Blog Archives - E S Walton

4 reasons to remain calm amid market volatility and uncertainty

Geopolitical tensions have led to a bumpy start to 2025 for investors. If you’re worried about volatility and what it might mean for your long-term finances, there are reasons to remain calm despite the uncertainty.

The ongoing war in Ukraine has resulted in some anxiety in Europe, with the UK and other countries committing to increasing defence spending. In addition, the new Trump administration in the US has imposed several trade tariffs on partners and suggested more will follow.

As a result, many companies and sectors have seen share prices rise and fall more sharply than usual.

Indeed, according to the Guardian, the euro STOXX equity volatility index, which tracks market expectations of short- and long-term volatility, reached a seven-month high at the start of March 2025. The index has almost doubled since mid-December 2024, suggesting investors are feeling nervous.

As an investor, these external factors are likely to have affected the value of your investments over the last few months.

Investment markets don’t like uncertainty

Uncertainty is one of the key factors that contributes to volatility in investment markets.

Unknown policies or other events can make it difficult to understand how a company will perform financially over the long term. This uncertainty can affect the emotions of investors, who may be more likely to make knee-jerk decisions as a result.

Imagine you hold investments in an electronic goods company based in China. In the news, you read the US will impose a 10% tariff on all Chinese goods. As a major export market, this decision by the US could significantly affect the profitability of the company.

After hearing the news, you might worry about your finances and whether you should still invest in the company. If enough investors act on these concerns, it may result in the value of the shares in the company falling.

With so much global uncertainty at the moment, your investments and the wider market could experience more volatility than usual in the coming months.

Level-headed investors could improve investment outcomes over the long term

While it may be difficult, remaining level-headed during times of uncertainty could make financial sense. Here are four reasons to remain calm.

1. Periods of volatility have happened before

When markets are volatile, it may feel unusual or unexpected. However, market volatility is a normal part of investing.

While investment returns cannot be guaranteed, historically, markets have delivered returns over a long-term time frame. Even after downturns, markets have bounced back.

Remembering this could help put your mind at ease and allow you to focus on the bigger picture rather than short-term market movements.

2. Diversified investments could smooth out volatility

Newspaper headlines are designed to grab your attention, and they’re likely to focus on the parts of the market that are experiencing the greatest volatility. For example, you might read that “technology stocks have plunged 10%” or “markets in Japan are booming”.

While these headlines aren’t inaccurate, they don’t tell you the whole story.

In reality, a balanced investment portfolio will typically include investments across a range of assets, sectors and geographical locations.

So, while a fall in technology stocks might affect you, it may not have as large of an effect as you expect if you only read the headlines. Gains or stability in other areas of your investment portfolio could balance out the dip.

3. Market volatility may present an opportunity to buy low

If you’d previously planned to invest a lump sum or you invest regularly, market volatility may cause you to rethink. However, halting your investments might mean you miss an opportunity.

When markets fall, you might have a chance to invest when the price of stocks and shares is lower, allowing you to buy more units for your money. Over the long term, this could lead to better yields.

While investing during a low period could result in higher returns over the long term, you should ensure investments are appropriate. You may want to consider your financial risk profile and wider circumstances when deciding how to invest your money.

4. Trying to time the market can prove costly

Finally, if you’re focused on what the market is doing today, it can become tempting to try and time the market – to buy low and sell high.

However, with so many external factors affecting markets, it’s impossible to consistently time it right. Even professionals, who have a team and resources, don’t always get it right.

Rather than trying to time the market, remaining calm and sticking to your long-term investment strategy is often a better course of action.

Contact us to talk about your investments

If you have any questions about how your investments are performing or would like to review your investment strategy, please get in touch. We’re here to answer your questions and help you feel confident about your financial future.

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.

5 strategies that could help you avoid running out of money in retirement

Worrying about your finances in retirement could dampen your excitement as you start the next chapter of your life. As you’ll often be responsible for generating your own income once you give up work, it’s not surprising that a February 2025 report from Which? revealed half of over-55s are worried about running out of money.

Indeed, just 27% of those who have retired or are nearing the milestone said they weren’t concerned about draining their pension or other assets in retirement.

Some apprehension about your finances as you retire is normal.

