Which Budget change has the biggest impact on your plans?
Modelling the lifetime effect of three Budget changes
We used the MyFinanceFuture Planner to explore how three of the main changes announced in the recent Autumn 2026 Budget might affect a 50-year-old couple with two children. They are both working, earn £130,000 between them, and spend £70,000 a year, plus repayments on a £300,000 mortgage.
We modelled three scenarios* to consider the potential lifetime effect of: changes to the State Pension Triple Lock, the 2% increase in property income tax, and the 2% increase in savings income tax.
Scenario 1: Changes to the State Pension Triple Lock
The couple start with £600,000 in pension savings and continue contributing until age 60. The change to the Triple Lock from 2030—while perhaps expected and likely inevitable—still has a significant effect.
They need to withdraw more from their pensions to fund retirement spending, reducing the residual assets at the end of their plan by around £250,000.
Scenario 2: Property income tax
Instead of pension savings, the couple start with a £600,000 rental-property portfolio, in which they have £400,000 equity, to fund their retirement.
The Triple Lock change has a somewhat lower effect here, as the resulting lower income reduces their retirement tax bill. However, the 2% increase in property income tax has a significant impact, reducing residual assets by £80,000. This is partly due to lower after-tax rental income and partly because there is less surplus income to reinvest.
Scenario 3: Savings income tax
The couple start with a £200,000 cash fund and a correspondingly smaller pension than in Scenario 1. They maintain the fund as a “withdrawal buffer” against market downturns in retirement.
In relative terms, the 2% increase in savings income tax has a lower impact in this case than the other changes have in the other scenarios, reducing residual assets by £3,000.
What could the Budget changes mean for retirement planning?
Given the expectation that the Triple Lock was unsustainable and would have to change at some point, its impact may already have been broadly discounted. On these assumptions, the Budget’s biggest lifetime impact appears to fall on landlords and people using property, rather than pensions, to fund retirement.
Which Budget change could have the biggest potential impact on your plans?
* These illustrations use the MyFinanceFuture Planner’s default assumptions for inflation, savings interest, mortgage rates and investment returns. Individual circumstances, future tax rules and financial outcomes will differ.
MyFinanceFuture Services Ltd does not offer regulated financial or professional advice.
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