Clients’ biggest Budget fears revealed – and how advisers can help

As part of our Friday Focus feature today, where we’re focusing on what might be coming at us in the budget next month, we were interested to see new research from Hargreaves Lansdown (HL) which reveals the taxes clients are most concerned about and where advisers can help calm nerves and add value.

According to a survey of 2,000 adults conducted by Opinium for HL in October 2025, the top Budget fear among the public is a hike in income tax (16%), followed by rises in VAT and council tax (9% each). Among higher-rate taxpayers, concern about income tax rises is far more pronounced (25%), with a further 9% worried about cuts to pension tax relief and 8% about potential restrictions on tax-free cash.

Notably, almost one in four respondents (23%) said they don’t know what to be most worried about, underscoring the need for clear, proactive guidance from advisers amid widespread Budget speculation.

Key findings from HL’s Budget survey

Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, said the findings reflect growing unease about rising tax burdens and the impact of frozen thresholds: “Statistically, the tax you’re most likely to be worried about rising in the Budget is income tax, and thanks to frozen thresholds, this is nailed on. Unfortunately, VAT is the second biggest worry, and inflation means you’ll automatically be handing over more money to the taxman there too. Worries around pensions have also risen up the ranks for higher earners, so it’s worth understanding what can be done before any changes are announced.”

Coles and HL’s Head of Retirement Analysis, Helen Morrissey, outlined a series of practical steps for clients, and by extension, advisers, to help mitigate tax risk and improve financial resilience in the light of these potential changes as follows:

Five practical actions that advisers can discuss with clients ahead of the budget are:

1. Maximise ISA and pension allowances. Encourage clients to use their annual ISA (£20,000) and pension (£60,000) allowances where possible. These remain the simplest ways to shelter income and investment growth from tax.
2. Consider spousal tax planning. For married couples and civil partners, transferring income-producing assets to the lower-earning partner can optimise use of allowances and keep both partners within lower tax bands.
3. Review inheritance tax strategy. Clients worried about potential IHT changes can use the £3,000 annual gifting allowance or make gifts out of surplus income. HL cautions, however, that larger gifts should be carefully planned to ensure clients retain sufficient assets for their own needs.
4. Manage exposure to capital gains tax. Higher-rate taxpayers, in particular, can benefit from using the £3,000 annual CGT exemption and considering Bed & ISA transfers to move assets into a tax-free environment.
5. Avoid knee-jerk pension withdrawals. Morrissey warns that reacting to rumours about tax-free cash could prove costly: “Taking the money out now could remove it from a tax-efficient environment and expose it to capital gains and dividend taxes. The decision to take tax-free cash should be part of a long-term financial plan — not a reaction to speculation.”

To us here at IFA Magazine, it seems that HL’s findings underscore how deeply tax fears are probably influencing client sentiment and how much scope there is for advisers to step in with reassurance and strategic planning. With one in four clients uncertain about what to be worried about, clarity and calm will be invaluable currencies in the run-up to the Budget.

Check out all the thinking and insights from experts across the industry who’ve been sharing their  Budget outlook with us for today’s Friday Focus here: https://ifamagazine.com/category/friday-focus/