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While the markets took this Budget calmly, the picture isn’t quite so settled for many of our clients. Having now had a chance to go through the detail, I want to set out plainly what has changed and what it might be useful to think about with your advisers. The important question is not simply whether you will pay more tax, but whether your financial plans still support what you want to achieve.
Savings and rental income
From April 2027, tax on savings and property income goes up by a further two percentage points, on top of a rise announced last year. That takes the rates to 24% for basic-rate taxpayers, 44% for higher-rate and 49% for additional-rate, for Property in England, Wales and Northern Ireland and savings rates across the UK. There is also a change to how your personal allowance is used: it will be set against earnings and pension income first. This could leave more of your savings and rental income exposed to tax.
The Chancellor said 88% of people will pay no more tax on their savings, and he may well be right. But those who may pay more are mostly people with substantial cash outside ISAs, investments in their own names, or a rental property or two, a position that that may sound familiar to many of you. The effect will depend on the income those assets produce. That makes it more important than ever to review how assets are held, which partner owns what, and whether returns are taken as income or growth.
I was glad to see the £20,000 cash ISA allowance kept and last year’s proposal to cut it to £12,000 dropped. I have never liked using the tax system to push people out of cash before they’re ready.
Rising earnings
Income tax thresholds are frozen until April 2031. More people in England, Wales and Northern Ireland who would never have thought of themselves as higher-rate taxpayers will soon find themselves paying 40% without feeling any better off. It is therefore worth reviewing pension contributions and the way investments are split between spouses and civil partners with your adviser. The aim is to understand which choices are appropriate for you, rather than assume that a higher tax bill simply has to be accepted.
Salary sacrifice is becoming less useful too. From April 2029, contributions above £2,000 a year will attract National Insurance. That makes it important to review how you contribute to your pension, not just how much.
Business owners
The new Founders’ Relief, a 10% rate of capital gains tax on qualifying disposals of shares up to £10 million of lifetime gains from April 2027, drew most of the headlines. It’s generous for those who qualify, but the Treasury’s own estimate is that only around 600 people a year will.
For most business owners, Business Asset Disposal Relief (‘BADR’) matters far more. Qualifying business owners can pay Capital Gains Tax on eligible gains at 18% (2026/27 tax year), subject to the lifetime limit and eligibility, compared with 24% on gains that don’t qualify for higher and additional-rate taxpayers. From 6 April 2027, that lifetime limit is being halved from £1 million to £500,000 of qualifying disposals. A higher or additional-rate taxpayer who would have used the full allowance could therefore pay up to £30,000 more when they sell, as £500,000 of gains moves from 18% to 24%.
I can see the argument for backing the fastest-growing companies, but I find it hard to reconcile cutting the relief most business owners actually use with launching a much more generous one that very few will see.
If you’re thinking about selling in the next few years, it is therefore important to look at ownership, residence, pensions and your wider family position well before a buyer appears.
Employee share options
The Company Share Option Plan is being renamed EMI2, and the value limit of options an employee can hold doubles from £60,000 to £120,000. That is good news for staff at growing companies. But a sale or flotation can also bring unfamiliar decisions: how to meet a tax bill, how to manage a large holding in one company that may be illiquid, and what to do with any cash received? The change to BADR could also make a sale more expensive than expected. Again, this needs careful thought, ideally before the transaction rather than after it.
Families
We have noticed that families increasingly need to plan their finances together. Helping a child with a house deposit affects your own retirement, your gifting and eventually your inheritance tax. These are connected decisions: support for one generation needs to be balanced with financial security for another. With salary sacrifice restricted and the Pensions Commission still to report, long-term pension decisions are not getting any easier to make with confidence.
Next steps
To read the budget breakdown in full, do take time to read Wren Sterling’s Budget Report 2026.
Every new rate, relief and condition adds complexity that you have to deal with. Our role is to help you understand what matters for your circumstances, weigh the choices and avoid decisions that solve one problem but create another.
If anything here sounds like it might apply to you or triggers a question, please speak to your adviser. They can show you how these changes affect your own circumstances and whether anything needs reviewing before April 2027.
Equally if these changes bring to mind a family member, friend or colleague who could benefit from advice, please feel free to share this article or pass on your adviser’s contact details. We would be very happy to talk through their questions and see if we can help.
This information does not constitute personal advice. Information provided regarding tax/pension treatment or legislation is based on our understanding of current UK legislation law, tax law and HM Revenue and Customs’ practice (October 2026), all of which may be subject to change.