Wealthy Households Brace for Tax Increases Amid Economic Uncertainty

Since the Labour government, led by Chancellor Rachel Reeves, took power following the 2024 general election, confidence among high-net-worth individuals (HNWIs) in the UK economy has significantly declined. According to the latest Saltus Wealth Index, confidence dropped from 84% a year ago to 66%, although it has improved from a low of 48% earlier in 2025. HNWIs are particularly concerned about impending tax increases, with 78% anticipating further tax hikes within the next year. Key worries include potential rises in capital gains tax, income tax, and inheritance tax, as well as the introduction of national insurance on rental income.

Wealthy households braced for Autumn Budget tax hikes - here is how high earners are preparingHNWIs brace for tax hikes as confidence edges up – Saltus Wealth IndexHNW confidence rises despite Budget fears

The upcoming Autumn Budget, scheduled for November 26, 2025, is expected to address a projected £30 billion shortfall in public finances. Analysts suggest that significant tax increases may be necessary to stabilize the economy and reassure bond markets. The Institute for Government has urged Reeves to consider comprehensive tax reform rather than piecemeal adjustments, warning that the current rigid commitments against raising VAT, income tax, or national insurance could lead to ineffective short-term fixes.

Reeves Urged To Reverse ‘Rash’ Tax Commitments And Reform System By Think Tank

Mike Stimpson, a partner at Saltus, noted that HNWIs are taking proactive measures to protect their wealth, with many reviewing retirement savings and considering strategies to shield pensions from inheritance tax. A third of respondents have made formal pension beneficiary nominations or established trusts to mitigate potential tax impacts. Despite the uncertainty, confidence in personal finances among HNWIs has risen from 86% to 92%, indicating a cautious optimism linked to recent market recoveries.

Wealthy households braced for Autumn Budget tax hikes - here is how high earners are preparing

Critics, including the Institute of Directors, have called for a reevaluation of the government's tax strategy, emphasizing the need for income tax increases to address the fiscal shortfall. Anna Leach, the IoD's chief economist, stated, "If they politically cannot deliver spending cuts, it has got to be income tax increases." This sentiment reflects a growing consensus that breaking Labour's manifesto pledge against raising taxes on working people may be unavoidable given the current economic landscape.

The Telegraph - UKGB NewsReeves Urged To Reverse ‘Rash’ Tax Commitments And Reform System By Think TankThe Telegraph - UK

While the government has repeatedly insisted it will not raise income tax, national insurance, or VAT, experts warn that maintaining this stance could lead to a more complex tax system that undermines economic growth. The Resolution Foundation has proposed shifting 2p from employee national insurance to income tax, which could raise £6 billion and create a more equitable tax structure. However, such changes would represent a significant departure from Labour's previous commitments.

The Telegraph - UK

As the November Budget approaches, HNWIs and the broader public await clarity on the government's fiscal strategy. With pressures mounting from both economic realities and political commitments, the Chancellor faces a challenging balancing act. The decisions made in the upcoming Budget will not only impact the wealthy but could also have far-reaching consequences for the UK economy as a whole.

HMRC changes could see higher Income Tax and National Insurance cuts