Arlene Ewing, Managing Director of Anderson Strathern Asset Management said:
“The decision to retain the £20,000 cash ISA allowance is welcome news for savers. We’ve already heard about people increasing their contributions ahead of the proposed reduction, so reversing that decision removes some uncertainty and allows people to make savings decisions based on their individual circumstances rather than changing tax rules.
“The proposed Starter ISA is also an interesting development. Encouraging more people to invest for the longer term is important, but this will ideally be supported by better financial education and an understanding of the different risks and benefits of saving and investing.
“Protecting those who rely solely on the state pension from income tax is another positive step, but the wider question is whether the Budget will do enough to restore consumer confidence. With household finances still under pressure from rising costs and economic uncertainty, people will want to see a meaningful improvement in their everyday finances before they feel more confident about the future.”
“Limited additional issuance, adherence to fiscal rules and gradual structural reform is positive to gilt market sentiment” – Raymond James on gilts following Budget
Oliver Faizallah, Head of Fixed Income Research at Raymond James, comments: “As anticipated, not much surprise in the Budget saw gilts yields remain stable, with yields falling slightly (c.3-5bps) during the speech. There was an immediate commitment to fiscal discipline, which was followed up by a Budget that was broadly in line with expectations: fiscal rules preserved and gilt issuance only marginally higher than expected, while confirmed reforms to the pensions triple lock from 2030 provide some evidence of willingness to address longer-term spending pressures.
“The OBR’s revised inflation expectations, with CPI now forecast at 3.1% in 2026 and 3.4% in 2027, materially above previous forecasts of 2.3% and 2.0% respectively. This suggests a more challenging backdrop for the Bank of England.
“On supply, the DMO announced planned gilt sales of £250.6bn for 2026-27, slightly above market expectations of £249.2bn and modestly above the level anticipated before the Budget. While this represents a marginal increase in near-term supply, the overall remit remains broadly manageable as shown by the relatively muted market reaction.
“Furthermore, the increase has been weighted to short and medium-end issuance, while longer-dated gilt issuance will fall by £6.9 billion, which will continue to be supportive for long end supply pressures.
“Despite higher inflation forecasts and a narrower fiscal buffer which leave little room for future shocks, we view the combination of limited additional issuance, adherence to fiscal rules and gradual structural reform is positive to gilt market sentiment, and believe gilt yields at current levels continue to look attractive to US Treasuries, which continue to trade at a discount.”
IG’s Michael Healy reacts to 2% increase in savings tax
“IG’s analysis shows that investors have already faced 20 changes to investment taxes and rules over the past decade. This constant tinkering creates uncertainty and risks undermining the confidence needed to make long-term financial decisions.
“If the Government wants to turn Britain from a nation of savers into a nation of investors, it needs to provide stability and direct households towards mechanisms that already work. Stocks & Shares ISAs offer a straightforward, tax-efficient way to invest for the long term, yet just 17% of UK adults currently hold one.
“The Government’s commitment to exploring a new incentive for first-time Stocks & Shares ISA investors is therefore a welcome step, and one we have long advocated. The priority now must be turning that ambition into meaningful action, while providing the clarity and stability people need to invest with confidence.”
The Budget Commentary – Business and Estate Planning
Sangeeta Rabadia, partner at law firm Spencer West LLP, comments:
“There are many measures in the Autumn Budget that are a cause for celebration – easing the burden of rising everyday expenses is important and necessary. But for those who have spent years building businesses, creating employment opportunities and investing their own capital, the cumulative effect of reductions in tax reliefs, increased inheritance tax exposure, and potentially higher financing costs may feel at odds with the Government’s ambition to encourage entrepreneurship and business growth.
This is characterised by the reduction of the Business Asset Disposal Relief lifetime limit to £500,000. Combine this with increased inheritance tax burden on business assets, there’s a significant risk of disincentivising individuals to start, grow, and invest in the UK. The growing tax liability for multi-generation family businesses poses serious questions over succession – which ultimately has flow on effects for local jobs and the going concern of businesses we are known for.
