With the chancellor’s next speech looming large, speculation is mounting over what the Government could have in store for UK households. Here’s how to protect your finances.
As we reported last week, rumours are circulating that next month’s Budget could bring stealth tax rises, Stamp Duty shake-ups and cuts to pension perks.
And understandably, these headlines are making many of us extremely nervous.
But while nothing is confirmed until Rachel Reeves takes to the podium on 26 November, there are steps you can take to protect your finances in the meantime – and mistakes you should avoid if you don’t want to pay the price later.
Things you must do
Let’s start with the positives. What can you do in the coming weeks and months to get the most out of your money?
1. Max out your ISA allowance (if you can)
Whatever your financial position, it’s always wise to get the maximum benefit from tax-free perks, with ISAs being the most obvious example.
During the 2025/26 tax year, most UK residents can save up to £20,000 across Cash, Stocks and Shares and Innovative Finance ISAs.
If you’re unsure how different ISA types work, you can learn more in our comprehensive savings guide
Worryingly for savers, however, several policymakers and industry figures have recently suggested to the chancellor that she could cut the ISA allowance to encourage more investment in financial markets.
So, if you have spare cash, using this shelter while you still can is obviously a sensible move.
2. Grab those pension perks
Saving for our twilight years is, of course, a concern for most of our readers.
And it goes without saying that it makes sense to save in the most tax-efficient way possible.
Pension contributions currently benefit from tax relief based on the rate of Income Tax you pay.
At present, Basic Rate taxpayers can receive £100 into their pension by saving just £80 themselves.
This is because the money you would have paid to the Government in taxes goes into your pension.
And the scheme is even more attractive for higher earners.
Higher and Additional Rate taxpayers only need to contribute £60 and £55, respectively, to see a £100 payment made into their fund.
That said, rumours are flying that Reeves could be planning to introduce a flat rate of 30%, which would obviously hit higher earners the hardest.
If you fall into this category, it’s a good idea to grab as many tax perks as you can during the current tax year.
Under current rules, most Brits can contribute up to £60,000 before they need to start paying tax, although there are rumours this too could be slashed.
You can read about any exceptions to this rule on the Government’s website.
3. Make use of past allowances
When it comes to pension saving, it’s also handy to understand the concept of ‘carry forward’.
This little-known rule allows you to capitalise on any unused pension allowance from the past three tax years – as long as you had a pension open at that time and earn enough to cover the contribution.
In theory, this could allow you to save as much as £180,000 within the current tax year, provided you can afford to do so.
This rule is particularly useful if your income fluctuates year to year, such as if you’re self-employed.
You can learn more about ‘carry forward’ in our recent guide.
4. Get ahead of the Inheritance Tax shake-up
Regardless of your age and health, reviewing your financial arrangements for once you're gone is always a sensible move.
Arguably, however, this has never been more important than in the current climate.
In one of the biggest financial shocks of recent years, the Government has confirmed that most unused pension funds and some death benefits will soon be brought within a deceased’s estate for Inheritance Tax purposes.
Although these changes won’t take effect until April 2027, it’s wise to get ahead of the game.
If you haven’t already done so, you may want to book an appointment with a financial adviser to discuss the best options for your circumstances.
Things you mustn’t do
And now, what steps should you potentially avoid?
1. Raid your pension based on hearsay…
While current speculation and news headlines are no doubt putting many of us on edge, these are only rumours at this stage – especially when it comes to pensions.
One of the most costly mistakes that you could make would be to panic and access funds from your pension if this isn’t suitable for your particular needs.
However, it seems that many of us are doing just that.
According to The Guardian, data from the Financial Conduct Authority has shown that UK pension savers withdrew more than £70 billion in 2024/25 – a 36% increase from the previous year.
2. …Or squander your tax-free lump sum
When we reach the age of 55 (rising to 57 from 2028), Brits can usually take up to 25% of their pension tax-free, typically capped at £268,275.
While it’s tempting to grab that 25% as soon as you can, doing so when you don’t need to could also shrink your future retirement income.
Remember that taking cash too soon can shrink growth, trigger tax and limit future contributions. If you need to act, do it as part of a plan – not just because of fear-mongering headlines.
3. Leave yourself without a safety net
While we’d never want to contradict ourselves, we’d also like to add a note of caution to our tips.
Although it’s certainly wise to get the maximum possible benefit from ISA allowances and pension contributions, you should never do so at the expense of your quality of life or leave yourself without cash in an emergency.
A solid emergency fund is worth more than squeezing in an extra allowance.
Even the best tax break won’t protect you from overdraft charges, credit card debt or the stress of not having funds for the unexpected.
Final thought
The upcoming Budget may bring significant changes to the financial landscape, but that doesn’t mean you should rush into drastic action.
Most new measures won’t take effect straight away, giving you time to plan carefully once the details are clear.
If you’re unsure, professional advice can help turn a short-term worry into a long-term strategy.
The information included in this article does not constitute regulated financial advice. You should seek independent, professional financial advice before making any financial decision.
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