Wednesday (October 30) will mark the first Budget by a Labour government in over a decade and speculation is rife on what could be announced.
Rise in taxation across the board, support for first-time buyers, and pension changes have all been predicted to be mentioned by chancellor Rachel Reeves.
So, what can advisers expect from the chancellor tomorrow?
Tax
One area that was identified by advisers as being particularly volatile was taxation with the majority of people predicting increases across the board.
Money First Aid co-founder and chartered financial planner, Rachel Harte, said: “Advisers are closely watching for potential changes to capital gains tax, inheritance tax, and pensions - areas essential to clients’ financial planning.”
She added that any changes to tax regimes, particularly around pensions and investments, could shake public trust in these critical financial tools and, as such, called for “stability and clarity” to support clients’ long term planning.
“Clear guidelines and achievable timelines would allow both advisers and clients to make sound, long term decisions,” she continued.
A similar sentiment was expressed by Dennehy Wealth chartered financial planner, Ruairi Dennehy, who said: “It’s safe to say we all expect tax rises, whether it be bringing capital gains tax rates in line with income tax bands, or bringing pensions into one’s estate for IHT purposes.”
However, Dennehy cautioned that, whatever avenue Reeves decides to go down, there needs to be a “clear roadmap” and a chance for people to react and plan accordingly.
Harte echoed this, advising that, regardless of the outcome, advisers are ready to navigate the shifts in the personal finance landscape.
“Advisers have become adept at managing evolving legislation. Whatever policies emerge, advisers will be prepared to help clients plan their financial futures with confidence," she said.
Property
On the topic of property, Rics former residential chair, Jeremy Leaf, spoke of his desire to see help for those people to get their first foot on the property ladder.
In order to support first-time buyers, Leaf called for some encouragement for the demographic, such as retaining stamp duty concessions.
Similarly, Dennehy stated he would like to see more support to encourage first-time buyers onto the property ladder, something which he argued could be achieved with an adjustment to the Lifetime Isa.
“The 25 per cent government top-up on savings up to £4,000 per year is a great incentive to help people save for their first home, but the corresponding 25 per cent exit penalty not only removes this bonus but also hits a chunk of your hard earned savings,” he explained.
“Adjusting this penalty so it only strips out the government bonus wouldn’t be an earth-shattering policy, but again is about improving consumer confidence and understanding in the products they are using.”
Finally, Leaf spoke on what the Budget could mean for landlords, pointing out they are leaving the sector, not yet in their droves, but in sufficient numbers to make rents unaffordable for many, while choice remains so poor.
