Okay, you were probably expecting yesterday’s post to be about the budget. I mean… fair enough. Saturday is usually my “money” day, and the budget is all anyone’s talking about right now. After all, Rachel Reeves only delivered it on Wednesday.

Speculation vs Reality

The run-up to the budget was wild - headlines predicted changes to capital gains, pensions, and more. Naturally, people panicked. But, like last year, my advice to clients was simple: wait and see. Patience paid off then, and it paid off again this year.

Honestly, I’m convinced half of these “predictions” exist just to make the actual budget feel less painful when it lands. Some of the dramatic changes people feared, like cutting the amount of tax-free cash you can take from a pension, never happened. It feels like expectation management… and, in my opinion, a lot of politics.

It’s short-sighted. None of it seems geared toward long-term growth, stability, or real people’s needs. Wouldn’t it be nice to have someone neutral - someone who actually understands how to attract businesses, grow the economy, increase employment, and help people without worrying about pleasing backbenchers?

The Big Picture

From a financial planning perspective, the budget was… fine. Nothing dramatic, nothing disastrous. But for businesses, it was pretty poor. Small firms in the UK are still being squeezed, and the hospitality sector? I wouldn’t be shocked to see more closures next year. Many places are already struggling to stay afloat and desperately need support.

Yes, the government keeps saying it’s “cut business rates,” but in reality, it feels more like a stealth tax. The chancellor claimed she was “backing small businesses” with the lowest rates since 1991. Yet most businesses will end up paying more due to rising property values and disappearing reliefs. Small businesses were expecting a 20p-in-the-pound reduction, but all they got was 5p.

UK Hospitality found that over the next three years:

• The average pub will pay £12,900 more in business rates (even with transitional relief).

• The average hotel will see its bill jump £205,200.

The so-called “support” feels like smoke and mirrors. Property values are rising, reliefs are being phased out, and bills are going up, not down. On top of that, businesses face higher employer National Insurance, climbing energy costs, and another rise in the minimum wage, which hits hospitality particularly hard.

Employee Ownership Trusts

I won’t dwell on this too much, but I really don’t understand why they’ve cut tax relief for owners selling to an Employee Ownership Trust (EOT) - halving it from 100% to 50%. An EOT lets owners pass their business to employees instead of selling to a competitor or private equity, keeping it independent and rewarding the people who actually make it work. Surely that’s a good thing? That’s exactly what I’d choose to do - so why penalise owners who take this route?

Some Positives

For my clients, there were some genuine positives. No big pension reforms, no changes to capital gains tax and no VAT surprises. And the changes that were announced mostly come in gradually, meaning we’ve got time to plan calmly. No one needs to rush into anything.

The State Pension will rise by 4.8% in April, keeping pace with average wage growth. Meanwhile, regulated rail fares will stay frozen until March 2027, and fuel duty will remain frozen until September 2026. Not life-changing, but still a small relief for households.

Key Changes to Know

Tax Threshold Freeze

This hits where it matters. Often called a stealth tax, it doesn’t raise rates, but as wages rise, more of your income gets taxed. The freeze is now extended until 2031 - nine years without any increase since 2022, despite inflation. More people will slip into higher tax bands, and fiscal drag is here to stay.

About 1 million people who currently don’t pay income tax will start paying it as their earnings exceed the £12,570 threshold - including state pensioners. National Insurance thresholds are frozen too, meaning more of your pay is exposed to National Insurance Contributions (NICs).

Cash ISA Allowance Cut

From April 2027, under-65s will see their cash ISA allowance drop from £20,000 to £12,000. The aim is to encourage investment in growth assets. Sure, diversified global equities can deliver better long-term returns, and cash loses value to inflation - but cash is still essential for short-term needs and emergencies, and paying less tax on your savings is always a plus.

Many people do not feel confident investing, and financial advice isn’t cheap or accessible to all. Without proper guidance, people often act on emotion, which can do more harm than good. Investing doesn’t have to be complicated, but understanding the basics is crucial.

Salary Sacrifice Pension Cap

From April 2029, the amount of pension contributions via salary sacrifice that are exempt from National Insurance will be capped at £2,000 per year. Salary sacrifice lets employees redirect part of their salary into a pension before income tax and NICs, giving them tax and NIC savings while also lowering NIC costs for employers.

• Income tax relief remains unchanged, so pensions are still a tax-efficient way to save, especially for higher earners.

• Around 30% of private sector and 9% of public sector workers currently use this.

• The cap disproportionately affects lower- and middle-income earners, as basic-rate NICs are 8% between thresholds, while higher-rate NICs are only 2% above the limit.

• The NIC cap will reduce the incentive for some employees to pay into their pension and will increase costs for employers.

Dividend Tax Rise

From 6 April 2026, dividend tax will rise by 2 percentage points for most taxpayers:

• Basic rate: 8.75% → 10.75%

• Higher rate: 33.75% → 35.75%

• Additional rate: stays at 39.35%

The £500 dividend allowance remains unchanged. This mainly affects limited company directors and investors with larger portfolios held outside ISAs and pensions. Dividends within ISAs and pensions are unaffected.

With corporation tax already high for many small companies and the rising cost of employing staff, this adds another burden for small business owners. It may be worth considering whether to take dividends before the increase takes effect (depending on your overall income position), or to move dividend-paying investments into ISAs to shelter that income and help reduce your future tax bill.

Property & Savings Income Tax Increase

From April 2027, rates on property income and savings rise by 2 percentage points, to 22%, 42%, and 47% for basic, higher, and additional rate taxpayers. Combined with ISA changes and frozen personal savings allowances, this could cut net returns for savers, especially as cash interest rates continue to fall.

Buy-to-let landlords face yet another challenge. Profitability has already been eroded by mortgage interest relief restrictions, Stamp Duty surcharges, and reduced capital gains tax allowances. The new property tax increases may push some out of the market, worsening the housing crisis, with fewer options and rising rents for tenants.

“Mansion Tax” Council Tax Surcharge

From April 2028, homes in England worth £2 million or more will face an extra council tax surcharge on top of their usual bill. How much you pay depends on your property’s value:

• £2m–£2.5m: £2,500

• £2.5m–£3.5m: £3,500

• £3.5m–£5m: £5,000

• £5m+: £7,500

Fewer than 1% of properties will be affected, mainly in London and the South East. Unlike regular council tax, the extra goes directly to the Treasury, not local councils.

Why Patience Matters

Most of the changes are manageable and phased in, giving advisers and clients time to plan sensibly. Everyone’s circumstances are different, of course, but just like last year, the message is clear: trust the facts, not the headlines. It’s almost always better to wait and see than to act on speculation. Don’t react out of fear; take the time to understand the announcements and plan with clarity, confidence, and a calm, informed approach.

Disclaimer: The content provided is for general informational purposes only and does not constitute financial, investment, or tax advice. It is not personalised to your individual circumstances. You should seek advice from a qualified financial adviser before making any financial decisions.