Royal London poll finds six in 10 advisers want pension tax stability before the 28 October Budget
Financial advisers want stability rather than fresh upheaval from next week’s Autumn Budget, according to new Royal London research. The data also shows that planned pension inheritance tax (IHT) changes are already altering client behaviour.
The research, conducted among 85 financial advisers from 12 to 16 October, found that greater certainty on pension taxation is their number one priority (59%). More than half (53%) want a simpler tax system.
Jamie Jenkins, Royal London’s head of policy, said the findings point to a clear message. “The bigger message coming through from advisers is that people need certainty and simplicity if they are going to plan confidently for the long term. Changes to the inheritance tax treatment of pensions are already influencing conversations and, in some cases, changing behaviour,” he said.
Chancellor John Healey is due to deliver the Budget on 28 October, the first of the Burnham government.
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Pension IHT dominates client conversations
Almost two-thirds of advisers (64%) say clients are raising the planned IHT treatment of pensions, making it the most-discussed issue. Estate planning (51%), general inheritance tax (49%) and pension tax-free cash (47%) followed.
More than four in five advisers (84%) say the changes have already affected client conversations to some or a great extent.
Under the rules, most unused pension funds and death benefits will count as estate assets for deaths on or after 6 April 2027. The government estimates around 213,000 estates will include pension wealth in 2027–28.
Advisers are already seeing action. Half (51%) report increased gifting of lump sums, and the same share have seen earlier pension withdrawals. Almost half report more gifting through the normal expenditure from income exemption (49%) and more reviews of estate plans (48%). Some 45% have seen greater demand for advice.
There are early signs of changes to long-term saving. Some 39% of advisers believe clients may make greater use of other savings and investments, while 25% think some could cut pension contributions. However, 46% selected “too early to tell”. Respondents could choose more than one answer.
For mortgage brokers, the findings suggest clients may be weighing gifts, earlier withdrawals or different ways of holding wealth. Those choices can intersect with property decisions and borrowing plans.
Capital Gains Tax worry may ease
The research comes as Healey has reportedly rejected calls to raise Capital Gains Tax (CGT). The Times reported that he has ruled out a rise over fears it could cost the Exchequer money if wealthy people leave or defer asset sales. Financial Times reported he has internally rejected calls to bring CGT in line with income tax.
The Treasury has not confirmed this. A spokesperson told City AM that tax decisions are for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour. The main CGT rate rose from 20% to 24% in October 2024.
Royal London said half of advisers (50%) believed a CGT increase from April 2027 could prompt clients to bring forward disposals. Another 48% expected clients to restructure investments to improve tax efficiency. That is relevant for brokers with landlord and second-home clients weighing up sales.
“The apparent decision to rule out an increase in Capital Gains Tax will be welcome news for advisers and clients who have been weighing up whether they need to take action ahead of the Budget,” Jenkins said.
Pessimism ahead of the Budget
Almost two-thirds of advisers (62%) expect the Budget to hurt clients’ long-term financial security, including 20% who expect a significant negative impact. Just 9% anticipate a positive one.
After pension tax certainty and simplification, advisers want more incentives for UK investment (38%), more detail on social care reform (35%), inheritance tax reform (34%) and measures to encourage long-term saving (27%).
“Advisers are telling us clearly that they want greater stability around pension taxation and a simpler tax system,” Jenkins said. “Providing that certainty would give people firmer foundations on which to make important decisions about saving, investing and retirement.”
