Helping you navigate the changes to pensions and investments
If you want to know how the Autumn Budget impacts pensions and investments, you're in the right place. We've untangled the changes to work out what the key takeaways are and what they mean for pensions and investments. In this article, we've outlined each change to pensions and investments in simple terms, so you have a better idea of where you stand.
The key takeaways
On 30 October, we heard from Chancellor Rachel Reeves, outlining the Government’s first Autumn Budget Statement. It set out the Government’s spending priorities, including additional investment in the NHS.
For wealth customers, we believe the Budget brings stability. There are no changes to pension tax relief, the tax-free lump sum, the annual allowance, national insurance related to employer pension contributions, or ISAs. This stability may help people when thinking about planning for their future financial goals.
That said, the Budget does announce changes to capital gains tax and inheritance tax, which will affect some of our customers and those at different stages in their financial journeys.
We’ve picked out a few important points below and what they could mean for you and your money. As always, speak to an adviser if you need help making significant financial decisions.
Aviva is committed to supporting all of our customers in planning their financial futures.
Autumn Budget key takeaways video
Listen to our Budget summary from Head of Savings and Retirement at Aviva, Alistair McQueen.
Transcript for video Autumn Budget summary
Hi. My name is Alistair McQueen, Head of Savings & Retirement at Aviva.
Budgets tend to be significant financial events, and this year’s Autumn Budget was no exception.
For our wealth customers, I’d suggest the word that maybe proceeded this year’s Budget, speculation, can now helpfully be replaced with the word stability. And this stability can help us plan for the financial future.
Why do I say stability? Well, the Budget included no changes to pensions tax relief; no changes to the pensions tax-free-lump-sum; no changes to the pensions annual allowance; no reintroduction of the pensions lifetime allowance; no changes to how national insurance relates to employer pension contributions; and no changes to ISAs. Stability.
Yes, there were changes in capital gains tax and in inheritance tax. These may have implications for some of our customers.
For capital gains tax, pensions and ISAs will continue to carry their exemption from this tax, but if your product is exposed to CGT, this tax is set to rise with immediate effect. For inheritance tax, from April 2027, private pensions wealth is to be included within an individual’s estate and will then become subject to inheritance tax from that day forward. Exactly how this inheritance tax change will work is subject to government consultation.
Now as always, there are many moving parts in any Budget, and different changes may have different implications for different people.
At Aviva, we’re committed to helping you plan for your financial future.
The details of the changes to pensions and investments
Capital Gains Tax (CGT)
- Capital gains tax on investments sold outside of ISAs (such as those held in a General Investment Account) or other tax shelters, will rise from 10 to 18% for basic-rate tax payers, and from 20 to 24% for higher-rate taxpayers, meaning people will pay more tax when selling their investments. This brings the rates in-line with those for residential property, which are not rising.
- The tax-free allowance, the amount of profit you can make before paying tax, has been lowered from £6,000 to £3,000.
Inheritance tax (IHT) and estate planning
- The amount you can pass on without paying inheritance tax stays at £325,000 (plus an extra £175,000 if you leave your home to your children or grandchildren) until 2030.
- But, from 2027, any unused pension savings when you pass away will be counted as part of your estate for inheritance tax. Currently, pensions are exempt. This means that your pension savings may be taxed when you pass away.
ISAs
- The maximum you can save or invest in an ISA (£20,000) will remain the same until 2030.
Further support
To help you with your financial planning, we provide a range of information, support and tools, so you can think about the kind of income or return that your pension and/or investment savings could provide for you. You can look at the amount of pension savings you might have when you reach retirement and what impact making changes to your pension contributions could have.
Should I get financial guidance or advice?
Financial guidance or advice can be a huge help when it comes to money matters. See how our experts can help you plan your retirement.
Pension basics explained
We’ve brought together some useful articles on the key things you need to know about pensions when you start making your retirement plans.
See what your pension could be worth
We can help you crunch the numbers to build a clearer picture of your future years and the pension pot you could have when you reach retirement age.
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