Blog Archives - E S Walton

Investment market update: August 2025

While global government policy – particularly US trade tariffs – continued to influence the value of investments in August 2025, many markets experienced less volatility compared to the start of the year. Read on to discover what factors may have affected the performance of your investments in August 2025.

Hopes of a peace deal between Russia and Ukraine boost markets

On 31 July, Donald Trump, the US president, signed an executive order imposing reciprocal tariffs of up to 41% on certain trading partners. The effect of this influenced market movements at the start of August.

On 1 August, Asian stock market indices, which track the performance of a selected group of stocks, fell. South Korea’s KOSPI was down 3%, while Japan’s Nikkei decreased by 0.4%.

The uncertainty also affected European and US markets. Even though the UK has a trade deal with the US, the FTSE 100 was down 0.5%, while the Dow Jones (-1.1%) and S&P 500 (-1.2%) both fell when Wall Street opened in the US.

There was good news for investors in the UK market on 6 August. The FTSE 100 reached a new closing high after it increased by 0.24%. Among the biggest risers were insurer Hiscox (9.4%), precious metal producer Fresnillo (8.8%), and drinks company Diageo (4.2%).

Ahead of US-Russia talks about the war in Ukraine, European stocks cautiously increased on 11 August. The FTSE 100 was up 0.3%, Germany’s DAX and France’s CAC both edged up almost 0.2%, and Italy’s FTSE MIB increased by 0.45%.

The MSCI’s broad All Country World Index, which tracks stocks from 23 developed and 24 emerging markets, hit an all-time high on 13 August. One of the driving factors was the hope that the US will cut its base interest rate in September.

Further speculation that Russia and Ukraine would strike a peace deal fuelled European stock markets on 19 August. Europe’s Stoxx 600 index increased by 0.6%.

In the first half of 2025, European defence companies saw stocks increase due to rising tensions. With investors hoping for de-escalation, defence stocks, including BAE Systems (-3.6%), Rheinmetall (-4.2%), and Thales (-3.5%), fell.

Despite official data showing inflation was higher than expected in the UK, the FTSE 100 hit another record high on 20 August following a jump of 0.67%.

UK

Inflation in the UK continued to rise in the 12 months to July 2025. Official data shows it was 3.8% and the highest annual reading since early 2024.

Despite persistent high inflation, the Bank of England opted to cut the base interest rate by a quarter of a percentage point to 4%. However, the central bank noted that inflation could slow the pace of further cuts.

Overall business activity is improving, according to a Purchasing Managers’ Index (PMI), which provides insight into economic conditions.

S&P Global’s August PMI recorded the strongest rise in UK business activity in the year to date, with a reading of 53 (a figure above 50 indicates growth) compared to 51.5 in July.

However, PMI data wasn’t as positive for the construction sector. In July, the reading was 44.3, suggesting contraction at the fastest pace in five years. Builders reported a decline in housing projects, which could suggest the government is struggling to hit housebuilding targets.

A report from the British Chambers of Commerce demonstrates the effects of trade tariffs. Goods exported to the US slumped by 13.5% in the second quarter of 2025. The figure is the lowest level in three years, when the Covid-19 pandemic severely disrupted trade.

There was some good news for investors from British fossil fuel giant BP.

BP revealed the largest oil and gas discovery in 25 years off the coast of Brazil. The news was followed by a statement from the company, which said, subject to board approval, it would raise quarterly dividends by at least 4%.

Europe

Eurozone inflation remained stable at 2%, though it varied significantly across the bloc from Cyprus at 0.1% to Romania at 6.6%.

PMI figures from Hamburg Commercial Bank paint an optimistic picture for the EU economy.

As the largest economies in the EU, the performance of companies in Germany and France is important, and both strengthened in August. Germany’s PMI improved for the third consecutive month with a reading of 50.9. While France is just below the 50 mark, which indicates growth, with a reading of 49.8, it’s the highest figure so far in 2025.

Across the eurozone, PMI data shows the manufacturing sector increased production at the fastest pace in more than three years. The reading suggests businesses may be feeling more optimistic as uncertainty around trade tariffs settles.

US

Economists predicted that US inflation would increase, but it remained stable at 2.7% in the 12 months to July.

Weakening demand for US exports due to tariffs has been linked to manufacturing slowing and the trade deficit narrowing.

A PMI conducted by the Institute of Supply Management shows new orders fell in July. Some companies blamed the disruption and confusion caused by changing trade policy.

In addition, the US trade deficit narrowed as companies rushed to import goods into the US before tariffs were applied. The gap between exports and imports was $60.2 billion (£44.5 billion) in June 2025 after a decline of $11.5 billion (£8.5 billion) when compared to May 2025.

There was some good news in the form of PMI data. According to S&P Global, US business activity hit an eight-month high.

US company OpenAI, the group behind ChatGPT, is in talks about a share sale that would value the company at $500 billion (£370 billion). The company isn’t listed on the stock market, and the talks are focusing on a potential sale for current and former employees, who could potentially make large returns by selling the shares on the secondary market.

Asia

China’s exports increased by 7.2% year-on-year in July 2025. The figure was higher than expected and is due to manufacturers taking advantage of a trade war truce between China and the US.

