An Autumn Budget update: pensions, savings and investments

An Autumn Budget update: pensions, savings and investments

By Neil Wilson, Investor Strategist at Saxo UK

Pension

What are you hearing from clients about their worries over pension wealth?

Clients are increasingly concerned about potential “stealth taxes” through changes to pension rules, particularly cuts to the tax-free lump sum, further inheritance tax reforms, or higher capital gains tax. A major concern is possible reductions to ISA allowances. Many want reassurance on whether they can still achieve low-risk, cash-like returns within a Stocks & Shares ISA, which has led to greater interest in money market funds.

What can people do to protect their pension wealth? 

The first thing is to avoid making hasty withdrawals. Taking large sums in one go can push you into a higher income tax bracket, eroding pension value and, in extreme cases, depleting funds too quickly. Careful planning around withdrawals is essential.

Savings and investments

What potential changes might happen to savings/investments?

Clients worry about restrictions on salary sacrifice, which currently boosts both pension savings and contributions to Stocks & Shares ISAs. If limited, more capital may need to be directed into pensions or SIPPs. Other risks include cuts to the capital gains tax allowance, the abolition of the dividend allowance, and a frozen Personal Savings Allowance (PSA).

What are you hearing from clients about their worries over savings/investments?

The main concern is how to stay resilient in the face of change. Clients are advised not to panic sell, markets can recover, and remaining invested helps capture long-term growth. Potential IHT reforms, such as a lifetime cap on gifts, could drive people to transfer wealth earlier, but this can reduce their own long-term financial security. Given uncertainty, many are asking how to “sweat” their existing ISAs and portfolios — for example, by actively selecting funds and stocks that offer reliable income and dividend growth within tax-efficient wrappers.