Labour came to power last summer on a mandate to boost growth and provide stability after a turbulent few years for the economy.

The government’s first six months in power however haven’t been smooth, making the job even harder. While the Chancellor’s latest initiatives to encourage growth, including Heathrow’s third runway, have generally landed well, their impact won’t be felt for a considerable time yet.

For advisers and their clients, one of the most seismic events so far has been Labour’s first Autumn Budget, which left both consumers and businesses shaken from the £40bn in tax rises it set out to deliver.

Supporting clients and providing peace of mind

Pre Budget, there was heightened speculation that worried clients about changes to capital gains tax and pension tax relief, as well as the pension tax-free allowance potentially being reduced.

As it turned out, most of this was only speculation but what clients are concerned about now are the inheritance tax (IHT) rule changes announced at the Budget. Although the IHT rule on pensions doesn’t come into effect until April 2027, there’s already been a reported rise in clients looking to gift money.

On top of this, there’s still a general concern about which area the Chancellor may have next in her sights to help balance the books.

At a time of year when advisers are reviewing finances with clients to ensure they make the most of their tax allowances, the reassurance they can provide now is the reason why people seek advice.

And advisers should be able to plan with clients with confidence, and play the long game, as there are solid indicators that we should see less disruption to tax planning ahead from the Chancellor.

Financial stability and a focus on boosting growth

With the government delivering a fiscal event last Autumn on such a scale, it’s only realistic to assume that the biggest changes to tax have already been announced for this term. If Labour does announce further significant changes, it risks undermining its credibility to provide the financial stability and boost growth that it says it will.

The Chancellor has also publicly stated that she wants to end the Treasury practice of preparing two big fiscal events a year and previously ruled out a Spring Budget.

While she plans to issue a statement at the end of March with updated economic forecasts from the Office for Budget Responsibility, the Chancellor’s said that she doesn’t intend to include any new tax rises. So, if there are more Treasury announcements this year, it’s less likely that they’ll directly impact tax advice.

One other indicator is that with the number of existing pension initiatives announced by the Labour government so far, there’s simply limited capacity for the Chancellor to look at other aspects of long-term financial planning this parliamentary term.

Making the most of tax allowances for clients

The government may still have more to do to deliver successful economic growth, but I believe there should be a more stable period of tax policy ahead.

And advisers can feel more confident that the tax planning rules are unlikely to shift any time soon.

While there are still some details to be clarified on the future inheritance tax changes, in the run up to this tax year end there’s enough information available for advisers to make best use of the allowances for clients.

As advisers support clients with their long-term savings plans now, it also gives them an opportunity to underline the value of advice during unsettling times, and they can plan together with clients with confidence.

See our dedicated TYE support for you and your clients or speak to your usual abrdn contact.

This blog is based upon abrdn’s understanding of UK law and HMRC practice in the UK as at February 2025. Tax and legislation are likely to change. Tax treatment depends on individual circumstances. The views expressed in this blog should not be regarded as financial advice.