Retirement is likely to represent a significant shift in how you create an income. No longer will you receive a regular wage for your work. Instead, you’ll often start depleting your assets, such as your pension, savings, or investments. As you can’t predict how long your assets need to last, it may be difficult to assess if the income you create is sustainable.

Here are five strategies that could give you confidence in your retirement finances, so you’re able to focus on what’s most important – enjoying this next stage of your life.

1. Consider inflation before you retire

A key obstacle when planning your finances in retirement is that inflation often means your outgoings will increase.

According to the Bank of England, between 2014 and 2024, average annual inflation was 3%. So, an income of £35,000 in 2014 would need to have grown to almost £47,000 to maintain your spending power in 2024.

As a result, if you planned to take a static income throughout retirement, you could face a growing income gap in your later years or deplete assets at a faster rate than you anticipated.

As part of your retirement plan, a cashflow model could help you visualise how your income needs might change, and the effect this would have on the value of your assets. While the outcomes cannot be guaranteed, it could highlight where you might face potential shortfalls and allow you to take steps to improve your long-term financial security.

2. Keep an eye on retirement lifestyle creep

It’s not just inflation that could affect your outgoings. Lifestyle creep, where you spend more on luxuries, could have an effect too.

As you may be in control of how much you withdraw from your pension, it can be easy to slowly increase the amount so you can indulge in an exotic holiday, new car, or regular days out. Over time, these luxuries can become new necessities in your mind and part of your normal budget.

Spending more in retirement isn’t necessarily negative. However, increasing your spending without considering the long-term consequences might mean you face an unexpected shortfall in the future. Regular financial reviews during your retirement could help you keep an eye on lifestyle creep that may be harmful.

3. Assess if investing in retirement is right for you

In the past, it wasn’t uncommon for retirees to take their money out of investments to reduce exposure to market volatility. However, keeping some of your money, including what’s held in your pension, invested might make financial sense for you.

Retirements are getting longer. With the average life expectancy of a 65-year-old now in the 80s for both men and women, you could spend three decades or more in retirement. So, continuing to invest with a long-term time frame during retirement could help grow your wealth and mean you’re at less risk of running out of money.

It’s important to choose investments that are appropriate for you and recognise that investment returns cannot be guaranteed. If you’d like to talk about investing in retirement, please get in touch.

4. Be proactive about retirement tax planning

While you might no longer be working, you’re very likely to still pay Income Tax in retirement. Indeed, according to the Independent, in March 2025, retired baby boomers were paying more Income Tax than working people under 30.

If your total income exceeds the Personal Allowance, which is £12,570 in 2025/26, Income Tax will usually be due. With the full new State Pension providing an income of £11,973 in 2025/26, most retirees will pay some Income Tax even if they’re only taking small sums from their personal pension.

It’s not just Income Tax you might be liable for either. You might need to pay Capital Gains Tax if you sell assets and make a profit or Dividend Tax if you hold shares in dividend-paying companies.

An effective retirement plan could identify ways to reduce your tax bill, so you have more money to spend how you wish and are less likely to run out during your lifetime.

5. Maintain an emergency fund throughout retirement

During your working life, you may have had an emergency fund in case your income stopped or you faced an unexpected expense. In retirement, a financial safety net might still be important.

Having a fund you can fall back on in case you need to pay a large, unforeseen cost, like property repairs, could be essential for keeping your retirement finances on track.

In addition, it may be prudent to contemplate how you’d fund the cost of care if it were needed. According to an August 2024 report from the Joseph Rowntree Foundation, the number of older people unable to perform at least one instrumental activity of daily living without help will increase by 69% between 2015 and 2040.

This rise is partly linked to a growing population of elderly people and rising life expectancies leading to more people relying on informal care, such as family members, or formal care, like a nursing home.

Whether you need to pay for care will depend on a variety of factors, such as the value of your assets and where you live. However, in most cases, you’ll often need to pay for at least a portion of the costs if you require formal care.

So, considering care when you assess your emergency fund could be essential. Knowing you have the savings to pay for care could provide you with peace of mind and mean that should it be required, you have more options to explore, such as choosing a care home with facilities you’d enjoy or one that’s easily accessible for loved ones.

Get in touch to discuss your retirement finances

As your financial planner, we could work with you to build a retirement plan that reflects your circumstances and goals. Whether you’re worried about running out of money or you have other concerns, we’re here to listen and discuss your options. Please get in touch to arrange a meeting.

