Budget 2026: What could it mean for your wealth?

What you need to know

As the Autumn Budget 2026 approaches, Capital Gains Tax (CGT) remains under scrutiny. While reports suggest the government does not intend to align CGT with income tax, a smaller increase has not been ruled out.
Previously confirmed changes to pensions and Inheritance Tax (IHT) are coming, but there’s still time to review your plans.
Individual Savings Accounts (ISA), savings and property income changes are also approaching.
Budget rumours can be a useful prompt to review your plans, but they shouldn’t drive big financial decisions on their own.

In the lead-up to any Budget, speculation typically intensifies and this year is no different. With only a few weeks to go until Chancellor John Healey delivers his first Budget to the House of Commons on 28 October, discussion about potential changes is in overdrive, with Capital Gains Tax (CGT) attracting particular attention. Recent reports suggest the government does not intend to align CGT rates fully with income tax, although the possibility of a smaller increase remains.

While financial decisions are best made on the basis of confirmed policy rather than speculation, it is helpful to understand the changes currently being discussed. Not all of these proposals will find their way into the final Budget, but some could have implications for investments¹, pensions² and estate planning.

What could change in the Autumn Budget 2026?

Could CGT still rise?

One of the key questions ahead of the Budget is whether CGT rates could rise again. It’s only been two years since rates were last increased in the October 2024 Budget.³

Senior Labour figures had called for CGT to be brought closer to, or aligned with, income tax rates. However, the Financial Times has since reported that Chancellor John Healey has rejected calls for full equalisation and that the Treasury does not intend to pursue this approach.⁴

This suggests that a substantial increase to align CGT fully with income tax is unlikely to feature in the forthcoming Budget. However, the report notes that the Treasury could still consider a smaller increase, so the position will not be certain until the Budget is delivered.

What to consider: While further changes to CGT remain unconfirmed, the Budget may be a useful prompt to review your existing plans. Any decisions should be based on your individual circumstances and the rules in place at the time, rather than speculation about what may be announced.

Could tax-free pension cash change?

Rumours around changes to the pension tax-free cash rules have circulated for the last couple of years.⁵ At the moment, you can usually take up to 25% of your pension pot as a cash lump sum tax free, up to a limit of £268,275. This could potentially be an area the government focuses on as it's a highly valuable and visible tax break.

What to consider: Speculation alone should not determine your decision. However, if you are already considering a withdrawal from your pension, it may be helpful to review the timing with your Client Advisor.

Could a ‘wealth tax’ be introduced?

Noise around a new ‘wealth tax’ has intensified recently, with campaigners and think tanks among those calling for an annual tax on wealth above a certain level. One proposal would introduce a 2% tax on net assets above £10 million.⁶

However, these are external proposals rather than government policy and no wealth tax has been announced.

What to consider: As this is still very much a rumour, it may be sensible to avoid making changes to your wealth plans on this basis alone.

What changes are already on the horizon?

Potential changes alone should not be the sole reason for making changes to your wealth plan. Confirmed changes are a different matter.

Several policy changes announced in previous Budgets are set to come in from April 2027. While every situation is different, these may warrant a conversation with your Client Advisor about whether your plans need adapting.

Pensions and Inheritance Tax

Perhaps the most significant change on the horizon is to the way pensions are treated for Inheritance Tax (IHT).

From April 2027, most unused pension funds and pension death benefits will be included in the value of your estate for IHT purposes.⁷ That’s a significant shift, as most pension funds currently sit outside the estate.

Existing IHT exemptions will continue to apply, including pension assets left to a spouse or civil partner being exempt. But if you’re planning to pass on pension wealth to your children or other beneficiaries, the changes could increase the IHT due on your estate.⁸

If you fall into this category, it may be helpful to consider your pensions alongside your wider estate planning. Depending on your circumstances, there may be different options to explore.⁹ The suitability and tax implications of any planning strategy will depend on your individual circumstances, and the following examples will not be appropriate for everyone. Independent tax and legal advice should be sought before taking action. These could include:

Business Property Relief (BPR): Certain business assets and investments may qualify for IHT relief, which could reduce the amount of your estate that’s subject to IHT when you die. This can include certain shares listed on the Alternative Investment Market (AIM), although different levels of relief and rules apply.
Agricultural Property Relief (APR): If you own qualifying agricultural property, such as farmland, farm buildings or some farmhouses, APR may reduce its value for IHT purposes.
Life insurance: A life insurance policy written in Trust may provide beneficiaries with funds to help meet IHT liabilities. Writing it in Trust typically means proceeds can go directly to your beneficiaries rather than forming part of the estate.

