Why it’s important to stay calm despite all the Autumn Budget speculation
Despite the rumours swirling around in the headlines, you need to stay focused on your long-term plan.
After a couple of months when the Autumn budget was expected to be scheduled between 28 October and 04 November, it was finally announced that it will take place on 26 November 2025. So there’s still only a few weeks to go.
And given all the economic indicators which show the need to raise taxes or cut expenditure, and the government’s commitment not to touch the big taxes – income tax, NI, VAT – there has been so much noise about what the Chancellor might do that many investors have started to panic, as reported in The Times.
This is understandable. With all the rumours flying around, many people feel that they should be doing something to be ready for any potential changes. However, the important thing is to keep calm and to avoid making hasty and emotional decisions. Making knee-jerk decisions before any changes are actually confirmed doesn’t make sense and could end up harming your long-term financial plan.
For example, ahead of the 2024 Autumn Budget, there were a whole series of headlines suggesting that the pension tax-free allowance was going to be scrapped. This led to some people taking a lump sum from their pension, even though this had not been a part of their long-term financial plan. When this change didn’t actually happen, many of these people were unable to cancel the withdrawal or put the money back in their pension, which could now leave them short when planning for retirement.
Because of this, here’s a few tips to help you keep calm in the run up to the Autumn Budget.
- Tune out the noise
Whilst you may find it difficult to do, try to tune out the noise in the lead-up to the Budget.
If you are less exposed to the rumours and speculation, it should help your stress levels and mean you’re less likely to make decisions based on rumours that could potentially have a negative impact your long-term financial plan.
News from some social media channels in particular should be treated carefully, as it can often be written as if a rumour is confirmed when it’s still just speculation.
So, before you respond to news or even worry, take some time to fact-check the source if you can.
- Consider the impact on your financial plan
Headlines about changes inevitably have to be generalised and often use average figures to highlight the potential implications. However, as everyone’s financial circumstances and goals are different, it could well be that an announcement won’t affect your long-term financial plan at all.
For example, earlier this year the government was expected to announce a cut in the amount savers can hold in Cash ISAs, and these rumours persist. That might seem like cause for concern, but if you use your ISA primarily to invest, it may not really have much effect on you.
Similarly, much has been written about possible inheritance tax changes. However, it could be that your estate might not be liable for IHT, or that you already have in place an estate plan that could mitigate the effects of any potential changes.
If you have any concerns, it makes sense to discuss them with your financial planner, who can help you understand what any speculative and/or confirmed changes could mean for you.
- Be aware that changes often don’t take effect immediately
You should remember that budget announcements do not always come into effect immediately. This means that you often have time to assess what the changes mean for you and to decide on the best way to respond before they actually come into force.
For instance, before the 2022 Autumn Budget, it was announced that the Capital Gains Tax annual exempt amount would be reduced from £12,300 to £3,000. The reality was that It was reduced to £6,000 in April 2023, and then to £3,000 in April 2024, so investors had time to adjust.
Obviously, this isn’t always the case, and sometimes changes may come into effect straight away. Even then, rather than respond immediately, it can often pay to take a little time to weigh up your options first and to discuss them with your financial planner, rather than making any snap decisions.
- Talk to your financial planner
If the Autumn Budget speculation is tempting to make changes to your financial plan, why not talk to your financial planner first.
If the Autumn Budget brings in changes that could impact on your finances, we can work with you to review and update your long-term financial plan to ensure it continues to reflect both current legislation and your individual circumstances.
So please do get in touch, if you’d like to talk to one of our team.
Please note:
This article is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.
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.