The countdown to the Autumn Budget is on, with chancellor Rachel Reeves potentially targeting the wealthy when she delivers her statement on 26 November. Speculation is mounting that taxes will rise further in the Budget and that the chancellor may even have to drop her pledge of not raising taxes for working people - meaning income tax, VAT and National Insurance.
Alternatively, pensions could be in Rachel Reeves's sights, with limits to pension tax relief or tax-free cash apparently being discussed. But the likelihood is Labour will want those with the broadest shoulders to bear the greatest weight of any tax rises or allowance cuts - which will mean targeting the wealthiest.
Who the government considers wealthy could be far removed from how those groups see themselves, however.
Sarah Coles, head of personal finance, Hargreaves Lansdown, said: "Rumours that wealthy people are in the frame for tax hikes in the Budget may be lulling some people into a false sense of security. It's perfectly possible not to feel well off, but to hold the kinds of things that the government might tax as wealth.
"Similarly, you might be at the very start of building your wealth and still find yourself affected. The question people need to ask themselves is whether they could qualify under any definition of wealth - and if so, which tax hikes might lie in store."
If you were to quantify 'wealthy' by income, the top 20% of households have median net household income of £83,427 a year, according to the Hargreaves Lansdown (HL) Savings & Resilience Barometer from September.
They have £761 left over at the end of the month, and save 10% of their household income. The government may think these higher earners have room in their budgets to pay more tax.
The HL Barometer shows they have an average of £29,542 in cash - including over £6,000 in their current accounts. The household collectively has £340,582 in pensions, and an average of £30,709 in stocks and shares ISAs.
However, they tend to be younger than the asset-rich older groups and still building wealth. It means this group may be comfortable, but hitting them with higher wealth taxes won't be as fruitful as those who have already built wealth.
If you were to quantify who is wealthy as the households holding the most assets, those with the top 10% of assets hold £624,000 of property wealth, £626,000 of pension wealth, £218,000 of savings and investments and £123,000 of belongings, according to the latest data from the Office for National Statistics in 2022.
By age group, having lots of assets tends to peak in relatively early retirement - between 65 and 74, when households have an average of £502,500 in wealth. Their household wealth is 33 times higher than for households aged 16 to 24, according to the ONS data.
People's assets tend to start low, build slowly, then pick up the pace when they hit 55. They then spend gradually as they go through retirement.
It means the next wealthiest group is aged 55 to 64 and then the over 75s. If you're in this position, and have been carefully building assets to fund your retirement, the idea of losing it to tax at an age where you have fewer options to rebuild wealth could be particularly worrying, especially given rising social care costs.
If you were to focus on financial assets - including savings and investments but excluding pensions, this has the same problem - as it peaks at the same stage of life.
When it comes to who among the wealthy may be the focus of any Budget changes, it could be that older people with the largest holdings are the biggest potential target.
The balance will be avoiding hitting the wealth of the newly retired or near retirement too hard, or risk leaving them short and then reliant on the state for things like care home fees.
The alternative could be to take a bit more from everyone as they grow their wealth, which is what already happens.
According to Hargreaves Lansdown's data, households in the sixth decile for wealth (so just above average) have an average of £16,000 in financial wealth.
"Depending on how it is held, whether it's saved or invested, how much they earn and whether it's inside an ISA, they could already be paying tax on gains. Changes could put more of them at risk of a tax bill," said Coles.
Pensions
Rumours the government is mulling changes to the amount of tax-free cash people can take from their pension have been doing the rounds for weeks, with signs that people are already withdrawing the cash now.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: "Taking tax-free cash without a plan can put you at risk of a whole host of poor outcomes. You may, for instance, have considerably more in tax-free cash than you can reinvest into a tax efficient stocks and shares ISA, so you may have to invest it elsewhere and incur capital gains tax or dividend tax."
HMRC has also recently clarified its position around cancellation rights - basically it's unlikely you will be able to make an instruction to take tax-free cash in the run up to the Budget and then cancel it if the rule change isn't made, potentially leaving you with a big case of buyer's remorse.
Pension tax relief changes could end up with some kind of flat rate put in place. This could potentially be good news for basic rate taxpayers as if the flat rate were set at say 30%, up from their current 20%. However, it would be bad news for higher and additional rate taxpayers, who currently enjoy tax relief at 40% and 45% respectively.
The way to beat any potential cuts to higher rate pension tax relief would be to stuff your pension now with any spare cash you have, up to the annual allowance of £60,000 (or annual earnings, whichever is lowest).
Potential changes to capital gains tax, inheritance tax and dividend tax
Capital gains tax, inheritance tax and dividend tax could also be targeted in the upcoming Autumn Budget.
There has been speculation capital gains tax (CGT) could rise to match income tax rates, and while dividend tax has also been raised relatively recently (and allowances cut), further tightening of the rules could be in the chancellor's sights.
On inheritance tax, the government is also apparently considering limiting the total value of one-off gifts people can make during their lifetime under the 'potentially exempt transfer' rules. Changes to IHT taper relief, which applies if you give away more than your nil rate bands before you die, and where the rate of tax you pay gradually drops between three and seven years after the gift is given, could also be on the table.