Financial Planning Round Up, September/October 2026: Autumn Budget Tax Watch, the Gift Rule Families Miss and Pension Scams

October 8, 2026 — David Gregory, Chartered Financial Planner

Chancellor John Healey delivers his first Autumn Budget on 28 October 2026. We look at what could change for Capital Gains Tax, property, pensions and thresholds, plus the Inheritance Tax gift rule 72% of adults do not know about, how to spot pension scams and what retirees wish they had known.

What is happening in markets and the economy?

The conflict involving Iran, now in its eighth month, continues to dominate markets. Brent crude has swung around $100 a barrel, pushing up fuel costs, and long term government borrowing costs have climbed in the US and elsewhere. At the start of October the FTSE 100 steadied after its weakest week since April.

At home, CPI inflation rose to 3.1% in August from 2.9% in July, driven largely by fuel and airfares. The Bank of England held Bank Rate at 3.75% on 17 September by a vote of 6 to 3, with three members favouring a rise to 4%, and it projected that inflation would rise to slightly above 4% in the first quarter of 2027, based on energy prices in mid September. The next scheduled Bank Rate decision is on 5 November 2026.

Our view: for investors, the message is not to react to every headline. Past oil shocks have often proved painful but temporary for diversified portfolios, although history is no guarantee, and selling after a sharp fall tends to lock in losses rather than avoid them. Periods like this reward a diversified portfolio, an appropriate cash buffer and a plan you understand. Higher rates also mean better annuity rates and yields on cash and gilts, which can work in your favour if you are approaching retirement. If you need to draw money in the next year or two, now is a sensible time to check that it is held somewhere a market fall cannot touch it.

What could change in the Autumn Budget on 28 October 2026?

Prime Minister Andy Burnham has said he will keep Labour's manifesto pledge not to raise the main rates of Income Tax, National Insurance or VAT. That is a political commitment rather than a legal limit, and it does not mean the overall tax take will not rise. The list below distinguishes existing rules and announced measures from possible Budget changes, which remain uncertain:

• Capital Gains Tax. Options floated include moving rates closer to Income Tax rates and removing the rule that wipes out gains on assets held at death. The annual exempt amount is already just £3,000.
• Property. A high value council tax surcharge on homes worth £2 million or more is already planned from April 2028. A lower threshold of £1.5 million has been reported as under consideration but is not confirmed.
• Wealth. A broader wealth tax has been discussed, but there is no confirmed proposal.
• Inheritance Tax and pensions. Under the Finance Act 2026, most unused pension funds come into the Inheritance Tax net from 6 April 2027. That is existing law. Further changes to reliefs are possible but unconfirmed.
• Frozen thresholds. The Personal Allowance is £12,570 and, in England, Wales and Northern Ireland, the higher rate threshold is £50,270 in 2026/27. Scotland sets its own Income Tax bands. Keeping thresholds frozen while wages rise pulls more people into higher tax bands without any change in headline rates.

Be prepared, not reactive. You do not need to predict the Budget to benefit from reviewing your position now. Areas worth checking include pension contributions, ISA allowances, unrealised capital gains, gifting and estate plans, and how business owners take income. Acting in haste on rumours can cost more than it saves, so any change should be part of your overall plan. In our experience the clients who fare best at Budget time are those whose allowances were already being used steadily through the year, rather than those trying to second guess the Chancellor in the final fortnight.

Which Inheritance Tax gift rule are most families missing?

Research for Canada Life among 2,000 UK adults, conducted in February 2026, found that 72% do not realise regular gifts funded from surplus income can be immediately exempt from Inheritance Tax. Unlike most gifts, which only fall outside your estate after seven years, gifts that qualify under the normal expenditure out of income exemption are exempt straight away, with no set upper limit.

Three conditions must be met:

Records are everything, because your executors may need to prove the exemption applies. Keep bank statements and a schedule of gifts, ideally using the same format as HMRC's IHT403 form. With pensions coming into the Inheritance Tax net from April 2027, gifting surplus income could become a more important planning tool for many families. Our guide to protecting your family, wealth and future covers the other gift exemptions.

What five questions should you ask before you retire?

Our new guide to planning your retirement income answers question four in detail.

Why do you need a Will?

