As the leaves start to fall and the Autumn Budget approaches, you might feel uncertainty starting to creep in.

Speculation is rife regarding what the chancellor, Rachel Reeves, may or may not announce on 26 November.

She has already warned that there are more “hard choices” ahead. This could be because government borrowing in August was the highest in five years. Moreover, several economists have predicted that the chancellor may need to find as much as £40 billion to fill the “black hole” in public spending, the Independent reports.

With this in mind, many analysts expect significant measures to be introduced, especially around taxation.

While it’s impossible to accurately predict what’s coming and you should always wait before making changes to your financial plan, reviewing some of the potential reforms means you can be readily prepared for any changes you may need to make.

Continue reading to find out what could be included in the upcoming Budget, and how it could affect your wealth.

The freeze on Income Tax thresholds might be extended, resulting in “stealth taxes”

The current freeze on Income Tax thresholds is set to remain in place until 2028, but Reeves could extend it further.

If this does happen, you may find that as your salary increases, a larger portion of your income crosses into higher tax bands.

This effect, known as a “stealth tax”, could result in you paying more tax without any actual rise in rates.

Reeves has not yet ruled out a prolonged freeze, which has only fuelled speculation.

National Insurance could be adjusted

National Insurance (NI) could also come under review. The Resolution Foundation think tank has suggested cutting the employee rate of NI by 2p while simultaneously raising Income Tax by the same amount.

This would mean that, while the general working population might not feel the change, other groups, such as pensioners, landlords, and the self-employed, could be more heavily affected.

Since these groups typically don’t pay NI, and the self-employed contribute through a separate system that wouldn’t receive the same reduction, they would see an Income Tax rise but not benefit from the offsetting of an NI cut.

Meanwhile, there has also been speculation about the introduction of an NI charge on rental income for landlords.

Currently, profits from rental properties typically aren’t subject to NI, but they are to Income Tax.

MoneyWeek states that the government might extend NI to private landlords, applying an 8% rate on rental income above a certain threshold.

If you’re a landlord, this change could reduce your net rental income and may require you to reassess your property’s profitability.

Value Added Tax might be simplified, and the rate on domestic fuel bills may be scrapped

Reeves has stated that Labour’s pledge not to increase the main rate of Value Added Tax (VAT) still stands.

However, her passive language has led some economists to think that she may still be considering adjustments to the tax.

While it seems unlikely that the government would raise the headline VAT rate of 20%, especially given the ongoing pressure on household budgets, Reeves could still change how VAT is applied.

For instance, she could decide to remove VAT on domestic fuel bills. Currently set at 5%, scrapping this charge would reduce costs for millions.

Alternatively, the government could look to simplify VAT by making the rate more uniform across goods and services, reducing the number of exemptions and lower-rate categories.

Tax relief on pension contributions may be standardised

Speculation has been building around how Reeves could make changes to tax relief on pension contributions.

Currently, any pension contributions you make within the Annual Allowance receive relief at your marginal rate.

Yet, reports suggest that Reeves may consider replacing this with a flat rate for everyone, possibly between 20% and 30%.

This would, of course, be a significant change, as it would mean all taxpayers receive the same level of relief, which could reduce the benefits of saving into a pension for higher earners.

While this could make pension saving less attractive for higher- and additional-rate taxpayers, it might simplify the system and create additional revenue for the government.

The report in the Independent notes that such a move could generate around £15 billion each year.

Stamp Duty might be replaced by an ongoing property tax

The government may also reform property taxes.

Some analysts suggest that Stamp Duty (the tax you pay when you buy a property above a certain value) could be replaced with an annual property tax.

This would completely change how property ownership is taxed, moving the burden from a one-off purchase cost to an ongoing liability.

Such a move could mean you face higher costs over time, depending on the value of your home.

There has also been talk of a “mansion tax” aimed at some of the most expensive properties.

Under current rules, you typically don’t pay Capital Gains Tax (CGT) on the sale of your main residence, provided you’ve lived there the whole time you owned it.

However, a reform could mean that the exemption is capped for properties above a certain threshold. Reports have mentioned £1.5 million, but this figure remains unconfirmed.

If introduced, this measure could mean you pay CGT even when you sell your primary home.

While preparation can be beneficial, it’s important to remain focused on the long term

It’s important to remember that none of the aforementioned measures have been confirmed, and speculation often intensifies in the weeks and months leading up to the Budget.

Acting hastily could lead to decisions that don’t align with your long-term goals.

For instance, in the run-up to the 2024 Autumn Budget, PensionsAge reports there was a sharp rise in people accessing their pension funds earlier than planned.

Between April 2023 and March 2024, 34,832 large pension pots were moved into drawdown without being fully withdrawn. This rose to 58,544 the following year – a 68% increase.

The steepest rise occurred between April and September 2024, directly before the Budget, suggesting that many acted prematurely.

However, data later showed that 45% of those who accessed drawdown during this period did so without seeking advice, leaving themselves more vulnerable.

Your financial plan is designed to weather periods of uncertainty, including those that come from financial policy changes.

Rather than reacting to speculation, it’s often prudent to wait for official announcements and assess their implications calmly.

If you still find yourself feeling uneasy or tempted to make changes ahead of the 2025 Autumn Budget, professional advice could help you weigh your options carefully. While it’s best to hold off on making any changes to your plan based on speculation, we can help you explore different strategies that could be beneficial if the rumours come to fruition.

We can review the government’s plans in full detail once they’ve been formally released. We will then determine whether you need to adjust your financial plan, ensuring that any decisions remain aligned with your long-term objectives.

To find out more about how we support you through the uncertainty, email info@blueskyifas.co.uk or call us on 01189 876655.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate tax planning.