How to prepare for the Budget

At a glance

• Investors should avoid basing their decisions about their portfolios on speculation ahead of the Budget
• Changes set out at the Budget announcement tend not to come into force immediately (although some can come into effect within days)
• Instead of making changes to your portfolio before the government confirms its plans, speaking to a wealth expert can be a good way to understand what the Budget means for your finances

With the Budget fast approaching, there is a lot of speculation around potential policy changes. Investing is a long-term pursuit, and we acknowledge that while policy updates can be impactful, the government’s priorities can change, so it’s usually best to take rumours about new policies with a pinch of salt. That said, it can be useful to follow news coverage about the Budget, to help you understand how the government could introduce policies that affect your finances. We typically avoid speculating on its contents in the lead-up to the announcement.

The rules governing investment products could be updated, which might alter the path towards meeting your financial objectives.

Pensions are one example of an investment product that is frequently the subject of speculation in the run up to a Budget. For example, last year, there was a lot of discussion about whether the Chancellor would target cuts towards the amount of money you could take from your pension tax-free. The speculation did lead some investors to withdraw their tax-free cash, and ultimately there was no change to the rules. Tax rules vary by individual status and may change.

This year, the Treasury has ruled out cutting the pensions tax-free lump sum allowance despite some reports that the government was considering reducing this allowance again. While paying close attention to the Budget can be particularly important if you’re about to access the money in your pension, we would urge people to avoid the temptation to act on speculation.

As with previous years, our wealth experts are on hand to have conversations with clients about the announcement. These conversations are often with clients who are either close to retirement or who have already retired. We recently published a guide on matters to consider when transitioning into retirement. Younger investors could also benefit from support on the Budget to help shape their finances.

Avoid basing decisions on speculation

The Chancellor will deliver her Budget to Members of Parliament on 26 November 2025, announcing plans for government expenditure and how taxes will contribute towards funding its spending. She has already given a speech this month in the lead-up to the announcement, which has been interpreted by some experts as laying the ground for tax rises.

Some changes to policy could be enacted immediately with MP support. MPs could be asked to approve some instant changes to taxes – tobacco and alcohol duties, for example, have been modified this way in the past. Capital Gains Tax (CGT), the rates of tax on dividends, and the tax-free allowance on dividend income, are all areas that can be altered immediately with the backing of MPs.

MPs will debate the Budget for a few days before being asked to approve any immediate changes to tax. Then, once passed, a Finance Bill will provide the legal basis for the Budget’s tax proposals. Any new tax or update to current taxes that the government wants to introduce before the Finance Bill is passed needs to be approved by Parliament within 10 sitting days of the Budget.

But please note that most changes tend not to come into force immediately, giving investors time to respond to the Budget. They will instead likely come into effect at the start of the next tax year, in April 2026.

“It’s important not to make significant decisions surrounding your personal finances – such as withdrawing substantial amounts of money and potentially losing the benefits of tax wrappers – in response to speculation,” says Holly Graham, Senior Wealth Manager and Financial Planner at J.P. Morgan Personal Investing.

Switching investments into cash could soon be affected by monetary policy. At its November meeting to determine interest rates, the Bank of England (BoE) held its base rate at 4% but hinted at a possible cut in December, saying that if progress on reducing inflation continues, its base rate “is likely to continue on a gradual downward path”.

Lower rates can reduce the returns on cash, as commercial banks tend to lower their savings rates in response to falling interest rates. Investors who have withdrawn from their portfolios and kept their money in cash could, as a result, be negatively impacted by an upcoming rate cut.

Speak to our experts

It can therefore be a good idea to speak to an expert about your finances in the lead-up to the Budget.

J.P. Morgan Personal Investing offers a free guidance service, where you can discuss with a wealth expert your options for investing with us and ways to strengthen your investment strategy.

Clients who have access to our financial guidance offering could ask an expert:

• What the Budget could mean for their portfolio
• How any hypothetical changes to policy might affect their retirement planning
• What the Budget might mean for their ability to pass on an inheritance
• How to handle any changes to the ISA allowance

We also offer a restricted paid advice service, where customers benefit from more direct recommendations on how to manage their money. Please note that we can only provide investment advice on the products and services that we offer.

“Our wealth experts are ready to speak to customers who have concerns about the Budget,” says Wendy Gilliland, People Lead at J.P. Morgan Personal Investing. “It could also be sensible to check-in with our team once the government’s plans have been set out, which will inform our advice and guidance.”

If you want to discuss the Budget, or find out more about our paid financial advice, please book a free call with our expert team. 

Risk warning

As with all investing, your capital is at risk. The value of your portfolio can go down or up and you may get back less than you invest. Tax rules vary by individual status and may change. This is general information, not personalised tax advice. We do not provide investment advice in this article. Always do your own research.