Autumn Budget: the importance of staying calm
With rumours of tax rises dominating the media, you might be worried about the upcoming Autumn Budget on 26 November. Here’s why it’s so important to stay calm
Over the past few months, you will have heard about the upcoming Autumn Budget on 26 November 2025, and rumours of potential tax increases. Naturally, you might be concerned. Paying more tax means you have less money to spend now or save for the future.
It’s unclear what might change in the Budget as Rachel Reeves looks for ways to balance the public finances. If media commentators are to be believed, all kinds of taxes are on the table, including:
- Inheritance Tax (IHT)
- Property taxes
- Capital Gains Tax (CGT)
- Dividend Tax
- Pension tax reliefs
- VAT.
Of course, we won’t know which of these taxes, if any, will increase until Budget day. This lack of information can be scary, as it might feel like forces outside of your control are disrupting your financial plan.
But, panicking either before or after the Budget could cause more problems.
Trying to get ahead of Budget changes could backfire
If you’re panicked about the upcoming Budget, you might try to pre-empt changes by adjusting your financial plan.
Prematurely withdrawing cash from your pension is a common way to attempt this.
In the 2024/25 tax year, savers took a record £18.08 billion from their pensions as they rushed to access their 25% tax-free lump sum[1].
This may have been because they were worried about rumoured changes to pension tax rules. By taking the full lump sum before the Budget, they hoped to avoid being stung by any new rules.
The same thing happened in the lead up to the 2024 Budget, and in the end, Reeves never announced any changes to the tax-free lump sum. This means all those people took their lump sum for no reason and can’t use it in the future to make tax-efficient withdrawals.
So, their knee-jerk reactions to rumours could mean they eventually pay more tax. That’s why 27% of people regretted taking their lump sum before the 2024 Budget[2].
It’s worth keeping this in mind and recognising that panicked decisions could easily backfire, especially when you don’t have all the facts.
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It’s equally important to avoid reactionary decisions after the Budget
Even after the Budget announcement, when we know what will change, it’s important to take a breath and avoid reactionary decisions. Instead, take time to understand how new legislation will affect your ability to reach your financial goals.
For example, if the chancellor were to announce increases to taxes on investments, you might decide to opt out of the stock market and hold your wealth in cash instead.
However, your portfolio may still provide the necessary long-term growth to achieve your financial goals, despite any tax rises. Meanwhile, if you panic and move to cash, it could be harder to build wealth, resulting in future lifestyle sacrifices.
Stock market fluctuations caused by the Budget are often short-lived
As well as changes to your personal tax position, you might worry about how the Budget will affect stock markets and the value of your investments.
Important political events can influence markets because there’s uncertainty about what will change and who will be affected. But if you’re thinking about cashing out investments or changing your investment strategy because of the Budget, this could be a mistake.
Although the Budget might cause a short-term dip, long-term damage to your portfolio may be unlikely because fluctuations are normally short-lived.
The mini-Budget unveiled by Liz Truss and Kwasi Kwarteng on 23 September 2022 is a prime example of this.
As you might remember, this Budget was widely considered a misstep, mainly because it included £45 billion worth of unfunded tax cuts.
This caused markets to lose confidence and inspired a severe reaction. The pound fell to its lowest-ever level against the dollar, and UK stocks plummeted.
The FTSE 100 lost 3.01% of its value on the day of the Budget and experienced several subsequent dips. By 10 October 2022, the FTSE 100 had fallen by 5.67%.
If you were invested in UK stocks at this time, you likely would’ve been concerned about the value of your portfolio.
However, by 4 November 2022, the FTSE 100 had recovered its value and continued growing. Had you invested in the index between 1 September 2022 and 1 September 2024, you would’ve seen total growth of 17.18%[3].
As you can see, despite the contentious mini-Budget and resulting effects on the stock market, you still would have achieved overall growth and continued working towards your financial goals.
So, it may be sensible to hold your investments and ride out any volatility before and after the Budget because it’s likely to be short-lived. If you panic and sell investments prematurely, you could cause lasting damage to your financial plan.
Your financial planner can help you navigate any changes announced in the Budget
Reactionary decisions before and after the Budget could make it more difficult to grow your wealth and achieve long-term financial goals.
The good news is that your financial planner can help you navigate any changes announced by the chancellor.
We’ll help you understand precisely how new legislation affects you and whether you need to make changes to your financial plan. Also, we’ll look at ways to mitigate tax in light of any new rules. We can help you review your investment portfolio and ensure it is well-diversified and robust in the face of market volatility.
Ultimately, this means you don’t need to panic about the Budget as you can still achieve your ideal lifestyle now and in the future, despite any changes.
Get in touch
Please contact your adviser today if you’re worried about how the Budget could affect you.
Alternatively, if you are yet to connect with an adviser, you can use the contact form on our website to make an initial enquiry and learn more about how we can help.
Approved by Best Practice IFA Group on 15/10/2025.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Benchmark Financial Planning is not responsible for the accuracy of the information contained within linked sites.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate tax planning.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
[1] 03.10.2025 Record £18bn pulled from pensions: Are savers right to be worried? Saga
[2] 03.10.2025 Withdrawing pension lump sum top of the list for pre-Budget regrets PensionsAge
[3] 06.10.2025 Why it’s important to stay calm after the Budget announcement Schroders
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