Financial Planners have given a mixed welcome to Chancellor John Healey’s first Budget - praising some changes but questioning the intention of others.
Overall, the response was one of relief that major pension, tax and financial services changes were mostly avoided and the focus on steadying markets and dealing with spiralling government borrowing was moved up the agenda.
There was applause for dropping the unpopular plans to slash the Cash ISA allowance from £20,000 to £12,000 but disappointment that tax on savings and landlords will rise significantly from April.
Most planners expected to be kept busy sifting through the mountain of small changes made by Mr Healey to reliefs and tax rules.
Here we’ve collected a spectrum of responses from some leading Financial Planning and wealth management firms.
Toni Meadows, head of investment at BRI Wealth Management, said: “The worst case scenario for the budget had already been digested and discounted as an option. In the event the Budget was relatively optimistic on growth and the deficit which could help government bond yields in the short term (intra-day). It was also less disruptive on businesses than it could have been. The room for radical measures was low given the fiscal constraints and outstanding debt levels in the UK (and the developed world).
Dan Swift, head of Financial Planning at TrinityBridge, said: “The decision to retain the full £20,000 cash ISA allowance is a welcome simplification. The proposed £12,000 limit was a fairly blunt way of encouraging people to invest, particularly as relatively few individuals use their full annual cash ISA allowance.”
Liz Colfer, director at Five Wealth, said: “The Autumn Budget felt relatively quiet from a business owner’s perspective, which may come as a relief to many. “The proposed Founders Relief could be very positive news for entrepreneurs considering a sale, potentially allowing them to retain more of the value they’ve worked hard to build and giving them greater flexibility when planning for life after an exit.
“Until the finer details are clear, business owners should be cautiously optimistic. For those planning an exit, the relief could be a welcome boost – but its real impact will depend on who qualifies and how it works in practice.”
Mark FitzPatrick, CEO at wealth manager St. James’s Place, talking about pensions policy, said: “I called for stability in pensions policy ahead of the Budget, so the decision to leave the pensions framework unchanged is welcome. Our research found that 61% of people would feel more confident making long-term retirement plans if they believed pension tax rules were unlikely to change significantly. By avoiding further changes today, the Government has given savers greater certainty as they plan and invest for their future.
“It is also welcome that the run-up to this Budget has involved less speculation about potential changes. In previous years, we have seen how speculation, or ‘kite flying’, can adversely affect people’s financial decisions. Less noise helps people make decisions based on confirmed changes rather than speculation about what might change."
Jason Hollands, managing director at wealth management firm Evelyn Partners, said: “The Chancellor has scrapped plans to cut the annual Cash ISA allowance for under-65s, but there is a sting for savers: the planned increase in tax on savings income from next April will be doubled, from two percentage points to four.
“That means the tax rates on savings income are set to rise to 24% for basic-rate taxpayers, 44% for higher-rate taxpayers and 49% for additional-rate taxpayers from April 2027. The starting rate for savings and Personal Savings Allowance remain important protections, but more people with taxable interest will face a larger bill.
“Keeping the £20,000 Cash ISA gives savers more scope to protect their interest from tax at a time when the tax treatment of savings is becoming less favourable. Incoming higher tax on savings interest and already implemented recent increases in tax on dividends and capital gains, underline the importance of making as much use of ISAs as possible whether you are a saver or an investor.
“Feedback from our Financial Planners and investment managers ahead of the Budget showed that potential changes to Capital Gains Tax had been a particular concern for clients, especially business owners. The Chancellor’s decision not to raise CGT will be a relief. The absence of further changes to private pensions is also welcome. The pensions regime has already seen repeated changes in recent parliaments, while speculation about reducing tax-free cash has prompted some savers to make decisions they may later regret. A period of stability would help people plan with greater confidence.”
“Other changes already announced will still shape the tax landscape. From April 2027, most unused pension funds and pension death benefits are due to come within the scope of Inheritance Tax. The High Value Council Tax Surcharge, dubbed the ‘Mansion Tax’, is due to begin in England in April 2028. And from April 2029, only the first £2,000 of employee pension contributions made through salary sacrifice will qualify for National Insurance relief.
