Autumn Budget 2026: What It Could Mean for Your Pensions, Investments and Inheritance Tax
Published 28 October 2026
The Chancellor delivered the Autumn Budget today. Some of the announcements affect how people save, invest and pass on wealth. Others confirm changes announced earlier, including the inheritance tax treatment of pensions from April 2027.
Everyone’s circumstances differ, and a change that matters a great deal to one person may have little effect on another. This article summarises the main points and is not a substitute for personal advice.
1. Pensions
Tax-free cash. Based on our review of the announcements, there is no general reduction in the tax-free cash you can take from your pension. Most people can take up to 25% of their pension benefits tax-free, up to a lump sum allowance of £268,275, unless they hold protections. Taking tax-free cash is not right for everyone. The decision depends on your income needs, other assets, tax position and long-term goals, and taking it earlier can reduce what remains for later retirement income.
Inheritance tax from April 2027. From 6 April 2027, most unused pension funds and death benefits will count towards your estate for inheritance tax (IHT). This was announced previously, and the start date is now close. For some people, pensions may no longer sit outside their estate. Whether any tax is due will depend on the size of your estate, available allowances and exemptions, and who inherits. Pensions left to a spouse or civil partner are expected to continue to benefit from the spouse exemption.
This does not mean withdrawing more from your pension is the right response. Withdrawals can create income tax liabilities and may reduce the funds available later in life. Points worth considering include:
Salary sacrifice. Previously announced changes will limit National Insurance relief on pension contributions made through salary sacrifice from April 2029, after the first £2,000. This may be relevant if you or your employees use these arrangements.
2. Inheritance tax
The standard nil-rate band remains £325,000 per person, and the Government has frozen it until April 2031. A residence nil-rate band of up to £175,000 may apply when a qualifying home passes to direct descendants. It reduces for estates above £2 million. Married couples and civil partners may be able to combine allowances, up to £1 million in qualifying circumstances. The standard IHT rate is 40% on the taxable value above available allowances.
If you think your estate may be affected, you could consider:
Any planning should leave you enough resources for your own needs. Trusts and gifts have their own tax rules and may not be suitable for everyone.
3. Investments
Dividends. Since April 2026, the basic and higher dividend tax rates are 10.75% and 35.75%. The additional rate is 39.35%. The dividend allowance is £500 a year. This may matter if you receive dividends outside tax-efficient accounts.
Savings and property income. As previously announced, tax rates on savings income and on property income will increase by two percentage points from April 2027. Cash remains appropriate for emergency reserves and short-term needs, though inflation can reduce its value over time.
Capital gains tax. No change here. Your tax position when you sell investments depends on timing, annual exemptions and how the assets are held.
Tax treatment depends on your individual circumstances and may change. The value of investments, and the income from them, can fall as well as rise, and you may get back less than you invest.
4. ISAs
The Chancellor has confirmed that the previously planned cut to the Cash ISA allowance for under-65s will not go ahead. The Cash ISA allowance stays at £20,000, within the overall £20,000 annual ISA limit.
Other ISA changes announced:
Cash may suit short-term needs. Stocks and Shares ISAs may suit longer-term goals if you can accept market fluctuations and the possibility of loss. ISA tax rules depend on your circumstances and may change.
5. Property
A High Value Council Tax Surcharge is due from April 2028 on residential properties in England worth £2 million or more. For landlords, previously announced increases to property income tax rates start in April 2027, which could reduce after-tax rental income.
6. Questions you may wish to ask yourself
There is no need to make hurried changes because of a Budget. Decisions are best made calmly and with your whole financial picture in mind.
7. Speaking with us
If you would like to talk through how these changes may affect you, we would be glad to arrange an initial conversation. Any advice will depend on your circumstances, and we will explain the options and the risks.
Important information: This article is for general information only and is not personal financial, investment, tax or legal advice. Tax rules, allowances and reliefs depend on individual circumstances and may change. Some Budget measures remain subject to legislation. Pension and investment values can fall as well as rise, and you may get back less than you invest. Information is correct as at 28 October 2026.
Price Ferguson Farnham
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