The Chancellor’s Budget announcement on 26th November has been met with mixed reaction among DIY investors, according to new research from Charles Stanley, part of Raymond James Wealth Management (RJWM).
The Autumn Budget has put DIY investors on edge as a majority have concerns over several measures announced on the widely anticipated day, according to the latest Charles Stanley Direct research.
Seven in 10 (71%) of self-directed investors are concerned about the increase in basic and higher rates of tax on property, dividends, and savings following the announcement of the Chancellor’s Budget, while the same number (71%) are concerned about the reduction to the cash ISA allowance from £20,000 to £12,000 from April 2027.
Down the line, these changes may impact the amount of money investors are willing to allocate to their investments, especially if they’ll be paying higher tax on their returns.
Notable characteristics of the fiscal event were higher income tax burdens and a ‘pick and mix’ of smaller, technical revenue raisers that aimed to fill the fresh hole in the nation’s finances. Frozen tax bands also did much of the heavy lifting for the Treasury, amounting to higher taxes for everyone subject to income tax.
When thinking about how concerned investors are about specific measures announced, 71% said they were concerned about the increase in basic and higher rates of tax on property, dividends, and savings. The same number (71%) said they were concerned about the cut to the cash ISA allowance from £20,000 to £12,000.
This is followed by concerns that income tax thresholds will be frozen until 2031 (66%), and rules on salary sacrifice will change in 2029 (65%).
Rob Morgan, Chief Investment Analyst at Charles Stanley, comments: “No one was expecting a quiet Budget, and so it proved. Chancellor Rachel Reeves wielded the famous red box with a sizable gap to close to meet her fiscal target amid criticism that her measures last year had made life difficult for businesses and constrained all-important economic growth.
“This year, the chancellor’s objective was to calibrate raising tax revenue without impinging economic growth or stoking inflation. While there was a little more pressure applied to businesses with an increase in pay for younger workers, it was moderate to high earners and wealthy individuals who were most in the firing line this time. Notably, though, while significant changes have been made in some areas, such as ISA allowances or salary sacrifice, investors have time to prepare for these. Speaking to a financial adviser can help in understanding what these mean for individuals and their finances to keep them in the best position possible.”
