26 November 2025
If you are covering the increased rates for property, dividend and savings tax, please see the following comment from Shaun Moore, tax and financial planning expert at Quilter:
"Increasing property, savings and dividend tax rates is a step in the wrong direction, although not unsurprising given the current fiscal trajectory. Many more people will now pay higher rates of tax, adding yet another hurdle to long-term saving and making it harder for investors to build diversified portfolios. Small business owners and landlords operating through companies will also see clear rises in their tax bills.
"What is particularly striking is that savings tax applies at your marginal rate, meaning these increases will hit hardest for those already paying higher or additional rates of income tax. This creates a disincentive for prudent savers and undermines the principle of rewarding financial resilience. Meanwhile, the personal savings allowance has remained static, meaning more savers will be caught by these higher rates. Especially as more and more people become higher rate taxpayers and therefore only get a £500 allowance rather than the £1,000 that basic rate taxpayers get.
"Freedom of Information data obtained by Quilter shows the scale of this shift: the number of dividend taxpayers has surged from 1.9 million in 2022/23 to nearly 3.7 million in 2024/25. Many of these individuals will now be dragged into self-assessment for the first time, adding complexity and stress to the process of investing and paying more tax. Combined with the slashing of the dividend allowance to just £500 previously, these higher rates make dividend taxation increasingly punitive for investors and small business owners.
"While this may raise revenue in the short term, it erodes confidence and consistency, the very qualities needed to help people invest for their future. Policy should be focused on encouraging saving and investment, not making it harder. The reduction of the cash ISA limit to £12,000 further compounds the challenge, limiting the ability to shelter savings from tax. That said, ISAs remain one of the most attractive options for tax efficiency, so for anyone concerned about these increases it is crucial to make full use of allowances and consider strategies to mitigate exposure."
