Pensioners urged to 'act now' to save thousands before budget

Pensioners are being warned to look at their finances before the Autumn Budget. Chancellor Rachel Reeves is set to outline her plans for the nation's finances in a fortnight. There has been considerable speculation ahead of her budget on Wednesday, 26 November, with worries surfacing over potential tax hikes. With a £30 billion deficit in public finances, the chancellor has already refused to dismiss the possibility of breaking Labour's manifesto promises on tax, suggesting that income tax, national insurance or VAT could be increased. However, there are also worries about a broad range of other areas which could also be targeted. Andrew Byers, an end-of-life planning expert from SafeKeep, suggests there are five steps pensioners - and others - can take to safeguard their finances and reduce inheritance tax bills before the Budget changes are announced. He said: "Pensioners could miss out financially if they fail to get organised before potential changes to inheritance and pension rules take effect. "New data suggests 40% are worried about upcoming changes to pensions and inheritance tax, and a further 23% of Brits are already planning to give away money to reduce their inheritance bill. "While the Government has reaffirmed the state pension triple lock, ensuring payments rise by around 4.8% from April 2026, the Treasury is also expected to explore ways to raise funds through targeted reforms, such as tightening inheritance tax thresholds, revisiting pension tax-free withdrawals, or adjusting long-standing gifting rules. "That's why pensioners and families need to act now to get budget-ready ahead of impending tax changes from November.", reports the Manchester Evening News . Andrew suggests there are five steps people should take before the budget. Here's his advice:. "As of September 2025, more than £105 million in Premium Bond prizes remain unclaimed, often because records are incomplete or executors are unaware the bonds exist," Andrew explained. "With 22.7 million Britons holding Premium Bonds, or 52% of adults, an estimated 6.7 million pensioners are likely to own them. "While Premium Bonds are free from income and capital gains tax, they do form part of your estate for inheritance tax purposes, so it's vital your executor knows about them and how to contact NS&I. The good news is that any winnings or bonuses remain tax-free, even after death. "To ensure your loved ones receive what's owed, keep your bond details clearly recorded among your financial documents and make sure your NSandI online account is accessible. As the system is now largely digital, being confident with online access, or getting help from a trusted family member, can make it far easier to claim prizes and manage your estate smoothly." Andrew suggests: "With over 3.3 million unclaimed pension pots at an average value of £13,620 for people aged 55-75, getting your finances in order could mean uncovering thousands of pounds you didn't know you had. Make sure your wills, trusts, and power of attorney are up to date, and that your executor or next of kin knows where to find key records such as pension statements, life insurance policies, Premium Bonds details, and property deeds. "From April 2027, pensions will be included in inheritance tax calculations, meaning executors, often family members, will be responsible for locating all pension assets. Digitising your documents now can save your family stress, delay, and potentially thousands in unclaimed funds and legal costs later on." "With inheritance tax thresholds frozen since 2009, more families are being drawn into the tax net as property and pension values grow," the expert explains. "Government figures estimate at least 31,500 IHT estates currently exceed the £325,000 inheritance tax threshold. "For those affected, now is the time, before this month's Budget, to review estate plans, ensure pension beneficiaries are up to date, and make the most of allowances while they still apply. For example, using the £3,000 annual gifting exemption for two spouses over five years can remove £30,000 from an estate, avoiding up to £12,000 in inheritance tax at current rates." "With nearly 500,000 weddings set to take place over the next two years - if a loved one is getting married in the near future, it could pay to be generous before the Autumn Budget. "Wedding gifts are currently exempt from inheritance tax - up to £5,000 for a child, £2,500 for a grandchild, and £1,000 for anyone else, and can be combined with your £3,000 annual gifting allowance. "For over 31,500 estates already exceeding the £325,000 inheritance tax threshold, that exemption can translate into meaningful savings, up to £2,000 in tax saved when gifting £5,000 to a child, or £1,000 saved when gifting £2,500 to a grandchild. "With potential changes to gifting and inheritance rules expected in the Budget, acting now helps ensure your generosity remains tax-free and protected from any future limits." "From April 2026, the full new state pension will rise by 4.8% to around £241 per week, or £12,530 a year. With the income-tax personal allowance frozen at £12,570, many retirees could find themselves edging closer to or crossing the tax threshold, especially those with even modest private or workplace pensions," warns Andrew. "Analysts estimate that over the next two years, an additional 2.7 million pensioners will fall into the higher or additional-rate tax bands, up sharply from about 1 million today. Reviewing how and when you draw income from pensions or savings, for example, spreading withdrawals evenly across the year or staggering lump sums, can help reduce exposure and avoid being pulled into a higher bracket. A quick review now could prevent an unexpected tax bill next spring."