This article was issued and approved by Titan Investment Solutions Limited which is registered in England and Wales (10636265) and is authorised and regulated by the Financial Conduct Authority.

Chancellor John Healey delivered his first Budget on Wednesday 28 October. For advisers and professional investors, the immediate questions are how the announcements may affect client tax planning and whether they alter the investment outlook. The main measure for savers is a further rise in tax on taxable savings interest and property income from April 2027. The planned cut to the cash ISA allowance has been scrapped, while no new changes to pension tax relief or mainstream capital gains tax rates were announced. In our view, the Budget alone does not warrant a change to a long-term investment strategy.

What was the backdrop?

The Budget came against a difficult economic backdrop. The conflict in the Middle East has pushed up energy prices: UK inflation rose to 3.5% in September, and the Office for Budget Responsibility (OBR) now expects inflation of 3.1% this year and 3.4% in 2027. UK government borrowing costs have climbed to their highest levels in decades, while the Government’s headroom against its borrowing rules has narrowed.

What was announced?

The further 2-percentage-point rise announced for savings and property income would, together with the 2-point rise announced last year, leave the relevant rates 4 percentage points higher from April 2027 than today. The Treasury expects the additional 2 points announced in this Budget to raise about £1.1bn a year by 2028/29. The Budget also stated that, from April 2027, pensioners whose only income is up to the level of the new State Pension will pay no income tax; the scope and operation of this measure should be checked against the final documents. 

There were no announced changes to income tax rates, dividend tax, mainstream capital gains tax rates, pension tax relief or inheritance tax thresholds.

What are the implications for advisers and investors?

ISAs and savings: The announced ISA allowance remains £20,000 a year, available across cash and stocks and shares ISAs, subject to the applicable ISA rules. From April 2027, the announced rates of 24%, 44% and 49% would apply to taxable savings interest where relevant, subject to individual circumstances and any available allowances. That may increase the value of tax-efficient wrappers for some clients, rather than making an ISA the right choice in every case. A proposed 22% charge on interest from cash held in stocks and shares ISAs, and restrictions on transfers to cash ISAs, were also reported to have been dropped; these points require confirmation in the final documents. A new Starter ISA for first-time investors is to be developed with industry, with details to follow.

Pensions: No new changes to pension tax relief were announced in this Budget. Measures announced previously remain relevant: unused pensions will count towards inheritance tax from 6 April 2027, and the minimum age for accessing a personal pension rises to 57 in April 2028. Pensions retain significant tax advantages for many long-term savers, although their suitability depends on individual circumstances and the applicable rules.

Income and dividends: Income tax rates are unchanged and thresholds remain frozen until April 2031. As earnings rise, this can bring more people into higher tax bands. Dividend tax rates rose this April, adding to the case for advisers to consider available ISA and pension allowances as part of broader client tax planning.

Capital gains and inheritance tax: Mainstream capital gains tax rates and the £3,000 annual tax-free allowance are unchanged. The proposed Founders’ Relief would apply a 10% capital gains tax rate to up to £10m of lifetime gains for founders of qualifying UK growth companies from 6 April 2027, subject to consultation. The announcement specifies at least five years’ share ownership and five years’ UK residence; the Government is consulting on the details until 30 November. Inheritance tax thresholds remain frozen at £325,000, plus £175,000 where a main home is passed to children or grandchildren, subject to the relevant conditions.

How did markets react?

Initial market moves on 28 October 2026 were relatively modest, based on mid-afternoon data. The 10-year gilt yield, a measure of UK government borrowing costs, edged down to around 5.32%, about 0.2 percentage points below this month’s peak, the highest since 2007. Longer-dated gilts strengthened after the Debt Management Office said it would sell fewer long-dated bonds, with the 30-year yield falling to just below 5.7%. The FTSE 100 rose 0.3%; Lloyds gained 4.2%, Barclays 3.7% and NatWest 2.4%. Sterling was little changed at around $1.33. These are initial observations rather than evidence of a lasting market response.

How are we assessing portfolios?

Our portfolios are diversified across regions, sectors, asset classes and fund managers with different approaches. Diversification can reduce exposure to a single event, such as a UK Budget, but cannot eliminate investment risk. We are not changing portfolios solely because of the Budget, although positioning remains subject to the mandates and circumstances of individual portfolios. We will be watching energy prices, gilt markets and the Bank of England’s next interest rate decision on 5 November. Higher gilt yields can increase the starting income available from newly purchased bonds, although bond prices may remain volatile while inflation is high. We will continue to assess developments through our established investment process rather than react to short-term headlines.

The long-term investment perspective

In our view, the Budget provides some clarity on the measures announced today, while energy prices, inflation and the path of interest rates remain important for investors. Advisers may wish to review affected clients’ use of ISA and pension allowances, the real value of cash holdings and, where relevant, estate plans ahead of the April 2027 pension changes. Any action should reflect individual circumstances and the final detail of the announced measures. Advisers and professional investors who would like to discuss the investment implications can contact the Titan Square Mile team.

Chris, Dan, Florrie and Mark

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This document is marketing material and is issued and approved by Titan Investment Solutions Ltd (“TISL”) which is authorised and regulated by the Financial Conduct Authority. The company is registered in England and Wales with Company Number 10636265. The independent research is provided by Square Mile Investment Consulting and Research Limited ("SMICR") which is not authorised or regulated by the Financial Conduct Authority and does not undertake regulated activities. TISL and SMICR are wholly owned subsidiaries of Titan Wealth Holdings Limited. Titan Square Mile is a trading style of Titan Investment Solutions.

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The value of an investment may fall as well as rise. Past performance should not be seen as an indication of future performance. Tax treatment depends on individual circumstances and may be subject to change in the future. Any opinions expressed reflect our current judgment at the date of this document and are subject to change without notice.

Views are those of the Titan Square Mile investment team as at 28 October 2026 and may change. This note reflects HM Treasury’s Budget announcements and early market reporting on Budget day; some details may change when HM Treasury and the Office for Budget Responsibility publish their full documents.

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Source of data: HM Treasury, “Budget 2026: Breathing space for today, hope for the future” (28 October 2026); Evening Standard, “Budget 2026: Key points announced by Chancellor John Healey” (28 October 2026); City AM, “Budget 2026: Healey reverses Reeves’ cash Isa cut” (28 October 2026); Financial Times, “UK Budget 2026 live” (28 October 2026); Office for Budget Responsibility, Economic and fiscal outlook (October 2026); Investment Week; Portfolio Adviser; Reuters; market data as at mid-afternoon, 28 October 2026; views and opinions are Titan Square Mile’s own unless otherwise stated.

Date of data: 28 October 2026 unless otherwise stated.

Registered address: Titan Investment Solutions, 101 Wigmore Street, London, W1U 1QU.