However, while exports increased in July, the ongoing trade war is harming China’s economy. Chinese industrial output increased by 5.7% in July, the slowest rate since November 2024 and below the 6% expected.

The largest automaker in the world, Japanese company Toyota, warned it would take a $9.5 billion (£7 billion) hit from Trump’s tariffs. As a result, it has cut its operating profits for the current financial year from £19.2 billion to £16 billion.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

How pension and Inheritance Tax policy changes could affect your legacy

From April 2027, pensions are expected to fall within your estate and could be liable for Inheritance Tax (IHT). That date might seem far away, but the policy change has the potential to significantly affect your estate plan, so thinking about it now could be useful.

While the policy change is still in the initial stage, the government has signalled that it intends to move forward with the plans.

Under current rules, your pension usually falls outside of your estate when calculating a potential IHT bill. As a result, pensions are often used in tax-efficient strategies to pass on wealth to loved ones.

The inclusion of pensions may mean some estates might need to consider IHT for the first time, or that estate plans need to be updated.

In 2025/26, the nil-rate band is £325,000. If the total value of all your assets, including your pension from April 2027, exceeds this threshold, your estate may be liable for IHT.

The good news is that there are often steps you can take to reduce an IHT bill, which an estate plan could help you identify.

Most pensions are set to be liable for Inheritance Tax, but there are some exceptions

The current proposals suggest most pensions are set to fall within the IHT net from April 2027, including defined contribution pensions, defined benefit pots, workplace pensions, personal pensions, and self-invested personal pensions.

However, there are some exceptions, including pensions that provide an income during your retirement years and certain types of annuities.

In addition, if your pension has a death in service benefit, which may provide your spouse, civil partner, or dependent children with a lump sum or regular income if you pass away, this is expected to be outside of your estate for IHT purposes.

Under current rules, beneficiaries don’t usually pay IHT on inherited pensions, but they may pay Income Tax in some circumstances. Assuming this doesn’t change, it could mean inherited pensions are subject to double taxation as they’ll be liable for both IHT and Income Tax.

The changes could significantly reduce how much you leave behind for loved ones, and could mean that passing on wealth through a pension no longer makes sense from a tax perspective.

3 ways you could pass on wealth and reduce Inheritance Tax

If you’d previously planned to use other assets to fund your retirement so you could pass on your pension tax-efficiently, your wider financial plan may need to change as a result of the incoming policy.

For example, you might choose to deplete your pension during your lifetime and pass on different assets to loved ones now or in the future. Here are three alternative options you might want to consider.

1. Gift assets to loved ones during your lifetime

One option is to pass on assets now. This could provide support for your loved ones when they need it most, such as when they’re buying their first home or are paying a child’s school fees.

However, there are two key things to be aware of before you start gifting assets.

First, review your financial plan to ensure you’ll still be financially secure in the long term after gifting assets.

Second, not all gifts are immediately outside of your estate for IHT purposes. Some may be considered part of your estate for up to seven years after they were gifted; these are known as “potentially exempt transfers”.

Gifts that are immediately considered outside of your estate include:

Up to £3,000 each tax year
Small gifts of up to £250 per person each tax year, so long as you have not used another allowance on the same person
A wedding gift of up to £1,000, rising to £2,500 for grandchildren or great-grandchildren and £5,000 for children
Regular payments to another person that are from your regular monthly income. For example, you may pay into a savings account for a child or cover the rent of an elderly relative.

So, you might want to make gifting part of your financial plan to make the most of gifts that are immediately exempt from IHT.

2. Place assets in a trust

A trust is a legal arrangement where assets are held on behalf of beneficiaries. For IHT purposes, you may use a trust to remove some assets from your estate. In some cases, you might still retain control or benefit from the assets.

There are several different types of trust, and it’s important to ensure yours is set up correctly, as it may not be possible to retrieve assets once they have been placed in a trust. Seeking professional legal and financial advice could help you assess if a trust is the right option for you before you proceed.

3. Take out life insurance to cover an Inheritance Tax bill

A life insurance policy won’t reduce the amount of IHT your estate is liable for, but it can provide your loved ones with a way to pay the bill.

You’ll need to pay regular premiums to maintain the cover. When you pass away, your nominated beneficiary will receive a lump sum, which they can then use to pay the IHT due. It could reduce stress for your loved one at a difficult time and help ensure your estate is passed on intact.

It’s important that the life insurance is written in trust. Otherwise, the payout could be considered part of your estate and lead to a larger IHT bill.

Get in touch to talk about your estate plan

Whether you’re starting from scratch or have an existing estate plan that you’d like to review, we can help you assess what the upcoming changes mean for you and the legacy you want to leave behind. We can work with you on an ongoing basis to ensure your estate and wider financial plan continues to reflect current policy and your needs. Please get in touch to talk to us.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate Inheritance Tax planning or trusts.

5 challenges a financial midlife MOT could help you overcome

Your midlife can be an exciting time; you may have ticked off some goals or bucket list items and are looking forward to what the future holds. Yet, it might also present some new challenges. Arranging a financial midlife MOT could help you overcome obstacles and feel confident as you prepare for the next chapter.

