Well, I don't have a crystal ball, but

Every year, from about September onwards, the same question starts arriving. What do you think the Chancellor is going to do?

I have a stock answer. It starts with "well, I don't have a crystal ball," and it ends, without fail, with me setting out exactly what I think the Chancellor is going to do.

It is one of my favourite parts of the year. There is something quite enjoyable about sitting down with a coffee and a list of rumours and working out which of them might come true. The thing worth saying before any of it, though, is this. Please don't worry too much. Whatever gets announced on 28 October, we can only play to the rules we are given, and we will.

The rules do change

Not long ago, a pension was one of the best inheritance tax planning tools available. Money left inside one sat outside your estate and could pass to your family without a penny of inheritance tax. A great many sensible plans were built around exactly that.

Then the October 2024 Budget announced that from April 2027, unused pension funds would be brought inside the estate. For inheritance tax purposes, the pension went from hero to villain in the space of an afternoon.

Was that frustrating? Yes. Did it change how people should plan? Also yes. That is simply how it works. The rules move, you read them, and you adjust. It is why every Budget is worth watching, and why a lot of plans look quite different now to how they looked two years ago.

Where we are this time

This one is unusual. There is a new Prime Minister and a new Chancellor, both only a few months into the job, and this will be John Healey's first Budget. Nobody, including the people writing the rumours, has much of a track record to go on.

What is known is that the Government has recommitted to not raising the main rates of income tax, National Insurance or VAT. It is also fairly clear that the public finances are in a tighter spot than they were in the spring.

Put those two things together and you get the same pattern as the last two Budgets. If the big three cannot move, the money tends to come from everywhere else. Dividends, savings, property and gains.

Things that are already happening, and are not rumours

Worth a reality check before the speculation, because these get mixed up with rumours constantly.

• Dividend tax rates went up by two percentage points in April this year.
• Unused pensions come inside the estate for inheritance tax from April 2027.
• The annual cash ISA allowance drops to £12,000 for under-65s from April 2027. The overall £20,000 ISA allowance is unchanged.
• VAT comes off domestic electricity bills from 1 October this year.
• The Lifetime ISA is due to be replaced by a new First Time Buyer ISA, with a consultation published in June and the replacement expected in 2028. Existing Lifetime ISAs stay open and can still be contributed to.

None of that needs a Budget speech to happen. It is already decided.

Capital gains tax: my crystal ball says "up a bit"

If I had to put money on one tax being nudged, it would be capital gains tax, and here is why.

The main rates are currently 18% and 24%. Income tax runs at 20%, 40% and 45%. That gap has been narrowed once already, in 2024, and it is the sort of gap a Chancellor short of money tends to notice. The annual exempt amount has already been cut to £3,000, so the easy lever has largely been pulled. The rates are what is left.

Then there is the pledge. The Government has promised not to raise taxes on working people. I have yet to find anyone who can tell me precisely who a working person is. I go to work every day, so I would like to think I count, but the definition seems to shift depending on who is being asked and which tax is on the table. What can be said with some confidence is that capital gains tax is charged on what people own rather than on what they earn, and that puts it comfortably outside the promise however you choose to read it.

The counter-argument, which is a good one: talk of fully aligning capital gains tax with income tax has gone quiet, and the Treasury's own forecasters know there is a point at which raising the rate raises less money, because people simply stop selling. So the guess here is a nudge rather than a leap.

What I would say to anyone holding investments outside an ISA or pension is this. Do not rush to sell things purely to beat a rumour. Sometimes using this year's allowance and crystallising a gain makes perfect sense anyway. Sometimes it does not. It depends on your circumstances, not on a newspaper front page.

Pensions and tax-free cash: the annual scare story

Every year, without fail, someone reports that the 25% tax-free lump sum is about to be cut. Every year, so far, it has not been.

My own view is that pensions have had enough spanners thrown at them for now. The lifetime allowance was abolished in 2024. The inheritance tax change lands in 2027. Providers and administrators are still working through the consequences of both, and the legislation behind the inheritance tax change is still being finalised. Adding another major change on top would be brave, and this does not look like a Chancellor wanting to be brave with pensions in a first outing.

So do I think they will cut tax-free cash? No. Can I guarantee they will not? Also no.

The rumour itself still does damage, though. Ahead of previous Budgets, people have taken tax-free cash early "just in case", and then found they did not need the money and could not put it back.

Taking tax-free cash is a one-way door. If you are tempted to walk through it because of something you have read, take proper advice on it first. That is the single most useful sentence in this article.

The rest of the rumour mill, briefly

A wealth tax is reported to have been ruled out. A land value tax to replace stamp duty and council tax has been denied for this Budget. The high value council tax surcharge on homes over £2 million is already legislated for 2028. There is a 3p fuel duty rise pencilled in for January, and almost every pencilled-in fuel duty rise since 2011 has been cancelled or deferred. And the quietest tax rise of all, frozen thresholds, will carry on doing its work without needing a mention at all.

What this means for you

Probably less than the headlines suggest, and possibly more than you would like.

The useful thing to do between now and the end of October is nothing dramatic. Know what allowances you have not used this tax year. Know whether you are sitting on unrealised gains outside a wrapper, and whether crystallising some of them would have made sense regardless of the Budget. Know what your plan actually depends on, so that if something does change you can tell straight away whether it matters to you.

Then wait. On 28 October we will find out, and reading the small print will be considerably more useful than reading the summaries.

If there is a rumour keeping you awake, it is usually worth talking through rather than acting on. I still cannot bring the crystal ball.

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This article is for general information and is not personal advice. It was written before the Autumn Budget on 28 October 2026 and reflects speculation rather than confirmed policy. Nothing is certain until announced by the Government and passed into law. Tax treatment depends on individual circumstances and may change. The value of investments can fall as well as rise and you may get back less than invested.