Over seven in 10 advised clients fear Budget will leave them worse off

Over seven in 10 (71 per cent) clients of a North East financial planning firm expect the upcoming Budget to leave them financially worse off.

Active Chartered Financial Planners’ latest survey of 4,000 clients found that the majority anticipate being in a worse financial position following the Budget, with just 2 per cent believing they will be better off.

More than half (56 per cent) said they were less optimistic about the Budget, while 30 per cent have become less positive about their own financial outlook.

When asked by the financial planning firm which taxes they believed were most likely to affect them, 31 per cent identified capital gains tax, while others cited inheritance tax (29 per cent) and income tax (22 per cent).

The survey also found considerably greater support for reducing government spending or taxation than for further tax increases.

Almost half (46 per cent) said cutting government spending was the best way to stimulate growth, while 37 per cent favoured lower taxes and 9 per cent supported higher taxes.

Active Chartered Financial Planners has written to the Chancellor, John Healey, ahead of the Budget, calling for action on frozen personal tax thresholds, inheritance tax and pensions, the cost of employing people and government spending.

In his letter to the Chancellor, managing director, Karl Pemberton, said one of the clearest concerns was the imminent inclusion of pension funds within estates for inheritance tax purposes.

He argued that repeated changes to pension and estate planning rules were creating uncertainty for people making long-term decisions about retirement, and that planned changes were "unworkable and unfair".

Pemberton has also called on the government to reconsider the continued freeze on personal tax thresholds, which is drawing more people into higher levels of taxation as their incomes rise.

He concluded: "There’s clearly a high degree of nervousness ahead of this Budget. Seven in 10 of the people we surveyed expect to be worse off afterwards and only a very small proportion believe their position will improve.

"What comes through strongly is that people don’t simply want another round of tax increases. They’re concerned about fiscal drag, inheritance tax and the changing treatment of pensions, while businesses are continuing to deal with the cost of employing people and other rising overheads.

"People need a degree of certainty if they’re going to make sensible long-term decisions about saving, investing, pensions and their businesses."

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