Speculation in the run-up to the Autumn Budget prompted thousands of people to make changes to their finances, with many now regretting this action, according to new research from St. James’s Place.
Almost a quarter (23%) of adults took financial action in response to the pre-Budget rumour mill, with one in five (20%) of those who acted now regretting at least one of the actions they took.
Of those who took action, the most common response was to adjust investment portfolios, with almost half (48%) altering how their money was invested. These changes ranged from withdrawing money into cash or delaying new investments, to reallocating funds into perceived safe-haven assets such as gold or premium bonds or, in some cases, riskier options such as cryptocurrencies.
Savings and pensions were also affected. A further third (34%) of those who acted changed their savings habits, while a similar three in ten (30%) altered their pension arrangements in anticipation of potential reforms. Pension-related actions included amending contribution levels, shifting risk profiles, and, for some, taking their pension tax-free lump sum early.
Around one in five (21%) made adjustments to their ISAs, while 12% gifted money to children or grandchildren during the speculative period.
Once the Chancellor’s Budget plans were confirmed, many individuals reassessed their decisions. Regret was particularly common among those who had altered pensions, with nearly one in five (19%) wishing they had waited. Pension decisions can often have lasting consequences, particularly where tax-free lump sums or long-term investment strategies are concerned.
Changes to investments also prompted uncertainty. One in six (15%) of those who adjusted their portfolios ahead of the Budget regretted doing so, while one in ten (10%) who modified their ISA arrangements felt they had acted too soon. Altering saving habits also led to regret for 10% of those who made changes, while 7% of people who gifted money to family members said they later wished they had held off.
Claire Trott, head of advice at St. James’s Place, said: “Budget speculation can have real consequences for people’s finances, particularly when it surrounds pensions and long-term savings. In the lead up to the Autumn Budget, months of speculation created a sense of urgency for many people, prompting individuals to take action before any policies were confirmed – and our latest research shows that some now regret doing so. Pension changes, especially those connected to the tax-free lump sum, can be irreversible, and acting prematurely can be detrimental for those who had made plans over the longer term.
“That is why reducing unnecessary speculation around fiscal events is so important. When the public is confronted with repeated ‘what ifs’, people feel pressure to move their money in ways that may not align with their long-term interests. Greater clarity and stability around tax and pension policy would go a long way in helping individuals make informed choices."
