Retail investor anxiety surrounding taxes has hit a record high, as Brits work to absorb the impact of Autumn Budget policy changes.
Nearly 50 per cent of UK investors said they were concerned about the impact of taxes and government policies on the performance of their portfolios for the coming year in December, up from 33 per cent in June.
The findings follow the unveiling of several tax changes in the Autumn Budget, with many of Chancellor Rachel Reeves’ decisions impacting investors.
This includes the extended income tax threshold freeze until 2031, which is set to push more workers into higher tax brackets and subject a greater amount of their investment returns to tax.
The move is also likely to reduce the amount of discretionary income Brits have to put towards investing which could potentially weaken some portfolio’s performances.
Dividend tax hikes were also introduced, with a two percentage point increase to be inflicted on both basic and higher rate tax payers from April 2026.
Chris Beauchamp, chief market analyst UK at IG, said: “In recent years, across different governments, we’ve seen dividend tax hikes, reductions in capital gains allowances, and frozen income tax thresholds. Investors are naturally worried that this trend is going to continue.”
Stable investing conditions
While the Budget introduced measures to encourage investing, including a three year stamp duty holiday for newly listed companies and a slash to the cash ISA allowance to £12,000, Beauchamp argued the government must do more to increase investor confidence.
Beauchamp said: “it’s encouraging to see steps being taken by the current government to boost retail investing in the UK, to grow participation in a meaningful way and give existing investors more confidence, these efforts must be backed by supportive policy.
“We need stable conditions to spark a stronger investing culture.”
Geopolitical conflict fears
Despite tax fears hitting new heights, it ranked as the third top concern, as fears over ongoing geopolitical conflicts concerned 51 per cent of investors, closely followed by political uncertainty.
But worries over geopolitical conditions fell sharply since June, tumbling from 61 per cent.
Broader economic worries are also rising, with investors also expressing anxiety over the state of the UK economy and government debt, after government borrowing reached £132.3bn in November after the first eight months of the financial year.