While you might have a better understanding of what you want to get out of life than when you were younger, finances can often become more complex, making it difficult to understand what’s possible. A financial midlife MOT gives you a chance to examine your finances now and calculate if you’re on track to reach your aspirations.

Here are five common challenges a financial MOT could help you navigate.

1. Merging your finances with a partner

As you start to consider retirement and your future, you may opt to merge finances with your partner if you don’t already.

Bringing together your finances can be challenging at any time, but particularly when you’re older, as you may both already hold assets, such as pensions or property. Working with a financial planner could help you take stock of your assets and start to understand how they might form part of your financial plan as a couple.

As well as juggling two sets of assets, you might have different views on financial priorities and long-term goals.

As your financial plan places your aspirations at the centre, a midlife MOT could help you clarify your priorities and balance them with your partner’s.

2. Planning for your retirement

66% of people aged between 45 and 49 feel unprepared for retirement, according to research from LV published in June 2025.

Retirement might feel years away, but it’s a milestone that benefits from early preparation. The decisions you make now could affect your income in your later years, so weighing up your options is essential.

A financial midlife MOT can include reviewing your pensions and other assets you intend to use in retirement to calculate if you have “enough” to live the retirement lifestyle you’re looking forward to.

You could find you’re already on track and enjoy peace of mind as a result. If you discover there’s a potential shortfall, knowing this sooner puts you in a stronger position to bridge the gap, and a financial plan highlights the steps you might take.

3. Balancing care responsibilities

While you might no longer have young children to care for, you could find that you still have care responsibilities during your midlife.

In fact, according to December 2024 research from Legal & General, 1 in 6 middle-aged people support other adults financially, such as grown-up children or elderly parents.

If this isn’t something you’ve considered as part of your financial plan, it could make it harder to budget now and may affect your financial security in the future.

It’s not just your finances that care duties may affect. 1 in 7 midlifers said they provide unpaid care, with hours equivalent to a part-time job. Around half said they feel overwhelmed by their weekly commitments. This can take a toll on your overall wellbeing.

A financial plan that’s focused on what’s important to you could help you balance new responsibilities with your personal goals. For example, you might pay for a carer a few times a week so you’re still able to attend social clubs that you enjoy.

4. Improving your financial resilience

While you might have ticked off some financial commitments, such as paying your mortgage or children’s school fees, it’s still important to ensure you could withstand a financial shock. Your income stopping or facing an unexpected bill often has the potential to derail your plans.

A midlife review gives you the opportunity to evaluate your financial security and assess how you’d cope with an unexpected event.

You might check if you hold enough cash in your emergency fund or review your financial protection to see if you have an adequate safety net. While you hope never to need it, a financial safety net can provide reassurance and protection if the unexpected happens.

5. Setting out your legacy

It’s easy to think that you don’t need to consider how you’ll pass on assets to your loved ones yet. However, it’s impossible to know what’s around the corner, and there may be benefits to passing on wealth during your lifetime rather than waiting to leave an inheritance.

Putting together an estate plan can be difficult. Not only are you bringing together all your assets and considering how circumstances may change in the coming decades, it’s also an emotional topic. So, if it’s something you’ve been putting off, you’re not alone.

It may be daunting at first, but your estate plan allows you to take control of your legacy. As your financial planner, we can help you create an estate plan that gives you long-term security while supporting the people who are important to you.

Contact us to arrange a financial midlife MOT

Get the most out of your life by feeling confident about your finances. Please contact us to talk to one of our team members and arrange a financial review.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Note that life insurance and financial protection plans typically have no cash in value at any time, and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

The Financial Conduct Authority does not regulate estate planning.

3 ways behavioural bias could affect your approach to estate planning

Financial biases are often linked to investing. However, subconscious tendencies can affect many aspects of your finances, including your estate plan.

An estate plan sets out how your assets will be managed during your lifetime and distributed after your death. It might include writing a will or creating a trust to provide for young children.

As estate planning can be emotional, it’s not surprising that behavioural biases could affect how you approach the task. So, here are three ways biases might affect your estate plan.

1. Putting off your estate plan due to emotions or overconfidence

Trying to avoid confronting difficult emotions means some people put off estate planning altogether.

A February 2025 survey carried out by JMW Solicitors found that 77% of people believe having a will is important. Yet, 58% don’t have a valid will, and avoiding the sometimes difficult conversations that might form part of estate planning could be a reason why.

Overconfidence may also be a reason for not creating an estate plan. For example, you might believe you’re “too young” to worry about writing a will or that you’re healthy now, so you can leave the task for the future. However, life is unpredictable and it’s impossible to know what’s around the corner.

Putting off estate planning because it’s difficult or you assume you don’t need one yet could leave your family in a vulnerable position should the unexpected happen.

While estate planning can be daunting at first, view it as a step that allows you to take control of your legacy. Once the task is complete, you may find it reassuring to know you’ve set out your wishes.

2. Under or overvaluing assets could have implications for your estate plan

A common financial bias that affects investors is tying the value of certain assets to a particular piece of information. For example, you might view shares as being worth £100 because that’s what you initially paid for them, even if the value has changed.