If you haven’t talked to your Client Advisor about the new pension rules yet, there’s still time to consider what they could mean for you and whether there’s anything you may want to do differently. Also, changes to BPR and APR took effect in April 2026,¹⁰ so it may also be worth checking that any existing estate planning still works for you.

New ISA rules

ISA rules¹¹ are also changing from April 2027. While the overall annual ISA allowance will remain at £20,000, if you’re under 65, you’ll only be able to put up to £12,000 into a Cash ISA each year. People aged 65 and over will still be able to put the full £20,000 into a Cash ISA.

There are also changes designed to stop people from using Stocks and Shares ISAs to get around the lower Cash ISA limit. For example, interest earned on cash held within a Stocks and Shares ISA will be subject to a flat 22% charge. This charge will be deducted and paid directly to HMRC by the ISA provider, so investors will not need to report it through a tax return. The 22% rate will apply regardless of an individual's tax status, meaning higher-rate taxpayers will not pay more, while non-taxpayers and those with unused Personal Savings Allowance will still be subject to the charge. There will also be restrictions on holding the entire ISA in cash-like investments, such as Money Market Funds.

From April 2027, the transfer rules will also change. Under the new rules, people under 65 will not be able to transfer funds from a Stocks and Shares ISA into a Cash ISA, although transfers from a Cash ISA into a Stocks and Shares ISA will continue to be permitted.

New tax rates on property and savings income

People receiving income from property or savings could also face higher tax bills from April 2027.¹²

In England, Wales and Northern Ireland, new income tax rates will apply specifically to property income, set at 22% for basic rate taxpayers, 42% for higher rate taxpayers and 47% for additional rate taxpayers.

Tax rates on savings income are increasing for people across the UK by two percentage points, to 22%, 42% and 47% respectively.

If you receive significant income from property or savings outside tax-efficient wrappers, it may be worth considering how the higher rates could affect your overall tax position and wider wealth plan.

What should you consider before the Budget?

It can be tempting to act on Budget rumours, particularly when they could affect your tax position. But making significant financial decisions based purely on speculation is rarely a good idea.

That doesn’t necessarily mean doing nothing. If you already have a financial decision on the horizon, such as crystallising investment gains or taking tax-free cash from your pension, now could be a good time to review your plans while there’s certainty around the current rules.

The important thing is to review rather than react. If you would like to discuss how any potential or confirmed changes could affect your plans, please speak with your Client Advisor.

Brown Shipley does not provide tax or legal advice, and we recommend seeking advice from an appropriately qualified professional before making decisions with tax or legal implications.

Sources:

¹ https://brownshipley.com/en-gb/what-we-do/investment-management-services-with-brown-shipley

² https://brownshipley.com/en-gb/news-and-insights/pensions-an-income-for-life-or-funding

³ https://www.gov.uk/government/publications/changes-to-the-rates-of-capital-gains-tax/capital-gains-tax-rates-of-tax

⁴ https://www.ft.com/content/d63348fb-901d-4ff3-9cdc-0d023778dbc2?syn-25a6b1a6=1

⁵ https://www.pensionsage.com/pa/Budget-tax-free-cash-fears-linked-to-rise-in-early-pension-withdrawals.php

⁶ https://taxjustice.uk/blog/an-economy-on-the-rokos/

⁷ https://www.gov.uk/government/publications/inheritance-tax-on-pensions-technical-note/technical-note-inheritance-tax-on-pensions

⁸ https://brownshipley.com/en-gb/what-we-do/passing-on-wealth

⁹ https://brownshipley.com/en-gb/news-and-insights/pensions-iht-and-the-end-of-an-era-planning-for-the-2027-rule-change

¹⁰ https://brownshipley.com/en-gb/what-we-do/budget-changes-explained

¹¹ https://www.gov.uk/government/publications/fiscal-events-2026-factsheets/isa-reform-2027-anti-circumvention-rules-factsheet

¹² https://www.gov.uk/government/publications/income-tax-changes-to-tax-rates-for-property-savings-and-dividend-income/income-tax-changes-to-tax-rates-for-property-savings-and-dividend-income

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Information correct as of 13 October 2026.

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