The Chancellor's recent budget has brought about several changes that could impact how you manage your finances. To minimize the impact, consider these five-point action plan:
Firstly, use your ISA allowance wisely. The annual limit on payments into tax-efficient accounts remains at £20,000, but from 6 April 2027, there will be a cap of £12,000 for those under 65. This means that any amount above this threshold will have to go into a stocks and shares ISA. Take advantage of the existing allowances before the changes come in, as you can move money around each year and earn interest without tax.
Secondly, switch your investments into an ISA if possible. The rise in income tax on dividends from April 2026 means that owning income-producing shares could become more expensive. Consider switching to an Isa to avoid this rise, especially if you have enough allowance left to do so. This process is called "Bed & Isa," and it involves selling off existing investments and repurchasing them within an ISA wrapper.
Thirdly, review your salary sacrifice. The rules for paying into a pension via salary sacrifice are changing from April 2029. Payments above £2,000 a year will no longer benefit from an NI exemption. However, if you're keen to keep down your taxable earnings, it's worth investigating other salary sacrifice schemes your employer offers.
Fourthly, give gifts while you can. Inheritance tax (IHT) is a tax paid on someone's assets after they die if they leave enough to go above a certain threshold. The thresholds at which IHT is payable are frozen until April 2031, but this means that making financial gifts before then could reduce the value of your estate. There are various allowances you can use to give tax-free gifts, such as £3,000 in a tax year or gifts of up to £250 per person.
Lastly, weigh up the mansion tax. The new high-value council tax surcharge will hit owners of properties worth more than £2m, starting at £2,500 a year and rising to £7,500 for homes above £5m. While this may seem daunting, some owners will decide to ride it out and set aside money to pay the tax. However, if avoiding the mansion tax is your only motive, you need to do your sums first, as moving home attracts significant costs.
Firstly, use your ISA allowance wisely. The annual limit on payments into tax-efficient accounts remains at £20,000, but from 6 April 2027, there will be a cap of £12,000 for those under 65. This means that any amount above this threshold will have to go into a stocks and shares ISA. Take advantage of the existing allowances before the changes come in, as you can move money around each year and earn interest without tax.
Secondly, switch your investments into an ISA if possible. The rise in income tax on dividends from April 2026 means that owning income-producing shares could become more expensive. Consider switching to an Isa to avoid this rise, especially if you have enough allowance left to do so. This process is called "Bed & Isa," and it involves selling off existing investments and repurchasing them within an ISA wrapper.
Thirdly, review your salary sacrifice. The rules for paying into a pension via salary sacrifice are changing from April 2029. Payments above £2,000 a year will no longer benefit from an NI exemption. However, if you're keen to keep down your taxable earnings, it's worth investigating other salary sacrifice schemes your employer offers.
Fourthly, give gifts while you can. Inheritance tax (IHT) is a tax paid on someone's assets after they die if they leave enough to go above a certain threshold. The thresholds at which IHT is payable are frozen until April 2031, but this means that making financial gifts before then could reduce the value of your estate. There are various allowances you can use to give tax-free gifts, such as £3,000 in a tax year or gifts of up to £250 per person.
Lastly, weigh up the mansion tax. The new high-value council tax surcharge will hit owners of properties worth more than £2m, starting at £2,500 a year and rising to £7,500 for homes above £5m. While this may seem daunting, some owners will decide to ride it out and set aside money to pay the tax. However, if avoiding the mansion tax is your only motive, you need to do your sums first, as moving home attracts significant costs.
gotta say, i'm lowkey excited about the bed & isa move lol just imagine switching those shares and getting more bang for your buck 
. but seriously though, i think its wild that theres already gonna be a cap on isas from 2027, like what even is the point of saving if you can't keep it all 
. also, salary sacrifice changes dont sound great, especially with nics exemption going away 
. gifts are always a nice touch tho, who doesnt love giving someone tax-free goodies 
? and that mansion tax tho... its like, if you're gonna be a homeowner above £2m, might as well just set aside the cash 
. gotta do your math before making any big moves, ya feel?
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. Gifts before the inheritance tax threshold freeze by 2031 might make some sense, but you gotta consider who's getting those gifts too... it's not just about you, you know?
. I mean, £7,500 a year for homes over £5m? That's some serious cash 
. It's all about weighing your options, you feel?
! You know what's crazy? The whole "Bed & Isa" thing... selling off existing investments and repurchasing them within an ISA wrapper sounds like a total money-saving move 
. But seriously, have you thought about how you can use this budget season to level up your financial game? For me, it's all about being mindful of my spending and making conscious choices about where I put my money 
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I think this change with the ISA allowance from £20k to £12k for people under 65 is a bit harsh. What's the point of limiting it like that? It's not like we can just sit on our money and expect it to grow magically, but at the same time, making us move everything into an ISA as soon as possible seems kinda stressful too... 
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. It's like, can't we just stick with what we know? 
. Can someone explain it to me in simple terms, please? 
. £12k cap under 65? really? that's gonna affect a lot of people's retirement savings... anyway, i guess it's good they're making us think about our finances more 
just kidding, sorta. seriously though, anyone know how their employer's salary sacrifice schemes are gonna work post 2029? 
. using our isa allowance wisely is defo key - let's make sure we don't miss out on those extra £8k before it gets capped 
i'm not too fussed about the changes, but i do think it's worth checkin' out other options with my employer 
. and gifts? yeah, let's make some thoughtful presents before the inheritance tax kicks in 
. lastly, the mansion tax... that's a big one 
. we gotta crunch those numbers and decide whether it's all worth it 
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. But if you're all about avoiding it, you gotta crunch those numbers and factor in moving costs 
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