How large is the gender pay gap? The answer may surprise you. The latest Office for National Statistics (ONS) assessment puts the gap among full-time employees at 6.9% in April 2025. In 2005, the ONS figure was almost twice as high, at 13%.

However, another gender gap is much wider: the gender pension gap. A new report from the Pension Policy Institute (PPI) highlights the disparity—or perhaps “chasm” is a better word—in pension wealth between men and women in their late 50s, typically within a decade of retirement.

The graph above, based on men and women aged 57, shows a gap of 46%. From the male perspective, this means that, on average, a 57-year-old man has 85% more in his pension pot than a woman of the same age. The PPI links this substantial gap to several factors, with two standing out:

• Different working patterns: A smaller share of women than men are in employment (75% compared with 82%). Among those in work, women are more likely to work part-time (33% versus 10%), often because they are the family’s primary caregiver. For part-time work, the gender pay gap favours women: the ONS reports that female part-timers earn 2.9% more than their male counterparts. The drawback is that, despite the higher hourly pay rate, their total earnings are lower than those of full-time workers.
• Gender pay gap: Pension contributions are usually tied to pay, often calculated as a percentage of salary. Because women generally earn less than men, the same contribution rate generates a smaller cash contribution and, consequently, a smaller pension pot. For low earners, automatic enrolment rules can compound the problem: people earning up to £10,000 a year are excluded, while contributions for those enrolled are calculated without the first £6,240 of earnings. At an 8% contribution rate, that means about £500 a year in contributions are not made.

If you find yourself on the wrong side of the pension gender gap, consider increasing your personal pension contributions if possible. And take advice on your overall retirement planning. Read more about the gender pay gap here.

A widespread misunderstanding of the rules for lifetime gifts to individuals—known as potentially exempt transfers (PETs)—has left many families facing an unexpected inheritance tax (IHT) bill.

IHT thresholds have been frozen for 17 years and are set to remain frozen until at least 5 April 2031. It is therefore unsurprising that more people than ever are making PETs in an effort to reduce the IHT due when they die. However, the rules governing PETs can be complex.

Understanding the seven-year IHT rule

The IHT due on failed PETs has risen substantially in recent years. Many people understand that a PET becomes fully exempt only if the donor survives for seven years.

A common misconception, however, is that the IHT due on a PET falls on a sliding scale when the donor survives for between three and seven years.

This misunderstanding stems from the way taper relief operates: it applies only when some or all of the PET exceeds the donor’s £325,000 nil-rate band.

For example, an individual gives £250,000 as a PET and dies six-and-a-half years later. The misconception is that taper relief reduces the gift’s taxable value by 80%. In reality, the £250,000 gift is fully covered by the donor’s nil-rate band, leaving just £75,000 of that band to offset against the estate. As a result, the gift will have saved very little IHT.

IHT is still paid on fewer than one in 20 estates, but receipts have risen. The latest statistics show that the number of deaths resulting in an IHT charge increased by 3.6% from 2022/23 to 2023/24. There is a growing perception that IHT has shifted from being a tax on the wealthy to a burden affecting a wider range of estates. Wealthy individuals who can afford to give away millions are much more likely to benefit fully from taper relief.

Taking advantage of available allowances and ensuring gifting is used correctly is therefore becoming increasingly important.

HMRC’s basic guide to how IHT works, including taper relief, can be found here.

Almost three million Child Trust Funds (CTFs) have been claimed or transferred to an individual savings account (ISA). However, around 827,000 matured CTFs are still unclaimed, each worth an average of £2,310.

CTFs were established for every child born between 1 September 2002 and 2 January 2011, with each account receiving an initial cash voucher:

• HMRC opened a CTF on behalf of any child whose parents did not do so themselves. As a result, many account holders may not know that they have a CTF.
• The government provided an additional contribution for children who turned seven by 31 July 2010.

CTFs are held with banks, building societies and other savings providers. The number of providers has fallen as some have merged and others have left the market. Consequently, many CTFs are now held with a different provider from the one that opened the account.

