In the months ahead, the UK personal finance landscape will be shaped by a wave of regulatory and legislative developments, AJ Bell’s director of public policy, Tom Selby, and head of public policy, Rachel Vahey, share their expert insight.
Key things to look out for in July and August:
- Chancellor’s Mansion House speech on 15 July: the chancellor will deliver her second Mansion House speech, which is rumoured to include an announcement to cut the Cash ISA subscription limit.
- DWP to kickstart the pension adequacy review: the DWP is expected to soon announce the names of the reviewers and the terms of reference for the pensions adequacy review.
- HMRC could publish its response to the consultation on extending inheritance tax to pensions: almost six months since the consultation closed, HMRC and the Treasury could soon be in a position to confirm the rules for extending inheritance tax (IHT) to unused pension funds.
- The FCA’s consultation on targeted support’s final rules closes on 29 August: The FCA is consulting on the final rules to introduce targeted support for pensions and investment customers from 2026.
- Chancellor could deliver Cash ISA bombshell in Mansion House speech
- The chancellor is due to deliver her key Mansion House speech on 15 July
- It is rumoured this could include an announcement to cut the annual subscription limit for Cash ISAs, possibly to as little as £5,000 a year – but the overall ISA subscription limit of £20,000 is expected to remain intact
- The government wants to boost the London stock market by encouraging savers to shift their money from cash to investments
- It is looking at options for reforms to ISAs that get the balance right between cash and equities to earn better returns for savers and boost the culture of retail investment
Tom Selby, director of public policy at AJ Bell, comments:
“The government’s goal of encouraging a retail investing culture in the UK is the right one, but paring back Cash ISA allowances would be the wrong way to achieve this, adding complexity and potentially failing to fundamentally change behaviour.
AJ Bell research suggests that if the Cash ISA allowance is cut, most investors will simply switch to cash alternatives outside the tax-free ISA environment.
Removing the unnecessary friction that exists in the ISA market by combining Cash ISAs and Stocks and Shares ISAs into a single main ISA product, alongside improved guidance through the introduction of ‘targeted support’, would be a more sensible, less controversial and zero-cost way to achieve the policy aim.
The current structure, which essentially requires people to turn left for cash or right for investing, leads too many people to opt for cash at the outset and then stick with cash, even where long-term investing would likely deliver better outcomes for their money. Tackling this clear behavioural barrier to investing should be the priority for any ISA reform the chancellor pursues.”
- There’s still the time to change proposed pension IHT rules, industry urges HMRC
- In the Autumn Budget, Chancellor Rachel Reeves announced that from April 2027 unused pension funds would be counted as part of the estate when working out IHT due
- HMRC launched a technical consultation on IHT and pensions, which closed on 22 January 2025
- Since then, HMRC and the Treasury have been silent on the results of the consultation and the way forward for pension savers, executors, and beneficiaries
- Advisers are already recommending that clients take actions, including accessing their pensions earlier than planned and taking advantage of gifting rules, to mitigate the impact of IHT on unused pension funds
- AJ Bell, along with others in the industry, has called on Reeves to consider alternatives to IHT on pensions, which would be simpler and fairer while still reforming the treatment of pensions on death
Rachel Vahey, head of public policy at AJ Bell, comments:
“Since the close of the technical consultation in January on extending IHT to include unused pensions pots, there has been silence from HMRC and the Treasury.
Whilst we wait to see their next move, the pensions market is already starting to factor in the proposed changes. Over half of advisers are seeing new clients approach them for help with estate planning, including measures such as withdrawing money to spend, sheltering funds from IHT, or gifting money to loved ones.
But the rules are not yet a done deal. Out of the hundreds of replies to the consultation, many shared one central message – the IHT proposals are simply unworkable and have the potential to wreak havoc for grieving families. Research for AJ Bell overwhelmingly shows advisers agree. Almost all advisers (94%) believe that IHT is not the best way to tax pensions on death*.
There are better solutions out there that don’t cause confusion and high costs for executors and beneficiaries, mean swifter payment of benefits to loved ones and tax to HMRC, and that ultimately make it easier for clients to plan how to spend their pension pot and make sure their loved ones also have enough money to live on.
Extending income tax to all withdrawals or lump sums, regardless of the date of death, is one alternative solution. Another is applying a flat rate of tax on unspent pension funds. Our research shows advisers prefer these solutions. They are simple and straightforward, allowing people to plan for their later life.”
Research based on an online survey of 301 financial advisers carried out by AJ Bell between 14 March and 2 April 2025.
