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  Title	Budget 2025: Experts respond
  ID	28450358
  External ID	efc65e6384af50e31e56ced8a1b5fd9b
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  Published Date	Nov. 26, 2025, 9:32 a.m.
  Summary	Budget 2025: Experts respond
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  URL	https://www.diyinvestor.net/budget-2025-experts-respond
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  Content ID	36095180
  Key	29a2030d-40af-45ff-af5c-e1d04fc3ed43
  Content	'The Chancellor's decision to cut salary sacrifice will reverberate across workplaces' Mark Futcher, Partner and Head of DC Pensions at Barnett Waddingham (BW), said: 'The Chancellor's decision to cut salary sacrifice will reverberate across workplaces. While it may raise extra NI revenue, it removes one of the most effective ways people boost their pension savings. With adequacy levels already worryingly low, this change will hit average earners hardest and increase cost pressures for employers at a time when budgets are stretched. It also runs against the aims of the new Pension Commission, which is focused on strengthening long term saving, not undermining it. 'And salary sacrifice goes beyond pensions. Parents use it to retain access to child benefits and funded childcare when they or a partner is deciding whether to stay in or return to work. This could present a significant barrier to people re-entering the workforce after periods of leave, worsening gender pay and pensions gaps. 'Sudden tax and insurance changes like these only create a lose-lose scenario for employers and employees – which we're seeing play out in the employment data across the UK. We can only hope the Government recognises the damage this could cause and turns her attention to policies that make it easier for ordinary working people to build a secure retirement, not harder.' Following the Chancellor's introduction of a 'mansion tax' on properties worth over £2 million from April 2028, Simon Main, Partner at Cripps, a top 100 UK law firm, said: ' It is clear that the government's 'mansion tax' will have a significant impact on the pricing, liquidity, and long-term ownership strategies in the prime central London market. 'From a legal perspective, much remains uncertain. Key questions, such as how properties will be valued, who will carry out the valuations, and who will bear the costs, suggest the application of any such levy will be fraught with difficulties.' Tradu CEO on Budget: Tinkering with stamp duty won't fix UK investment crisis 'The Chancellor's measures to make up the shortfall in public funds have neglected the urgent need to revitalise domestic investment. 'Increasing the dividend tax at a time when retail ownership is historically low will only push households even further out of the market. Why would retail investors choose our market when US equities already enjoy stronger corporate earnings growth? More than half of retail investors believe US stocks are more attractive than UK stocks due to lower tax obligations. This move only serves to widen that gap. 'Freezing the income tax allowance risks hurting Britain further. Without any incentives to drive people's hard-earned money into domestic equities, the Chancellor will struggle to unlock dormant capital. 'The reduction of the cash ISA allowance to £12,000 is a further half measure that won't succeed in reigniting interest in domestic equities by itself. Penalising savers won't turn them into investors. If the government genuinely wants to channel more capital into UK equities, then the priority must be to remove cultural and structural barriers, and not simply restrict savers' options. 'Though the move to offer stamp duty holidays for new listings is a step in the right direction, the failure to abolish the share tax altogether and enhance financial literacy means we're leaving up to £740bn on the table. Tinkering around the edges isn't working, and it will not be surprising if the government remains in the same place come the next Budget.' 'this reduction in the allowance will impact a substantial proportion of savers' – Moneybox react to ISA announcement at Budget Brian Byrnes, Head of Personal Finance at Moneybox, commented: 'The Cash ISA is the UK's most popular savings vehicle, so today's cut to the annual tax-free limit will understandably cause concern for many. In fact, in the 24/25 tax year, two-fifths of Moneybox Cash ISA customers deposited more than £12,000, indicating that this reduction in the allowance will impact a substantial proportion of savers.' 'It is vital that the government recognises that cash savings remain the bedrock of financial confidence and a cornerstone of financial resilience. A strong cash buffer is what ultimately gives people the confidence to invest over time. At Moneybox, we see more than a million people — many on modest incomes — relying on tax-wrapped accounts to build security and plan for the future. Sudden changes to allowances risk undermining that confidence. 'We support the government's ambition to encourage more people to invest for stronger long-term returns but it is widely accepted that cutting the Cash ISA allowance alone will not create an investing culture. Real change requires policy stability, a clear long-term savings and investment strategy, and meaningful support for those who are less confident about investing.' Budget: Retirement security just took a hit – James Floyd, MD of SIPP platform Alltrust 'The government's cut to salary sacrifice relief confirms a move away from supporting private retirement saving and towards short-term fiscal balancing. While not presented as a direct hit on savers, the impact is clear. Legal & General's actuarial analysis already shows nine in ten people are failing to meet their retirement goals, and removing one of the few remaining incentives for disciplined long-term saving will only worsen outcomes. 