Chancellor Rachel Reeves’ upcoming 2025 Budget (November 26th) is one of the most anticipated in years. With growth sluggish, inflation still running nearly double the Bank of England’s 2% target, and tax pressures rising, investors are asking one question: how can they protect their money?
Tax Tensions Rising
Before last year’s election, Labour promised not to raise major taxes like Income Tax or National Insurance. Yet speculation is mounting that Reeves may not hold that line. A controversial “exit tax” on wealthy individuals leaving the UK has even been floated.
Her 2024 Budget already lifted Capital Gains Tax (CGT) rates from 10% to 18% for basic-rate taxpayers and 20% to 24% for higher earners, and many expect further hikes or a cut in the CGT allowance, now just £3,000 (down from £12,300 in 2022/23).
But one asset class stands out: UK legal tender gold and silver coins such as Sovereigns and Britannias remain exempt from CGT no matter how much they appreciate. Gold bullion is also VAT-free, making it one of the most tax-efficient investments available.
According to Solomon Global’s July 2025 research, 41.9% of new investors cited gold’s tax advantages as their main motivation – a clear sign that many are seeking shelter from potential policy shocks and inflation.
Interest Rates & Inflation: A Golden Mix
The Bank of England will announce its next rate decision on December 18th, with many expecting a cut from 4% to 3.75%. Lower rates tend to weaken returns on cash savings and make non-yielding assets like gold more appealing. Combined with sticky inflation, it’s a recipe that could drive even more investors toward precious metals.
Cash ISAs Under Pressure
Rumours suggest Reeves may also cut the annual Cash ISA limit from £20,000 to £10,000, in an attempt to push savers toward stock market investments. For many, however, ISAs are about security, not speculation. If limits fall, investors may turn instead to assets outside government reach – such as gold coins, whose favourable tax status has stayed consistent through years of fiscal tinkering.
A Climate of Uncertainty
Confidence in traditional savings and investments is waning. The latest data shows UK unemployment at 5%, adding to economic unease. With high public debt, weak growth, and stubbornly high inflation, Reeves’ Budget is unlikely to deliver much cheer.
As AJ Bell’s Danni Hewson recently put it, “That tax on jobs has undoubtedly forced some businesses to pare back their workforce.” Against this backdrop, gold’s appeal is clear: a hedge against inflation, a stabiliser in volatile markets, and one of the few assets offering genuine tax efficiency and independence from government policy.
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Buying physical gold as an investment involves risk, as the value of precious metal prices can be volatile. Historical financial performance does not necessarily give a guide of future financial performance. We recommend that you conduct your own independent research and seek professional tax, legal and financial advice before making any investment decisions.
