Autumn Budget 2025: Part 6 - What Have We Learned (and What Might Happen Next)?

As we approach the Autumn Budget 2025, one thing is clear: uncertainty has dominated the conversation. From pensions to income tax, the past few months have seen a whirlwind of rumours, reversals, and speculation. In this final part of our series, we recap the key pension topics we've covered and look at what might still be on the table.

A Quick Recap of Our Series

Part 1: Is Pension Tax Relief at Risk? We explored the possibility of moving to a flat-rate tax relief system, potentially 30%, and what that could mean for higher earners and SIPP savers.

Part 2: Could the Tax-Free Lump Sum Be Cut? Early rumours suggested the Pension Commencement Lump Sum (PCLS) might be reduced. Thankfully, the latest reports indicate PCLS will remain untouched - a relief for many planning their retirement.

Part 3: Will the Lifetime Allowance Make a Comeback? We examined whether the abolished Lifetime Allowance could return. While no firm commitment has been made, fiscal pressures mean this remains a possibility.

Part 4: Could Employer Pension Contributions Be Taxed? We looked at proposals to apply National Insurance to employer contributions or cap salary sacrifice arrangements. The latest rumour? Tax-free salary sacrifice may be capped at £2,000 per year—a significant change if implemented.

Part 5: Will the Chancellor Rethink Inheritance Tax on Pensions? We discussed the plan to include pension funds within Inheritance Tax from April 2027 and the strong industry opposition. With the House of Lords now scrutinising the proposals, the Autumn Budget could be an opportunity for compromise.

The Bigger Picture: Uncertainty Everywhere

It's not just pensions. The entire tax landscape has been marked by speculation:

• Income tax: Reeves' speech on 4 November appeared to pave the way for a rise, despite manifesto promises. Now, reports suggest a backdown after fears of a backlash from MPs and the public.
• Other measures: From capital gains tax to property levies, rumours have shifted almost daily. This chopping and changing underscores the challenge of planning amid uncertainty.

What Should You Do Now?

• Stay informed: The Autumn Budget will clarify which rumours become reality.
• Avoid knee-jerk decisions: Acting on speculation can lead to costly mistakes.
• Seek advice: Professional guidance is essential to navigate potential changes.

Final Thought

If this series has shown us anything, it's that pensions remain a prime target for reform. Whether it's tax relief, employer contributions, or inheritance rules, the landscape is evolving, and staying ahead is key.