Autumn Budget 2026

What the latest announcements could mean for your savings, investments, pensions, property and business.

Our initial view: The Budget was less dramatic than many feared, but the detailed papers contain important changes. In particular, taxable savings interest and rental income will face higher rates from April 2027, while the forthcoming inheritance tax treatment of pensions remains a major planning issue.

There were no sweeping increases to the main rates of Income Tax, National Insurance or VAT. However, if you have accumulated cash, investments, pension wealth, rental property or business interests, several announcements deserve attention.

 

 

Cash savings will be taxed more heavily

From 6 April 2027, the rates applying to taxable savings interest are due to rise to:

· 24% for basic-rate taxpayers

· 44% for higher-rate taxpayers

· 49% for additional-rate taxpayers

This is a further two-percentage-point increase on top of the rise announced in 2025. Compared with the rates applying today, the eventual increase will be four percentage points.

 

What this means for you

Review whether you are holding more cash than you need for emergencies and planned spending.

· Use your ISA allowance where appropriate, particularly for cash or investments that would otherwise generate taxable income.

· Consider how savings and investments are owned between spouses or civil partners.

· Compare deposit rates on an after-tax basis rather than focusing only on the headline interest rate.

 

Your ISA allowance remains valuable

The proposed restriction on Cash ISAs has been reversed. You will retain the flexibility to use the full £20,000 annual ISA allowance for cash, investments, or a combination of both.

As tax on savings interest rises, sheltering suitable savings and investments from Income Tax and Capital Gains Tax becomes even more valuable.

 

Investments outside ISAs and pensions

If you hold investments through a General Investment Account, careful tax-wrapper and ownership planning remains important. We may need to consider:

· which investments are held inside your ISA and pension;

· how taxable investments are structured;

· whether available allowances are being used efficiently; and

· whether ownership between spouses or civil partners remains appropriate.

Tax should not dictate your investment strategy, but you should not pay unnecessary tax on investments you intended to hold anyway.

 

Rental property faces a further tax increase

From 6 April 2027, property income tax rates in England, Wales and Northern Ireland are due to rise to 24%, 44% and 49%, depending on your tax band.

If you own rental property personally, assess the return after tax, maintenance, insurance, financing costs and other expenses, rather than looking only at the gross rent or property value.

This does not automatically mean you should sell. It does mean your property portfolio should continue to meet your objectives and should be compared periodically with alternative uses of your capital.

 

Pensions remain valuable, but estate planning is changing

There was no further major restriction on pension tax relief in this Budget. However, the previously announced change bringing most unused pension funds and pension death benefits into your estate for Inheritance Tax from 6 April 2027 remains on course.

For many years, a common approach has been to spend cash and investments first and preserve pensions for beneficiaries. That will not necessarily remain the most tax-efficient strategy.

Your retirement income and estate planning may now need to consider:

· when you begin or increase pension withdrawals;

· whether pension or non-pension assets should be spent first;

· lifetime gifting and how much capital you need to retain;

· the interaction between your pension, property, investments and wider estate; and

· whether existing beneficiary nominations remain appropriate.

This does not mean you should automatically start drawing from your pension. It means your pension, retirement income and estate plan should be reviewed together.

 

Inheritance Tax planning

If your property, investments, cash, pensions and other assets could take your estate above the available Inheritance Tax allowances, the April 2027 pension change may increase the eventual liability or bring your estate into the tax net for the first time.

The Budget also introduced technical restrictions on when certain trust-related liabilities may be deducted in calculating an estate. Complex trust and loan arrangements should therefore be reviewed rather than assuming a liability will automatically reduce the taxable estate.

 

If you own a business

 

Business Asset Disposal Relief

From 6 April 2027, the lifetime amount of qualifying gains eligible for Business Asset Disposal Relief is due to fall from £1 million to £500,000.

If you are already contemplating a business sale, the timing and tax position should be reviewed well before April 2027. Tax should not dictate a commercial decision, but your exit strategy and personal financial plan should be considered together.

 

Taking money from your company

Your remuneration strategy should continue to consider salary, dividends, employer pension contributions, benefits, retained profits and your personal spending requirements as one combined plan. Employer pension contributions may remain particularly valuable, subject to your available allowances and the relevant company tax rules.

 

Benefits in kind

From 6 April 2027, employers will need to payroll certain benefits, including company cars and vans, fuel and medical benefits. If you receive benefits through your company, your accountant and payroll provider will need to prepare for the change.

 

A welcome pension death-benefit change

The existing two-year rule is being removed. Otherwise tax-free pension death benefits should no longer become taxable merely because the scheme takes more than two years after notification of the death to make payment. The change applies to relevant payments from 28 October 2026.

 

What should you do now?

· Make appropriate use of your ISA allowance.

· Review large cash balances and the after-tax interest you are receiving.

· Consider taxable investments on an after-tax basis.

· If you are a landlord, review the genuine net return from your properties.

· Review the order in which you expect to draw from pensions, ISAs and other investments.

· If your estate may be subject to Inheritance Tax, consider your pensions, property, investments and gifting together.

· If you own a business, coordinate salary, dividends, pension contributions and retained profits.

· If you may sell your business, review the effect of the April 2027 BADR reduction.

· Avoid making major investment or retirement decisions solely because of tax.

 

Our view

The Budget was less severe than many had feared, but it was not quite as benign as the Chancellor’s speech first appeared. The further increases in tax on savings and rental income are particularly relevant if you hold significant cash or investment property. The inclusion of most unused pensions within estates from April 2027 is an even more fundamental change for retirement and estate planning.

The core planning tools available to you have not disappeared. ISAs and pensions remain valuable, and business owners retain flexibility over how wealth is built and extracted. What matters increasingly is making sure your cash, investments, pensions, property, business interests, retirement income and estate work together as one financial plan.

For most people, this Budget should not prompt an immediate change of direction. It should prompt a check that the direction you are already travelling remains the right one.

 

Important information

This general overview is based on measures announced in the Autumn Budget on 28 October 2026 and previously announced measures relevant to financial planning. It is not individual tax or financial advice. Tax treatment depends on your circumstances and legislation may change.

Sources: HM Revenue & Customs, Budget 2026 Overview of Tax Legislation and Rates; ICAEW Budget tax update, both published 28 October 2026.