Autumn Budget – what does it mean for you and your clients?

Simon Martin, Technical Distribution Manager, discusses what the Government's Autumn Budget means for your customers.

Published: 29 Oct 2026 10 mins read

The build up to the 2026 Autumn Budget was beset with rumours and speculation, although perhaps less intensely than in the last two years.

Chancellor John Healey delivered his 2026 Budget on 28 October amid a complex economic landscape. With economic growth remaining subdued and geopolitical tensions continuing to drive volatility, the government faces significant challenges in balancing support for households, public finances, and long-term growth.

In the weeks leading up to the Budget, many commentators focused on government debt levels and the increasing cost of borrowing.

Against this backdrop, questions inevitably arose over how the Chancellor would navigate these challenges while honouring the government's manifesto commitment not to increase the main rates of income tax, National Insurance, corporation tax or VAT.

In the build-up to the Budget, there were rumours of various tax changes, from CGT rates to Pension Commencement Lump Sums and changes to wealth taxes.

None of these measures formed part of the Autumn 2026 Budget. However, we did have some changes announced in advance, including changes to the state pension uprating, i.e. the triple lock, from April 2030.

Rumours, even when unfounded, highlight how decisions based on speculation can undermine robust financial plans and ultimately lead to poor outcomes for clients.

For financial planners, guiding clients through such uncertainty is challenging. This reinforces the importance of building financial strategies grounded in facts rather than conjecture.

We will focus on the key changes affecting personal financial planning and outline considerations for those advising clients.

Change:

Business Asset Disposal Relief (BADR) and Founders’ Relief

The government will reduce the lifetime limit on gains eligible for BADR (which offers a reduced 18% rate of Capital Gains Tax on qualifying disposals) from £1 million to £500,000.

The new lifetime limit will apply to disposals made from 6 April 2027. Legislation will be introduced in Finance Bill 2026-27.

From 6 April 2027, the government will introduce a new Capital Gains Tax Founders’ Relief, offering a reduced 10% Capital Gains Tax rate on up to £10 million of lifetime gains. The relief is aimed at high-growth, innovative UK companies. There will be a technical consultation to finalise details.

What does this mean?

Even though the amount of tax relief available through BADR has reduced, it’s still a valuable way to cut the CGT payable on selling a business. It’s important for planners, and accountants to make sure business owners meet all the BADR rules before a sale.

There may be steps you can take to increase the chances of qualifying. For example, removing excess cash or assets from the company if they could affect eligibility. As any action taken to qualify for BADR could have costs, tax consequences or other drawbacks, you should weigh up whether the expected savings are worth it.

The changes to BADR, coming in April 2027, may be too soon for entrepreneurs yet to start the sale of their business. However, it would be prudent for those in the process of sale or liquidation to try to finalise the sale before 6 April 2027.

BADR is just one factor to consider when exiting a business. Because the tax saving from BADR will be smaller, business owners should ask whether it’s worth the cost and effort needed to qualify for it. In some cases, it may be a better option to keep the company than sell it.

Some business owners may prefer to leave capital within the company (or a group holding company) and withdraw it gradually as dividend income, depending upon their tax position, income needs and plans to exit the business.

We expect to get further details of Founders' Relief following the technical consultation announced in the Budget. This information could affect the decisions facing clients who own a business.

Most importantly, decisions about selling a business should be based primarily on the owner’s commercial goals, retirement plans and family circumstances rather than tax considerations alone.

Change:

Increase to tax on property and savings income 

The government is increasing the tax on income from savings and property, making these investments less tax efficient.

From April 2027, tax rates on savings and property income will rise to:

24% for basic rate taxpayers

44% for higher rate taxpayers

49% for additional rate taxpayers.

What does this mean?

Because these taxes are increasing, you may want to consider investments that delay when your clients pay tax.

For example, onshore and offshore investment bonds may be attractive, as they provide tax control to investors, allowing the chargeable gains to be deferred to a future date. The chargeable event deferral allows clients to trigger a gain when they are in a lower tax band.

ISAs may also become even more attractive because any interest, income and investment growth are tax free.

Due to a series of tax changes over recent years, property investing is becoming less tax efficient. This may lead property investors to consider other investments.

For property investors used to getting an income, one alternative could be an investment bond, particularly when combined with suitable trust planning, such as a discounted gift trust. This can still provide an income but may also help with tax planning by reducing the value of an estate for inheritance tax purposes. 

Your clients should not focus on tax alone. With your help, they need to consider their income needs and overall financial goals alongside any capital gains tax bill from selling a property and potential inheritance tax savings from moving money into trusts or other investments.

Change:

Pension Tax Allowance

From April 2027, the government will introduce a new Pension Tax Allowance for people who have reached State Pension age, designed to ensure that those with income at or below the value of the full new State Pension do not pay income tax as a result of State Pension increases.

If a person’s income is at or below the full new State Pension, they will get the full allowance. If their income is slightly higher, the allowance will gradually reduce.

What does this mean?

For clients with income around the level of the full new State Pension, the allowance should prevent State Pension increases alone creating an income tax liability. Advisers will still need to consider each client's wider sources of retirement income and tax position.

Change:

Cash ISA changes to be scrapped

Chancellor John Healey also confirmed plans to reduce the annual Cash ISA allowance for those under age 65 from £20,000 to £12,000 will not proceed. The limit will remain the same for all ages.

