Advisers call for budget certainty and simplicity to support long-term financial planning

Royal London research finds six in ten advisers want greater certainty on pension taxation, while more than half want a simpler tax system. 

Advisers are calling for greater certainty and simplicity from the Autumn Budget to give clients the confidence to make long-term financial decisions, new research from Royal London has found. 

The research, conducted among 85 financial advisers, found that greater certainty around pension taxation is advisers' number one priority (59%). More than half (53%) want to see simplification of the tax system.  

The findings come as the Chancellor appears to have ruled out an increase in Capital Gains Tax (CGT) in the Budget next week, removing one potential area of uncertainty for advisers and their clients. This will be welcome news as half (50%) of advisers had said a CGT increase from April 2027 could prompt clients to bring forward investment disposals, while 48% expected clients to restructure investments to improve tax efficiency. 

Almost two-thirds (64%) of advisers say clients are raising the planned changes to the inheritance tax treatment of pensions making it the most discussed issue. This is followed by estate planning (51%), general inheritance tax (49%) and pension tax-free cash (47%). 

More than four in five advisers (84%) say the planned pension IHT changes have already affected conversations with clients to some or a great extent. 
Advisers are also seeing clients take action. Half (51%) report increased gifting of lump sums, while the same proportion have seen an increase in earlier pension withdrawals. Almost half report increased gifting through the normal expenditure from income exemption (49%) and increased reviews of estate plans (48%), while 45% have seen greater demand for financial advice. 

There are also early indications of changes to the way some clients approach long-term saving. Some 39% of advisers believe clients may make greater use of other savings and investments because of the pension IHT changes, while 25% think some clients could reduce pension contributions. However, uncertainty remains, with 46% also selecting ‘too early to tell’. *

Overall, Royal London's findings suggest advisers' priority for the Budget is not further change but a more predictable environment in which clients can plan. 

After certainty on pension taxation (59%) and tax simplification (53%), advisers' priorities include greater incentives for UK investment (38%), more detail on social care reform (35%), inheritance tax reform (34%) and measures to encourage long-term saving (27%). 

The findings also reveal a pessimistic outlook ahead of the Budget. Almost two-thirds (62%) of advisers expect it to have a negative impact on their clients' long-term financial security, including 20% who expect a significant negative impact. Just 9% anticipate a positive impact.

Jamie Jenkins, Head of Policy at Royal London, said: 

"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. 

“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.  

"Advisers are telling us clearly that they want greater stability around pension taxation and a simpler tax system. Providing that certainty would give people firmer foundations on which to make important decisions about saving, investing and retirement." 

*Respondents could select more than one response to this question