Financial commentators share possible scenarios for the upcoming Autumn Budget and how people are considering new options
Mounting speculation that UK Chancellor of the Exchequer Rachel Reeves could tighten the tax treatment of retirement savings in her November Budget is prompting British expatriates across Europe to consider moving pensions out of the UK, according to deVere Group investment director James Green.
No measures have yet been confirmed, but Reeves faces a £20 billion gap in the public finances and borrowing costs at their highest in over a decade, with ten-year gilt yields around 4.75%.
However, Sarah Coles, head of personal finance at Hargreaves Lansdown, sees an even bigger shortfall nearing £30 billion.
She suggests the cost of borrowing has kept rising. “The higher these yields are, the more expensive it is for the government to borrow, and the more money it needs to raise,” says Coles.
“Rachel Reeves has spent much of today fending off questions about tax rises. It’s not a matter of ‘if’ tax bills will rise after the Budget. That’s a given. The question is which taxes will rise and by how much,” says Coles.
Pensions could be tax-target
The pressure to raise revenue without headline income-tax hikes has fuelled debate that pensions may be in the frame.
“Expats are already weighing their options,” says Green.
Continuing, he says, “Even the possibility of new or extended taxes on pensions is enough to set serious savers in motion. British nationals living in Europe, those planning to retire there, or other nationalities, such as Irish and Dutch, with UK pensions, are now considering international solutions to protect their retirement income.”
Cross-border EU IORP structures
deVere Group, which has 80,000 expatriate clients, reports a marked increase in enquiries from UK citizens in Portugal, Spain, France and the Netherlands. Many are exploring cross-border EU IORP structures, particularly in Malta, ahead of the Budget.
“The conversation has shifted from curiosity to preparation,” Green explains. “People recognise that Malta’s EU-recognised framework provides flexibility, strong investor protection and potential tax efficiencies that could prove vital if the UK introduces tougher rules.”
Malta, for example, allows tax-efficient lump-sum withdrawals of up to 30% with no lifetime cap, phased income on a schedule set by the member, and inheritance treatment often outside UK death duties for non-residents. Portugal’s still-favourable tax regime, along with similar arrangements in Spain and France, strengthens the appeal for mobile retirees.
Frozen allowances to hit middle-class pensioners
Green emphasises that the concern extends beyond high-net-worth individuals.
“Frozen allowances and stealth tax rises have already drawn millions into higher brackets,” he says.
“Even a modest extension of those freezes would hit many middle-class pensioners. Anyone with UK retirement savings who lives abroad, or plans to, should be considering the implications now.”
Official data show UK public borrowing running well above forecasts as debt-service costs rise. “Interest payments are tens of billions higher than projected,” notes the deVere director.
“This fiscal reality keeps pressure on the Treasury to find revenue sources less politically explosive than broad income-tax hikes. Pensions are a perennially tempting option, which is why investors are acting even before any announcement.”
Coles says commitments to working people in the Labour Party conference speech indicate no appetite for breaking manifesto promises on income tax, National Insurance or VAT. However, she says, that leaves an awful lot open to question.
“On Monday, attention turned to the possibility that the freeze on income tax thresholds could be extended – which Reeves said she couldn’t rule out. However, over the past few weeks, everything has been in the frame from capital gains tax to stamp duty,” says Coles.
Where could more taxes come from?
Technically, she suggests, more tax revenues could come from more economic growth, boosting the tax take within the existing system. “The problem,” says Reeves, “is that this isn’t happening either. GDP growth in the first two quarters of 2025 was 0.7% and 0.3%. These figures are better than expected, but they’re not enough to close the gap.”
Changes to the Winter Fuel Payment and Universal Credit have both faced huge challenges politically. The government is therefore likely to turn to tax policy to help close the gap.
“Anything from capital gains tax to stamp duty and inheritance tax to another freeze on income tax have been up for debate,” says Coles.
She says, in every case, there are several possible “tweaks” that could generate more income for the government. “None of them would be welcome; some could have horrible unintended consequences, but it goes to show that the tax options are far from exhausted,” says Coles.
