1. Pensions are coming into your estate
If you raise only one thing with your financial planner, make it this. From 6 April 2027, most unused pension funds and pension death benefits are due to form part of your estate for inheritance tax (IHT) purposes.
For years, a common and perfectly sensible approach has been to spend ISAs and other savings first, leaving your pension untouched for the next generation. For many families, that thinking now needs a fresh look.
But here's the important bit: this isn't necessarily a signal to start drawing heavily on your pension. It can still be a valuable way to build capital for the years ahead. What it does mean is looking at your pensions, ISAs, investments, property, and cash together, and working out the best way to fund your retirement over time.
It's also a good moment to check who you've nominated to receive your pension. Keeping your nominations up to date can help the people managing your pension scheme identify your intended beneficiaries, and depending on the scheme rules, preserve any flexible beneficiary options. Currently, the nominees have a 2-year window to decide how they take the benefit. This will be removed after April 2027. That's a welcome change, but the bigger point is that your pension is about to become part of your estate. So it's worth making sure your nominations, will, and wider estate plan all point in the same direction. When did you last check who your pension would go to?
2. Tax on savings income is going up
From 6 April 2027, tax rates on savings income will rise to 24% for basic rate taxpayers, 44% for higher rate taxpayers, and 49% for additional rate taxpayers.
If you hold a lot of cash or interest-paying investments outside ISAs and pensions, it's worth focussing on what you actually keep after tax. A headline interest rate can look attractive until tax takes its share. It's what you keep that counts.
The increase in tax on savings is also a reason to think about where your investments are held, not just what they are. Most of us focus on what we own: how much in shares, bonds, or cash. But the same investment can be taxed very differently depending on whether it sits in an ISA, a pension, a general investment account (GIA), or an offshore bond. Often, the best answer is a combination, with each account doing a different job for you. And your GIA deserves proper attention, with regular reviews of gains, losses, and income. It shouldn't just be home to whatever doesn't fit elsewhere.
Don't forget the basics, either. The Cash ISA limit is staying at £20,000 for adults from April 2027, rather than being cut as had been discussed. Gradually moving money from a taxable portfolio into an ISA each year is still one of the simplest steps you can take. Selling investments to do this may create a capital gains tax bill, so it's worth checking the numbers first. And if you're married or in a civil partnership, it's worth looking at how your assets are owned between you, especially if one of you has unused allowances.
3. Rental property deserves a fresh look
The same higher rates will apply to property income in England, Wales, and Northern Ireland from 6 April 2027. If you own a buy-to-let property in your own name, now is a natural time to ask what it's really earning you once tax, mortgage costs, maintenance, and other expenses are taken into account.
I like to think of it this way. If you have £2m in property and £2m in an investment portfolio, you don't have two separate financial lives. You have a £4m family balance sheet. Looking at your finances as a whole gives you a much clearer picture of how diversified you are, how easily you can access your money, and where your income and risk really sit. Sometimes a property is kept simply because it's always been part of the family's wealth. This is a chance to judge it on its merits.
You may be wondering whether to move your property into a company. It's an understandable question, but doing so can bring capital gains tax, stamp duty land tax (or land transaction tax in Wales), financing, and admin issues of its own. The numbers and your long-term plan should lead that decision, not one tax change.
4. Business owners: start the exit conversation early
If you run your own business, there's plenty here for you. The proposed new Founders' Relief could give qualifying founders and significant early investors in high-growth, innovative UK companies a 10% capital gains tax rate on qualifying disposals from 6 April 2027, up to a £10m lifetime limit. It's an exciting prospect, but the detailed conditions are still being consulted on, so it's best not to assume you'll qualify.
At the same time, the lifetime limit for Business Asset Disposal Relief (which reduces capital gains tax when you sell a qualifying business) is due to fall from £1m to £500,000 for qualifying disposals from 6 April 2027.
That makes exit planning the real conversation to have, and the earlier the better. It's easy to wait until an offer lands on the table, but by then some of your options may have narrowed. Ideally, you'd start by thinking about what a successful exit looks like for you:
- How much capital you'll need
- What lifestyle you want it to support
- What role, if any, you'd like afterwards
- What you'd like to pass on to your family
- How the proceeds should be invested
Once that's clear, decisions about ownership, pensions, investments, and succession become far easier. Employer pension contributions may also have a part to play, especially as your personal and business finances start to overlap.
A word on gifting
With pensions coming into the scope of IHT, you may be thinking about giving more to your family during your lifetime. It's a rewarding conversation to have. But giving money away purely to reduce tax isn't right if you might need that money later. Cash flow modelling can help you understand what you may comfortably afford, so you can give with confidence. Your own financial independence should always come first.
Bringing it all together
The thread running through all of this is simple. Your investments, pensions, ISAs, property, cash, and business interests are all part of the same picture, and a change in one area affects the others. That makes now a good time to step back and check that your plan still fits what you want your wealth to achieve.
Speak to your financial planner or, if you're new to Rathbones, get in touch with our team to arrange a conversation. We'd love to help you feel confident about what comes next.
What should you do next?
The Autumn Budget brings significant changes that could impact your wealth strategy, including frozen tax bands, dividend tax increases and a clampdown on salary sacrifice. These measures may affect property owners, business directors, high earners, and families with complex financial arrangements.
If any of the points outlined above resonate with you, now is the time to talk. We’re here to help you navigate Budget-driven changes, protect your wealth, and identify opportunities.
Please get in touch with your Rathbones adviser today to review your plan and ensure it remains robust in this evolving landscape, or complete the form below if you'd like us to arrange a no-obligation conversation.
Take action
If you would like to talk to one of our team about the announcements in the Budget and how we could help you make a plan, please fill in the form below and we'll get in touch. Alternatively, please feel free to call us on 0330 390 9191 and we’d be happy to help.
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