Discover how the UK autumn Budget 2025 could affect buying property or retiring overseas – from tax changes to exchange rates and pension reforms.
When the Chancellor, Rachel Reeves, delivers the autumn Budget on 26 November 2025, her decisions will shape not only the UK economy, but also the finances of thousands of people dreaming of a life in the sun.
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If you’re buying property abroad, planning a retirement overseas, or already living part-time outside the UK, this Budget could affect your plans in ways that aren’t immediately obvious – from how far your money goes to when you should move it. Let’s unpack what this year’s autumn Budget might mean for you.
1. Income tax changes
While the signposted rise in personal income tax or National Insurance appears to have been shelved, the government is expected to extend the freeze on income tax thresholds. This is a so-called “stealth tax” as it quietly increases what you pay as your income rise. There are also suggestions that thresholds could be lowered from the current £12,570 taxable allowance. With the UK state pension about to hit £12,534 (for those with full contributions) from April 2026, more retirees are expected to be caught by income tax.
2. Pension reforms
There’s speculation that the Chancellor could adjust pension allowances or limit the 25% tax-free lump sum. For many moving abroad, that lump sum forms the cornerstone of their property purchase or relocation fund. The chancellor is also looking at those items you can deduct from your taxable income via ‘salary sacrifice’. These include the Cycle to Work scheme and some electric car discounts. More importantly for those saving for a retirement overseas, there could also be a limit on how much you can benefit from into paying your pension at £2,000 per year.
3. Inheritance and wealth tax discussions
The government has hinted at possible changes to wealth, inheritance and capital-gains taxes to boost Treasury revenues. These could include a ‘mansion tax’ on high-value homes. This matters because if you own (or plan to own) property overseas, your estate may still be liable for UK Inheritance Tax depending on your domicile. Another potential shock could be a new “exit” or “emigration” tax. This would targeting those wealthy individuals reported to be bailing out for lower-tax (and often sunnier) locations.
4. The pound under pressure
The Budget will also affect confidence in the UK economy – and therefore the strength of sterling. If borrowing costs rise or markets react negatively, the pound could weaken. You don’t need to remember far back for an example. The infamous mini-Budget of 2022 upset the bond markets and the pound fell to its lowest level every against the US dollar. A weaker pound makes your dream home in Spain, France or Portugal more expensive overnight. For example, if sterling falls from €1.17 to €1.12, a €300,000 property would cost you over £11,000 more.
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What overseas buyers and movers should do now
The autumn Budget may not directly target expats or overseas buyers, but its ripple effects can be significant. Whether you’re buying your dream villa in Spain, planning a retirement in Portugal, or relocating to Italy or France, keeping an eye on tax and exchange-rate changes could make a huge difference to your future wealth. Here’s how to stay ahead:
- Check your tax position: Understand how UK tax changes could affect your disposable income or pension withdrawals.
- Review your timeline: If you’re close to purchase, consider securing your currency now.
- Stay informed on sterling: Even a small movement can shift your property costs by thousands.
- Plan your transfers: Use a Smart Currency account to move funds efficiently when opportunities arise.
- Get advice early: If you’re unsure about pensions, tax or timing, speak to both a financial adviser and your Smart Currency specialist.
Talk to Smart Currency Exchange today to discuss how the autumn Budget might affect your plans — and how to protect your money from currency market swings.
