News in Review
- Markets have been relatively measured following Andy Burnham’s appointment as Prime Minister, although UK government bond yields initially rose and sterling dipped as investors assessed his early comments on fiscal policy. The surprise appointment of John Healey as Chancellor helped calm some concerns, with markets viewing him as a reassuring choice. As the new government announces various policy changes focused on the cost of living, speculation over how they will be funded – and whether tax changes could follow – is likely to continue ahead of the Autumn Budget.
- UK inflation fell from 2.8% to 2.6%, in the 12 months to June 2026. The drop was mainly driven by a fall in motor fuel prices, particularly diesel, while food prices – including chocolate and margarine – also fell. Clothing prices also dipped as summer sales began.
- Renewed tensions between the United States and Iran influenced energy prices, reminding investors that geopolitical risks remain an important factor for markets.
A closer look at upcoming ISA changes
The government announced a series of changes to individual savings accounts (ISAs) in the Autumn Budget 2025 that are due to take effect from April 2027. The main change is a reduction in the yearly cash ISA limit from £20,000 to £12,000 for those under 65.
For those aged 65 and over, the £20,000 yearly limit remains. It will apply from the start of the tax year in which a person turns 65. New 22% charge on interest paid on cash held in non Cash ISAs A flat rate charge of 22% will apply to any interest paid on cash held in stocks and shares ISAs – aimed at discouraging people from holding large amounts of cash for long periods. ISA managers will pay the charge to HMRC – individuals aren’t required to declare to HMRC any interest paid on an ISA. Remember, the personal savings allowance doesn’t apply to any growth or interest paid in an ISA. Transfer restrictions for those under 65 It will no longer be possible to transfer money from stocks and shares ISAs into cash ISAs. However, transfers from a cash ISA to a stocks and shares ISA or cash ISA will still be possible. These proposed rules will be subject to a short technical consultation, with the final legislation expected in Autumn, and will come into effect from 6 April 2027. Tax rules can change and the impact of taxation, and any tax relief, depends on your personal circumstances and where you live.
A reminder of our video on the pensions and inheritance tax changes coming next April – covering what’s changing, key exceptions, and why it could be worth reviewing your plans if you’re thinking about passing on wealth to loved ones.
Tax rules can change and the impact of taxation depends on your circumstances and where you live.
Salary sacrifice remains one of the most tax‑efficient ways to save for retirement. But the rules won’t always be this generous. From April 2029, changes to National Insurance treatment are set to reduce some of the current benefits.
This is particularly relevant for those making larger pension contributions through salary sacrifice. For higher earners, this makes it even more important to understand what's changing and how the current rules work. The good news is there's still time to make the most of the current tax and National Insurance efficiencies available through salary sacrifice. If you've been meaning to review your pension contributions, now could be a good time to check that you're making the most of the options available to you. Of course, tax rules can change and the impact of taxation depends on your circumstances and where you live.
As always, if there’s anything you’d like to discuss, or if you have any questions, please get in touch – I’m more than happy to help, or we can discuss when we next meet.