Late Autumn Budget must consider consumer outcomes by providing realistic change

20 Nov 2025

First seen in Professional Adviser

It's one of those years. Unfortunately, energy that would be typically devoted to Christmas planning must be balanced with thinking long and hard about the upcoming Budget, and the ramifications of it once we know what it contains.

The Autumn Budget is very late this year, scheduled on 26 November. The last time a budget was delivered so late was 29 years ago in 1996 by Chancellor Kenneth Clarke, a final Budget from a Conservative party that had held power since 1979.

That budget saw income tax reduced, an increase to the personal allowance and a raised inheritance tax threshold.

November Budget 2025

I imagine the similarities between the 1996 and 2025 budgets stop at sharing the same date. This year's rumour mill is already in full swing and much of the speculation centres on how today's government might raise taxes.

One widely talked about rumour has been scrapping the pensions tax-free allowance. At present, savers can take 25% of their pension pot tax-free up to £268,275 as a one-off, tax-free lump sum. This precise rumour did the rounds ahead of last year's Budget and caused total chaos; swathes of members withdrew some or all of their pension in response to speculation that Labour was going to overhaul the rules.

The government then issued guidance that members could not undo the tax-free lump sum withdrawals, meaning many savers shrunk their pots considerably and reduced their retirement income, all thanks to hearsay. What a mess.

Late Autumn Budget can cause consumer detriment

We're big fans of Halloween in my house and by steering clear of a budget scheduled close to Halloween, the government avoids headlines about "ghoulish spending" and "frightening tax raises". Nevertheless, a Budget so late in the year can lead to gruesome outcomes, potentially causing real consumer detriment if changes are announced that require speedy action from an industry taken by surprise.

A November Budget leaves financial providers with very little time to properly digest and consult on the various announced changes before they come into play (traditionally ahead of the new tax year).

The industry has already witnessed events play out like this with the abolition of the lifetime allowance (LTA). HM Treasury required the removal of the LTA tax charge just 22 days after the announcement was made in the 2023 Spring Budget. The LTA itself was abolished at the start of the 2024/25 tax year, on 6 April 2024. Cue chaos. The move took many pension providers by surprise.

Whilst as an industry we have made great strides in making rapid technology changes, there is always an increased risk that when responding to sudden news, timelines that would typically include consultation periods and extensive planning must be compressed. When you rush, you leave room for error. The risk of consumer detriment, therefore, increases.

Good consumer outcomes should never be the casualty of rushed policymaking. Everyone, providers and consumers, benefits when change is introduced with care and clear timelines. Consumers shouldn't act on rumours, and providers, where possible, should avoid responding to change at breakneck speed. This is especially relevant in the pension sector, where collaboration between industry and policymakers leads to the best results.

Such cooperation helps avoid unintended consequences and allows enough time to make controlled changes to the underlying technology that powers pension products.

It's important to be pragmatic. Change is necessary but change must be realistic and balanced against risk. Here's hoping November's Budget has a measured amount of change appropriate for the timescale for implementation and is not a nightmare before Christmas.

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