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.

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.

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.

The Financial Conduct Authority does not regulate cashflow planning.

4 tricks that could help you curb potentially harmful impulses

Everyone has made an impulsive financial decision that they end up regretting later. While these hasty decisions might feel right when you initially make them, they have the potential to harm your long-term finances.

Some impulsive decisions might have little effect on your overall financial wellbeing. For example, picking up a treat when you’re grocery shopping or spending a little more than you should when you’re browsing your favourite online shop.

However, there are times when making a quick decision has the potential to affect your long-term financial security. This might include when you’re deciding how to invest your money, withdraw a lump sum from your pension, or deplete your emergency fund.

So, using tricks to curb your impulsive decisions, including these four, could be useful.

1. Recognise when you’re more likely to make impulsive decisions

There are times or situations that mean you’re more likely to make impulsive decisions. For instance, common triggers for making rash financial decisions might include:

When you’re experiencing emotional highs or lows
Limited-time offers that give a sense of urgency
If you’re facing social pressure.

Usually, you might take the time to carefully evaluate an investment decision to understand how it could fit into your wider goals. However, if you’re approached by a group of friends who are excitedly chatting about an opportunity that you “must” buy before it’s too late, you could be tempted to throw caution to the wind.

Simply understanding which scenarios are more likely to lead to you making an impulsive decision is a good place to start. In means you’re in a better position to take note when you could benefit from taking a step back, expert advice, or more research.

2. Implement a cooling-off period

An impulse purchase can seem exciting at first. Yet, a day later, the high it gave you may have worn off and it might be replaced by feelings of regret. So, implementing a cooling-off period could help you reduce the effect emotions have on your financial decisions.

Using different time frames depending on the importance of the decision may be useful.

For a smaller purchase, you might benefit from simply sleeping on the decision. If you still want the item or experience the following day once the initial emotions have passed, it might be worth it.

For larger financial decisions, give yourself several weeks or even longer.

If you’re thinking about investing more money, taking out a loan, or adjusting your financial plan, this longer period could give you the time to fully research your options and weigh up the pros and cons.

Should you decide to go ahead with your initial impulse, you can feel more confident if you’ve explored the other options and fully understand the potential implications.

3. Consider your long-term plan when making decisions

When you’re managing your finances, it’s important to remember the decisions you make today could affect your options in the future.

Having a clear long-term plan that you’re working towards could help you balance short- and long-term goals. For instance, you might enjoy treating yourself to a fancy meal out each week and feel that it’s a worthy expense. But would you still feel the same if it could place your plans for an early retirement at risk?

It’s not just about how you spend money either. You might be tempted to increase the amount of investment risk you take in the hope of achieving higher returns. Yet, taking more risk than is appropriate for you might mean you have a greater chance of losing your money.

So, next time you’re about to make an impulsive financial decision, ask yourself: does this align with my long-term goals?

4. Work with a financial planner

Working with a professional who understands your circumstances and goals could help keep you on track. There are several important reasons why.

First, by setting out a financial plan with your aspirations at the centre, you’re more likely to be aware of how impulsive decisions could place your goals at risk. In some cases, that could be enough to curb your impulsiveness.

Second, being able to turn to someone you trust when you need a second opinion could be invaluable. Talking about your ideas and discussing alternatives may be useful when you’re assessing which options are right for you in the short and long term.

Finally, regular financial reviews might mean you’re less likely to make large impulsive decisions as you know you have a scheduled time to discuss and think about your finances. If you’d like to talk about how we could work with you or you’d like to review your financial plan, please get in touch.

Please note: 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.

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

Investment market update: February 2025

After reading headlines throughout February, you might be expecting a gloomy investment outlook. Yet, despite threats of trade wars and uncertainty around the world, there were market highs. Read on to find out more about some of the factors that influenced investment markets.

As investment markets are experiencing volatility, it’s perhaps unsurprising that some investors sought the “safe haven” of gold. On 10 February, the price of gold hit a record high of $2,900 (£2,288) an ounce.

While you might be tempted to follow suit and change your investment strategy, remember to focus on long-term performance. While returns cannot be guaranteed, volatility is part of investing and, historically, markets have delivered returns over long-term time frames.

UK

The Bank of England (BoE) started the month by cutting the base interest rate from 4.75% to 4.5%, which may provide some relief to borrowers. However, higher than expected inflation could mean the Bank is less likely to make a further cut in March.

