In this video, Tess Williams FPFS, Redmayne Bentley's Head of Financial Planning, discusses the 2025 Spring Statement and the elements which may relate to financial and tax planning.
A transcript of this video can be found below.
What stood out in the Spring Statement?
From a financial planning perspective, the standout point is the absence of any changes. On the plus side, there were no changes to Income [Tax] or Capital Gains Tax and no further reductions in pensions contributions tax reliefs or the amount you can pay into pensions. On the other hand, the forthcoming changes to assets from an Inheritance Tax perspective are still being rolled out. So, in 2026, AIM investments will be charged IHT at 20% and business and agricultural assets will be charged at 20% for any assets over a lifetime value of £1m. The changes to Personal Independence Payment qualifying criteria, which has been well publicised recently, have been confirmed and announced as well.
We were watching this budget statement for changes to ISA reliefs and, although there were no immediate changes to ISA allowances, the papers released alongside the statement do confirm that this is under review, particularly the balance between cash and equity ISAs. It also confirmed that there would be no changes to the overall ISA limits between now and 6th April 2030. Quite how those limits will be split between cash and investments, though, remains to be seen.
Are there any personal finance implications?
Yes, I think there are. The overall message is to make use of the available allowances while they are available still. Perhaps, in the 2025/26 tax year, make your ISA contributions at the beginning of the year if you can, rather than towards the end, just in case anything changes, the same [goes for] pensions contributions if possible, although those are harder to work out at the beginning of the year. Or the pending changes to the Inheritance Tax exempt assets in 2026 and with pensions being brought into the IHT regime from 2027 mean planning and reviewing your assets is more important than ever. Holding onto assets and passing them down generations through your Will may no longer be the best course of action or the most tax efficient. In particular, pensions which only pay out lump sum death benefits may not be the most tax efficient way of holding those assets. So, working together with your financial planner and your tax advisors to assess the impact of these changes on you and your family and what mitigating actions are available to you could provide an improvement to your situation. Starting as early as possible would give you more opportunity to put steps in place. Of course, everyone’s situation is individual and seeking advice that is bespoke to you and your family is really important and, with investments, capital is at risk.
I’m also mindful that there will be an Autumn Budget before the end of the fiscal year and that could bring its own changes. Likewise, we are still awaiting the draft legislation for changes announced in the 2024 Autumn Statement relating to the IHT reliefs and pensions and to confirm exactly how this will look. The changes to the Personal Independence Payments emphasises the need for individuals to take ownership for their own financial wellbeing. Putting in place your own protection in the event of illness or disability, as well as planning for your retirement, ensuring you have sufficient means to support yourself, even if later life care is needed is becoming more important than ever and important to getting you the best outcomes.
At Redmayne Bentley,
we have a team of financial planners who will be happy to discuss any of these areas with our clients and their wider families as well. But, I think if there’s one message to take away it’s to review what you have put in place previously and ensure it is still effective, particularly with the changes that are impending.
Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
Investments and income arising from them can fall as well as rise in value. Past performance and forecasts are not reliable indicators of future results and performance.
There is an extra risk of losing money when shares are bought in some smaller companies.
Please note that tax treatment depends on the specific circumstances of each individual and may be subject to change in the future. Redmayne Bentley has taken steps to ensure the accuracy of the information provided.