Under or overvaluing your assets could have implications for your estate plan.

You might want to split your estate evenly between your children while giving them specific assets. However, if you don’t have accurate information when doing this, they could end up with very different proportions of your wealth, which might lead to disputes.

Alternatively, if you undervalue assets, you might not realise your estate could be subject to Inheritance Tax (IHT). For instance, if you’ve “anchored” the value of your home to the price you paid for it 20 years ago, your estate could unexpectedly be liable for IHT due to rising property prices.

Regular financial reviews with your financial planner can help you track the value of your assets, and how they could rise or fall in the future.

3. Loss aversion could mean you are reluctant to pass on assets

Loss aversion suggests that you feel the pain of a loss twice as strongly as the pleasure of an equivalent gain. This bias can lead to people avoiding taking action, even when it would make sense.

As part of your financial plan, you might want to gift assets to your beneficiaries now instead of leaving them an inheritance. It’s an option that could provide much-needed financial support to your loved ones, such as covering university fees or helping them renovate their home.

Gifting during your lifetime can be rewarding, but loss aversion might also mean you’re reluctant to part with assets.

A reason for this is that you might worry about an unexpected event creating a financial shortfall in the future. So, you choose to hold on to the assets.

A financial plan could help you see the effect of gifting during your lifetime, including whether you could still overcome a financial shock. Discussing your gifting plans could give you the confidence to pass on assets and ease your worries.

Contact us to talk about your estate plan

Working with a professional who understands your circumstances and goals can make estate planning easier. We’ll be on hand to offer support and guidance from the outset.

Please contact us to arrange a meeting to discuss your estate plan.

The Financial Conduct Authority does not regulate estate planning, will writing, or trusts.

Taken out a new mortgage? Don’t forget to review your financial protection

Taking out a new mortgage deal could represent a shift in your financial commitments. So, reviewing whether your financial protection is still appropriate could ensure you have a vital safety net should you face a shock.

Read on to learn how financial protection can provide security in unexpected situations, and what to consider when taking out new cover.

Financial protection paid out a record £8 billion in 2024

Financial protection could provide a much-needed cash injection when you or your loved one experiences a financial shock.

Indeed, in 2024, insurers paid out a record £8 billion in financial protection claims, according to data released in July 2025 by the Association of British Insurers (ABI).

There are several types of financial protection that you might want to weigh up as a homeowner. The three main options are:

1. Income protection

If you’re unable to work due to an illness or accident, income protection would pay you a regular income until you return to work, retire, or the term ends. This income is usually a portion of your salary, such as 60%.

Income protection could help you cover financial commitments, including mortgage repayments, if your regular income stops. The ABI figures show the average amount paid through income protection was £25,133.

2. Critical illness cover

If you’re diagnosed with a covered critical illness, this form of financial protection would pay you a lump sum. According to the ABI statistics, the average amount claimed was £68,735.

You can use the lump sum however you wish. So, you might use it to cover your regular outgoings while you take time off work, adapt your home if necessary, or pay off your mortgage.

3. Life insurance

Life insurance would pay out a lump sum to your beneficiaries if you passed away during the term. It could provide your loved ones with financial security while they are grieving.

You can choose the level of cover to suit you and your family. For example, you might opt for an amount that would pay off your mortgage to reduce your family’s financial commitments.

The ABI figures show 96.5% of life insurance claims were upheld in 2024, and the average claim was for £79,703.

Your circumstances will affect the type of financial protection that’s right for you

If you’ve taken out a new mortgage, review your current financial commitments and consider when and how financial protection could benefit you.

For example, if you’re a homeowner with limited savings, income protection could be a valuable option.

According to a May 2025 article in Cover Magazine, 14% of mortgage holders would immediately struggle to pay their mortgage after income loss. As a result, they could be at risk of losing their home if they haven’t taken other steps to create an income stream.

Alternatively, if you have a family that relies on your income, life insurance may be a priority to protect your loved ones.

In July 2025, a Which? article noted that more than half of people in the UK don’t have life insurance in place, potentially leaving households at risk of financial hardship if they were to die unexpectedly.

Depending on your needs, you might find that you’d benefit from taking out more than one type of financial protection.

3 other factors that might affect which financial protection is right for you

Before you take out new financial protection, check these three areas. They could affect the type and level of cover that’s right for you.

1. Review existing cover

Take some time to review what cover you already have in place.

Even if you haven’t taken out financial protection directly, you could still have some cover. For instance, if your employer provides a death in service benefit, you might not need to take out life insurance as well.

2. Check your employer’s sick pay policy

In 2025/26, Statutory Sick Pay is just £118.75 a week and is paid for up to 28 weeks. As a result, most families would struggle if they relied on this alone, making income protection an attractive option.

However, many workplaces offer an enhanced sick pay policy, so it’s worth reading your contract or employee handbook. Check what portion of your salary you’d receive if you were unable to work and how long it would be paid for.

You could select income protection to complement your sick pay. For instance, if you’d receive a salary for six months, you could select income protection with a six-month deferment to reduce premiums.

3. Assess your other assets

Look at your wider finances when assessing financial protection – what assets could you use if you faced a financial shock?

