The November Budget was one of the most heavily briefed, leaked and second-guessed in recent memory. That usually leads to bad outcomes: rushed decisions, unnecessary anxiety, and planning based on rumours rather than rules.
Now that the dust has settled, a few things are clearer. And while this wasn’t a “big bang” Budget, it does nudge behaviour in some very specific directions - some helpful, some less so.
Where appropriate, the topics below will form part of the discussions we will have with you throughout 2026. Our thoughts about the budget will evolve over time.
I want to be perfectly clear - the devil is in the detail, and still not all the details are known.
This is not a call to action, I am simply marking your card for now.
A Government Trying to Nudge (Not Reform)
This Budget is best understood as behavioural engineering by stealth.
Rather than radical reform, we’ve seen:
- Frozen thresholds (again).
- Higher taxation of income-like returns (interest, dividends, property).
- Increasing pressure to move savings out of cash and into productive assets.
- A slow erosion of “easy wins” for owner-managers.
None of this is accidental. The message is clear: cash hoarding, income extraction and inertia are being quietly penalised.
Whether that’s good or bad for the country, only time will tell.
ISAs: Cash Is Being Politely Shown the Door
From April 2027, under-65s will only be able to add £12,000 to a Cash ISA, with the remainder of the £20,000 allowance needing to sit in investments. Anti-circumvention rules will prevent “cash-like” assets being smuggled into Stocks & Shares ISAs.
What behaviour will this change?
- Less long-term cash parking in tax wrappers.
- More pressure to decide rather than defer.
- A push toward genuine investment risk.
That may be good for long-term growth - but it does reduce choices.
PCLS: Take It All Now? Probably Not. Take Some? Maybe.
Despite speculation, the maximum Pension Commencement Lump Sum (PCLS) remains unchanged for now.
For clients at or near the current limit, the real question isn’t what’s allowed today, but what’s politically sustainable tomorrow.
Our current thinking:
- Taking some PCLS earlier than strictly necessary can make sense.
- Taking all of it “just in case” often doesn’t.
- Retaining flexibility matters, particularly given the inclusion of unused pensions in IHT from 2027.
Directors & Owners: The Old Playbook Is Wearing Thin
For years, the small-salary / high-dividend model has been the default for owner-managers.
This Budget doesn’t abolish it - but it does further compress the advantage:
- Dividend tax rates rise from April 2026.
- Frozen thresholds drag more income into higher rates.
- Salary sacrifice faces future NI complications from 2029.
So has the advantage ended?
Not entirely - but it’s no longer a lazy default.
What should directors be thinking about instead?
- A broader mix of salary, dividends and pension funding.
- Greater use of employer pension contributions outside salary sacrifice.
- Timing income more deliberately across tax years.
- Viewing retained profits as a strategic asset, not just deferred income
Cash Is Being Taxed More Heavily - So What Do We Do About It?
From April 2027, savings interest outside ISAs will be taxed at rates up to 47%. That’s not subtle.
But we also don’t want to “waste” ISA allowances on long-term cash if the intention is to invest.
Practical steps we’re considering:
- Segmentation of cash: operational vs strategic vs investable.
- Greater use of short-duration assets where appropriate.
- Careful consideration of whether accumulation units in money-market-type funds genuinely remain acceptable under future ISA rules (likely not inside ISAs, possibly outside).
This is an area where rules and implementation matter enormously - and one we’ll be watching closely as consultations progress.
Offshore Bonds vs GIAs: Is There a New Winner?
Short answer: no silver bullet.
The Budget confirms that higher savings tax rates will also affect bond taxation, including the internal rate on onshore bonds. Detailed modelling shows that wrapper preference hasn’t dramatically shifted - context still dominates.
For TCFP clients:
- GIAs remain perfectly viable for long-term investing.
- Offshore bonds continue to earn their place where:
- Tax deferral is valuable.
- Control of timing matters.
- Trust planning is involved.
Our existing approach - GIAs by default, offshore bonds where structure matters - still stands. This Budget doesn’t materially change that.
Sometimes “nothing to see here” is the correct conclusion.
The Bigger Picture
Zooming out, this Budget reinforces a long-running trend:
- Doing nothing is getting more expensive.
- Flexibility is being traded for direction.
- The tax system increasingly rewards decisions, not defaults.
That’s uncomfortable - but also where advice adds the most value.
For TCFP clients, the opportunity isn’t in reacting quickly. It’s in thinking clearly, moving deliberately, and keeping option available where it really matters.
As always, we’ll continue to filter the noise, stress-test the rules, and focus on what actually improves outcomes.