Over the past few days, I’ve had bucketloads of UK based updates. It seems that every professional services firm is in a race to provide a budget update as soon as they can directly after the budget. 

All of which are factually correct and professionally produced. 

But there’s a problem. They all show what’s changed but rarely talk about what you and I should be doing about it. 

So, in this blog I want to talk about the changes that happened in this budget but also provide some actionable steps you need to consider when thinking about your own financial plan. 

On the 26^th of November (last week), Rachel Reeves stood up in Parliament and delivered the UK’s 2025 budget. 

Now there’s plenty of noise around the budget but in this blog I want to look at the things I believe will have a specific impact to your financial plan and the actions you should consider taking. 

Now whilst the budget contained a lot of specific actions, in this blog I want to share 6 tips, highlighting specific changes this year’s budget and the action you should consider, the elements you should still be focusing on from last years budget and I reckon you’ll be surprised on at least one of the points I’m going to make. 

Let’s start with recommendation one – Ignoring the noise 

Here’s the interesting thing. As I write this, there’s still loads of noise in the news about the way the budget has been communicated and how the Office for Budget responsibility forecasts were actually more optimistic than Rachel Reeves had communicated. 

I get it. The idea of the news media is to find the story and fill the pages with stories designed to get your attention. The media business model is attention based and talking about politicians ‘lying’ gets our attention. 

But here’s the thing. It’s unlikely that any of the 2025 budget changes, with proper planning, make an irreversible difference to your longer-term financial plan. 

Regardless of your particular political leanings this point remains. Often we get caught up in the noise but the most healthy thing you can do, for your financial plan and potentially your own wellbeing, is to look at the budget changes practically. 

If you’re working with a financial planner, revisit the cashflow plan.  

If you’re not, a great question to ask is “How are these budget changes likely to impact me in 10 years time?” and think about the best way to get really clear on the answer to this question. This might mean starting to work with a financial planner or it might mean building your own plan in a spreadsheet. 

Either way, my experience tells me that getting really clear on what your medium to longer term plan is does one thing. Allows you to stay calmer through then noise and take practical action designed to improve your plan. 

Let’s move onto point two – The impact of higher dividend tax and frozen thresholds and what to do about it. 

From April 2026, the government is increasing the tax rates on dividends and increasing the tax on property income from 2027. 

So, for dividends, If you’re a basic rate taxpayer, your dividend tax rate will be around 10.75% and If you’re a higher rate taxpayer, that jumps to 35.75% on dividends.  

This might matter to you particularly if, 

• You might be planning to live off investment income from shares or funds outside ISAs. 

• You might have rental income from a buy-to-let. 

• You might have significant savings now earning more interest than they did a few years ago. 

So, If more of your future income is coming from investments held outside tax shelters, the Budget has just made that more expensive. 

Also, the chancellor has continued to freeze income tax and national insurance thresholds. 

This means that if either your earned or pension income increases, more of it will be taxed in the next few years. 

It takes less than a couple of minutes and could save you years of uncertainty later. 

This always feels like a bit of a stealth tax to me, one that is used by both blue and red governments in recent years but effectively means that we pay more tax despite the rates not increasing. 

One slight quirk, the chancellor has confirmed, is that if an individual’s only income is their state pension, they won’t end up paying tax even if they end up exceeding their personal allowance. 

However, for most of us it’s likely to mean we’re paying more income tax. This means tax planning really matters over the next decade or so. 

So, what’s an immediate practical actions we should consider taking? 

Firstly, I’d be looking, particularly if you’re a business owner, to consider how you’re remunerated moving forward. Increases in dividend rates might mean a conversation with your accountant about how you pay yourself might be really useful. 

Secondly, I’d look at (if you’re married) how you use both your tax efficient allowances. Often when I’m first working with clients their investments are skewed towards one partner or the other when the most efficient way to hold these assets might be different depending on their individual tax situations. 

So, look at this, and make sure the assets you hold are held in the most efficient way possible. The good news is that transfers of assets between spouses are usually treated on a ‘no gain / no loss’ basis meaning that for the majority of occasions capital gains tax isn’t triggered. 

This means that you can efficiently manage your families assets making sure that it’s held as efficiently and effectively as possible. 

And 

Lastly, ensure you’re using as efficiently and effectively as possible all available tax efficient allowances. 

Consider pensions and the tax relief you receive and look at whether you’re making the most of this opportunity. 

And 

Look at your ISA allowances and whether you’re making the most of this allowance too. 

In my next point, I want to talk about changes in the ISA allowance. 

This will change from 2027 if you’re under 65 in the following way. 

The ISA allowance remains at £20,000. However, once the changes kick in, you’ll only be able to use £12,000 for a cash ISA and the remainder needs to be in stocks and shares ISA. 

Also, tax on savings and dividends income is also increasing from April 2027 too. 

So, what practical action should you consider taking based on these two changes. 

The simplest one is look at using your ISA allowances as effectively as you can aligned to your own plan. 