What does this mean?

ISAs will remain an important way to save and invest tax-efficiently. This presents an opportunity for financial planners to revisit conversations around purpose and risk.

Understanding what a client wants their ISA to achieve, and over what timescale, remains crucial. Are they looking for long-term growth or a short-term safety net? The answer can help determine where to hold assets and give an opportunity to educate clients on the long-term benefits of investing.

Revisiting a client's objectives, risk tolerance and asset mix not only helps make sure their investments remain aligned with their goals, but also shows the value of ongoing financial advice.

Change:

Replacing the Lifetime ISA with a First Time Buyer ISA

From April 2029, the government will introduce a new First Time Buyer ISA replacing the Lifetime ISA for new savers. The account will provide a 25% government bonus, paid on withdrawal, towards the purchase of a first home worth up to £450,000, with the maximum bonus capped at £20,000. 

Existing Lifetime ISA holders will be able to continue contributing under the current rules. The withdrawal charge for existing Lifetime ISA holders buying a property above the £450,000 property price cap will reduce to 20% from 29 October 2026. The 25% charge for other unauthorised withdrawals remains unchanged. 

The Chancellor also announced plans for a new ‘Starter ISA’ aimed at encouraging first-time investors, although details for this have yet to be published. 

What does this mean?

Clients currently using a Lifetime ISA as part of their retirement planning can continue to do so under the existing rules. However, it won’t be available as an option to clients in the future. 

Younger clients looking to start saving for retirement may consider a more traditional route using pensions. This may have implications for long-term retirement planning where a client had planned to take their full Lifetime ISA value as a lump sum, as pension benefits will generally be subject to the usual limits on tax-free cash. 

The new First Time Buyer ISA is likely to be an attractive option for those saving towards their first home, combining tax-free growth with a government bonus. 

In addition, first-time buyers purchasing a property above the £450,000 limit will no longer face the current 25% withdrawal charge. As a result, it’s worth making sure cash earmarked for a property purchase is held in the most appropriate vehicle for the client's circumstances. 

Other changes

We saw a number of other announcements which will be of interest to financial planners and their clients.

Bank taxation – The Chancellor announced a temporary surcharge on banking profits. The Bank Corporation Tax Surcharge will increase from 3% to 6% from 1 January 2027 to 31 March 2028. This increase was lower than many commentators had predicted.
Pension death benefits – From 28 October 2026 beneficiaries will no longer be taxed on pension and lump sum death benefits paid more than 2 years after the scheme is told of the member's death.
Carer’s Allowance changes – The government will replace the cliff edge withdrawal of Carer’s Allowance at the Weekly Earnings Limit with a 100% taper on earnings above the limit. The taper is due to be introduced in 2030-31 and apply in England and Wales. This will give carers more flexibility to take on extra work, increase their house or accept a pay rise without suddenly losing all their support.
Energy – Standing charges on gas supplies will be abolished, with this added onto the unit rate instead. This is expected to benefit lower-usage households, while higher-usage households may face higher overall costs.
The previously announced VAT cut on domestic electricity has been extended to July 2027.

Clients living in properties in council tax bands A to D will get a £100 Household Energy Payment from January 2027. This is a similar scheme to previous government intervention.
Fuel duty – The Chancellor extended the temporary 5p per litre reduction in fuel duty to July 2027. 
National Minimum Wage – From April 2027, the National Living Wage will increase to £13.21 per hour, with the National Minimum Wage increasing to £11.27 for 18–20-year-olds and £8.31 for 16–17-year-olds. All these changes represent a 3.9% uplift.
Small Business Rates Relief – The Small Business Rates Relief thresholds will increase from April 2027, with the 100% relief threshold rising from £12,000 to £18,000 and tapered relief increasing from £15,000 to £21,000. This is expected to bring around 70,000 additional high street businesses into scope for business rates relief.

These significant changes will again provide an opportunity to provide smart tax planning alongside reassurance for your clients. As tax changes, the opportunity to deliver great outcomes becomes even more valuable.

Relationship with the previous Budgets

When considering the impact of the 2026 Budget, it’s also important to remember the significant changes announced in the 2024 and 2025 Budgets which are yet to come into force.

Key changes coming up include:

Pensions will become subject to inheritance tax from April 2027, which could increase the amount of tax some estates pay.
Beneficiaries may also face income tax on inherited pension funds if the pension holder dies aged 75 or over. Salary sacrifice pensions will become less generous from April 2029, with a proposed £2,000 annual limit on contributions that qualify for full National Insurance savings.
Income tax bands and inheritance tax thresholds will remain frozen until 2031, meaning more people could be pulled into higher tax rates over time.
The normal minimum pension age will increase to age 57 in April 2028, affecting when some people can access their pension savings.

These changes make financial planning more important than ever. Advisers should help clients understand how upcoming pension and inheritance tax changes could affect them, review their retirement income plans, and ensure their financial arrangements remain aligned with their long-term goals.

All of this gives financial planners an opportunity to produce a coherent and robust long-term strategy to deliver meaningful value and help clients navigate an increasingly complex tax landscape.

While Budget announcements often dominate the headlines, tax should rarely be the primary driver of financial decisions. The most successful client outcomes come when advisers start with a clear understanding of a client's objectives, values and desired future, then use tax planning as one of many tools to help achieve those goals. In a changing tax landscape, that client-centred approach remains as important as ever.