions.

How to prepare

• Review yourretirement strategy: Even if the government leaves reliefs unchanged, there are many good reasons to consider maximising pension contributions.
• Update your death benefit nominations: Make sure your pension provider knows who should receive your funds on death.
• Consider lifetime withdrawals: In some cases, accessing your pension earlier could be more tax-efficient than leaving it untouched, but it’s important to seek personalised advice from a financial adviser before making any decisions.

The government may introduce a lifetime cap on tax-free gifts, with figures around £100,000 being floated. There’s also talk of extending  the seven-year rule to ten years, and removing taper relief, which currently reduces IHT on gifts made more than three years before death. These changes would significantly tighten the rules around gifting.

Some commentators have suggested that broader IHT reform could be used to raise revenue while appearing progressive, especially if paired with pension and property tax changes.

How to prepare

• Start gifting early: The sooner you make gifts, the more likely they are to fall outside your estate.
• Use exemptions wisely: The £3,000 annual gift allowance and small gift exemptions are still available, as is the normal gifts out of income exemption.
• Consider protecting the gifts: For any gifts that do not qualify for the IHT exemptions, they could be potentially chargeable during the first seven years. Speak to SPW about how life cover could help.
• Document everything: Keep clear records of gifts, dates, and recipients to support your estate planning.

The annual CGT allowance has already been reduced, and further cuts could be on the way. There’s also speculation that the main residence exemption (which protects your main home from CGT) could be limited for high-value properties, and that CGT rates could rise again, particularly for higher-rate taxpayers.

Reeves has already raised CGT rates in her previous Budget, and further increases, especially for non-residential assets, are being considered.

How to prepare

• Plan ahead for disposals: If you’re thinking of selling assets, doing so before any changes could save you tax should CGT rates increase.
• Use spousal exemptions: Transferring assets between spouses could help maximise allowances.
• Review your property holdings: If you own multiple properties, consider how future CGT changes might affect your portfolio.

There’s growing interest in replacing Stamp Duty Land Tax (SDLT) and Council Tax with a value-based annual property levy. This could mean ongoing costs for property owners, rather than one-off transaction taxes. Other proposals include applying National Insurance to rental income, and shifting SDLT liability from buyers to sellers.

Reeves is under pressure to consider serious property tax reform, including a potential overhaul of council tax bands and SDLT structure, to address housing inequality and raise revenue.

How to prepare

• Stay informed: Property tax reform could take time, but early awareness helps you plan as changes could impact your expenditure requirements in the future.

While these changes are speculative, they reflect the direction of current policy discussions. By staying informed you can ensure your plans remain resilient and tax-efficient.

If you’d like to discuss how these potential changes could affect your personal finances, our advisers are here to help. Whether it’s pensions, gifting, or property planning, we’ll work with you to build a strategy that’s ready for whatever the Budget brings.

Please note: This article is based on current speculation and should not be taken as financial advice or a reflection of confirmed government policy. 

Fees and charges apply at Schroders Personal Wealth. 

The value of investments and the income from them can fall as well as rise and are not guaranteed. The investor might not get back their initial investment. 

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. 

The retirement benefits you receive from your pension plan depend on a number of factors including the value of your plan when you decide to take your benefits which isn’t guaranteed and can go down as well as up. The benefits of your plan could fall below the amount(s) paid in. 

In preparing this article we have used third party sources which we believe to be true and accurate as at the date of writing but can give no assurances or warranty regarding the accuracy, currency or applicability of any of the contents in relation to specific situations and particular circumstances. 

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