'Stripping away NI efficiency removes the core advantage of salary sacrifice, narrowing the gap with SIPP funding and shifting more responsibility back onto individuals. This continues a pattern advisers see every day—later retirement ages, more volatile outcomes and growing recognition that the system no longer supports the retirement futures people were promised. 'Reducing the ability to save efficiently, limiting flexibility and diluting incentives effectively hard-wires later retirement into the economy. For many under 50, working well into their 70s will become a financial necessity. Meanwhile, public sector workers remain insulated within defined benefit schemes, widening the divide between those with guaranteed pensions and those without. 'Advisers will now need to recalibrate strategies and place greater emphasis on SIPP funding to provide control and resilience as employer-based advantages erode. The industry must also be clear: raising revenue today at the expense of long-term retirement security is not sustainable. Restricting saving incentives will mean more people working longer, facing greater financial insecurity in later life and ultimately relying more heavily on the state. Working people deserve a retirement system that supports, rather than penalises, those who save for their future.' says James Floyd, managing director of Alltrust Services Limited On the Cash ISA reduction The £12,000 threshold for cash savings is more palatable than the lower caps touted previously, but it is still a blow to younger savers and won't yield the sorts of results the Treasury and City want to see. This policy doesn't speak to the millions of younger people who rely on Cash ISAs to develop good savings habits, helping them plan for the future and rely less on the state for later life financial support. Savers should move what they can into their current £20,000 Cash ISA allocation before the threshold is reduced in April 2027. On including UK stocks in your stocks & shares ISA Reinvigorating the UK stock market is an honourable ambition, but this feels more like holding younger savers to ransom than enacting progressive policy change. The idea that a lower Cash ISA allowance will magically turn cautious savers into confident investors is deeply flawed. Our latest data* shows that cutting Cash ISA limits won't drive people into investing, it will simply create confusion. 35% of Flagstone savers say they 'don't know yet' how they would respond, which tells you they're hesitant, not eager to take on more risk. A further 24% say outright they're unlikely to shift into Stocks & Shares ISAs. Savers want protection and autonomy, not pressure or paternalism. 53% of Flagstone savers say they would be concerned about any requirement to invest in the UK market. Their financial advisers agree. According to Flagstone's pre-Budget poll of financial advisers** 68% of advisers say reducing the Cash ISA limit won't encourage more investment in UK equities. Only 20% say they're seeing more UK equities that are undervalued and attractively priced. And 32% say they have not recommended UK-focused funds to clients for three or more years. * Survey of 450 Flagstone savers, November 2025 ** Survey of 103 UK financial advisers, November 2025 On capping salary sacrifice in pensions This is a startling and scary step to creating a less affluent, more dependent later-life population. There is a real risk that, as workers' take-home pay decreases as a result of the salary sacrifice cap, they will start to change their saving behaviours – and not for the better. One of those shifts will be to pay less into pensions. Saving directly from your salary into your pension is one of the most tax-efficient ways to save for later life. Reducing your contributions can put pressure on your financial health in retirement, particularly when you are younger and at the accumulation phase of pension saving. For those who do reduce pension contributions to mitigate this cap, it's hugely important to establish good habits around excess take-home pay to ensure that savings are continuing to accumulate – both inside the pension and out. Saving into your cash ISA is always a good first port of call, since every penny of interest you earn will be tax-free; and then actively move savings into high-interest, long-term savings accounts. These funds can help to preserve their value, stay safe and can be used to top up your retirement income later, reducing your reliance on your pension alone. On income tax threshold freeze While the big headline rumour that the Treasury would increase income tax by 2p never came to pass, a failure to raise income tax bands may prove just as detrimental to savers anyway. A failure to act on income tax bands is a stealth tax in (poor) disguise. Maintaining the same income tax bands for a fifth year means that more people than ever will be pushed into higher tax bands and pay more tax on their income. This disproportionately impacts those aged 65 and over. The Institute for Fiscal Studies says that almost two thirds of 65yo+ will pay income tax this year – more than those aged 16-64. Saving for your pension knowing that you will pay considerable income tax on whatever you withdraw from it is a bitter pill to swallow. It's particularly hard for those nearing pensionable age for whom the chances that income tax bands will increase before they need them to look very slim. Saving for your pension will continue to remain one of the most tax efficient ways to save for retirement, regardless of these frozen bands. But if the thought of being pushed to pay tax in retirement is unappealing, it can be worthwhile amassing savings with your take-home pay outside of a pension too. Saving into your cash ISA is always a good first port of call, since every penny of interest you earn will be tax-free; and then actively move savings into high-interest, long-term savings accounts. These funds can help to preserve their value, stay safe and can be used to top up your retirement income later, reducing your reliance on pension withdrawals. Chasing cash while driving wealth away ? ' You cannot tax wealth that has already left the building. ' The Chancellor's latest address was less of a rallying cry for growth and more of a starting gun for an exodus. By freezing allowances, slashing tax breaks, and tightening residency rules, the Government hasengineered a dangerous paradox: they are desperate to fill an immediate multi-billion pound black hole, yet are seemingly actively dismantling the incentives required to generate that wealth. Instead of stimulating the innovation andproductivity needed to revive the economy, these decisions offer zero clarity and dangerously low motivation for entrepreneurs and investors to stay put. The government is hunting for immediate liquidity, but their discouraging words are simply shrinking the tax base they intend to harvest. P eople are already voting with their feet. Over the last 12months, enquiries from clients seeking to leave the UK have hit record highs for us ,driven by a desire to escape a stifling fiscal environment for dynamic hubslike Dubai, Portugal, and Ireland. It isn't just the wealthy using the newnon-dom changes to exit. We are witnessing a massive increase in enquiries fromambitious young professionals and teachers seeking higher pay and lower taxes abroad because they want to be able to save money, something the UK regimemakes i ncresingly impossible to do. When British schools and firms are prioritizing international expansion over domestic growth, and the regulatory environmentmakes it more appealing to set up in Cyprus than London, it is a clear indictment that the UK is becoming uncompetitive. Ultimately, these measures fail to solve the professed problem of immediate funding because they rely on a captive audience that no longer exists. By targeting pensions and savings, the Government is discouraging investment in UK companies exactly when it is needed most. This approach ignores the unintended consequences of capital flight. You cannot tax wealth that has already left the building. We are looking at a policy framework that doesn't just fail to fix the present but, rather, actively mortgages the future by pushing capital, talent, and stability offshore. A step in the right direction for UK retail investors 'This Budget isn't a resounding victory for UK retail investors, but it's a step in the right direction, on a day of difficult trade-offs for the Chancellor. The dividend tax rise will hit some investors, yet the decision to scrap stamp duty on new London listings is a positive signal that the government is serious about revitalising the UK market. Meanwhile, cutting the cash ISA allowance for under-65s rightly recognises that long-term investing is a more effective way to build wealth than leaving money parked in cash. We'd love to see the Chancellor go further on both measures in future Budgets.' Daniela Hathorn, Senior Market Analyst, Capital.com 'Rachel Reeves' 2025 Budget has so far centred on a strategy of plugging the fiscal gap through significant tax increases while simultaneously committing to long-term public investment. A key feature is the freezing of personal income-tax thresholds for another three years, a move that effectively raises taxes over time as wage growth pulls more people into higher bands. Additional revenue-raising measures target dividends, high-value property, gambling, and other sectors, while spending plans emphasise investment in health, education, infrastructure, defence and technology. 'This mix of higher taxes and expanded public investment has created a mixed response in financial markets: gilts have risen, pushing yields lower, and the pound has strengthened against its major peers in a sign that investor concerns about fiscal credibility may have been tempered slightly. The FTSE 100 remains stable within the wider uptrend that has taken over global equities in the last few days. 'That said, sentiment is fragile, with investors weighing the risk that back-loaded tax revenue, elevated borrowing costs, and uncertain growth prospects could make the fiscal plan difficult to sustain. While certain sectors poised to benefit from planned public investment have reacted more positively, overall market behaviour reflects caution and a focus on the government's ability to deliver credible long-term fiscal discipline.' Commenting on the Autumn Statement and how it could affect the real estate industry and property investing, Daniel Austin, CEO and co-founder at ASK Partners: Mansion tax 'The Mansion Tax announced in today's Budget will likely soften demand for higher-end homes, especially those near the £2 million threshold where the impact is greatest. While the super-prime market may absorb the charge, the wider upper tier can expect renewed price pressure and slower growth. We may see a brief pre-implementation rush, but just as many owners could delay selling to avoid the levy, reducing turnover and constraining supply. The burden will fall hardest on asset-rich, cash-poor households in high-value areas such as London. 