Budget rumours spark a surge in client queries for financial advisers
Independent financial advisers have seen a significant uptick in client enquiries in the run up to the Budget, as speculation over tax changes continues to plague Brits.
According to analysis from wealth management firm, Rathbones,90 per cent of independent financial advisers (IFAs) have reported a spike in client enquiries as the November Budget inches closer.
Almost a third have seen a client queries uptick of 26 per cent to 50 per cent, while two-thirds reported an increase of 11 per cent to 25 per cent.
This sudden rise has been credited to growing fears of tax rises and pension changes, as the Chancellor seeks to fill a £20bn fiscal black hole without breaking Labour’s manifesto pledge of increasing taxes for ‘working people’.
In particular, 73 per cent noted that clients were concerned about potential changes to the lifetime allowance abolition, while nearly 50 per cent expressed fears of potential further shake ups to inheritance tax.
Other worries centred on changes to the pension tax-free lump sum, passing on wealth to family members and changes to trust structures.
Faye Church, senior financial planning director at Rathbones said: “The findings highlight the heightened anxiety among clients as they seek clarity and reassurance in an evolving financial landscape.
“While speculation around a reversal of the pension lifetime allowance abolition has largely flown under the radar, potential changes to the tax-free pension lump sum have dominated Budget-related conversations – yet both are top concerns among our clients.”
Stopping rash decisions
The wave of complex concerns has left advisers struggling to explain rules in an understandable manner, leading some clients to consider rash decisions which could ultimately damage their ability to grow their wealth.
Nearly 80 per cent of IFAs cited explaining rules in simple terms was becoming a growing challenge, with 74 per cent found themselves scrambling to keep up with potential legislative changes, due to the growing noise surrounding potential Budget decisions.
Some have also been forced to stop customers taking kneejerk actions before the confirmation of rules, after many consumers who opted to act before the Budget last year regretted their actions.
According to Rathbones, nearly 30 per cent of people regretted their tax-free lump sum withdrawal, after speculation that capital gains tax (CGT) rates could be raised to match income tax rates.
Elsewhere, a freedom of information request submitted by Evelyn Partners to the FCA also uncovered that the amount withdrawn from UK pensions in tax-free lump sums rose more than 60 per cent in the 2024/25 financial year to £18.1bn, up from £11.25bn the prior year.