The Budget has sparked plenty of questions and concerns, from pension changes to ISA limits and support for families.
Many readers are wondering how the new rules will affect their savings, retirement plans, and household finances – and what they should do now to prepare.
In a recent Q&A with Independent readers, I tackled your questions on pensions, ISAs, Universal Credit, and practical steps for navigating the changes.
Here are some of them – and my answers:
Q. For those of us who can’t max out the full £20k anyway, does changing the ISA allowance even matter?
Dan1976
A: Let’s start with what the main changes are:
The wording from Rachel Reeves was that £8k of your ISA has to be allocated to a Stocks and Shares ISA. That’s just a strange way to say your Cash ISA has been capped at £12k. So, if you are someone who traditionally puts £20k into a Stocks and Shares ISA, you won’t notice this. Likewise, if you don’t come close to adding £12k into your ISAs combined, you probably won’t notice it either. Lastly, if you’re over 65, this change won’t apply to you – a heads up!
So what are the actual impacts?
Flexibility: Your choice – or ability to choose – is being eroded. Say you fill up your Stocks and Shares ISA every year but suddenly want to save towards a house in a Cash ISA – your ability to do that has been reduced. Say you get a large inheritance or have a great year at work and want to fill up your Cash ISA – you’ll now only be able to put in £12k.
Tax: For people who want to continue saving and used to fill up their £20k Cash ISA allowance each year, they will now be shifting at least £8k of that to a non-tax-efficient account. With the rate you pay on savings interest increasing in this budget, it’s likely you will pay more tax on your savings.
Investing: The reason Rachel Reeves gives for this decision is to encourage the country to invest. I don’t know about you, but in my opinion, people don’t start investing because they are forced into a corner. They start because of education, confidence, and incentives. Essentially, I prefer the carrot over the stick.
Q. I have three kids – does scrapping the two-child benefit cap mean my family will get more support now?
BBenB
A: Simple answer: yes.
This is a universal credit, meaning anyone with more than two children will benefit from this announcement.
In practical terms:
- You receive benefits for every child you have.
- The exact amount depends on your personal circumstances and the Universal Credit calculation.
- This starts in April 2026.
It’s worth noting a few other changes announced for families on Universal Credit (other terms apply, so you need to check if you qualify):
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Get a free fractional share worth up to £100.
Capital at risk.
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- Help To Save – an extra 50% bonus on savings (up to £1,200).
- Free school meals – depending on ages and income.
- Childcare support – Universal Credit can cover up to 85%.
A lot of people were quite angry about this, wondering where the money came from to pay for it! But overall, if it does what the government says and brings almost half a million children out of poverty, I’m all for it.
Q: I pay about 30K into my pension using salary sacrifice, how will the announced changes affect me? I think it’s being introduced in 2029 – why the delay?
9Diamonds
A: Let’s start with the reasons for the delay… who knows. My best guess is that, come 2029, there might be a chance this policy magically disappears as part of an election campaign (but that’s just my guess – I would still seriously prepare for this change being implemented).
Now, how it affects your money!
It’s important to note that these changes apply only to Salary Sacrifice schemes, so before you start stressing, make sure that’s the scheme you’re on.
The main impact is simple: you will pay NI on anything you contribute above the first £2k – in your case, on £28k. The rate of NI depends on your overall salary, with most basic-rate taxpayers falling into the 8% bracket and most higher-rate taxpayers paying 2% (taken from your take-home pay).
However, there are two other consequences to be aware of, because your employer will also pay NI on it (at a higher rate of 15%):
- More NI from their side might mean a reduction in the benefits they offer, especially if they are currently generous.
- Overall pay packages might be diminished over time as employers look to pass this cost onto employees.
And a question back at you:
Does this technically mean Labour have broken their manifesto, since you’ll be paying more NI?
Q: Due to bad money management in my youth, my pension pot is smaller than it should be for my age. Will anything in this Budget actually help someone like me?
SammyW
A: Unfortunately, no. This budget wasn’t exactly one that handed out huge tax breaks or left us all with loads more money.
HOWEVER!
Regardless of what was announced, there’s no better time than now to use these changes as the perfect occasion to get your finances back on track. Don’t wait for the government to help you – do it yourself!
Pensions
- The (negative) changes to pensions don’t come into effect until 2029. Even then, pensions remain an incredibly powerful tool thanks to tax incentives. You still pay ZERO income tax on money contributed, so take advantage of this.
- Does your employer offer a match scheme? If so, not using it is literally leaving free money on the table.
Savings and investments
- Hopefully Rachel proves me wrong and these ISA changes get the country investing! The one positive I took from it is that more people are now aware of what an ISA is—genuinely a superpower for saving and investing.
- Take the time to figure out how to use all the various ISA accounts. A balanced approach should be on most people’s minds. There are tons of free resources online, on social media, or on YouTube!
Hope this helps! If I can ever be of more assistance, I answer weekly questions in the Independent’s Money newsletter and would be more than happy for you to send them there.
Q: I’m thinking about opening my first ISA. With the Budget changes, should I go for a cash one, a stocks and shares one, or a mix and how do I decide?
BenJ
A: Firstly, congratulations on opening your first ISA! These are brilliant products that not enough people in this country take advantage of, so please spread the word.
When it comes to choosing which ISA to put your money in, there are a few things to consider.
The factual rules:
- £20k allowance across all your ISAs (Cash, Stocks and Shares, Lifetime, Innovative Finance—the one no one really uses).
- The Lifetime ISA is currently capped at £4k per tax year (under review, apparently).
- The Cash ISA will be limited to £12k per tax year from April 2027.
How to make the choice: Ask yourself the following questions:
- When do you need the money? Long term (over 5 years) → Stocks and Shares ISAs start to make sense. Short term → Cash ISAs are your friend thanks to less volatility.
- How do you feel about risk? If the idea of your balance going down stresses you out → Cash ISA. If you can handle short-term ups and downs for long-term growth → Stocks & Shares ISA.
- Do you have an emergency fund already? If no → start here first.
These questions can help guide you towards the ISA that’s more suitable for your money. But the main thing to remember is: it’s likely not one or the other, but a balance between both types of accounts. How you split that balance is up to you –probably based on the questions above.
For tips on your emergency savings fund, see here.
Q: When do the changes to voluntary National Insurance contributions abroad start?
A: In this case, it’s 6 April – but great question, and always worth checking. Here’s a link with more information.
P.S. For everyone else (and everything else), please check the dates when changes will be applied and react accordingly. Don’t assume anything is changing immediately, as most things aren’t!
These questions and answers were part of an ‘Ask Me Anything’ hosted by Gabriel Nussbaum at 1pm GMT on Thursday 27 November. Some of the questions and answers have been edited for this article. You can read the full discussion in the comments section of the original article.