I’d consider whether you’re using your ISA allowance? Are you considering what ISA allowances your partner might have? Are these allowances being used as effectively as they can? 

The other interesting thing about this change for me is that the government are conscious that the majority of new ISA money goes into Cash Isa’s (about 60% according to government research from September 2025) when in reality you’re potentially going to get better longer term growth (depending on your circumstances, goals and appetite for risk) in an investment ISA. 

So, use this as a nudge towards thinking about whether using your tax efficient allowances are best used and consider investment ISAs as an option for your longer-term financial goals. 

My Fourth point is on state pensions, which continue to benefit from regular and consistent increases and are likely (as I’ve mentioned) to now, in the next couple of years, be greater than your personal income tax allowance (the amount you’re allowed as income before you start to pay tax). 

There’s two actionable points I’d mention here… 

Firstly, if you’re not currently receiving your state pension, make sure you understand what you’re entitled to. Most of us can do this for free and in about 15 minutes simply by using this link

https://www.gov.uk/check-state-pension

Whilst for most of us the state pension won’t provide a sufficient income to live the lives we want in our 60’s, 70’s and beyond, it is important to consider it as part of your plan. 

So, understanding whether you’ve accumulated sufficient ‘years’ national insurance contributions, whether you’ve got a gap and what you can do about it is important. 

Secondly, look at how frozen allowances and an increasing state pension will impact your total tax bill. There is some planning here to do, potentially looking at what pots of money are used to generate income each year and potentially looking at your entire wealth and how to most efficiently extract the income you want to live in the most efficient way possible. 

My next tip is not to forget the implications of last year’s budget. 

The reality is that often the noise of the 2025 budget means we forget to plan for the previous changes. Last years budget certainly had an impact on the plans we’re building for our clients and the inclusion of pension pots from 2027 was certainly a big one. 

Prior to last year’s budget, pension pots weren’t part of the inheritance tax calculation when your die. 

In practical terms. If you die before the new rules take effect, and you leave unused pension savings or death benefits (e.g. lump-sum or drawdown pot), those will pass to beneficiaries without triggering Inheritance tax. 

However, from April the 6^th 2027 this is changing and you still have a pension pot that hasn’t been used, that pot will be aggregated with your other assets meaning they are now included in your IHT calculation. 

The practical thing here is to consider how this applies to your plan. 

I’m certainly having more conversations with our clients about two things. Spending more and gifting earlier. 

Now, both these things need to be considered strategically but certainly thinking about the balance of how we use our wealth, provide it to the people we love during our lives and having enough for us has become more interesting now that pension pots are included in the mix for the purposes of inheritance tax. 

The reality is that you don’t only need a plan to mitigate inheritance tax. You also need to ensure it aligns with your own financial plan and it’s important to find the appropriate balance between the two. 

One other big tip here is to plan earlier than you think you need to. My experience is that the individuals who start to build their financial plan early, regardless of planning for retirement or planning to mitigate IHT, have more success because they’ve got more time to successfully implement their plans in line with their goals. 

The next point is on Salary Sacrifice changes. 

If you’re still working and using salary sacrifice to boost your pension and save National Insurance, the 2025 Budget introduces a new cap: 

• From 2029/30, there’ll be a £2,000 annual cap on earnings you can exchange for pension contributions that benefit from the NI break. 

• Anything above that still gets income tax relief, but no extra NI saving.  

Now, we’ve got a bit of time to plan for this one so there’s no need to panic. However, if your like a lot of my clients and use salary sacrifice as an efficient strategy, it might be worth thinking about how this rule might impact you in the future and consider whether we need to maximise salary sacrifice pension contributions before the rules change, especially if your employer gives you all or part of their national insurance savings. 

My last tip is about perspective. 

No single budget will financially define the next 30 years of your life. 

Budgets come and go. Chancellors get replaced. Rules will be tweaked. 

What really matters is:- 

Your time and how you choose to spend it 

Your direction of travel both in your financial plan but also your life plan 

And 

How you’re gradually adjusting your plan towards the life you want to life. Budgets are one reason you gradually adjust your plan but there are a lot of others to consider, including how you might want to live your life moving forward. 

So, my next practical tip is to use this budget to review your plan. Then make a few considered adjustments. Then get back to focusing on the stuff that, for most of us, really matters. Your health, your relationships, your community and doing stuff that gives you purpose. 

Retirement isn’t just a date it’s a transition into a new chapter of your life. That’s why understanding the emotional and practical shifts that come with it is just as important as the financial planning. 
 
That’s why I’d like to suggest two more videos to support you. The first introduces a practical Stoic principle that helps you cut through noise, reduce anxiety and make clearer decisions by directing your energy toward what you can actually influence.  – https://www.youtube.com/watch?v=7EZ3LrwZKNo 
 
The second dives into the psychological side of retirement why some people struggle when the routine of work suddenly disappears, and how a more gradual, intentional approach can help you build a chapter that feels meaningful, balanced and truly yours. Both are designed to give you the clarity and confidence to navigate this transition on your terms. – https://youtu.be/ec2gYW0dkaA