REGULATORY OUTLOOK: DIARY
This is a summary of key policy and regulatory developments expected this year and beyond. Dates are correct at the time of publishing but are subject to change according to updates issued by regulators, government departments and other relevant bodies.
| What | When | Who | AJ Bell View |
| Summer 2025 | |||
| Chancellor’s Mansion House speech | 15 July 2025 | Chancellor | |
| Treasury to publish policy note on proposed legislative change to enable future implementation of Targeted Support, alongside Chancellor’s speech | 15 July 2025 | HMT | ‘Once in a generation’ FCA reforms to boost financial help for millions |
| DWP publish details of Reviewers and Terms of Reference for Phase 2 of the Pensions Review | July 2025 | DWP | Government ‘kicks pensions adequacy review into the long grass’ after Budget employer tax hit |
| HMRC to publish response to IHT on pensions technical consultation, and possibly to publish draft legislation | Summer/Autumn 2025 | AJ Bell calls on chancellor to consider alternatives to IHT on pensions | |
| FCA Consultation Paper (CP25/17) on Supporting consumers’ pensions and investment decisions: proposals for Targeted Support closes | 29 August | FCA | ‘Once in a generation’ FCA reforms to boost financial help for millions |
| Autumn/Winter 2025 | |||
| FCA to provide further update on its review of FCA requirements following the introduction of the Consumer Duty | September 2025 | FCA | |
| Authorisations PASS service for Targeted Support opens | October 2025 | FCA | |
| FCA to publish consultation on Value for Money regulations for workplace arrangements | Autumn 2025 | FCA | FCA launches pension scheme ‘league tables’ consultation as part of value for money drive |
| Treasury could publish statement or consultation on outcome of review of ISAs to ensure better balance between cash and equities | Autumn 2025 | HMT | Rachel Reeves sets the scene for ISA reform – here’s how she can radically simplify the system and boost UK plc at almost zero cost |
| Autumn Budget | Possibly October/November | HMT | |
| FCA to publish consultation(s) on pensions tools and modellers, and consolidation of pensions | H2 2025 | FCA | Why the FCA should expand the scope of its pension ‘projection’ review |
| PRA to publish policy statement following proposals to increase FSCS deposit protection limit from £85,000 to £110,000 from 1 December 2025 | H2 2025 | PRA | |
| FCA issue policy statement and final rules on Targeted Support for pensions and investment decisions | December 2025 | FCA | ‘Once in a generation’ FCA reforms to boost financial help for millions |
| FCA to publish Policy Statement on Consumer Composite Investments (CCI) disclosure framework | Winter 2025 | HMT | FCA urged to stick with principles-based regulation on investment disclosure |
| Other publications expected in 2025 | |||
| Treasury to publish outcome on ban on cold calling for consumer financial services and products | 2025 | HMT | Government sets out plans to ban cold-calling for all financial products |
| DWP publish updated transfer regulations changing terms for red and amber flags | 2025 | DWP | |
| Independent Review of planned State Pension Age increases | 2025 – 2026 | DWP | Why economic woes may force state pension review |
| 2026 | |||
| Pension Schemes Bill receives Royal Assent | Early 2026 | DWP | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
| Business Asset Disposal Relief (BADR) for capital gains tax to rise to 18% | 6 April 2026 | HMRC | Capital Gains Tax raid will hit small shareholders where it hurts |
| New IHT rules including combined agricultural and business property £1 million limit for 100% relief from IHT, and 50% relief thereafter | 6 April 2026 | HMRC | IHT Reforms spark death tax raid on small businesses and landowners |
| FCA Authorisations Gateway for Targeted Support opens | April 2026 | FCA | |
| SPA to start to increase to 67 | Between 6 April 2026 – 5 April 28 | DWP | |
| Targeted Support goes live | H2 2026 | FCA | |
| DWP and FCA consultation on Guided Retirement | H2 2026 | DWP/FCA | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
| Final connection deadline for pensions dashboards | 31 October 2026 | DWP | FCA confirms commercial Pensions Dashboards rules but firms in the dark on timescale for delivery AJ Bell Launches Free Pension Finding Tool to Track Down the UK’s £26bn Lost Retirement Savings |
| FCA publishes Final Value for Money rules | Q4 2026 | FCA | FCA launches pension scheme ‘league tables’ consultation as part of value for money drive |
| Later on | |||
| Mastertrusts start complying with Guided Retirement | H1 2027 | DWP | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
| Unused pensions to be included in the estate for IHT | 6 April 2027 | HMT | AJ Bell urges government to go back to drawing board on IHT proposals |
| GPPs start complying with Guided Retirement | H1 2028 | FCA | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
| Income tax thresholds for rest of UK to remain frozen until | 5 April 2028 | HMT | How much frozen income tax bands are costing us as OBR reveals another huge increase in tax take |
| NMPA rises to 57 (unless protected) | 6 April 2028 | HMRC | |
| First publication of Value for Money assessments | Mid-2028 | FCA/DWP | FCA launches pension scheme ‘league tables’ consultation as part of value for money drive |
| Small pots consolidators selected | 2029 | DWP | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
| The final Child Trust Funds mature | 2 Jan 2029 | HMRC | Government urges families to track down £1.4bn in forgotten CTF accounts |
| Deadline for mastertrusts and GPPs to reach £25bn | April 2030 | DWP | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
| ISA annual subscription to remain frozen at £20,000 until | 5 April 2030 | HMRC | |
| IHT nil rate band and residence nil rate band to remain frozen until | 5 April 2030 | HMRC | |
| Small pots consolidation comes into force | 2030 | DWP | Government promises sweeping changes for pension scheme savers under the pension schemes bill |
