What to expect from the Autumn budget

The award winning wealth management and investment experts Killik & Co have opened a new space on Devonshire Road – House of Killik Chiswick. The Chiswick Calendar is pleased to share their guest blogs on how best to plan and save to acquire the wealth to achieve your goals.

Killik & Co won “5-star Wealth Manager” at the Investors’ Chronicle and Financial Times Celebration of Investment Awards 2024

The second Autumn Budget from this government will be delivered later than initially expected, on November 26.

The reason it carries so much weight is that Chancellor Rachel Reeves is in a tight spot from a fiscal perspective. Some estimates suggest the “black hole” of around £22bn the government believes it inherited when it took power, may have climbed to more than double that. This number essentially represents the extent to which cumulate government spending exceeds income.

The choices facing the Chancellor when it comes to funding this gap can be summarised as:

• Cutting spending – something Labour have previously been reluctant to do.
• Borrowing more money – an increasingly tricky option with the cost of debt (“bond yields”) rising.
• Increasing taxes – currently their preferred default option.

The challenge from a political perspective is that Labour have already pledged to keep certain key taxes, being income tax, employees’ national insurance and VAT, essentially flat. They also promised a single big fiscal event at the start of the current parliament (to put the public finances back on a stable footing as part of a “fixing the foundations” pledge) followed by little more than minor adjustments subsequently. Given the deterioration in the overall funding position, this commitment is looking ever harder to deliver on.

Managing change

In that context, it is worth recapping some of the major changes which resulted from the Chancellor’s first Autumn Budget just a year ago. These include:

• An increase in the amount of national insurance employers pay on behalf of their employees.
• Some big changes to the Inheritance Tax regime, such as reductions in the amount of Business Property Relief (BPR) and Agricultural Property Relief (APR) available when qualifying assets are passed on to future generations (effective from April 2026) and a key change in the status of private pensions which brings them back within the scope of Inheritance Tax from April 2027.
• Changes to Capital Gains Tax rates which took effect immediately.

Such seismic changes to Inheritance Tax have already triggered conversations between many of our clients and their Advisers.

Staying calm

As usual, when it comes to the content of future announcements, there has been much speculation about what might be about to change this year. For instance, further rumours have swirled around pensions:

• Will Rachel Reeves decide, for example, to restrict the amount of tax-free cash that can be withdrawn from a private pension?
• Might the Inheritance Tax seven-year rule be under threat or could she impose a lifetime cap on the value of exempt gifts?
• Could accelerated stamp duty rates be applied to certain, more expensive, assets?

The perennial problems for anyone keen to try to pre-empt the Chancellor remain the same, however:

• She may take a different tack altogether; this government has so far proven reluctant to release its true intentions in advance.
• The cost and hassle of setting up and then unwinding an inappropriate tax solution, should the rumours prove unfounded, can be considerable.
• She may even decide to retrospectively go after what she sees as tax avoiders, although this would represent a departure from the usual principle that underpins tax rule changes and could trigger a legal challenge.

Taking action

That being said, there are certain things everyone can do to ensure they are being as tax efficient as possible within the bounds of what we do know:

1. Make full use of allowances such as ISAs and SIPPs, as well as the junior versions of both. For instance, up to £20,000 can be invested into an adult ISA straight away and a further £9,000 into the child equivalent.
2. Don’t delay decisions when it comes to wider tax planning. For instance, reductions in BPR and APR and the inclusion of pensions within IHT from April 2027 have already been confirmed.
3. Think across generations. Decisions around inheritance and passing assets down the family efficiently will often affect multiple generations for years to come.
4. Take care with big decisions. The devil is often in the detail, and the cost of unwinding a poorly conceived or hastily executed plan can be considerable. Seeking professional advice can help ensure you build the right long-term strategy, taking account of your goals and supported by careful planning.

How we can help

Killik & Co is an award-winning, independently owned wealth manager that has been helping families save, plan and invest for over 35 years. We opened House of Killik Chiswick on Devonshire Road in 2023 – a welcoming space for local residents to explore their financial ambitions.

Whether you are thinking about retirement, supporting the next generation, or simply want to make your money work harder, we provide clear, straightforward guidance across investing, pensions, tax planning and more. There’s no need to book ahead, and there’s no charge for an initial conversation – just drop in and see us on Devonshire Road, or email chiswick@killik.com.

The value of your investments may go down as well as up. Tax treatment depends on individual circumstances and may be subject to change in the future.

To find out how Killik & Co can support you in saving, planning and investing for your family’s financial future, visit House of Killik Chiswick at 13 Devonshire Road.

There’s no need to book ahead, and there’s no charge for an initial conversation.

Alternatively, you can get in touch at chiswick@killik.com.

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