Budget 2026: Pensions, ISAs and financial planning

Relief that pensions escaped further changes

Firstly, a sigh of relief that personal pensions weren’t in the spotlight in any way, other than the usual pre-budget jitters over losing the tax free 25%. I’m hoping this has now been put to bed for the foreseeable future.

For me, although the announcements were dominated by three letters I-S-A… I don’t foresee the changes from the budget around ISAs having a profound impact for me and my clients – nothing announced moves the dial on how I am likely to approach financial planning for individuals and business owners.

The big change had been announced previously, with pension pots being dragged into the IHT net from April 2027 – and here, I am glad to see that there weren’t any further changes announced. There are a few ways to potentially approach the thorny issue of IHT being introduced on pensions, an asset that can exceed the value of peoples’ homes, and I am glad that these are still on the table.

There is no silver bullet that can remove the liability completely but, for many, a proper plan can be implemented to manage things in a sensible way – especially in the context of large pension pots being used to cascade wealth during their lifetime by looking at the family group as a whole, turning to annuities or funding life insurance.

This is still going to be the biggest challenge I’ll be helping clients to tackle into 2027 and beyond.

ISA changes in the Budget

The ISAs then…

At last count, I made it six different flavours of the tax efficient accounts available – not accounting for the revolving door of ISAs to help get on the housing ladder.

I think I can see where the government is trying to go with this, as a follow on from the now u-turned reduction in the Cash ISA allowance for under 65s, in trying to get savers to invest rather than focus on cash. I’m not sure that additional options and red tape to untangle is going to be the catalyst to get more dipping their toes into the world of investing for the first time with the new ‘Starter ISA’.

Cash versus investing: finding the right balance

Even with my own clients, I far too often see people holding more cash than they need to – I get it, it’s a comfortable place to be; but does comfortable make it the right place to be?

Cash will always have a vital part to play in personal finances but if you can afford to save £20,000 a year, the likelihood will be that you are missing a trick by maximising just your Cash ISAs.

Apart from helping to structure clients’ wealth, my job is to advise on how much risk that person needs and can afford to take – and then be the voice of reassurance when markets inevitably drop. No amount of regulation and choice is going to replace this and help nervous investors avoid the common pitfall of selling out during a crash and sitting on cash whilst the markets rebound.

Helping families achieve their goals

My job is centred on helping individuals and families use their wealth to benefit them as a whole – whatever their goals may be. One goal that comes up consistently from parents and grandparents, is to help family members get on the property ladder – and they look to me to help them achieve this and whether there are ways to ‘boost’ their gifts.

What happens to first-time buyer savings?

Here, we look to be losing the Lifetime ISA, which in itself replaced the Help to Buy ISA, and in will come the newly announced ‘First Time Buyer ISA’ – how much well-intentioned government support will be left on the table due to constant tinkering here…? Time will tell when we have the detail.

More pressure on buy-to-let landlords

At the other end of peoples’ property journey, we have implications for buy to let investors – an additional 2% increase to the already announced levy of 2% for property income. Taking the surcharge for landlords with personally held properties to 4%. I have already been working through plans with clients looking to exit their properties – and how to invest the proceeds to replace their income, this announcement I expect to further accelerate this thinking.