If you have a substantial emergency fund, you may reduce the level of cover. However, if your assets are earmarked for other purposes, like retirement, you might want to consider the effect depleting them now could have on your future financial security.

We can help you create a reliable financial safety net

As part of your long-term plan, we can work with you to create a safety net you and your loved ones can rely on, including taking out appropriate financial protection. Please contact us to arrange a meeting.

If you have any mortgage related queries please get in touch

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Note that life insurance and financial protection plans typically have no cash in value at any time, and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Explained: How remortgaging works and why it’s important

Remortgaging is a task most homeowners will do at some point. Yet, it can seem complex or something that isn’t that important. Read on to learn how remortgaging works and why it could save you money.

When taking out a mortgage, you’ll choose the term length, the length over which you repay the loan. First-time buyers traditionally opt for a 25-year term, but it’s possible to repay a mortgage over 40 years in some cases.

However, the interest rate you’re offered won’t usually last for the full term of the mortgage. Instead, the deal will expire after a defined period, most commonly two, three, or five years.

When your mortgage deal expires, you can remortgage without paying an early repayment charge (ERC) either with your current lender or a new one. One of the main reasons homeowners remortgage is to save money.

Remortgaging could save you thousands of pounds over the full mortgage term

Typically, when your mortgage deal expires, you’ll move on to your lender’s standard variable rate (SVR). If you continued to make repayments, you’d still pay off the mortgage at the end of the term.

However, the SVR isn’t normally competitive, so it could mean you’re paying far more in interest.

As you often borrow large sums over an extended period through a mortgage, even a small difference in the interest rate could mean you save thousands of pounds.

Imagine you’ve borrowed £250,000 through a repayment mortgage and you have 20 years remaining on the term. If your lender’s SVR is 6%:

Your monthly repayment would be £1,791
Over the full mortgage term, you’d pay almost £180,000 in interest.

Now, if you search for a new mortgage deal when your previous one expires and secure an interest rate of 4%:

Your monthly repayment would fall to £1,514
Over the full mortgage term, you’d pay around £113,500 in interest.

So, in this scenario, taking the time to remortgage would save you more than £65,000.

While your interest rate is likely to change several more times throughout the remaining 20-year mortgage term, the figures illustrate the power of remortgaging. Paying less interest could help you become mortgage-free sooner or allow you to pursue other goals.

3 more practical reasons to remortgage

Saving money isn’t the only reason to remortgage. Here are three more reasons to check when your current deal expires and prepare to find a new deal.

1. You may choose to fix the interest rate

As the name suggests, the interest rate if you’re paying the SVR is variable. This means it could rise or fall, which would affect your repayments.

When you remortgage, you might also want to consider whether a fixed-rate mortgage is the right option for you. This would mean the interest rate you pay is fixed for the duration of the mortgage deal, which can be useful for budgeting.

2. You can change your mortgage term

Remortgaging is an excellent opportunity to assess if the mortgage term is still right for you.

If you want, you can shorten the term, which would mean you repay the debt sooner. Alternatively, if you want to reduce your outgoings, you might extend the term. Keep in mind that repaying over a longer term usually means paying more interest overall.

3. You might be able to release equity from your home

As you make mortgage repayments or the value of your property rises, you build up equity in your home. Depending on your circumstances, you might be able to release some of this equity to fund a renovation project, consolidate debt, or cover other expenses.

While this can be a tempting option, this increases the amount you borrow, meaning higher repayments and more interest over time.

You’ll usually need to complete a mortgage application to access a new deal

The process for remortgaging is similar to taking out a mortgage for the first time.

Comparing lenders can help you secure a competitive interest rate. As a mortgage adviser, we can help you assess the options and which lenders are likely to approve your application.

Usually, you’ll need to apply for a mortgage, including proving that the repayments are affordable. Again, we can lend support here when you’re completing the paperwork to ensure the process is as smooth as possible.

If you have any mortgage related queries please get in touch

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Guide: Revealed: The value of financial planning

Financial planning can add real value to your life, helping you achieve your goals and enjoy the lifestyle you want.

When you think about financial planning, you might initially focus on the financial element.

Perhaps you’re interested in how planning can help you reduce your tax bill, invest to get the most out of your savings, or make sure you’re on track for retirement?

While financial planning can certainly help in these areas, it actually goes far beyond that. It’s all about helping you live the life you want, feel more confident about the future, and reach your goals.

When clients first approach a financial professional, it’s often because they need support with a specific question or concern, such as:

Can I afford to invest more of my wealth?
How much do I need to save to enjoy my lifestyle in retirement?
What can I do to reduce Inheritance Tax for my loved ones after I’m gone?

While a planner can help you answer questions like those above, the process of financial planning is even more all-encompassing, designed to deliver greater value.

In this guide, you can find out why.

Download your copy here: “Revealed: The value of financial planning” to discover how financial planning could help you achieve your long-term aspirations.

If you have any questions or would like to discuss how we could work together to build a financial plan, please contact us.

Please note: This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Investment market update: July 2025

The US struck trade deals with several countries in July 2025, leading to markets rising and putting an end to some of the uncertainty that had plagued investors for months. Read on to find out what else may have affected your investments recently.