Without a Will, the law decides who inherits, which may not match your wishes and can leave an unmarried partner with nothing. A Will lets you choose your beneficiaries and executors, name guardians for children and reduce the risk of family disputes. Leaving at least 10% of your net estate to charity can also reduce the Inheritance Tax rate on some assets from 40% to 36%. Review your Will after marriage, divorce, a birth or a house move. Our sister business Legacy Lines can help.

How can you spot a pension scam?

Scammers often pose as genuine advisers or well known firms and may already know personal details about you. The warning signs are:

• Unexpected contact about your pension by phone, email, text or social media. Pension cold calling is banned in the UK, so the safest response is to end the conversation.
• Offers of a "free pension review" used to identify targets.
• Promises of high or guaranteed returns with little risk, often in overseas property or unusual ventures.
• Pressure to act quickly because an opportunity is "limited".

Before dealing with anyone, check they are authorised on the FCA's Financial Services Register, and contact them using details from official sources rather than those you were given. If in doubt, pause and speak to your existing provider or your adviser.

Why does diversification matter in an uncertain world?

Geopolitical tension, trade disputes and energy shocks can move markets quickly. Diversification means spreading money across asset classes such as shares, bonds, property and cash, and across sectors and regions, so your future is not tied to one outcome. Investing only in the UK ties you closely to one economy and one currency.

Owning many funds is not the same as being diversified, because several funds can hold the same large companies. Portfolios also drift as some investments outperform others, so regular reviews and rebalancing keep your risk where it should be.

What do retirees wish they had known?

Research by the Phoenix Group for Standard Life found that 31% of retirees say their standard of living is worse than before they retired, compared with 20% who say it has improved. 17% underestimated how much money they would need and 16% did not expect retirement to last as long as it has. The biggest regrets were not saving regularly (30%) and not starting a pension earlier (29%), while around one in eight wish they had better understood how to turn their pension into an income. The lesson is to start early, save consistently and plan the move from saving to spending well before you stop work.

How is pension drawdown taxed in 2026/27?

You can usually take up to 25% of your pension tax free, within the standard Lump Sum Allowance of £268,275. The rest of your drawdown withdrawals are added to your other income and taxed at 20%, 40% or 45% in England, Wales and Northern Ireland, after your £12,570 Personal Allowance. Taking a large sum in one year can push you into a higher band, so spreading withdrawals across tax years is often more efficient. Taking flexible taxable income usually triggers the £10,000 Money Purchase Annual Allowance if you are still contributing. Remember that the minimum pension age rises from 55 to 57 on 6 April 2028.

Frequently asked questions

When is the Autumn Budget 2026?

Chancellor John Healey will deliver his first Autumn Budget on Wednesday 28 October 2026.

Will Capital Gains Tax go up in the 2026 Budget?

Nothing is confirmed until Budget day. Aligning Capital Gains Tax more closely with Income Tax and changing the treatment of gains at death have both been discussed, so it is sensible to review any large unrealised gains with your adviser now.

Are gifts from surplus income exempt from Inheritance Tax?

They can be, if they form part of your normal expenditure, are made out of income rather than capital and leave you with enough income to maintain your usual standard of living. Qualifying gifts are exempt immediately, with no seven year wait and no set upper limit.

What is the UK inflation rate?

CPI inflation was 3.1% in the 12 months to August 2026, up from 2.9% in July. In September the Bank of England projected that it would rise to slightly above 4% in the first quarter of 2027, based on energy prices at the time.

How do I check if a pension adviser is genuine?

Search the FCA's Financial Services Register for the firm and check it has permission for the service offered, then contact the firm using details from the Register rather than those given to you.

This article is for your general information and use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice. Although every effort has been made to provide accurate and timely information, there is no guarantee that it is accurate on the date it is received or that it will remain accurate in the future. Possible Budget measures discussed here are unconfirmed until announced. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of taxation, and reliefs from taxation, are subject to change, and their value depends on individual circumstances. Unless otherwise stated, figures relate to the 2026/27 tax year. The value of your investments can go down as well as up, and you may get back less than you invested. Past performance is not a reliable indicator of future results. A pension is a long term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The Financial Conduct Authority does not regulate tax advice, Inheritance Tax planning, trusts, estate planning or Will writing.