Pensions
There is no change to tax relief or limits with regards to contribution or benefit limits.
However, salary-sacrificed pension contributions above an annual £2,000 threshold will no longer be exempt from NI contributions (NICs) from April 2029. Salary-sacrificed pension contributions above £2,000 will be treated as ordinary employee pension contributions in the tax system and therefore be subject to both employer and employee NICs, while ordinary employer pension contributions will remain exempt from NICs.
State pension - confirmation of the triple lock is not a surprise but will be welcomed by pensioners. This means the basic and new state pension will rise by 4.8%, an average increase of £440 and £575 per year respectively. Under the triple lock, the state pension increases each year by either 2.5%, inflation, or average earnings growth - whichever is the highest figure. The full new state pension should rise to around £241 per week or £12,534 a year from April. This means the new state pension at full rate will now be utilising most of the personal allowance, which for example, means all other pension income will be pushed into taxation.
Pre-1997 pensions in the PPF (Pension Protection Fund) are to benefit from indexation. The changes to indexation of pre 1997 pensions in the Pension Protection Fund will be welcomed by many. It will be a costly exercise but for those who lost so much because of failed schemes, this will be a real boost to their retirements.
Investments
ISA allowance- The annual amount that can be saved into a cash ISA will be reduced from £20,000 to £12,000 from April 2027 if you are under 65. From April 2027, the overall annual ISA limit will remain at £20,000 with £12,000 allocated to cash and £8,000 to stocks and shares. The £20,000 cash ISA limit will continue to apply if you are 65 or older. The intention of the change is to encourage people to put more of their money into Stocks and Shares ISAs.
The government is set to consult on Lifetime ISA reform in early 2026, with plans to scrap the product. It will replace the product, which was introduced in 2017, with a simpler ISA product to support first time buyers to buy a home.
From April 2026, the income tax relief on Venture Capital Trusts (VCTs) will be reduced from 30 per cent to 20 per cent. The changes came alongside a government commitment to increase the VCT and EIS (Enterprise Investment Scheme) company investment limit to £10million and £20million for knowledge intensive companies and also an increase of the lifetime company investment limit to £24million and £40million respectively.
Please click here to go back to our full Autumn Budget 2025 analysis.