Taking control

People aged 16 or over can take control of their CTF. It may be worth transferring the funds to a junior ISA to access a better interest rate. When the account matures at age 18, the funds can be withdrawn or reinvested in an adult ISA.

Tracing lost accounts

If you know the provider, contact it directly. You can transfer the funds to an ISA with another provider, though it may be worthwhile comparing options first. If you do not know the provider, HMRC offers an online tracing service for parents and guardians, as well as for people aged 16 or over who manage their own CTF.

You will need the child’s National Insurance number and date of birth. Completing a request takes about five minutes. HMRC usually provides the CTF provider’s details within three weeks, but it will not disclose the account balance.

The oldest matured CTFs are now more than six years old, and some young people may have no idea that savings are available to them.

The starting point for HMRC’s CTF tracing service can be found here.

The state pension triple lock is expected to be revised under new proposals.

Introduced by the coalition government in 2010, the triple lock was designed to increase the basic state pension’s value relative to average earnings. It currently means that the old and new state pensions—but not other state pension components—rise each April by whichever is highest:

• Annual CPI inflation in the year to the previous September;
• Annual average earnings growth, including bonuses, over the previous May to July period;
• or 2.5%.

At the time of writing, the April 2027 increase is almost certain to be based on earnings growth of 3.9%. Annual inflation in August 2026 was 3.1%.

What could change?

In a late-September speech at the Labour Party conference, Andy Burnham proposed “adjusting” the triple lock from 2030 onwards—after the next election. Under his proposal, increases would be set at the highest of:

• CPI inflation;
• 2.5%; and
• The amount needed to ensure that the state pension keeps pace with average earnings growth from 2030.

The difference from the current arrangement may seem like splitting hairs, but it could have a lasting impact. The existing best-of-three formula has a ratchet effect, meaning that over time the state pension grows faster than earnings. Burnham’s adjusted triple lock would not have the same effect.

The Resolution Foundation estimates that if the proposed system had been in place since 2012, the State Pension would have been:

• 4.5% higher than under increases linked to earnings, but
• 5.9% lower than under the current triple lock.

Any impact would likely emerge gradually. From 2030, while annual earnings growth remains above both inflation and 2.5%, the proposal would make no practical difference to increases compared with the current triple lock. Over the longer term, however, it could deliver substantial savings in pension expenditure.

The government estimates that by the end of the 2030s, savings could amount to £15 billion a year, rising to £50 billion a year by 2050.

Those savings are earmarked for funding adult social care, but they also mean a less generous state pension than the current triple lock would provide. A reminder that personal pension planning is a key component of future financial well-being.

Read more about the prime minister’s plans for a new national care service here.

From 1 January 2027, the qualifying period for protection against unfair dismissal will be cut from two years to six months. At the same time, the cap on compensatory awards for unfair dismissal will be removed.

Currently, the dismissal of an employee might be considered unfair if the employee has been employed for at least two years and there is no fair reason for the dismissal, or the reason is not sufficient to justify dismissing the employee.

A fair reason for dismissal includes:

Gross misconduct: For example, if an employee has defrauded the business, physically assaulted another employee, or refused to accept reasonable orders from a supervisor.

Capability: When the employee is unable to do the work that they were employed for, or they do not have the right qualifications. Capability also covers long-term illness, but employers need to be very careful here, with dismissal only as a last resort.

A legal reason: For example, a lorry driver who has been banned from driving.

The changes

From 1 January 2027, employers will only be protected from claims for unfair dismissal for the first six months of employment. However, as is currently the case, employees will still have day-one protection against automatically unfair dismissal (for example, dismissal for making a flexible working request or being pregnant) and wrongful dismissal (for example, the employer does not give the correct notice period).

The changes will apply across England, Scotland and Wales, but not Northern Ireland where unfair dismissal legislation is devolved.

Compensatory awards

Unfair dismissal compensation is made up of two parts:

• The basic award is not going to change; this is based on an employee’s age, length of service and weekly pay.