While it might seem like 2025 has been a poor year for investors, due to geopolitical tensions and trade wars, the figures paint a different picture.

In the first half of 2025, the FTSE 100, an index of the 100 largest companies listed on the London Stock Exchange, gained 7.2%. It’s the best performance in the first six months of the year since 2021. The data shows how markets often bounce back following short-term market movements, as the index fell sharply in April due to US tariff announcements.

Remember, while markets typically deliver returns over a long-term time frame, they cannot be guaranteed, and it’s important to invest in a way that reflects your risk profile and goals.

Trade deals lead to market rallies in July 2025

While uncertainty affected markets in July 2025, there were also several record highs.

On 3 July, it was announced that the US and Vietnam had struck a trade deal. In addition, US data showed 147,000 new jobs were created in June. The good news led to global stocks reaching a record high, according to MSCI.

US President Donald Trump previously set a deadline for trade deals. As this date approached on 7 July and countries without a deal faced high tariffs, shares on key US indices dipped slightly. The Dow Jones Industrial Average fell 0.16% and the S&P 500 was 0.3% lower.

With the trade deal deadline looming, Trump announced a pause on the levies for 14 trading partners to give countries time to negotiate with the US. It led to Asia-Pacific indices rising, including Japan’s Nikkei 225 (0.3%), South Korea’s KOSPI (1.9%), and China’s CSI 300 (0.8%).

The good news continued the following day. The FTSE 100 climbed 1.23% to close at a record high. Mining stocks led the way with Glencore, Rio Tinto, and Anglo American all up more than 3.5%.

On 14 July, European markets opened lower after Trump threatened to impose a 30% tariff on EU imports in August. The pan-European Stoxx 600 index was down 0.6%. Falls were also recorded on the main indices for Germany, France, Italy, and Spain.

There was further positive news for investors of stocks on the FTSE 100 index on 15 July. It hit 9,000 points for the first time after a rise of 0.2%. The UK was one of the few countries to have a trade deal with the US, and UK stocks benefited from trade tensions as a result.

The US and Japan reached a trade deal on 23 July. Under the deal, Japanese goods will incur a 15% tariff at the US border compared to the 25% Trump had previously threatened.

On the back of the news, Japan’s Nikkei index jumped 3.75%. Carmakers in particular saw rises, including Toyota (14.5%), Honda (10.8%), Subaru (16.8%), and Mazda (17.75%).

There was yet more trade deal news on 28 July when an agreement between the US and EU was announced. Indices across the EU were up as a result, including Germany’s DAX (0.8%), France’s CAC 40 (1%), and Spain’s IBEX (0.8%).

UK

With the Autumn Budget due in October, Reeves faces increasing pressure as key data released in July 2025 was negative.

Indeed, the Office for Budget Responsibility (OBR) said public finances are in a “relatively vulnerable position” with risks posed by tariffs, defence costs, and an ageing population. Based on current tax and spending policy, the organisation said public debt was on track to hit 270% of GDP by the 2070s. The projection would see public debt almost triple compared to the current level.

The concerns around public debt were further highlighted when UK borrowing increased to £20.7 billion in June 2025 due to interest payments rising. Worryingly, the figure was £3.5 billion more than the OBR’s forecast and could prompt the chancellor to raise taxes or cut spending.

In addition, data from the Office for National Statistics shows the UK economy shrank in May for the second month running. The 0.1% contraction was driven by a slump in industrial output.

The rate of inflation also unexpectedly increased to 3.6% in the 12 months to June 2025. It’s the third consecutive monthly increase and was the highest rate recorded since February 2024.

While the Bank of England’s Monetary Policy Committee didn’t meet to discuss interest rates in July, member Alan Taylor signalled a cut was likely in August. He said the “deteriorating” UK economy warranted a deeper interest rate cut than financial markets currently predict.

A Purchasing Managers’ Index (PMI) measures economic activity, and a reading above 50 indicates growth. In June, S&P Global’s PMI data for the UK found that the:

Manufacturing sector continued to contract with a reading of 47.7, but hit a five-month high
Construction sector was also contracting, but reached a six-month high with a reading of 48.8
Service sector posted its strongest growth in 10 months with a reading of 52.8, and improvements in order books indicate further growth in the months ahead.

So, while there are setbacks for many UK businesses, the figures suggest there’s movement in the right direction.

Europe

The eurozone hit the European Central Bank’s (ECB) 2% inflation target in the 12 months to June 2025.

Over the last 12 months, the ECB has cut its base interest rate by a quarter percentage point eight times, taking the policy rate from 4% to 2%. Despite speculation that there would be a further cut when inflation hit its target, the central bank opted to leave the rate as it was.

S&P Global’s PMI suggests the manufacturing sector across the eurozone continues to contract. However, the data indicates it may have turned a corner as the reading in June 2025 was the highest in 34 months and only just below the 50 mark at 49.5.

As the bloc’s largest economy, Germany’s exports are essential and ongoing challenges could dampen growth this year, though the new US-EU trade deal may ease some of the pressure.

