For those living within their means, budget season is coming – and this year's financial framework has several surprises to consider. In an effort to mitigate its impact on personal finances, here are five key actions you can take.
Firstly, make the most of your ISA allowance. With a £20,000 annual limit, it's essential to use as much of it as possible in the 16 months leading up to changes in April 2027. Once money is in an ISA wrapper, you'll be able to move it around each year and earn interest without tax.
Next, consider switching shares to an ISA to avoid a rise in income tax on dividends. From April 2026, the ordinary rate will increase from 8.75% to 10.75%, while the upper rate goes from 33.75% to 35.75%. If you switch your investments into an ISA as long as you have enough of your £20,000 allowance left, you can avoid these increased tax rates.
Reviewing salary sacrifice is also crucial. While this benefit will be reduced after April 2029, it remains a good option if your employer still offers the scheme. This could allow you to boost your pension contributions while avoiding national insurance payments on sums above £2,000 a year.
Making the most of gift allowances can help with inheritance tax (IHT). The Chancellor has extended the freeze on IHT thresholds until April 2031, so it's essential to consider how much you can give away without being added to your estate. There are various allowances available, including the small gift allowance and potentially exempt transfers.
Finally, weigh up the impact of the new "mansion tax" – a high-value council tax surcharge that will apply to properties in England worth over £2m. While this may seem daunting, you have almost three-and-a-half years to consider your options. Moving home can be costly, and bringing forward plans to downsize might be the best way to avoid the new tax.
Firstly, make the most of your ISA allowance. With a £20,000 annual limit, it's essential to use as much of it as possible in the 16 months leading up to changes in April 2027. Once money is in an ISA wrapper, you'll be able to move it around each year and earn interest without tax.
Next, consider switching shares to an ISA to avoid a rise in income tax on dividends. From April 2026, the ordinary rate will increase from 8.75% to 10.75%, while the upper rate goes from 33.75% to 35.75%. If you switch your investments into an ISA as long as you have enough of your £20,000 allowance left, you can avoid these increased tax rates.
Reviewing salary sacrifice is also crucial. While this benefit will be reduced after April 2029, it remains a good option if your employer still offers the scheme. This could allow you to boost your pension contributions while avoiding national insurance payments on sums above £2,000 a year.
Making the most of gift allowances can help with inheritance tax (IHT). The Chancellor has extended the freeze on IHT thresholds until April 2031, so it's essential to consider how much you can give away without being added to your estate. There are various allowances available, including the small gift allowance and potentially exempt transfers.
Finally, weigh up the impact of the new "mansion tax" – a high-value council tax surcharge that will apply to properties in England worth over £2m. While this may seem daunting, you have almost three-and-a-half years to consider your options. Moving home can be costly, and bringing forward plans to downsize might be the best way to avoid the new tax.
! Reminds me of when I used to work on my parents' old Ford Cortina 
, trying to scrape together enough pennies for a petrol tank refill. But, you know, at least back then it was just about making ends meet, not dealing with fancy tax rates and ISA wrappers 
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️, and don't forget to review those salary sacrifice schemes before they get axed in 2029 
. And, yeah, maybe consider downsizing if you're near that £2m mark for council tax – it's not the end of the world, but it might sting a bit 
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! Everyone's all stressed about savin' their pennies and whatnot. But for me, I remember when you could just put your money away in a savings account and earn interest without any fuss 
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. And now there's this new "mansion tax" thingy... I'm not sure what to make of it, but if it means people are thinkin' about downsizin' their homes, that's a good thing in my book 
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but what if you already got one? Like, if you've already put some money in an ISA last year and now it's almost full... shouldn't that be better than using it all up next year? 
But at the same time, reviewing salary sacrifice and making the most of gift allowances makes total sense... but don't we need a better system that doesn't have so many rules and exceptions? 
. And don't even get me started on the mansion tax 
so thinkin about budget season comin up 
like use it all in 16 months before april 2027 
that's gonna hit properties worth over £2m hard 
anyway, i guess it's good that they're giving us a heads up about the changes so we can plan ahead... maybe?
It's all just part of being an adult, you know? You gotta make some financial decisions and take risks. I say, go for it! 
about the future. £2m is such a huge amount of money! Do people really own homes that expensive? 
And now they're gonna charge us extra for it? 
Like, isn't England rich enough already? 
. I mean don't get me wrong, being responsible with your finances is a good thing, but all these tax changes are enough to make an old retiree like me wanna pull his hair out 
. But what really gets my goat is the "mansion tax" - it's just another way for the government to pinch pennies from people who are already struggling 
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. And, yeah, that mansion tax might be a thing, so consider downsizing if u're planning 2 move...or just wait it out