Office for National Statistics (ONS) data shows UK inflation was 3% in the 12 months to January 2025 – an increase of 0.5% when compared to a month earlier.

Additional data from the ONS was a mixed bag.

The chancellor will no doubt welcome news that the UK returned to growth in the final quarter of 2024 after the economy grew by 0.1% between October and December. However, GDP per head fell for the second quarter running and the manufacturing sector shrank for the fifth consecutive quarter.

The BoE also slashed its growth forecast. It halved its prediction made in November 2024, and now expects GDP to increase by just 0.75% in 2025.

In addition, a report from S&P suggests businesses are shedding jobs at the fastest pace in the last 15 years (excluding the pandemic). The trend was linked to higher payroll costs following increases to minimum wage and employer National Insurance contributions unveiled in the Autumn Budget.

Markets in the UK were rocky at the start of February. On 3 February, the FTSE 100 fell 1.25% when markets opened following talks of trade tariffs from the US and almost every share on the index was down.

Yet, just days later, on 6 February, the FTSE 100 hit a new closing high on the back of the BoE cutting interest rates. Then, on 10 February, the index hit another high, this time led by BP, which saw a 7% increase after activist investor Elliott Investment Management took a stake in the company.

Amid growing geopolitical tensions, on 25 February, prime minister Keir Starmer announced the government will increase defence spending to 2.5% of GDP by 2027. The news led to UK defence stocks rising, including BAE Systems, which lifted 4.2%.

Europe

Official figures from Eurostat show the eurozone narrowly avoided stagnation at the end of 2024 after posting growth of 0.1% in the final quarter. Growth varied across the bloc, both France and Germany contracted, while Spain grew 0.8%.

Figures from S&P Global’s Purchasing Managers’ Index (PMI) indicate the eurozone may have turned a corner. Indeed, the output index was above 50, which indicates growth, for the first time since August 2024. Spain was the main growth engine, but Germany, the largest economy in the bloc, posted its best monthly performance since May 2024.

Goldman Sachs warned the eurozone faced a “sizeable” hit from trade tensions.

Indeed, tariff threats are already affecting the business decisions of some companies. Beauty firm Estee Lauder announced plans to cut 7,000 jobs as it significantly expanded its restructuring programme to allow it to manage “external volatility, such as potential tariff increases globally”.

Similar to the UK, European markets opened in the red on 3 February. Germany’s Dax (-2%), France’s CAC 40 (-1.9%), Spain’s IBEX (-1.7%) and Italy’s FTSE MIB (-1.4%) were all affected by investor anxiety about the effect tariffs will have.

Again, the market didn’t experience a downturn for long.

European shares hit a record high on 12 February. The pan-European Stoxx 600 increased by 0.2% led by Amsterdam-based brewer Heineken, which saw a 12% jump after it revealed better than expected profits.

Following the US side-lining Ukraine during peace talks with Russia, investors anticipated a rise in military spending. On 17 February, more than €18 billion (£14.9 billion) was added to the value of European defensive stocks.

US

The headline figure for inflation was 3% in the 12 months to January 2025 after a slight increase when compared to a month earlier. The data may mean the Federal Reserve holds off cutting interest rates in the coming months.

Since taking office in January, President Donald Trump has implemented several trade tariffs and made threats to impose more. Trump has said tariffs will protect the US economy, but early signs might indicate it’s backfired.

The US trade deficit widened by around $19.5 billion (£15.3 billion) to $98.4 billion (£77.5 billion) as imports increased at the end of 2024. The jump may be driven by US companies trying to beat potential tariffs by shipping goods in larger quantities.

In contrast to initial speculation suggesting the Trump administration would boost US businesses, JP Morgan analysts said it was now leaning towards a “business unfriendly stance” due to tariffs.

Trump has also spoken about plans to cut immigration and deport those who are not authorised to live in the US. Global investment bank Goldman Sachs has warned these policies could harm economic growth. Indeed, the bank said in a baseline scenario, lowering immigration would result in losing 0.1% of GDP every quarter.

The report also noted that deportation could severely disrupt some industries. In the US, unauthorised immigrants account for around 4–5% of the workforce, but in some sectors, it is as high as 15–20%. The bank added losing these workers may lead to higher inflation.

