Before the 2024 Autumn Budget had even been announced, FTAdviser reports that one-fifth of high net worth individuals were already considering leaving the UK for fear of what was to come.
Yet, worrying about an event before it happens or overreacting when an announcement is made could result in unnecessary stress, anxiety, and even costly financial mistakes.
The chancellor, Rachel Reeves, has suggested that she will present a single annual Budget during her tenure – currently, the government usually delivers a Spring and an Autumn Budget each year. Yet, additional financial announcements might be made if the need arises.
So, read on to discover four reasons why it’s important to stay calm and not overreact to key financial announcements.
1. Nothing is certain until the announcements are made
In the build up to a key financial announcement such as the government’s Budget, there’s usually a lot of speculation about what might be included and how this could affect your finances.
From the news on your television or car radio, to email updates, mobile phone alerts, and social media posts, Budget forecasts are usually hard to avoid.
Yet, while it’s important to stay informed, it’s also helpful to be aware of your limits. Engaging too much with the “what ifs” and “maybes” – especially if these focus on changes that might negatively affect your finances – could lead to unnecessary stress.
According to Professional Paraplanner, nearly half of paraplanners said their clients had shown “a lot of concern” regarding potential tax changes in the Budget, largely due to mounting press speculation.
On the other hand, tuning out some of the pre-Budget “noise” and reminding yourself that nothing is certain until legislation is in place might help you remain calm.
2. You may be presented with unexpected opportunities that could benefit you
If you’re concerned about the potential implications of an upcoming financial announcement, you might tend to focus on the worst possible scenario.
Indeed, scaremongering by the press and your own biases could make you feel pessimistic about potential changes.
Yet in truth, it’s impossible to predict exactly what a financial announcement will include. Remember that although there may be less-welcome surprises, you could also be presented with unexpected opportunities that benefit you and your family.
For example, in the recent Budget, the chancellor announced that there will be no raises to Income Tax, VAT, or National Insurance for working people.
3. Some changes may not come into effect for years
While some measures – such as changes to the rates of duty on tobacco and alcohol – may come into effect almost immediately, others may not become law for several years.
For example, in the Budget delivered on 30 October, the chancellor announced a proposal to bring defined contribution (DC) pension schemes into a person’s estate for Inheritance Tax purposes. Yet, this is not scheduled to come into effect until 2027.
Also, proposals made in key financial announcements often require further debate and scrutiny before they become law. Many of the changes announced in the Budget require Parliament to pass a new Financial Bill to give them permanent legal effect.
So, you could have time to navigate any changes that are made and adapt your financial plan accordingly.
4. A financial planner can help you to adjust your plan
Whatever changes a financial announcement introduces, once you know what’s likely to happen you can plan accordingly.
However, some proposals and pieces of legislation may be complex and difficult to navigate alone. You might also find it difficult to understand how any changes could affect you personally.
As experienced financial planners, we can help you review and adjust your financial situation in light of new legislation or proposed changes.
We can work together to make the most of any changes that could benefit you and mitigate any new rules that could hamper your progress towards your financial goals.
Knowing that you have the support to accommodate any changes and keep your financial plan on track could help you avoid overreacting to key financial announcements.
Get in touch
If you’re concerned about how the changes announced in the recent Budget could affect your finances, we can help you review and amend your plan accordingly.
Please get in touch. Email info@lloydosullivan.co.uk or call 020 8941 9779 to see how we can assist you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning or tax planning.
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