My initial reaction to John Healey’s speech as Chancellor today is that there is little to alter established personal financial planning strategies, provided the previous changes due to take effect from April 2027 have already been considered. 

The ‘breathing space’ needed to ease the cost of living may come as much from what the Chancellor did not change as from the measures he announced. 

There was no significant change to pension contribution tax relief, whether contributions are made personally or by an employer or business. 

There was also no change to the Lump Sum Allowance for tax-free pension cash, leaving another year’s speculation about a possible reduction unfounded. 

The planned reduction in the cash ISA limit has been dropped, with the limit remaining at £20,000 from 6 April 2027. 

For younger savers, the new First Time Buyer ISA will be introduced from April 2029 and will replace the Lifetime ISA for new savers.  

In addition, from October 2026, the Lifetime ISA withdrawal charge will reduce where a first-time buyer purchases a qualifying property above the current price cap.  

The new government-backed Your First Home equity-loan scheme is also intended to help first-time buyers in England, particularly those without access to the ‘bank of mum and dad’. 

Capital Gains Tax has escaped largely unscathed, although business owners will see the Business Asset Disposal Relief lifetime limit reduced from £1 million to £500,000 for qualifying disposals from 6 April 2027. 

The new Pension Tax Allowance will prevent pensioners whose total income is no more than the value of the full new State Pension from being brought into Income Tax because of State Pension increases.  

However, the continuing freeze of the standard Personal Allowance and Income Tax bands will retain the effect of fiscal drag. From 6 April 2027, savings and property income rates will be 24%, 44% and 49%.  

Inflation remains a primary concern. The 12-month CPI rate was 3.5% in September 2026, above the Bank of England’s 2% target. The Office for Budget Responsibility expects inflation to peak at 3.8% in the first quarter of 2027 before falling, although the outlook remains sensitive to wholesale energy prices. 

The State Pension Triple Lock will continue in its current form through to April 2029. From April 2030, the State Pension will rise by the highest of 2.5%, inflation, or the amount needed to maintain its April 2029 value relative to earnings. This adjustment reinforces the importance of building personal retirement provision rather than relying solely on the State Pension.

Finally, there were no further changes to the previously announced inheritance tax treatment of pensions. For deaths on or after 6 April 2027, most unused pension funds and pension death benefits will be included in the value of an estate for Inheritance Tax purposes. 

Since this change was first announced in 2024, I have seen an increase in clients wanting to understand how they may pass assets to the next generation, whether through lifetime gifts or their estate, in a tax-efficient manner. 

Now that the legislation has received Royal Assent, I expect these conversations to become increasingly important. 

Clients will need to understand possible ways to mitigate the impact of the changes, while personal representatives and pension scheme administrators will need to follow the new valuation, information-sharing and payment processes. Separately, the Budget removes the existing two-year rule for the Income Tax treatment of pension and lump-sum death benefits from 28 October 2026.  

So, there may be one or two additional items for the agenda at your next review with your financial adviser: 

• Review cash holdings, particularly those outside ISA wrappers.
• Continue to make appropriate use of available ISA and pension allowances.
• Revisit asset allocation across the different tax wrappers available.
• Review retirement income plans to test their sustainability against higher tax and inflation.
• Consider using pension savings to provide retirement income rather than primarily as a vehicle for passing on wealth.
• Recalculate potential Inheritance Tax liabilities from April 2027

Contact us on 0330 320 9280, email: info@cravenstreetwealth.com or complete our online enquiry form to discuss how government policy could impact your financial plans. 

The content of this article is for information only and does not constitute formal financial advice. This material is for general information only and does not constitute investment, tax, legal or other forms of advice. 

References to legislation and tax is based on our understanding of United Kingdom law and HM Revenue & Customs practice at the date of publication. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments. 

You should not rely on this information to make, or refrain from making any decisions. Always obtain independent, professional advice for your own particular situation. 

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