Budget 2025: What the Key Changes Mean for Your Financial Plan

The 2025 Budget introduced several significant tax, pension, property and investment reforms. While Budgets often create noise and speculation, the real value lies in understanding what has genuinely changed and how these measures may influence long-term financial planning.

The team at Ifamax Wealth Management have put together a clear and straightforward breakdown of the most relevant announcements.

ISA Reform: New Rules for Cash ISAs

From April 2027, Cash ISA rules will change:

  • Under-65s will have a £12,000 Cash ISA limit.

  • Over-65s will keep the full £20,000 cash allowance.

  • The overall ISA allowance remains at £20,000.

These changes may influence how individuals choose to balance cash and investments inside ISAs in the future.

Higher Taxes on Property, Savings and Investments

The Budget confirmed several tax increases that will affect taxable investments, rental property owners and company directors receiving dividends.

Headline changes include:

  • Higher rates of property income tax for landlords.

  • Increased dividend tax rates from 2026.

  • Higher savings income tax from 2027.

For those with rental portfolios or significant holdings in general investment accounts, these changes will increase the tax paid each year.

Salary Sacrifice for Pensions: Major Adjustments from 2029

A notable change has been announced for salary-sacrificed pension contributions:

  • From April 2029, only the first £2,000 of salary sacrifice pension contributions each year will receive National Insurance relief.

  • Contributions above this level will incur employer and employee NICs.

This represents a meaningful shift for higher earners or for those who use bonus sacrifice as part of their pension funding approach.

Pensions and Inheritance Tax

The government has introduced changes to the way pensions may be treated for inheritance tax purposes from April 2027; personal representatives will be able to direct pension scheme administrators to withhold 50% of taxable benefits for up to 15 months and pay inheritance tax in certain circumstances. Personal representatives will be discharged from liability for payment of Inheritance Tax on pensions discovered after they have received clearance from HMRC.

Additional areas to note:

  • The nil-rate band and residence nil-rate band remain frozen until 2031.

  • Additional rules affect agricultural, business and offshore assets.

These measures highlight the continued importance of clear, up-to-date estate paperwork and an awareness of potential IHT exposure.

VCTs and EIS: Important Changes for Tax-Efficient Investors

Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS) remain an important part of the UK’s tax-incentive landscape.

Key changes announced:

  • VCT Income Tax Relief will fall from 30% to 20% from April 2026.

  • Investment limits for VCT/EIS companies have increased.

The reduction in relief will alter the tax incentives for future VCT investments, particularly for those who regularly use them as part of a wider tax-planning strategy.

High-Value Property: New Annual Surcharge

From 2028, a new annual charge will apply to high-value properties, starting at £2 million. The new charges start at £2,500 per year, rising to £7,500 per year for properties valued above £5 million.

While this affects a relatively small number of properties, it will add to ongoing ownership costs.

Electric Vehicles: Per-Mile Charging Introduced

A new system of per-mile charging for electric vehicles begins in 2028:

  • Fully electric vehicles: 3p per mile

  • Plug-in hybrids: 1.5p per mile

This will form part of the overall cost of ownership for EV users going forward.

Final Thoughts

This year’s Budget continues the trend of increasing taxation on investments, property income and higher earners, while tightening several long-standing reliefs. At the same time, pensions and inheritance tax remain central themes in long-term planning.

As ever, the impact of any Budget will vary from person to person depending on circumstances, goals and financial priorities. Understanding the details is the first step towards making informed decisions when the time is right.

At Ifamax Wealth Management, our focus is on understanding your values, goals, and aspirations. We take a long-term approach to planning, recognising that Budgets will come and go — and while they may require occasional adjustments, they rarely derail a well-structured plan.

If you would like to speak to the team about your financial journey, contact us today and begin your journey with Ifamax.

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Ashton Chritchlow