• A compensatory award which reflects the employee’s actual financial loss. This is currently capped at the lower of 52 weeks’ gross pay or £123,543. Although the majority of awards are not affected by these limits, the ceiling will be removed from 1 January 2027.

In future, employers will need to be particularly careful if dismissing a highly paid employee.

Acas guidance on dismissals can be found here.

The population of directors and employees utilizing company vehicles decreased by 240,000 during the 2015/16 to 2020/21 period; however, this trend has reversed annually since then, primarily attributable to the favourable tax incentives associated with electric and hybrid vehicles.

According to HMRC’s most recent data for the 2024/25 tax year, the current figure stands at 920,000 directors and employees with company vehicles.

Lower Emission Vehicles

The most significant transformation concerns fully electric company vehicles. Prior to 2020/21, such vehicles represented a niche offering, yet adoption has accelerated substantially, now representing marginally over half of all company vehicles by 2024/25. When combined with low emission hybrid options (CO2 emissions ranging from 1 to 50 grams per kilometre), these vehicles comprise approximately three-quarters of the total. Specifically:

A low emission company vehicle carries substantially reduced tax implications relative to conventional petrol or diesel alternatives. In the current tax year, a fully electric company vehicle qualifies for a 4% benefit-in-kind rate.
This translates to an approximate annual tax liability of £990 for a higher rate taxpaying director operating a company-supplied Tesla Y Performance Auto—a vehicle with a market value exceeding £60,000.
Employers providing charging infrastructure for directors and employees to charge electric company vehicles at workplace or residential locations incur no taxable benefit, further enhancing the tax advantages.

The tax framework proves less favorable for low emission hybrids, with benefit-in-kind rates typically ranging between 10% and 16%. For a Toyota Prius plug-in hybrid priced around £38,000, a higher rate taxpaying employee faces an approximate annual tax obligation of just over £1,500; a comparatively modest amount.

Future changes

By 2029/30, the current benefit-in-kind rate of 4% will increase to a much less favourable 9%, putting up the annual tax cost of the Tesla to just over £3,300. Future increases will push up the tax cost of the Toyota Prius hybrid to around £2,870.

The tax cost of having a company car can be calculated using HMRC’s company car and car fuel benefit calculator.

The HMRC will commence the enrolment process for sole traders and landlords who were required to register for Making Tax Digital (MTD) in April 2026 but have not yet completed registration. In preparation for this, HMRC has made available an MTD exemption window for eligible taxpayers who would otherwise be mandated to join beginning next April.

Except for those who qualify for an MTD exemption, sole traders and landlords earning qualifying income exceeding £50,000 should have already filed their initial quarterly return for the 2026/27 tax year. Nevertheless, of the 864,000 taxpayers obligated to register for MTD, only 570,000 have completed registration, and merely 436,000 have successfully submitted their filings to date:

• HMRC has decided to start signing up the remaining taxpayers it believes are within the scope of MTD for 2026/27, rather than wait for those taxpayers to sign up themselves.
• Although no penalty points will be charged for late quarterly updates in 2026/27, HMRC is obviously keen for taxpayers to be aware that MTD is not optional.

Taxpayers signed into MTD by HMRC will receive a letter or digital message depending on contact preferences. They will be advised about the next steps, such as obtaining and using MTD-compatible software.

Exemption window

Self-employed individuals and property owners earning between £30,000 and £50,000 in the 2025/26 tax year will be required to participate in Making Tax Digital beginning 6 April 2027, provided they do not meet the criteria for digital exclusion. HMRC has recently made exemption applications available to eligible taxpayers. Qualification for an exemption may be granted if any of the following circumstances apply:

• Internet access: This means no internet access at home or business because of the location, and where access is not available at a suitable alternative location.

• Age, health or disability: Taxpayers will need to show that their age, health condition or disability stops them from using a computer, tablet or smartphone to keep digital records or submit them to HMRC.

• Religious reasons: This will apply to practising members of a religious society or order whose beliefs mean they do not use a computer, tablet or smartphone for business or personal use.

