Not all eyes are on the upcoming Budget, according to data from RBC Brewin Dolphin, which showed a lack of interest in the chancellor’s yearly address and widespread misunderstanding of personal finance implications from previous years.
Over the past decade, there have been more than 130 “notable changes” to personal finance rules ranging from tax to savings and pensions. Yet most people are unaware of many of the policies.
Just a third of young people aged between 18 and 29 pay attention to the Budget, the research shows, despite decisions such as student loan repayment changes and the freezing of income tax thresholds likely to disproportionately affect this age bracket.
Overall, around half (51%) of the population follow the chancellor’s address, with 66% of older people aged over 55 paying attention, making them the most likely to follow the statement.
Following the Budget is one thing, but keeping track of the changes announced is another. Here, just 22% of people surveyed said they found it easy to keep track of financial planning changes from previous Budgets, while only a third are confident that their current financial decisions and plans reflect the recent Budget changes relevant to them.
Ian Kloss, head of intermediaries at RBC Brewin Dolphin, said: "We've seen 10 years of Budgets steadily redraw the financial planning landscape and even clients who follow announcements closely can lose sight of the finer points.”
For example, only half of those surveyed understood the upcoming changes to the ISA allowance in April. Announced in last year’s Budget by then-chancellor Rachel Reeves, from April 2027 savers under the age of 65 can only put £12,000 into a cash ISA, down from the £20,000 limit currently in place.
The total amount that can be subscribed to ISAs remains unchanged at £20,000, but the remaining £8,000 available must be placed in a stocks and shares ISA.
Of those who said they understood the changes, only 43% were able to correctly explain the above, suggesting many people inaccurately think they know how their finances will be affected. Overall, just 23% of people were aware of, and correctly understood, the changes.
Fewer still understand upcoming changes to inheritance tax and pensions, with less than a third (30%) of respondents aware that pensions will be brought into estates for IHT purposes from April 2027 – a policy that was brought in at Reeves’ 2024 Budget. The percentage of people who were both aware of and understood this change stood at 17%.
Kloss said: “The upcoming changes to ISAs and to the inheritance tax treatment of pensions, both taking effect from April 2027, are a good opportunity to be proactive and help clients act early.
“For advisers, it is worth reviewing clients' ISA and pension arrangements, stress-testing estate planning assumptions and making sure clients understand how the new rules may apply to their specific circumstances. Engaging clients now is one of the most valuable ways to demonstrate the worth of ongoing advice."