The Chancellor’s Shake-Up

Rishi Sunak was going to present the much-awaited autumn budget; however, it has now been postponed due to circumstances beyond his control.

The Autumn Budget has been cancelled for the Winter Economy Plan.

As you are aware, the shape of Britain’s economy is in dire status due to the recovery from lockdown.

With more than 700,000 people out of work since March and a debt that has risen above £2 trillion, there is growing pressure on the Chancellor to outline a plan that will bail the UK economy out of the coronavirus recession.

While the Chancellor may delay the release of the budget due to COVID-19, the impact of proposed changes should still be considered and prepared for.

Below we answer your most commonly asked questions about the upcoming budget – what are the expected changes, how could they impact you, and how can you prepare for them now?

Upcoming changes to Pension Tax Relief

It is expected that the upcoming budget will establish that everyone is entitled to the same 20% rate for pension tax relief. Currently, higher earners can enjoy a 40% tax relief on pension contributions. This proposed reduction, creating a single basic tax rate relief for all, could save £10 billion in payments to higher rate taxpayers. It would also significantly disrupt the long-standing practice of saving money in a pension from untaxed income.

By potentially altering this critical incentive from 40% to 20%, the government could reduce contributions to retirement in an uncertain and unstable time. This has ramifications for all and reinforces the importance of securing your financial future. If approved and the changes come into effect, eligible clients should consider contributing to their pension now.

Pension access age change

Also affecting pensioners, the government recently confirmed that from 2028, the age people can access their pension will rise from 55 to 57. This will mostly impact individuals who will reach their 55th birthday just after the change is implemented in 2028. The government credits the change to trends in longevity, encouraging people to stay in work for longer and maintain sufficient savings for later life.

Homes under the hammer

Changes made in the March 2020 Budget
In his March 2020 budget, the Chancellor slashed Entrepreneurs’ Relief from £10 million to £1 million. Harsh criticism followed this decision, with Jamie Morrison of accountancy firm HW Fisher stating that ‘this is not enough to drive support of creativity and entrepreneurship.’

Other benefits including the principal private residence relief were unchanged in March and under review by Mr. Sunak. Following the review, changes are now expected in his upcoming budget. Principal Private Residence (PPR) Relief allows consumers to not be taxed on the sale of their primary home. 

Expected changes to Capital Gains Tax
While the exact changes are unknown, speculation details that the relief could adopt a lifetime cap, become subject to a per-transaction cap, or be entirely removed. Changes to PPR relief would be highly contentious, however as the relief was worth approximately £27 billion in 2018-19, the government is expected to refine the system and reduce potential grey areas.

Following the Chancellor’s review of these relief principles and Capital Gains Tax more generally, it is widely considered that CGT will be an area of change in his upcoming budget. Specifically, a flat rate CGT could be implemented to remove the incentive for wealthy people to structure investments that generate capital gains, not income.

With the suggested CGT changes, planning and preparation should commence now. A potential for CGT to be taxed the same rate as income tax could be applied, and action now could prevent future consequences. For more personal guidance, you can contact us at Duke Godley Financial Planning Limited.

ISA allowances

Every ISA allowance account is unique. For example, for Tax Year 2020/2021, the limit on a Junior ISA is £9,000, but Lifetime ISAs have a limit of £4,000. In the current tax year, a maximum saving of £20,000 applies.

How can I maximise savings in my ISA this tax year?
The tax advantages and flexibility of an ISA means that anyone serious in investing or saving should utilise the maximum limits. As mentioned, you can contribute up to £20,000 into an ISA for this tax year. The contribution can be in cash, stocks, and shares, or a mixture of both. Here are some tips and reminders to achieve the maximum benefit from your ISA.

1. Use it or Lose it!
With ISAs, if you do not contribute the maximum amount, your remaining allowance will not carry over into the following tax year.

2. Remember that both members of a couple have an allowance each.
The £20,000 annual amount is an individual limit, meaning a couple can save up to £40,000 per year. If your civil partner or spouse has no income, you can transfer your assets tax-free, allowing them to also maximise their saving.

3. You can move between stocks and shares and cash.
You can hold as much cash in a stocks and shares ISA as you please. Additionally, you could maximise your cash ISA this year and move it into stocks and shares when you are comfortable.

4.  Junior ISAs
With the limit on Junior ISA’s increasing from £4,368 to £9,000 in the last financial year (2019/2020), it is a great opportunity to maximise your children or grandchildren’s ISA limit. If you are a parent or guardian of a child under 18, you can open a Junior ISA for them. Anyone can contribute to this account, which can generate significant savings for young people – setting up their futures.

There are numerous opportunities to maximise your ISAs this tax year. For more information or advice, you can contact us at Duke Godley Financial Planning Limited. 

Secure your financial future

With the markets currently low, now may be a great time to invest. As per the philosophy of Warren Buffet, an opportunity arises to invest in a low market and “get out” when the market soars. His words are incredibly relevant in the current climate:

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”

The experienced team at Duke Godley Financial Planning Limited can assist you to track investment performance and future-proof your finances. Our comprehensive financial management services will guide you to protect your business and family, manage wealth, and help to make your dreams come true.

Speak with our expert team on 0208 515 1200, or contact

Financial Advice is based upon distinct consideration of your Personal Circumstances and varies from client to client based upon personal needs and full completion of our Core Fact Find.

Your capital is at risk, you may get back less than you originally invested
The Financial Conduct Authority does not regulate taxation advice
Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means-tested benefits.
Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement.

Please pick up the phone and give us a call on 0208 515 1200 if you are worried or would like some advice or drop us a line at and one of the team will get back to you as soon as possible.

Important Information

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested.

Issued by Duke Godley Financial planning Limited, which is authorised and regulated by the Financial Conduct Authority. FCA Number 629938

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