'It is disappointing that stamp duty reform was overlooked. As one of the biggest barriers to market mobility, leaving it untouched will continue to create friction in an already subdued market. The OBR's downgraded growth forecasts, as a result of the budget, prove that supporting transactions should have been central to today's package.' Infrastructure and investor sentiment 'On a more positive note, renewed funding for the Lower Thames Crossing signals intent to push ahead with major infrastructure. Such projects typically bolster confidence among developers, investors and buyers. Over time, improved connectivity should lift demand, and eventually values, across parts of east and south-east London.' Capital flows and residential investment 'Rather than driving capital out, the Budget is more likely to redirect it within UK housing. Foreign, institutional and private-credit investors are expected to continue favouring mid-market, income-led residential assets, build-to-rent, PBSA, single-family rental, affordable and suburban schemes, while relying more heavily on credit strategies as banks remain cautious.' ISA allowance reduction 'The cut to ISA allowances is another unwelcome development. Cash ISAs are central to how aspiring buyers save, and a lower limit makes deposit-building even harder. It may also reduce low-cost funding for building societies and smaller lenders, tightening mortgage availability. At a time when the market needs more mobility and higher transaction volumes, this risks suppressing demand, delaying first-time buyer activity and adding friction to an already subdued market.' Employee Ownership Trusts: Christian Carr, partner at law firm Spencer West LLP comments: 'Halving the capital gains tax relief on sales to employee ownership trusts will likely cool momentum in the short term. It raises founder tax costs, squeezes headroom for deferred consideration and is likely to bring seller price expectations closer to independent valuations. That said, EOTs remain a robust succession route for good businesses because they preserve culture, jobs and independence; it's not just about the tax. The added advantage of creating your own buyer and softer due diligence remain unaffected.' Mansion Tax: Michael Shapiro, partner at law firm Spencer West LLP: 'The thresholds presented by the Chancellor mean there could be inequity. In some areas of the country, £2 million would buy a nice country house befitting of the term 'mansion', but in central London, you might only expect a 2-3-bedroom flat in a mansion block. My view is that regulations would need to be adapted to reflect the higher value property market in London and other high-value areas of the country. This surcharge comes into effect in 2028, so we await further clarity as to whether the 'mansion tax' is a one-size-fits-all approach.' Commercial Property: Michael Shapiro, partner at law firm Spencer West LLP: 'It's evident this is a 'political' budget without producing anything to stimulate the mantra of 'growth, growth, growth.' Despite lowering business rates for many retail and hospitality businesses through higher rates on warehouses used by online retail companies, the fact remains that the local high street has many empty retail and hospitality premises. Speaking with many commercial landlords and tenants which make up my client base, the main driver is the level of business rates, and the way that the business rating system works. While an overhaul is scheduled for April 2026, this is something that needs to be addressed with urgency. Hospitality and retail businesses continue to struggle through the current system, which is further compounded by the rise in NI in the last Budget and the incoming rise to the minimum wage in January. The domino effect of this on retail and hospitality workers, builders, and tradespeople cannot be underestimated, and the impact is clear to see by walking along any high street.' 'Not making life easier for working people' – Leading challenger bank comments on ISA rules Ben Mitchell, Director of Savings at Chetwood Bank, said: 'Many savers, especially those approaching retirement, will be disappointed to learn that today's budget saw the cash ISA allowance cut after all. This decision will require many savers to reassess how they plan for the future, as cash plays an important role in supporting resilience during periods of market volatility. 'The Chancellor's ambition to encourage more people into long-term investment is understandable, but making everyday savings less appealing or versatile doesn't make life easier for working people. There is no guarantee that changing the ISA rules will lead to more money finding its way into other investment assets, such as stocks and shares. ISA rules have changed repeatedly over the years at the hands of different Governments. A better option would have been to look for simplification and stability.' Share on FacebookShare on TwitterShare on Google+
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