Toby Larkman, Managing Director, Wealthtime
As we reached the end of 2025, it’s fair to say the quarter has been dominated by one thing: the Budget. Months of speculation, a scene setter speech and the Budget itself leaked before the Chancellor stood up created worry for clients, stress for advisers and made the process feel something of a farce. Yet beneath the headlines, several announcements will shape planning conversations well into 2026 and beyond.
Budget announcements
In the end, Rachel Reeves announced several changes affecting advised clients, including extending the freeze on personal tax thresholds, cuts to the Cash ISA limit for under-65s and capping salary-sacrifice National Insurance relief on pensions at £2,000 a year. The good news for firms is that many of the changes won’t come into force for months or years, giving advisers time to discuss the implications for clients and make adjustments to long-term plans.
While ISA reform was presented as a simplification exercise, many in the industry expect it will lead to further complication. The introduction of two-tier ISA rules, with different limits for under-65s and over-65s, creates an extra layer of operational complexity for providers and advisers. This includes parallel eligibility checks, system changes, and new communication requirements, all of which will take time away from client-focused planning. To prevent circumvention of the rule, the Budget documents set out plans to ban transfers from Stocks & Shares ISAs into Cash ISAs, introduce a tax charge on cash held within these accounts and reclassify certain ‘cash-like’ investments as ineligible for inclusion.
The next 12 to 24 months are likely to involve significant operational work for platforms and advice firms, who must adjust systems and processes while ensuring clients understand the different ISA types and contribution rules.
Toby Larkman, Managing Director
Taken together, these changes move ISAs further away from the simple, accessible product they were originally intended to be. For advisers, they risk creating a greater administrative burden, increased client confusion and a higher likelihood of inadvertent non-compliance.
Crucially, will these changes deliver the Chancellor’s stated ambition of encouraging more UK investment? Continual tinkering may deter rather than encourage engagement, particularly for those who already find the landscape difficult to navigate.
The next 12 to 24 months are therefore likely to involve significant operational work for platforms and advice firms, who must adjust systems and processes while ensuring clients understand the different ISA types and contribution rules.
You can read about the Chancellor’s announcements in more detail in the Budget hub on our website, with expert commentary from our friends at Technical Connection including a summary for your clients outlining the major changes in a ready to share format.
Regulatory change
The announcements haven’t stopped in the run up to Christmas. At the start of December, the FCA announced several investment reforms aimed at enhancing the UK’s investment culture. These included consultations on client categorisation and conflicts of interest and a discussion paper on whether the regulatory treatment of MPS should be more consistent with funds, including having similar disclosures and risk scores. Any plans to improve the client’s ability to understand the products and services that form part of their long-term plan are welcome and we’ll be watching this space with interest.
Investment picture
From geopolitical tensions and tariffs to the ongoing AI story in the US, there’s been no shortage of activity from an investment perspective this year. Despite pockets of volatility, most major asset classes have performed well. The investment team at Copia has prioritised protection for lower risk strategies, while higher up the risk scale regional diversification has been key, with opportunities in Europe, Japan and UK offering strong value compared to some of the US mega caps. You can read Pete Wasko’s review of 2025 on the Copia website.
As we wrap up the final quarter of the year, I’d like to thank you for your continued support and engagement throughout 2025. On behalf of the whole team, I wish you a restful break and a very happy Christmas, and a successful start to 2026.
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This article is intended for regulated financial advisers and investment professionals only. Wealthtime does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such.
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