“Income tax thresholds are also frozen until April 2031. As earnings rise in cash terms, more people will be drawn into higher tax bands. The OBR estimates that, between 2022/23 and 2030/31, 4.8 million more people will move into the higher rate and 600,000 more into the additional rate as a result of frozen thresholds.”
Andrew Zanelli, head of technical engagement at Aberdeen Adviser, said: “This Budget brought some changes, but importantly it stopped short of another round of major upheaval for pensions and long-term savings.
“People’s finances can be complicated enough without constant speculation and changes to the rules making them more so. Pensions, tax and long-term savings will never be completely simple, but the framework around them should aspire to be. Stability and simplicity give people confidence to plan for the long term. So, a Budget with fewer surprises and less tinkering, is exactly what was needed.”
Robbie Hewitt, wealth planner at Brown Shipley, said: “While it is important not to lose sight of the role cash plays in a portfolio, those holding significant sums may now be more inclined to consider alternatives, including UK gilts. The increase in tax rates on rental income could prove to be the final nail in the coffin for some property investors, prompting them to question whether the returns still justify holding rental property.”
Alex Shields, partner at Chartered IFA The Private Office (TPO), said: “Although the impact of the announcements made in the Budget on many people may be limited, the impact of frozen tax bandings will continue to affect millions of households.
“Having already been frozen until 2031, there were no further extensions to the freeze, but with UK CPI inflation currently 3.5% in September 2026, more and more taxpayers will move into higher rates of tax, whether that be 20%, 40%, 45% or 60%, even if they only receive inflationary increases to their pay.
“The Budget was mixed news for savers, with the proposed reduction in the Cash ISA allowance being scrapped, but the tax on savings will now increase by 4% in April 2027. For business owners, the lifetime limit for Business Asset Disposal Relief being reduced to £500,000 is disappointing, but Founders’ Relief giving those who are entitled to the relief a reduced rate of 10% up to £10,000,000 will be welcomed.
“Landlords will be disappointed to see the tax they pay on rental income increasing by 4% (rather than 2%) in April, but rumoured increases to the standard rates of capital gains tax did not materialise.”
Rachel O’Donoghue, partner and head of Financial Planning at Buzzacott, said: “The decision to keep the Cash ISA limit at £20,000 is good news for savers, particularly after the reforms announced last year. But looking beyond that headline, this Budget makes saving outside an ISA more expensive, with tax rates on savings income increasing by two percentage points from April 2027."
“The introduction of a new First Time Buyer ISA will also attract attention, particularly with a 25% government bonus and up to £20,000 potentially available. But with another ISA potentially on the horizon to encourage first-time Stocks and Shares ISAs investors, there is a wider question about whether continually adding new products actually helps people save or simply makes an already complicated system harder to navigate.”
Chris Ball, CEO of financial advisory firm Hoxton Wealth, said: “For a Budget that is intended to encourage growth, reducing the Business Asset Disposal Relief lifetime limit from £1 million to £500,000 feels somewhat counterintuitive.
“The rate of Capital Gains Tax under BADR is already 18%, and reducing the amount of gains that can benefit from this relief could further discourage business owners from taking risks and growing their businesses. We have already seen increases in employers’ National Insurance contributions, which have added to the cost of employing people. Reducing the relief available when business owners eventually sell could be seen as another disincentive.
“However, this needs to be considered alongside the announcement of a new Founders’ Relief, which will offer a 10% Capital Gains Tax rate on up to £10 million of lifetime gains for qualifying founders and significant early investors in high-growth, innovative UK companies.”
Tom Matterson, investment Manager at wealth manager Saltus, said: “The rally in bank shares shows markets had braced for worse, and a smaller, temporary rise in the surcharge looks like the right call. Taking it all the way back to 8% would have sent a poor signal about one of the FTSE 100's biggest sectors at a time when the UK should be doing everything it can to attract investment rather than put it off.
Neil Jones, tax and wealth planning specialist at Standard Life, said: “For those with significant cash balances or regular savings, the incentives have edged further towards ensuring money is directed towards an ISA.”