The Chancellor, Rachel Reeves, has delivered the first Autumn Budget of this Parliament. She called it “a decade of national renewal.” This Budget brings real, immediate changes that could affect your income, savings, and long-term plans.
Here’s a clear and practical breakdown of what this year’s Budget means for you, and the steps you may need to consider next.
1. Frozen Tax Thresholds Until 2031
Income Tax and National Insurance thresholds will stay frozen for another six years.
This freeze acts like a stealth tax. As your income rises with inflation or career growth, more of it gets pulled into higher tax bands. Over time, this reduces your spending power, even if your gross salary goes up.
This makes smart tax planning, like using allowances, benefits, and salary structuring, even more important.
2. New Rules for Investors and Savers
From 2029, the government will introduce a £2,000 cap on the National Insurance relief available for pension contributions made through salary sacrifice.
For investors, that’s a direct cut to net returns, and for landlords, another layer of pressure on margins.
The ISA allowance stays at £20,000, but from 2027 only £12,000 can go into a Cash ISA.
It’s a clear nudge towards long-term investing rather than parking cash.
Your investment wrappers are now more valuable than ever. Reviewing which assets sit inside ISAs, pensions, or taxable accounts should be a priority.
3. New “Wealth Tax” for High-Value Homes
Own a property over £2 million? A new High Value Council Tax Surcharge arrives in 2028:
- £2,500 per year for homes over £2M
- £7,500 per year for homes over £5M
This is a lightweight wealth tax aimed at higher-value properties, especially those in London and the South East. This creates a new annual cost. It may also influence decisions around ownership structures, gifting, or downsizing.
4. Major Change to Pension Salary Sacrifice
From 2029, the government will introduce a £2,000 cap on National Insurance relief for pension contributions made through salary sacrifice.
You can still contribute more than £2,000. But only the first £2,000 will receive NI relief. Anything above that will no longer qualify.
This is a major change. Salary sacrifice has been one of the most efficient ways for higher earners and business owners to build pension wealth. With this cap in place, the benefit is reduced.
If you rely on this strategy, you will need to review your long-term plan. Alternatives may now offer better value.
5. Good News for Entrepreneurs and Early-Stage Investors
The Budget brings a welcome boost for UK innovation.
- SEIS and EIS will expand
- EMI will become more accessible
This opens more doors for founders raising capital and investors looking for tax-efficient opportunities.
If you are building or backing a UK business, these reforms may unlock better funding and stronger incentives.
Your Next Steps Forward for Robust Financial Planning
The rules have changed, and your strategy needs to change with them.
Now is the ideal time to check whether your financial plan is still tax-efficient and aligned with your long-term goals.
At Legend Financial, we help clients navigate these changes with clarity and confidence.
Book a complimentary financial review today, and let’s build a plan that protects and grows your wealth.
