One in three parents spurred into action by Budget worries – Hargreaves Lansdown

Parents are alarmed by potential threats within the upcoming Budget, and around one in three have made changes as a result, according to Sarah Coles, head of personal finance at Hargreaves Lansdown.

Coles said: “Much of this is due to how the Budget threatens families in particular – and some is because of the things that matter to us at the time in life when we’re likely to have children living at home.

According to Coles, the top three tax concerns for parents – higher Income Tax, National Insurance, and VAT – have already been ruled out due to election manifesto pledges.

However, Hargreaves Lansdown pointed out growing fears that parents will still face higher income taxes indirectly, with speculation that Rachel Reeves might extend the current Income Tax freeze.

Council Tax was another major concern for parents.

While some changes, such as removing the single-person discount and altering council tax bands, have been ruled out, rates tend to increase annually, and families could see a rise of up to 5% or more in the near future.

Coles said: “They’re using their ISAs – with around one in three paying into a cash ISA and a similar number paying into a stocks and shares ISA.

“This protects savings interest from income tax and investments from capital gains tax and dividend tax.

“They’re paying more into pensions too.

“This capitalises on tax relief while they know where they stand, makes the most of existing allowances, and protects against tax on growth too.”

She added: “More than one in four parents are also taking the opportunity to give money away to family.

“This not only helps bring down the size of the estate if they’re worried about tax.

“It also enables them to give away money while they’re still around to see their family make the most of it.”