Building retirement resilience ahead of the Autumn Budget

Retirement planning is generally framed around one fundamental question. Will I have enough money to live on?

The answer is not about a simple, unchangeable, ‘yes’ or ‘no’. A resilient retirement plan also needs to provide control, flexibility and access to different sources of income. It should help you manage changing tax rules, market volatility, unexpected costs and the needs of future generations.

This is particularly important as we approach the Autumn Budget, when speculation can create pressure to act before the detail is known. Here, we are looking at the approach you should consider taking towards your pension and retirement ahead of the Chancellors announcement on 28 October.

Pensions are likely to be one of the most important assets for many people in retirement. However, they should not be considered in isolation.

A broader plan may include pensions, but also ISAs, general investments, investment bonds, property, business interests and trusts. Holding assets across different structures can provide greater flexibility over when income is taken and how tax is managed.

This is important to give you the best opportunity to not only be financially independent on the day you retire, but also to remain so as circumstances change throughout your later years. You may want to reduce your hours, support family members or pursue a different interest, and a well-structured plan should give you the freedom to make those choices.

Ahead of every Budget, there is usually intense speculation about possible changes to pensions, inheritance tax (IHT), capital gains tax (CGT) and more.

Some of the headlines may be based on credible discussion, while others are designed primarily to attract attention.

It is therefore important to distinguish between changes that have been announced and proposals that remain uncertain.

As a reminder of changes that have already been announced, pensions are scheduled to be brought into estates for inheritance tax purposes from April 2027, the normal minimum pension age is also due to rise from 55 to 57 from 2028, and National Insurance is expected to be charged on salary sacrifice pension contributions from 2029.

Other regularly discussed possibilities, such as changes to the 25% tax-free pension allowance or further restrictions on pension contributions, should not be treated as fact unless they are formally announced and legislated, and pensions minister Torsten Bell recently advised “newspapers writing garbage” to “stop it” in relation to the 25% allowance. Although nothing is absolutely guaranteed until the Budget is announced.¹

Tax treatment depends on individual circumstances and is subject to change.

Pension decisions require particular care because some actions cannot easily be undone.

Once pension benefits have been taken, the money cannot simply be returned to the pension, and so making a significant decision based on speculation could therefore create unintended consequences. For example, withdrawing money early may result in a tax charge that could have been avoided or could impact your ability to save more money into a pension. Moving assets into a trust or another structure without considering the wider implications could also restrict future choices.

The key principle is that you should not make permanent financial decisions in response to temporary headlines.

Liquidity is a central part of retirement resilience. Having access to cash or readily available investments can help you manage unexpected costs without being forced to sell assets or make structural changes at the wrong time.

Potential future needs might include care costs, helping a child or grandchild, supporting a family member’s business or meeting a major one-off expense.

This is why retirement planning should consider how different assets can be accessed, not just their total value. A plan that provides several potential sources of income may offer greater resilience than one that depends entirely on a single pension or investment portfolio.

Long-term estate planning also needs to remain aligned with your wider objectives. If passing wealth to the next generation is important, that should be thoughtfully considered as part of the overall plan, not rushed at the last minute or before a Budget based on rumoured changes.

One of the most useful ways to assess retirement resilience is to test your plan against a range of possible scenarios.

This could include living longer than expected, requiring care, experiencing a significant market fall or facing a change in household income. For couples, it may also involve considering what happens if one partner dies while the other is still alive.

Market volatility is another important consideration. While it is impossible to predict the cause or timing of the next downturn, we have seen how markets behave during periods of stress. Understanding the potential impact on your income and capital can make it easier to avoid emotional decisions during a sell-off.

Cashflow modelling takes your real financial information, projecting it out to the future to gain an insight into what it might look like. While it can’t offer a guarantee on future outcomes, it can be a very useful tool in providing insight on the resilience of your financial plan under various scenarios.

Retirement resilience comes from having a plan that can evolve as your circumstances, markets and tax rules change. Rather than reacting to every headline, focus on the actions you can take now:

• Review your pension, income and liquidity needs

• Check your beneficiary nominations and wider estate planning

• Consider how your plan would respond to market falls, longer life expectancy or increased future costs

• Separate confirmed changes from speculation

• Take advice before making significant or irreversible decisions

The aim is not to predict the future, but to make sure your financial plan remains flexible enough to respond to it. To discuss your own retirement resilience, you can speak to your usual Evelyn Partners contact or book an appointment online.