On 26 November 2025, chancellor Rachel Reeves is set to deliver her highly anticipated Autumn Budget. And many sources are speculating over what changes could be around the corner.
Reeves renewed the government’s pledge not to increase Income Tax, VAT, and National Insurance (NI) for “working people” in September 2025, as the Independent reports. While this may offer a certain measure of comfort, it seems inevitable that some taxes will increase.
Indeed, the Independent estimates that Reeves may need to generate as much as £40 billion in revenue.
By understanding what changes could be on the horizon, you can create a plan and prepare to implement it once the policies are announced. However, while rumours can often create a sense of panic, beware of making irreversible decisions before the changes are confirmed in November.
Read on to learn what key policy changes Reeves could introduce, what they could mean for your finances, and why acting too soon could be costly.
Reeves could tighten the rules for Inheritance Tax and gifting
The government already introduced stricter Inheritance Tax (IHT) rules in the 2024 Autumn Budget. In 2025, the amount you can give away tax-efficiently, both in life and after death, could again be reduced.
Frozen nil-rate bands
In the 2024 Autumn Budget, the freeze on the nil-rate bands was extended from 2026 to 2030. Reeves may opt to further prolong the freeze in the 2025 Budget.
The nil-rate band has remained at £325,000 since 2009, while the residence nil-rate band hasn’t changed from £175,000 since 2020. Had they risen with inflation, MoneyWeek reports that in 2025 they would be £517,007 and £221,633, respectively.
As a result, the value of your estate that will be subject to IHT is likely to increase.
Gifting restrictions
As of 2025/26, you can gift an unlimited amount of your wealth tax-free, provided you don’t pass away within seven years of giving the gift. If you die within those seven years, some financial gifts may be subject to a tapered rate of IHT, reducing gradually from 40% to 8%.
Some sources have speculated that Reeves could introduce a lifetime cap on gifting, restricting the total amount you can give away tax-free. The seven-year rule could also be extended to cover a longer period, while the taper relief within that period could be reduced or removed.
That said, nothing is confirmed, so rushing to give away your wealth ahead of the Budget announcements in November could prove unnecessary.
The Income Tax benefits of pensions could be reduced
In March 2025, the government confirmed it is not planning to scrap the triple lock, as the Independent reports. This ensures the full new State Pension rises annually in line with inflation, earnings growth, or 2.5% – whichever is the highest.
However, the Autumn Budget could target private and workplace pensions by reducing the tax benefits available on both contributions and withdrawals.
Some rumoured policies include:
- Reducing the tax-free lump sum allowance. As of 2025/26, you can withdraw 25% of your pension as a tax-free lump sum, up to a maximum of £268,275. If Reeves opts to reduce this allowance, a larger portion of your pension could be subject to Income Tax.
- Introducing a flat rate of tax relief. This could be especially costly for higher- and additional-rate taxpayers, who can often claim 40% and 45% tax relief, respectively, as of 2025/26. A lower, universal rate could see less funds going into pensions and more going to HMRC.
While these policies could have a significant impact on your retirement plan, it’s important to remember that these are just rumours at this stage. Rushing to withdraw your pension before November could prove costly if the lump sum allowance remains unchanged after the Budget.
Property taxes could be reformed
There has been widespread speculation about potential changes to property tax in the Autumn Budget. Not only could the government use property tax reforms to generate more revenue, but they may also be aiming to stimulate the housing market by removing barriers to moving.
In particular, Rightmove suggests that Reeves could abolish Stamp Duty – a one-off tax paid by buyers when purchasing a new home.
In its place, some rumours suggest that the government could introduce an annual property tax for homes valued at over £500,000, or possibly shift the tax burden onto sellers, rather than buyers.
There is speculation that the Council Tax regime may also be altered, especially regarding rental properties, where landlords may be levied with the tax rather than tenants.
The potential impact of any property tax reforms remains uncertain. Not only are the details of any changes unconfirmed, but some people could stand to pay less tax under a new system, while others could pay more.
Taxes on investment returns and savings interest could be increased
The Autumn Budget could see more of your investment gains and interest accruals subject to tax. Speculation around potential changes is particularly focused on Capital Gains Tax (CGT) and the Cash ISA allowance.
Capital Gains Tax
The government increased the lower rate of CGT from 10% to 18% in the 2024 Autumn Budget. However, some rumours suggest it could rise again in November.
Additionally, while the Annual Exempt Amount was £12,300 in 2022/23, in 2025/26 the point at which your investment returns become subject to CGT is just £3,000. Reeves could opt to further reduce this allowance, meaning more of your investment could be taxable.
Cash ISA allowance
As of 2025/26, you can pay up to £20,000 a year into a Cash ISA without paying tax on interest. In July 2025, Reeves shelved her plans to cut this allowance following backlash from banks, building societies, and consumer groups.
However, some sources have speculated that the Cash ISA allowance could be reduced in the Autumn Budget. If so, your savings’ growth could be restricted as more of your interest becomes taxable, while some savers may opt to transfer funds to a Stocks and Shares ISA instead.
Find out more about how we can help
While the details of the Autumn Budget remain uncertain, we can support you in creating a plan to protect your finances once the policy changes are confirmed in November.
Email us at [email protected], or call 01273 076 587.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning or tax planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pensions Regulator.
Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.
Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.