It will also be interesting to see how the proposed £10 million Founders’ Relief operates in practice, particularly against the backdrop of restrictions on and reductions in other reliefs available to business owners. Eligibility criteria here will be key to determine the practical value. There is a risk that its benefits may be limited to a relatively narrow group of entrepreneurs, while owners of established family businesses and those planning succession face a greater tax burden. The key question is whether the new relief will genuinely encourage business creation and long-term investment or whether its benefits will be undermined by restrictions elsewhere in the tax system.
Further, if banks respond to higher bank surcharges by increasing lending margins or tightening lending criteria, businesses and individuals could face higher financing costs and greater difficulty accessing credit, which may discourage businesses from borrowing to fund expansion, investment and recruitment.”
Comment on a more encouraging Budget than many expected
Commenting on a more encouraging Budget than many expected, Charlie Hancock, Partner at Winckworth Sherwood, said: “Kemi Badenoch has labelled the Budget “not good enough, not strong enough, not bold enough”. From a private client perspective, it was more encouraging than many expected.
“The decision not to increase the main rate of CGT is welcome, as is the retention of the £20,000 Cash ISA allowance. Clients value certainty, and both measures support long-term saving and investment. The proposed £10 million founders’ CGT relief is also a positive development. Encouraging entrepreneurship and wealth creation is sensible, although it remains to be seen precisely who will qualify and how the relief will operate in practice. As ever, the devil will be in the detail.
“The headlines are optimistic but the real test will be the legislation that follows. The detail will determine whether these measures ultimately achieve what they set out to do.”
Commenting on a disciplined Budget with broader political ambitions, Jonathon Marchant, Fund Manager at Mattioli Woods, said: “Under Andy Burnham and John Healey, messaging was notably more disciplined, with consistent pre-Budget speeches, limited leaks and a clearer articulation of the government’s priorities. Your First Home should provide some support for housebuilders and building materials companies, although persistently higher gilt yields continue to constrain affordability. A higher National Living Wage and the absence of significant personal tax increases may offer a modest boost to consumer confidence following October’s sharp decline, while increased defense spending was generally well received. The initial gilt market reaction was mildly positive, with targeted cost of living measures funded in part by tax increases on sectors including banks and gambling.”
“Healey’s first Budget was relatively uneventful, but Burnham’s broader rhetoric remains ambitious. Strong polling could encourage the government to seek a fresh mandate, and this Budget may lay the foundations for a 10-year strategic plan expected early next year. With many political parties continuing to move away from the centre ground, the range of potential outcomes at the next general election appears wider and more polarised than has been the case for some time.”
Budget Commentary: Head of Tax on State Pension & Frozen income tax thresholds / increase in trading allowance
Neal Groves, Head of Tax at Kinbrook Group’s Beavis Morgan, said:
“It is reasonable that pensioners whose only income is the State Pension should not be pulled into paying income tax simply because the triple lock has increased their pension while the personal allowance has remained frozen. But this is also an avoidable policy friction. Freezing tax thresholds while increasing pensions creates unnecessary complexity and uncertainty for people who have worked hard throughout their lives, highlighting the need for better alignment between tax and welfare policies.”
Separately, on the increase in the trading allowance, he said:
“The decision to triple the trading allowance from £1,000 to £3,000 is welcome news for individuals earning additional income through self-employment or side businesses. This will reduce the tax reporting burden for many people generating modest amounts of income, while giving those looking to start a small business greater flexibility to test their ideas. It’s a positive step towards encouraging entrepreneurship and simplifying the tax system.”
UK Budget: More optimistic outlook could offer near-term gilts relief
By Toni Meadows, Head of Investment at BRI Wealth Management
The worst case scenario for the budget had already been digested and discounted as an option. In the event the budget was relatively optimistic on growth and the deficit which could help government bond yields in the short term (intra-day). It was also less disruptive on businesses than it could have been:
- Among the devolution measures, the visitors levy had already been announced.
- Banks were also showing relief that the surcharge was not as bad as it could have been.
- An extra £10bn loans to Ukraine for defense but the defense spending review is still to come and there will be a new financing task force.
- Cheaper borrowing to councils for affordable housing. First time buyer ISA introduced and your first home scheme. Were positive for housing.
- Cost of living measures were well flagged and the savings measures such as not cutting ISA levels would be welcomed.
The room for radical measures is low given the fiscal constraints and outstanding debt levels in the UK (and the developed World).
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