Budget 2025 – Savings and Investments

It was only yesterday, but the Chancellor’s Autumn Budget has well and truly landed. While it may not be the page‑turner of the year, it certainly shapes the financial landscape we all navigate. As Benjamin Franklin once quipped, “In this world nothing can be said to be certain, except death and taxes.” Sadly, this Budget proves he was right yet again!

Taxes

The government has frozen income tax thresholds until 2028, meaning more earners will quietly slip into higher tax bands – the fiscal equivalent of being invited to a party you didn’t want to attend. A new mansion tax and council tax surcharge will apply to properties over £2 million, dividend and savings income tax rates are rising by two percentage points, and employer National Insurance will now apply to salary sacrifice pension contributions.

As Winston Churchill once said, “We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Everyday spending isn’t spared either, with the sugar tax extended to milkshakes and lattes – so even our morning coffee is now a patriotic contribution.

Savings

Savers face mixed fortunes. From 6 April 2027, the annual cash ISA allowance will be cut from £20,000 to £12,000 for those under 65, while pensioners over 65 can keep the full £20,000. Savings interest will also be taxed at rates 2 percentage points higher than standard income tax bands. Mark Twain once said, “The lack of money is the root of all evil.” The Budget seems determined to test that theory, nudging savers toward stocks & shares ISAs rather than cash with the Chancelor referencing long term growth potential for tax free savings.

Investments

Investors and business owners should brace for thinner margins. Dividend tax rates rise from April 2026, with the basic rate moving to 10.75% and the higher rate to 35.75%. Property income tax is also set to increase from April 2027, though in Scotland the impact is still unclear due to devolved rules. Hospitality investors should note the new tourist tax on overnight stays.

Oscar Wilde once joked, “When I was young, I thought that money was the most important thing in life; now that I am old, I know that it is.” The Budget seems to agree, finding new ways to collect it.

Our Perspective

This Budget is less about giveaways and more about plugging fiscal gaps. For clients, the key takeaway is to plan ahead: review dividend‑heavy portfolios, make the most of ISA and pension allowances before changes bite, and consider property exposure carefully. With growth forecasts modest and debt levels high, the government is signalling caution.

Closing Thought

Think of this Budget as a Scottish winter: brisk, a bit biting, but manageable with the right preparation. Or, to borrow from Shakespeare, “Now is the winter of our discontent” — but with careful planning, we can turn fiscal frost into financial firewood.