At Manning Gee Investments, our role is simple: to help you grow, protect and enjoy your wealth with confidence.
Every Budget announcement brings headlines, noise and sometimes unnecessary worry. So, we’ve broken down the 2025 Budget into the key points that matter most for families, individuals and business owners planning for the future.
This blog focuses on the areas most relevant to our clients: ISAs, property, savings and investment income, pensions, and salary sacrifice.
As always, if you’d like to understand how these changes apply to your financial plan, we’re here to help.
1. ISAs Are Changing – Especially for Under-65s
One of the most noticeable changes is to how much younger savers can hold in Cash ISAs.
From April 2027:
- Under-65s will be limited to £12,000 of their £20,000 ISA allowance in cash.
- Over-65s can continue to hold up to the full £20,000 in cash.
- The overall ISA allowance remains frozen at £20,000.
What this means for your financial planning
For many clients, ISAs are a core part of tax-efficient planning. These changes mean that, for some, more of the ISA may need to be invested rather than held in cash.
This aligns well with most long-term plans, especially for those building wealth for retirement.
2. Higher Taxes on Savings and Investment Income
The Budget confirmed increases to tax on:
- Dividend income (from April 2026)
- Savings interest (from April 2027)
With allowances frozen until at least 2031, more people will pay tax on investment income even if their finances haven’t changed.
What this means
Tax-efficient planning becomes more important. Making full use of ISAs and pensions can help reduce unnecessary tax drag on your savings and investments.
If you currently hold investments in a General Investment Account (GIA), you should revisit the structure to ensure your assets are held in the most efficient way possible.
3. Rental Property Income Will Be Taxed at Higher Rates
If you’re a landlord, take note.
From April 2027, rental income will be taxed at:
- 22% (basic rate)
- 42% (higher rate)
- 47% (additional rate)
What this means
For clients with property portfolios or single rental properties, this is a significant change. It may reduce net rental returns, particularly on mortgaged properties.
4. Salary Sacrifice Pension Contributions – Big Changes in 2029
Salary sacrifice remains one of the most tax-efficient ways to contribute to a pension. However, from April 2029, the amount that attracts National Insurance savings will be capped at:
- £2,000 per year
Employer and employee NI will apply to contributions above this.
What this means
This affects higher earners, business owners and anyone making substantial pension contributions via bonuses or sacrifice.
5. Pension Death Benefits – New IHT Rules Ahead
From April 2027, pension providers may withhold tax where death benefits are deemed part of an estate for Inheritance Tax purposes.
What this means
Your pension nomination forms become even more important.
Make sure these are reviewed and updated so your wishes are carried out and any potential tax is minimised.
6. High-Value Property Surcharge (the ‘Mansion Tax’)
From 2028, properties valued above £2 million will attract an annual surcharge:
- £2,500 per year (for £2m–£5m properties)
- £7,500 per year (for £5m+ properties)
This affects fewer than 1% of homes, but it will matter for some clients.
What Should You Do Now?
For most people, nothing needs to be done immediately.
Many changes come into force between 2026 and 2029, and we will help you adjust your financial plan when the time is right.
Our advice remains consistent:
- Avoid reacting to headlines
- Focus on long-term planning, not short-term noise
- Please speak to us before making decisions
- Use your annual review as an opportunity to check everything is still working for you
Financial planning is about steady, thoughtful choices, not rushed reactions.
How We Can Help
If you are unsure how the Budget affects your own plan, please get in touch. We can talk everything through and clearly, and make sure your plan continues to:
- Grow your wealth
- Protect what you have built
- Deliver a tax-efficient retirement
- Support your family now and in the future
.
Disclaimer
This blog is based on the UK Budget 2025 announcements and is for general information only. It does not constitute personal financial advice. Please speak to a qualified financial planner before taking action.