How Could the Autumn Budget Impact Higher Earners?

With the Autumn Budget approaching, speculation is growing over what changes the Chancellor may introduce and higher earners could be watching closely. From talk of a potential wealth tax to rumours around pension reform, there’s no shortage of uncertainty about what’s next.

At Cleveden Park Wealth, we believe the best defence against tax uncertainty is preparation — not panic. Here’s what’s being discussed, and what you can do to stay financially resilient.

1. Could a Wealth Tax Be on the Horizon?

In an effort to boost government revenues, there’s been growing talk of a possible “wealth tax” - a levy on assets such as property, investments, or other holdings.

For many, this sparks immediate concern. While “the super-rich” often make headlines, the reality is that wealth isn’t limited to billionaires. Those who have built up pensions, property, and savings over decades — especially near or in retirement — could find themselves caught in the net.

Typically, wealth peaks between ages 65 and 74, as retirees consolidate assets to fund life after work. That’s not excess wealth: it’s hard-earned financial security. A tax targeting property sales or high-value homes, for instance, could make downsizing less appealing and potentially erode the capital retirees rely on.

At this stage, there are no confirmed plans for a wealth tax. The key is to remain informed but avoid knee-jerk reactions based on rumours.

2. Are Pension Tax-Free Withdrawals at Risk?

Another hot topic is the future of pension tax-free cash - the 25% portion you can normally withdraw without paying income tax (capped at £268,275 for most people).

Speculation around potential changes has led some to act quickly, taking their tax-free cash early “just in case.” However, withdrawing funds you don’t need can have long-term consequences.

Once money leaves your pension, it loses its tax-efficient status and becomes subject to income, capital gains, and even inheritance tax. In other words, moving too soon could end up costing you more in the long run.

As always, decisions around pension withdrawals should be made with a long-term view, ideally with professional advice.

3. Pension Tax Relief Under the Microscope

There’s also discussion about reforming pension tax relief, which allows contributions to receive tax benefits based on your income bracket.

Currently, higher and additional-rate taxpayers can claim relief at 40% or 45%. However, the government could consider moving to a flat rate of relief, perhaps between 25%–30%.

While this would benefit some basic-rate taxpayers, it could reduce the incentive for higher earners to save at a time when personal retirement responsibility is more important than ever.

For context, just a few decades ago, 93% of taxpayers paid basic rate tax. Today, that figure has dropped to 78%, meaning any change to relief could affect millions of ordinary savers, not just the wealthy.

If you’re in a position to do so, it may be worth maximising current pension allowances before the Budget. By contributing now, you can benefit from today’s rules, including higher-rate tax relief and tax-free investment growth within your pension.

4. What Should Higher Earners Do Now?

While the rumours are circulating, the most important step is not to make impulsive decisions based on speculation. Policy changes often evolve slowly, and early, reactive moves can lead to inefficiencies and unnecessary tax costs.

Instead, focus on proven strategies that remain valuable under any government policy:

• Make full use of your ISA and pension allowances each year

• Review your portfolio for tax efficiency

• Ensure your wealth strategy aligns with your retirement and estate planning goals

• Seek professional guidance before making significant changes

The Autumn Budget may bring adjustments that affect higher earners, but uncertainty doesn’t have to mean instability. With the right planning, you can stay in control of your financial future no matter what changes lie ahead.

At Cleveden Park Wealth, we help clients navigate shifting tax landscapes with confidence and clarity. Whether it’s pension planning, investment strategy, or inheritance tax efficiency, our team is here to ensure your wealth continues to work hard for you.