The market volatility experienced in Europe on 3 February, affected the US too. Indeed, the Dow Jones – an index of 30 prominent companies listed on stock exchanges in the US – was down 1.26% at the start of trading. The broader S&P 500 index also fell by more than 1.6%.

After an initial post-election bounce, Elon Musk’s Tesla saw stocks tumble by 1.5% on 25 February after data showed European sales were plunging.

Asia

Markets in Asia started poorly in September as concerns about sweeping tariffs from the US weighed on exports across the region. Indeed, on 3 February, Japanese and South Korean automakers saw dips, including Honda, which fell by around 7%, and Toyota and Nissan, both of which slipped by more than 5%.

When China’s market reopened on 5 February following Lunar New Year celebrations, the CSI 300 index fell by 0.6% on opening.

The threat of tariffs is expected to affect economic performance too.

South Korean think tank Korea Development Institute now projects the country will grow by 1.6% in 2025 – 0.4 percentage points lower than it estimated in November 2024. The organisation said the lower pace of growth was due to a “deterioration of the trade environment”.

However, it wasn’t all negative.

In fact, Chinese technology stocks continued to perform well after receiving a boost in January following the launch of the AI app DeepSeek. The Hang Seng TECH index in Hong Kong was up 2.7% on 12 February and had increased by around 25% in the month to mid-February.

Among the companies that benefited from the boost was internet giant Alibaba and carmaker BYD, which boasted gains of 25% and 30% respectively for the month to mid-February.

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

Thinking about investing in crypto? You need to be aware of these signs of a scam

As some cryptocurrencies have delivered large returns in the past, you may be more likely to overlook red flags when you’re assessing an investment opportunity. Yet falling victim to a scam could leave you out of pocket and affect your mental wellbeing, so being aware of the warning signs could be essential.

According to the City of London Police, more than £612 million was lost to investment fraud in 2023, and many scammers are using the growing interest in cryptocurrency to entice victims.

Indeed, the figures show cryptocurrency accounts for more than 40% of all investment scam reports and was the most common commodity that victims believed they were buying.

The money lost through crypto scams can be substantial.

In a prosecution brought by the Financial Conduct Authority (FCA), two individuals were convicted in November 2024 of defrauding 65 investors out of more than £1.5 million – the equivalent of around £23,700 for each victim. The duo used cold-calling to establish contact with victims and then directed them to a professional-looking website that claimed to offer high returns in crypto.

Smaller upfront investments could be used to entice crypto scam victims

The City of London Police report suggests one of the reasons why crypto scams are growing is that fraudsters ask for a smaller upfront investment to “prove” the opportunity is legitimate. This could give targets a false sense that the investment is low risk and offer a sense of security.

There are other reasons why even savvy investors might be more likely to fall for a crypto scam too, including:

Crypto is still a relatively new asset, and many people don’t fully understand what the term means. According to a 2023 report from the Financial Services Compensation Scheme (FSCS), while 91% of consumers had heard of cryptocurrencies, only 11% said they had a good understanding of how they worked. Scammers may use this lack of knowledge to gain the trust of victims.
Some crypto assets have delivered large returns, which may make bold claims by scammers seem reasonable. For example, figures published by Morgan Stanley in October 2024 suggest Bitcoin’s average annual return between 2014 and 2024 was 49%. However, it’s important to note that investment returns can’t be guaranteed and the value of crypto assets is often volatile.
A 2024 survey from the FCA found that 38% of participants had seen or heard an advert about cryptoassets, up from 27% in 2020. Social media was the most common place people remember seeing a crypto advert and it could give the false impression that everyone else is investing in crypto. For some, this view might mean they’re more willing to listen to a scammer if they’re targeted.

So, with crypto scams on the rise, if it’s an asset you’re interested in learning more about, it’s crucial you take steps to protect your wealth.

How to protect your wealth from crypto scams

Be wary of adverts promising high returns

While potential high returns can be tempting, if you spot an advert or social media post promising significant returns, be cautious. Ask yourself if the claims sound realistic.

It’s also important to note that investment returns cannot be guaranteed. So, if an advert states there is no risk of you losing your money, it should set alarm bells ringing.

As the old saying goes, “If it seems too good to be true, it probably is.”

