2025 Autumn Budget preview: What could be coming and how to prepare

As the UK prepares for the 2025 Autumn Budget, speculation is mounting around potential tax changes and financial reforms. With Labour continuing to face budgetary challenges, the Chancellor is expected to announce measures that could impact individuals, families and businesses alike.

At Evelyn Partners, we’re closely monitoring developments to help our clients stay ahead. While it’s still too early to tell exactly what announcements we’ll see, to follow are some of the options being discussed in the media, and the types of strategy options you may want to consider if they do come to fruition.

One of the most likely outcomes is an extension of the freeze on income tax thresholds until 2030. While not a headline-grabbing move, this ‘stealth tax’ could pull millions into higher tax bands as wages rise with inflation.

What to consider: Whichever tax band you fall into, reviewing income tax-efficiency  should be an ongoing part of any good financial plan. As well as considering your income sources and split within your household, it’s also worth exploring tax-efficient investment wrappers such as ISAs and pensions, or even other tax efficient investments such as VCTs and EISs to mitigate the impact of tax on your returns. Remember, tax advantaged investments like these carry higher risks than other investments and are not suitable for all investors.

Pensions are under further scrutiny following the announcement in the 2024 Autumn Budget to include defined contribution balances under the inheritance tax (IHT) regime. There are suggestions that the Chancellor hasn’t finished with pensions yet, and that there may be changes coming to tax relief and lump sum allowances.

A flat 30% tax relief rate for all earners is being discussed, as opposed to the current system which allows higher and additional rate taxpayers to claim full relief of 40% and 45% respectively.

This change could benefit middle-income savers who currently only receive basic rate relief of 20% but reduce incentives for higher earners. The maximum tax-free lump sum, which is currently capped at £268,275, may also be significantly reduced.

Salary sacrifice schemes could also face restrictions, particularly around National Insurance and income tax exemptions.

What to consider: High earners may want to review their pension contributions and tax-free cash position under current rules, however it’s important to note that any increase in contributions comes with risks such as losing access to the funds under you reach pension age (generally at least age 55), given that the announcement has not yet occurred. Tax treatment will also depend on individual circumstances.

While the overall ISA allowance is expected to remain at £20,000, the government is reviewing how ISAs are structured. There’s a push to encourage equity investment over cash savings, and previous proposals included reducing the cash ISA allowance to £4,000.

What to consider: This isn’t likely to be of huge concern to those with high incomes or net worth, who are more likely to be investing in Stocks and Shares ISA as opposed to Cash ISAs. Nevertheless, it is one to watch should there be other, unexpected changes to ISA rules.

CGT rates were increased in the last Budget, and further hikes may be on the table, particularly targeting second homes and investment properties. The annual exemption has already been reduced to £3,000 from £12,300 in 2022/23 and further reductions could follow.

What to consider: If you’re planning to sell assets, it may be worth doing so before any new CGT changes take effect. As mentioned before, pre-empting potential announcements is always a risk, so you should only consider this after seeking professional advice. Strategic use of losses and timing can also help reduce liabilities, but again, this is a complex area where advice is highly recommended.

IHT is another area where changes are expected. From 2027, unused pension funds will be included in estates for IHT purposes. Agricultural and Business property relief is being narrowed from 2026, and there are suggestions that the 7-year gift rule may be extended to 10 years, though this is not confirmed.

The nil-rate band is likely to remain frozen, increasing the number of estates subject to IHT in the same vein as the frozen thresholds on income tax.

What to consider: Estate planning is more important than ever. Consider trusts, lifetime gifting strategies, whole of life insurance and pension drawdown options to manage future liabilities, though this is a highly complex area with additional risks where specialist advice is highly recommended

There’s growing discussion around a new wealth tax, but the practicalities of implementing such a major shift in tax policy comes with many challenges. There is some talk around an initial form of wealth tax targeting individuals with assets over £10 million, but given the myriad ways this could be implemented, it’s not at all clear yet how this could impact individuals and families.

What to consider: There are few options for planning until we see any details of this potential new tax announced, High-net-worth individuals should, of course, always be mindful for legislative changes and ensure they have professional advisers in place to monitor changing guide rails.

To stay informed on the lead up the Budget and after the announcement, sign up to our Budget webinar series.

With so many potential changes on the horizon, proactive financial planning is essential. Our advisers are here to help you, optimise your tax position, plan for retirement and estate transitions, and navigate investment decisions in a shifting economic environment.

Whether you're an individual, a family office, or a business owner, Evelyn Partners can provide tailored advice to help you stay ahead of the curve.

Book an appointment to speak with one of our experts and prepare for the Autumn Budget with confidence.