A Destatis report found that German exports fell by 1.4% in May when compared to a month earlier. Exports to the US played a significant role as they were down 7.7% month-on-month and 13.8% lower than the same period in 2024.

Germany’s central bank, the Bundesbank, said the country’s exporters were losing competitiveness and called for urgent reforms to improve the business climate, including reducing barriers for skilled migrants and enhancing tax breaks for private investment.

US

Official data from the Bureau of Statistics shows that inflation increased in the 12 months to June 2025 to 2.7%. The figure is above the Federal Reserve’s 2% target.

Tariffs and uncertainty continued to leave a mark on the US’s trade deficit.

In May, the trade deficit widened by 18.7% when compared to a month earlier, according to official data. The deficit now stands at $71.5 billion (£53.5 billion) as exports dropped by 4%.

The consumer sentiment index from the University of Michigan suggests people are feeling more optimistic. The reading in July was 61.8, up from 60.7 in the previous month. It was the highest score since the trade wars began five months ago.

American chipmaker Nvidia became the first listed company to reach a valuation of $4 trillion (£3 trillion). The company announced it would build high-powered systems to train its AI software, which led to shares soaring. As of the start of July, the company’s shares have gained 22% in 2025.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Does your income make you a “Henry”? Here are some ways it could affect tax considerations

High earners striving to build wealth, dubbed “Henrys” (high earner, not rich yet), may find their tax position changes drastically as their income grows. Being aware of your tax liability now and in the future could allow you to create a financial plan that helps you get more out of your money by potentially reducing your tax bill.

There isn’t a clear definition of how much you need to earn to be a Henry or what constitutes being “wealthy”. A huge range of factors could affect your financial position, from where you live in the UK to your long-term goals.

According to a February 2025 study from HSBC, people in the UK believe you need an average annual income of £213,000 to be wealthy. The figure is around six times the national average income and represents the top 4% of earners.

However, even people earning below this threshold could find they’re affected by high-earner tax rules. As a result, you may benefit from regular reviews.

If you’re a Henry, here are four tax rules that might affect your long-term finances.

1. The “60% tax trap” may affect you if your salary exceeds £100,000

A key tax implication of becoming a high earner is losing the Personal Allowance – the amount you can earn each tax year before Income Tax is due. This could mean you fall into the “60% tax trap”.

While there isn’t an official tax rate of 60% on earnings, tax rules may mean you end up paying more Income Tax than you expect. Indeed, a December 2024 report in the Financial Times suggests the number of people affected increased by 45% between 2021/22 and 2023/24.

For every £2 you earn above £100,000, you lose £1 of the Personal Allowance, which is £12,570 in 2025/26. So, once you’re earning £125,140 or more, you don’t have any Personal Allowance.

In real terms, this means for every £100 you earn between £100,000 and £125,140, you pay Income Tax of £40 and lose another £20 because of the tapering of the Personal Allowance. As a result, you’re effectively paying 60% tax on this portion of your income.

Depending on your circumstances, there are some steps you might take to beat the 60% tax trap, including:

Increasing your pension contributions
Making charitable donations from your salary
Using a salary sacrifice scheme, where you’d agree with your employer to give up a portion of your salary in return for other benefits, such as higher pension contributions or a company car.

It’s important to weigh up the pros and cons of these options, and there might be other ways to manage your Income Tax liability. Please get in touch if you have any questions.

2. Your pension Annual Allowance could fall to £10,000

The pension Annual Allowance is how much you can tax-efficiently contribute to your pension each tax year. For most people, the Annual Allowance is £60,000 in 2025/26.

However, the Annual Allowance is gradually reduced if you’re a high earner. If your threshold income is more than £200,000 or your adjusted income (your income plus the amount your employer pays into your pension) is above £260,000, you’ll normally be affected by the Tapered Annual Allowance. It reduces your Annual Allowance by £1 for every £2 your adjusted income exceeds the threshold.

The maximum reduction is £50,000. So, if your adjusted income is £360,000 or more, your Annual Allowance would be just £10,000.

As a result, it could significantly affect how you might effectively save for retirement.

3. Parents may pay the High Income Child Benefit Charge

Parents claiming Child Benefit may be subject to the High Income Child Benefit Tax Charge, if one of them earns more than £60,000 a year.

Importantly, the tax charge applies if one of the parent’s income exceeds the threshold, rather than the household income. So, if both parents worked and earned £55,000 each a year, the High Income Child Benefit Tax Charge would not be applied.

The Income Tax charge would be 1% of your Child Benefit for every £200 of income between £60,000 and £80,000. The charge will never exceed the amount of Child Benefit you receive and is usually paid through a self-assessment tax return.

While you wouldn’t receive any Child Benefit if you or your partner’s income exceeds £80,000, you may still claim it for National Insurance (NI) credit purposes. For example, if one partner is not employed because they’re caring for the child, claiming Child Benefit may mean they receive NI credits.

To receive the full State Pension, you usually need 35 years of NI credits on your record. As a result, claiming Child Benefit, even if you exceed the threshold, could be important for your or your partner’s future State Pension entitlement. While the State Pension often is enough to retire on alone, it could still play a valuable role in your long-term financial security.