The fact that additional costs will be incurred, or that extra time will be required for MTD, is not a valid reason for HMRC to grant an MTD exemption.

HMRC guidance on applying for an exemption from MTD can be found here.

This July’s tax revenue increased by 17% compared to two years prior. The outlook is expected to deteriorate, with approximately 1.7 million additional savers now projected to incur tax on their savings during the current year, exceeding initial estimates.

Recent administrations have sought to circumvent public opposition to higher tax rates by employing a more subtle strategy: maintaining allowances and thresholds at their current levels.

This form of fiscal drag has progressively moved more taxpayers into elevated tax brackets, while simultaneously bringing previously untaxed individuals into the taxation system. Regarding capital gains tax (CGT), the government has taken more aggressive action, raising tax rates and substantially reducing the tax-free allowance. Consequently, CGT revenues have experienced considerable growth over the preceding twelve months.

Strategic CGT planning has become increasingly critical, and – where feasible – it may be prudent to consider retaining assets in anticipation that future government policy on investment taxation may become more favorable.

More savers forecast to pay tax

HMRC’s initial projection anticipated that 2.7 million savers would incur tax obligations on their savings income during 2026/27; however, current estimates indicate this figure has risen to approximately 4.5 million individuals facing tax liability:

• Beyond the effects of fiscal drag, savings rates have remained elevated. As of August 2026, NS&I continues to offer 4.82% on its one-year bonds, with marginally superior rates obtainable through alternative providers.
• The consequences of fiscal drag prove particularly severe for savings income. Wage growth and increased self-employed income will result in numerous savers transitioning from basic rate to higher rate taxation. Furthermore, their personal savings allowance has been diminished from £1,000 to £500.

Along with the 45% tax rate, anyone pushed into additional rate tax will have lost any entitlement to the savings allowance.

With rates of tax on savings income to increase by two percentage points across the board from 6 April 2027, the outlook for savers is somewhat bleak. Details of income tax rates and personal allowances for the current tax year can be found here.

The Autumn Budget date has now been set for 28 October, with the new Chancellor facing some familiar challenges.

Following a two-week period marked by numerous announcements from Prime Minister Andy Burnham and his restructured cabinet, a potentially pivotal statement emerged late Friday afternoon: the announcement of the Autumn Budget date. Chancellor John Healey released a video message disclosing that the Budget would take place on Wednesday, 28 October. This represents approximately four weeks earlier than the 2025 Budget timeline, yet provides sufficient opportunity for public discourse and analysis to develop.

So, what can we expect in late October from the second former defence minister named Healey to occupy 11 Downing Street? Among a long list to watch for are:

• Income tax: At the end of his first week, Burnham told The Times that the “frustration about the personal allowance” he experienced during his Makerfield by-election campaign had “lodged in my mind”. Shortly afterwards, he was more cautious: “There is no commitment at this point to change, but we will look at that at the Budget”. Any move away from the freeze that lasts until April 2031 would be costly.

• The VAT cut to electricity bills: This was Burnham’s first “breathing space” announcement, which the government said was “expected to take around £45 off the yearly Ofgem price cap in October”.However, it subsequently emerged the cut is only for six months, so it will be interesting to see whether Mr Healey makes any mention of its extension beyond March 2027.

• State pensions and tax: In her last Budget, Rachel Reeves said that “we are ensuring that people only in receipt of the basic or new State Pension do not have to pay small amounts of tax through Simple Assessment from April 2027”.No more detail has emerged since; in the meantime, many tax experts have highlighted a variety of complex issues raised by the seemingly simple goal.

• The fiscal rules: When announcing the date of his Budget, John Healey was careful to say that “It will meet our fiscal rules’’. At present, this could mean tax rises as the latest estimates suggest more than half of the all-important fiscal headroom has disappeared since March, due to the fallout from the Iran war.

As ever, if you wish to undertake any pre-Budget planning, do not delay.

The full Budget announcement can be found here. For any further information contact GBAC.