Why it’s so important to base your financial plan on the knowns, not the speculation

The date for the Labour Party’s 2025 Autumn Budget has finally been confirmed for the 26 November 2025.

As is usually the case in the run-up to a Budget, there has already been plenty of speculation. Indeed, predictions have ranged from: 

• Changes to Individual Savings Account (ISA) limits

• Restricted salary sacrifice options

• Altered Capital Gains Tax (CGT) rates

• A potential lifetime cap on tax-free gifts 

• A restriction on the 25% tax-free lump sum you can take from your pension.

It’s easy to get caught up in the rumours and start reacting emotionally, rather than logically. You may even consider hasty decisions, such as making significant pension withdrawals before any changes have been confirmed. 

While this might seem like a way to get ahead of the curve, acting on speculation rather than fact could ultimately harm your long-term financial wellbeing. 

If the changes never materialise, you risk locking in decisions that affect your flexibility in the future. 

Continue reading to discover why it’s so important to base your financial plan around the knowns and tune out the speculation.

Budget speculation is common, and it has affected people’s decisions in the past

History has shown that speculation ahead of Budgets can lead people to make choices that aren’t necessarily in their best interests. 

In 2024, the Labour Party was getting ready to deliver its first Budget in 14 years. Many guessed there would be significant changes, given that the new chancellor, Rachel Reeves, stated she would have to fill a “black hole” in the public finances.

Two of the more commonly predicted measures were: 

1. A reduction in the tax-free cash available from pensions, currently capped at £268,275 in most cases

2. An alteration in the levels of tax relief available on pension contributions.

While neither of these changes came to light, many in the UK acted pre-emptively. 

Indeed, data from PensionsAge states that the number of large pension pots accessed and placed into drawdown without being fully withdrawn rose from 34,832 between April 2023 and March 2024, to 58,544 between April 2024 and March 2025 – a 68% increase. 

The particularly sharp rise noted between April and September 2024 coincided with the run-up to the Budget, showing that a fear of change prompted many to take their pension wealth earlier than planned. 

In doing so, many of these people potentially undermined their long-term security in retirement. 

Considerable withdrawals reduce the amount of wealth left invested, limiting potential future growth. 

Now, it seems as though history is repeating itself. 

The source above reveals that, over the past year, pension withdrawals have surged again, rising by 35.9%. In 2023/24, withdrawals totalled £52.152 billion. By 2024/25, this figure had reached £70.896 billion.

Granted, some of these withdrawals may be part of a carefully considered retirement plan. However, the timings could indicate that speculation around Budget changes has once again driven people to act prematurely.

If you act based on rumours, you may inadvertently affect your financial security

As the rumours start to circulate, one of the more effective ways to maintain your financial wellbeing is to remain calm. 

Your financial plan should ideally be centred around your long-term goals, not short-term speculation. 

Reacting emotionally could simply lead to decisions that are difficult, or even impossible, to reverse. 

For instance, if you rush into a significant pension withdrawal based on a rumour, you may later regret the decision, especially if you don’t take advice first.

In fact, the PensionsAge article above claims that 45% of those who accessed drawdown didn’t seek any advice, increasing the risks of adverse outcomes.

Returning the money isn’t always possible, and if you do attempt to give it back, the withdrawal may be classed as an unauthorised payment and result in tax consequences. 

It’s vital to remember that your financial plan is designed for the long term. It will account for periods of uncertainty and is intended to provide you with the resilience needed to withstand external changes. 

Unless your life goals have changed, your plan is unlikely to need adjusting every time rumours circulate. 

3 ways to stay calm in the face of speculation and stick to your financial plan

1. Tune out the “noise” and check where your news is coming from

It’s important to remember that “noise” from media outlets is designed to capture your attention, so it tends to focus on the negatives. 

While this might drive their readership, it can fuel concerns about how changes may affect your wealth. 

The more time you spend reading political commentary, especially on social media, the more likely you are to feel the pressure to act. 

This doesn’t mean you must entirely cut yourself off from the news. Instead, you may benefit from being more selective about your sources or reducing how often you check updates. 

Taking time to fact-check information is also helpful, as rumours are often presented as though they are confirmed policy changes. 

2. Consider what proposed changes might realistically mean for your financial plan

It can also help to think carefully about what any proposed change might actually mean for your unique circumstances. 

Headlines often use dramatic figures or broad averages that may not necessarily reflect your goals and aspirations for the future. 

As such, considering how a rumoured change would realistically affect your finances might help you realise that it would be significantly less impactful than you first imagined. 

3. Speak to your financial planner

Most importantly, speaking with a financial planner can give you clarity and reassurance at an uncertain time. 

If you do find you’re tempted to make changes based on speculation, we could help you assess whether doing so is appropriate. 

We can also carefully review the Autumn Budget announcements when officially published. Then, if any of the changes affect your plans, we can work closely with you to adapt your approach to one that remains aligned with your goals.

Email info@athertonyork.co.uk or call us on 0208 882 2979 to find out more.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.