4. Inheritance Tax could reduce how much you leave behind for loved ones

If you’re still building wealth, it might feel too early to think about how you’d like to pass it on to loved ones in the future. Yet, establishing an estate plan now can be valuable and evolve as your wealth changes.

In 2025/26, the nil-rate band is £325,000. If the total value of your estate is below the threshold, no Inheritance Tax (IHT) would be due when you pass away.

In addition, some estates may be able to use the residence nil-rate band if the main home is left to direct descendants, such as your children or grandchildren. In 2025/26, this is £175,000. However, the residence nil-rate band is reduced by £1 for every £2 that the estate exceeds £2 million.

You can pass unused allowances to your spouse or civil partner, so an estate may be worth up to £1 million before IHT is due. Yet, the threshold for paying IHT could be significantly lower if you’re not estate planning with a partner or the estate isn’t eligible for the residence nil-rate band.

With a standard tax rate of 40% applied to the portion of the estate that exceeds the threshold, your loved ones could face a hefty bill.

The good news is that there are often steps you can take to reduce a potential IHT bill if you’re proactive. So, if you’re a Henry, making estate planning part of your tax considerations now could be useful in the long run and enable you to pass on more to your loved ones.

Contact us to talk about your tax liability

Reducing your tax liability now could mean you have more opportunities to invest or build long-term wealth, as well as potentially pass more on to your loved ones. If you’d like to create a tailored financial plan that considers your tax position, please get in touch.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate estate planning or tax planning.

The decumulation dilemmas you might need to overcome when you retire

One of the retirement challenges many people face is how to handle wealth decumulation. During your working life, you’re typically working to increase your wealth, and this usually shifts as you enter retirement.

So, if you’re retired or are nearing the milestone, read on to find out more about decumulation dilemmas and how you might manage them.

Changing your mindset may be the first decumulation dilemma

You might expect retirement challenges to focus on your money. Yet, one of the first obstacles to overcome is often your mindset.

After decades of saving money or contributing to your pension, it can feel strange to start depleting your assets, even when you’ve built them up to fund retirement.

For some retirees struggling to change how they view their assets, they might spend retirement worrying about their finances, even though they’re secure. Alternatively, they might unnecessarily cut back and miss out on experiences they’ve been looking forward to.

Having a clear financial plan could give you the confidence to use your assets to enjoy retirement.

You may be responsible for ensuring your pension and other assets last your lifetime

Many people choose to take a flexible income from their pension to fund their retirement. While this gives you more freedom, you also need to consider how long the money needs to last. If you don’t, there’s a risk you could spend too much too soon.

It’s a common fear among modern retirees. Indeed, according to a January 2025 article in IFA Magazine, half of people over the age of 55, the equivalent of 10.5 million people, worry their retirement savings won’t last their lifetime. Just 27% said they were confident they wouldn’t run out of money.

It’s easy to see why it’s a concern for so many retirees. Your pension and other assets you use to fund retirement typically need to last for decades.

February 2025 Office for National Statistics data suggests a 65-year-old woman has an average life expectancy of 88, and a 1 in 10 chance of celebrating their 98th birthday. A 65-year-old man has an average life expectancy of 85, and a 1 in 10 chance of reaching 96.

So, to be certain you won’t run out of money, most retirees need to consider how to create an income for more than 30 years.

As part of your financial plan, a cashflow model can be valuable when you want to understand how to use your wealth in retirement. A cashflow model will show you how the value of your assets will change depending on certain assumptions, such as potential investment returns and the decisions you make.

You might use a cashflow model to answer questions like:

Do I have enough to retire five years earlier than planned?
Could I afford to increase my retirement income by £10,000 a year?
What would happen if I faced an unexpected expense and needed to withdraw a lump sum?

So, it could help you understand if you have “enough” and if you might run out of money during your lifetime.

It’s important to note that the outcome of a cashflow model cannot be guaranteed, and regular reviews are essential. However, it can be a valuable indicator of whether your plan may provide financial security throughout your life or if you could benefit from making adjustments.

Inflation could affect your income needs during retirement

Your income needs during retirement are unlikely to remain static. As well as your lifestyle plans, you might benefit from understanding how inflation could affect you.

The Bank of England’s (BoE) inflation calculator highlights the effect rising prices could have on your income needs throughout retirement.

Imagine you retired in 2014 and calculated that you needed your pension to provide an annual income of £25,000. A decade later, your income will need to have increased to more than £33,000 simply to maintain your spending power.

So, if you hadn’t considered inflation when reviewing your pension, you could unexpectedly find your income falls short in your later years or that you run out of money sooner than expected.

With retirements often spanning several decades, even a seemingly low rate of inflation could add up.

As a result, making inflation part of your retirement plan is often an important part of ensuring you’re depleting assets at a sustainable rate. Again, a cashflow model could be useful for understanding the effect of inflation on your income.

A retirement plan could help you manage decumulation effectively

There isn’t a one-size-fits-all solution when managing your retirement finances. Instead, a long-term tailored financial plan could help you manage decumulation and other retirement challenges in a way that reflects your priorities and situation.

Please get in touch if you’d like to arrange a meeting to talk about your retirement.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate cashflow modelling.