Financial Advisers discover amazing new sleep elixir – Budget 2026

The afternoon had started so well.

Our crack team of financial planners had gathered well in advance, eager to learn and discover how they could help, prepare and advise their clients how to negotiate a changing financial and economic environment. But now, not many minutes later, the room was silent save for a television screen displaying a business-suited older man talking to a room full of lively people.

One adviser was fast asleep with his head on his folded arms on the desk, mouth slightly open as he breathed. Next to him another adviser reclined in her chair, head to one side, eyes closed, breathing deeply. Further inspection revealed a third curled up in a ball under the table, whilst a fourth was emitting loud snores as he used his laptop for a pillow. Other members of the team were fast asleep in similar repose.

What, I wondered, had been responsible for having this soporific effect on our usually energetic financial planning team? My attention turned to the individual still speaking on the television screen, and after a few moments I began to understand. His speech appeared to be full of suggestions and ideas without any specific detail of what he actually meant, which in fairness is probably what he intended. Whilst it became clear that the Chancellor had put together a budget without big shocks or surprises in order to keep favour with his masters (namely, the international bond markets), it was only later, reflecting on the content of said speech that I fully appreciated the sleep inducing effects of this significant address to the nation.

Lots missing

It became obvious that the nature of the chancellor’s sleep elixir was in what he didn’t say rather than what he did, because he didn’t say quite a lot. Missing from his pronouncements was any change to income tax, National Insurance or capital gains tax. The rates of inheritance tax were not mentioned, and neither were the various IHT reliefs available. There was no change to the tax on Venture Capital Trusts, Enterprise Investment schemes, business relief or dividends. There was no change to personal allowances, VAT or employers NI contributions, and no alteration to corporation tax or private pensions.

No wonder our financial planners had nodded off. They had no reason to dash off to start making changes to their clients’ plans in the absence of any significant changes in taxation. So it seems to be largely business as usual for them.

Time to wake up

So I wondered how I could rouse them from their soporific state. I picked up on a couple of points that might do the trick. “Restriction of cash ISAs to £12,000 cancelled,” I whispered gently. A couple of eyelids flickered. “Another 2% on savings and property income,” I ventured, slightly louder. “Halving of business asset disposal relief to £500,000,” I said.

That did it. Suddenly everybody was awake and taking notice. There were some things in the budget that made it worth paying attention.

Devil in the detail

Listening to a budget statement is rather like cooking a meal for vegan guests (I speak from experience having committed vegans in our family). The devil is in the detail, and you need to read the ingredients on the packet to be completely sure of what’s inside and that it’s not going to do you harm. If you take the recipe at face value you could be missing some important information. With that in mind, a lively conversation took place amongst our team (now fully awake!) at which various questions were raised about the ingredients in this particular concoction and some insightful observations were discussed (they all love this stuff really). You can be sure that our team will be digging deep over the coming period to analyse the budget in more detail and ensure that our advice to our clients is up to date and effective.

In fairness to the Chancellor, there were a lot of measures that could make quite a difference to specific sectors of the UK economy, and to the nation’s future as a whole. Whilst interesting, these items don’t have a direct impact on most of our clients’ financial planning unless they are engaged in one of the affected sectors themselves.

What do we know?

There are some things that we do know, however. Here’s a brief list of the items that we pulled out as being of particular interest.

• Rising energy costs are likely to result in increased inflation over the period to come, which will put pressure on interest rates. If you’re planning to borrow money soon, you should be aware of the possibility of further hikes in mortgage rates.
• The Chancellor delivered a cash handout of £100 ( a ‘household energy payment’) to all households with a property in council tax band A to D to assist with increasing energy costs. He also scrapped the standing charge on fuel bills which will benefit people using less energy, although heavier users will pay more through higher unit prices.
• Savings and property income, which was due to rise by 2% from April 2027, will now rise by 4%. This means that whilst a basic rate taxpayer will pay 20% on income that they earn from employment, they will pay 24% on savings and property income, rising to 44% for higher rate taxpayers and 49% for additional rate taxpayers (those earning over £125,140 a year). This change makes investing in property by individuals even less attractive, with significantly higher rates of stamp duty on purchase combined with these higher tax rates on income received. With further pressure being added to the economics of personally owned buy-to-let property we might expect a further exodus of private landlords from the rental market. Anyone who still holds the view that owning a residential property is the best form of pension needs to challenge that view carefully as higher purchase taxes, restricted reliefs and now higher tax on rental income have reduced the attractions of property investment significantly over recent years.
• People whose only income is the state pension will not have to pay tax from next year. However the existing personal allowance still applies making life a bit more complicated for people with modest income from other sources in retirement.
• Currently you can earn up to £1,000 in trading income without paying tax so if you have a small income from carrying out odd jobs or selling craft work, for example, you won’t need to declare it. This limit is being increased to £3,000 from next year giving you a bit more flexibility.
• Whilst the rates of capital gains tax are unchanged, people selling their business can qualify for business asset disposal relief, reducing their effective tax rate from 24% to 18% on gains up to £1,000,000. The budget changes this to £500,000 from next April, so if you’re in the process of selling your business doing so before April could save you up to £30,000 in tax.
• The government has proposed a new Founders relief for the sale of high growth companies, but the requirements are quite restrictive and it looks as though only a very limited number of entrepreneurs will qualify. More details will follow after consultation.
• The previous proposal to reduce the cash ISA limit to £12,000 for people under 65 has been scrapped, and the limit will remain at £20,000 for all ages.
• First time buyer ISAs are being planned, but they won’t be introduced until April 2029. No doubt we’ll be hearing more about this idea in the future.

As always, our team will be reviewing these changes and discussing any actions that are appropriate for each of our clients at their next Progress Meeting. If you have any questions about any of these changes in the meantime, or if you would like to discuss your own situation to make sure that you are making full use of your available tax allowances and get a robust financial plan in place, you can contact us here.

If you’re feeling nerdy and you would like to dig into the detail of the budget, here’s where to go; https://www.gov.uk/government/publications/budget-2026-document/budget-2026-html

And if you’re having trouble sleeping, we have the perfect cure. Here is a video of Chancellor John Healey’s speech in full. Enjoy. https://www.youtube.com/watch?v=F_SZtMFb2ek

 

 

Andy Jervis

Chartered MCSI, Certified Financial Planner

29th October 2026