Budget 2025: Small Signals – and a Significant Silence

The Budget 2025 did not deliver major reform for SEND families, but it did include a number of micro-tweaks that signal growing recognition of how financially different life can be for families raising disabled children and adults.

Below is a concise overview of the updates most relevant to SEND planning professionals.

⭐ Key Micro-Changes

  • Pathways to Work: Introduction of 1,000 specialist employment advisers for disabled adults. With around 95% of adults with learning disabilities not in paid work, this is a modest but welcome step toward tailored support.
  • Child Benefit modernisation for disabled 16–19-year-olds, removing the 12-hour education rule and recognising non-standard educational and therapeutic provision.
  • NEET support strengthened for young people not in education, employment or training — highly relevant to many disabled young adults who fall between systems.
  • Two-child limit ending from April 2026, a significant shift for larger SEND households who have been disproportionately affected.
  • UC childcare reimbursement increasing for families with three or more children, acknowledging the complex and costly childcare patterns often seen in SEND families.
  • Carer’s Allowance overpayment review, addressing issues caused by historic operational guidance errors.
  • PIP eligibility stable, although reassessment activity will increase, leading to additional administrative pressure for families.
  • Cash ISA changes:
    From April 2027, the Cash ISA allowance for under-65s will reduce to £12,000. For many families this is small; for SEND households it matters more.

SEND families are significantly more reliant on cash savings because:

  • Reducing tax-efficient space for accessible cash restricts the primary safe vehicle families use to manage instability and risk
  • Investment volatility is often unaffordable
  • Emergency costs are frequent and unpredictable
  • Caring roles can reduce income stability
  • Liquidity is essential for equipment, therapies and transportation

⭐ The Major Omission: Pensions and SEND Legacy Planning

The Budget made no reference to the outstanding proposal to bring certain defined contribution pensions into the taxable estate from 2027.

This omission is important — and it is essential to distinguish between the two different pension issues that matter to SEND families.

  1. Pensions During the Parents’ Lifetime

(Funding property and stability)

Many families use tax-free cash from pensions to:

  • purchase or part-fund a property for a disabled adult child
  • adapt an existing home
  • secure stable accommodation
  • bridge gaps in provision

This is a core strategy, entirely separate from inheritance tax.
Nothing in this Budget changes these lifetime uses directly — but future reforms could reduce flexibility or change behaviour.

  1. Pensions On Death

(Potential estate inclusion from 2027)

The 2027 proposal concerns death benefits — whether pensions will be counted within the taxable estate on death.

If implemented, the implications for SEND legacy planning are substantial:

  • higher inheritance tax exposure
  • reduced funds reaching a discretionary or disabled person’s trust
  • greater pressure on trustees
  • potential need to shift towards alternative investment routes to support future housing or care plans
  • reduced efficiency of pensions as a long-term planning tool

This remains the single most consequential policy risk facing SEND families preparing for lifelong financial support.

The proposal is not confirmed, but importantly, it has not been withdrawn.

⭐ Final Thought

The Budget offered small signs of recognition – adjustments that reflect an understanding of the unique pressures on SEND households; but the silence on pensions remains the largest unresolved issue for long-term SEND financial security.