Cut through the headlines: 3 Things You Can’t Control Around the Budget and 3 Things You Can

Every Budget brings a wave of headlines and speculation. In the weeks before the announcement, the rumour mill often goes into overdrive, and with the date pushed back to late November this year, it feels like there has been more than ever.

It is a confusing time. One minute wealth taxes seem inevitable, whispers of increases to income tax rates circulate, and property tax reforms are presented as a certainty. Then, just as quickly, these ideas are shelved or softened. For many people, it is exhausting and raises the same question: what does this mean for my money?

This time, with a significant gap in the public finances to address, the risk of tax changes and the potential impact on UK markets are front of mind for many investors.

The reality is that some things are completely outside your control. However, there is still plenty you can do to keep your plans on track.

Acknowledge what you can’t control

1.      Government Policy Changes

It’s almost impossible to predict which tax rates, allowances or thresholds will change. For example, the recent removal of the Lifetime Allowance was positive for many savers, but it came alongside changes to the inheritance tax treatment of pensions that affected plans for passing on wealth.

Acting purely to avoid a possible change can lead to regret later.  The key is not to try to predict these moves but to build flexibility into your plan and be ready to act when the rules change. Most changes don’t take effect immediately, so you often have time to respond.

2. Market Reactions

Budgets often have less impact on a globally diversified portfolio than you might expect. However, if you hold concentrated positions, a surprise tax on gambling firms or a boost for defence spending could move share prices sharply. This time, attention will be on whether the government has done enough to reassure markets about the UK’s fiscal position, which could make sterling and government bonds more volatile. We all remember the impact of the 2022 mini-Budget, but if you had stayed invested in a diversified portfolio, it shouldn’t have derailed your long-term plans. Timing the market rarely works. Staying invested and diversified usually does.

3. Economic Conditions

The real impact of a good or bad Budget often comes through inflation, interest rates and economic growth. These are influenced by global forces as much as domestic policy. For example, rising global energy prices in 2022 drove UK inflation higher and pushed up interest rates, regardless of government measures. Accept that the economic backdrop will always be a moving target and make sure your plan can withstand a range of possible outcomes.

 
Focus on what you can control

1.      Your Savings and Investment Strategy

You can’t dictate tax policy, but you can make sure your money is working as hard as possible within the rules. For example, using your ISA allowance each year protects your investments from income and capital gains tax, which became even more valuable after the recent increase in CGT rates and could become even more important if income taxes rise. Despite recent changes, pensions also continue to offer generous tax relief, so contributing more than your default amount could be a smart move.

If you have funds available, accelerating contributions ahead of the Budget could make sense if you’re concerned about future rule changes.

2.      How You Prepare and Respond to Change

With so much speculation, it can feel like you need to act quickly to protect what you have. Instead, it usually makes sense to pause and take stock. What actions can you take now that you won’t regret later? For example, topping up your ISA or pension is rarely a bad move.

When the Budget headlines arrive, pause and ask: has anything material changed for me? If the Chancellor freezes income tax thresholds, you might drift into a higher band over time, but that’s a reason to review salary sacrifice or pension contributions, not to overhaul your entire plan overnight.

3. Your Long-Term Plan

This is the most important area you control. The Budget may change some details, but your goals remain the same: retiring comfortably, helping children, or leaving a legacy. A clear plan gives you confidence to ride out uncertainty and avoid reactive decisions. For example, if you know you need £40,000 a year in retirement, a short-term change in dividend tax shouldn’t derail your strategy. Building in buffers, stress-testing for different scenarios and reviewing your plan regularly can help you stay on track. If you’re unsure, this is where professional advice can make a real difference, turning uncertainty into clarity and action.

 
Why this matters now

As highlighted in our previous insights, the temptation to focus on what you can’t control is strong, especially when headlines are dramatic. But the most successful investors concentrate on the factors they can influence: how much they save, how they allocate their assets, and how they respond to events. These are the levers that make the biggest difference over time.

The bottom line: focus on what you can control and don’t let the noise of Budget day distract you from your long-term objectives. The rules may change, but the principles of good financial planning remain the same.

Please note, the value of your investments can go down as well as up. 

This article is for information purposes only and does not constitute financial advice.