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Budget: What it means for your money

The Chancellor’s latest Budget brings a mix of headline-grabbing changes and quieter tweaks that could still affect your finances.

Here, Jason Ryan, senior investment assistant Newcastle-based wealth manager Raymond James, Monument provides a simple breakdown of the key measures and considers how these measures could shape household budgets, savings decisions and long-term financial planning.

Income Tax

Personal tax thresholds will remain frozen for another three years, until 2031. This “stealth tax” means as wages rise, more people will move into higher tax bands. By 2029, nearly 1.7 million more people will pay higher or additional rates.

Dividend, savings, and property (rental) income will also be hit. From April 2027, income tax on these sources will rise by two percentage points.

Pensions

From April 2029, salary sacrifice pension contributions above £2000 will attract National Insurance.

Employers and employees will likely share the cost, which could reduce take-home pay or pension contributions.

Critics warn this could make saving for retirement harder, although the income tax relief remains attractive.

Savings & ISAs

Cash ISA limits will fall to £12,000 pa for under-65s from April 2027, while over-65s keep the £20,000 allowance.

The overall ISA cap remains at £20,000 pa, but this change may encourage more people to look at Investment ISAs.

Capital Gains, Inheritance & Investments

CGT relief on sale of businesses to an Employee Ownership Trust (EOT) is reduced from 100 per cent to 50 per cent with immediate effect.

Upfront tax relief on Venture Capital Trusts will reduce from 30 per cent to 20 per cent from April 2026.

We are likely to see an increase in demand for these types of investments before the deadline.

Pension pots will still form part of estates from April 2027.

Business Relief is still being reduced to £1 million per person from April 2026, whereby on death the first £1 million of a qualifying business will be free from IHT with the balance being subject to an IHT rate of 20 per cent.

However, the £1 million allowance will now be transferable to the surviving spouse.

Property

A new “mansion tax” arrives in April 2028.

Homes worth over £2 million will pay £2500 annually in addition to the normal council tax, rising to £7500 pa for properties over £5 million.

Motoring

Electric vehicle drivers face a new mileage tax from 2028:

• 3p per mile for fully electric cars
• 1.5p per mile for plug-in hybrids

Other Changes

The Lifetime ISA will be scrapped with consultation starting early 2026.  

Average energy bills will fall by £150 per year thanks to reduced green levies.  

There will also be a stamp duty break for companies listing on the London Stock Exchange for the first three years.

What does this mean for you?

The freeze on tax thresholds and higher income tax rates on rental income, savings and dividends will affect many households.

Pension savers should review contributions ahead of the 2029 changes.

Property owners and investors may want to plan for new taxes and reduced reliefs.

Need advice? Do reach out to us so we can help you understand how these changes impact your plans.

Please reach out to RJUK-Monument@RaymondJames.com to see how we can help or visit www.monument.raymondjames.uk.com

Risk warning: Any opinion or forecast reflects the judgment as at the date of issue and is subject to change without notice. Past performance is not a reliable indicator of future results. This commentary is intended for information purposes only and no action should be taken or refrained from being taken as a consequence without consulting a suitably qualified and regulated person. With investing your capital is at risk.

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