Treat cold-calls with suspicion

If you’re contacted out of the blue about an investment opportunity, treat the communication with suspicion. This is a common tactic that scammers use to establish a relationship and gather information about you.

It’s not just calls or messages to your phone you need to be cautious of. Scammers might also email or message you on social media.

Don’t rush into investment decisions

If you see an investment opportunity that you think could boost your wealth, it can be exciting. However, it’s important not to rush into a decision. Instead, take a step back and do your research.

Fraudsters will often pressure you to make a decision quickly, so you don’t have time to think. They might say offers are for a limited time or there are only a few opportunities to invest, so you need to beat other people to it.

Scammers might try to use the volatility of the crypto market to apply further pressure. For instance, they may say the value of the asset is rapidly climbing, so you need to make a decision right away or miss out on the opportunity for good.

Legitimate financial professionals will understand the importance of considering investments, and won’t pressure you to commit on the spot.

Research the firm

It’s not just the investment you should research either, but the person or firm you’d be working with.

Scammers will often go to great lengths to convince you they are a genuine professional. So, don’t take a glossy website or glowing reviews at face value, dig a bit deeper.

The Financial Services Register allows you to check if individuals or firms are authorised by the FCA.

Some criminals will pose as a legitimate firm to gain your trust. So, use the contact details on the Financial Services Register to check the person you’re speaking to is genuine and confirm the information you have.

Don’t be afraid to seek advice

You don’t have to review an opportunity on your own. Sometimes, speaking to a trusted loved one or independent financial planner could help you identify potential red flags you’ve overlooked.

Even genuine crypto investment opportunities can be high risk and might not be right for you. So, speaking to a professional could help you understand how it might fit into your wider financial plan and provide a chance to review the alternatives.

If you’d like to talk to one of our team about your finances and the steps you might take to reach your long-term goals, please get in touch.

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

Crypto assets are not regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws.

How to reduce your Capital Gains Tax bill in 2025

A combination of rising rates and panic ahead of the current government’s first Autumn Budget has led to HRMC collecting a record amount in Capital Gains Tax (CGT) towards the end of 2024.

According to a report in the Telegraph, between July and November 2024, CGT generated more than £1 billion for the government – more than a £200 million increase when compared to the same period in 2023.

The rise in CGT has been associated with uncertainty in the lead-up to the government’s Autumn Budget. Speculation that tax rates would rise sharply, and tax breaks would be cut, led to some investors, who worried they might face a much larger tax bill if they delayed decisions, selling assets.

As CGT is a tax that’s paid on the profit you make when selling certain assets, this panic increased the amount of CGT collected.

While the Labour government did unveil changes to CGT during the Autumn Budget, including a rise in tax rates, they weren’t as drastic as some investors feared. Following the Budget on 30 October 2024:

The basic rate of CGT increased from 10% to 18%.
The higher rate of CGT increased from 20% to 24%.

The increase could mean the amount of CGT collectively paid continues to rise. Indeed, according to the Office for Budget Responsibility, the changes could increase CGT revenue by around £1 billion by 2029/30. However, it also assigned the figure a “high” uncertainty rating as it can be difficult to judge behavioural responses.

If you could face a CGT bill in the future, read on to discover some practical steps you might take to reduce your liability.

1. Consider your overall tax position

Rather than looking at your CGT liability in isolation, reviewing it alongside your overall tax position and wider financial plan could be useful.

For example, if you’re a basic-rate taxpayer and the profits you make when selling an asset are below the higher-rate Income Tax threshold (£50,271 in 2024/25) when added to your other income, you could pay the lower CGT rate. So, if your other sources of income are flexible, you might wait to sell assets until you’d potentially benefit from the basic rate of CGT.

If you plan to delay selling assets, keep in mind the value of them could change.

2. Use your Capital Gains Tax exemption

Each tax year, you can make a certain amount of profit before CGT is due. This is known as the “Annual Exempt Amount”.

In 2024/25, the Annual Exempt Amount is £3,000 for individuals. Crucially, you cannot carry this exemption forward into a new tax year if you don’t use it.

Spreading asset disposals across multiple tax years to use the Annual Exempt Amount could help you reduce your overall tax bill.

3. Use tax-efficient wrappers when investing

If you could face a CGT bill when you sell investments, you might want to consider using tax-efficient wrappers, such as ISAs and pensions.

In 2024/25, you can deposit up to £20,000 into ISAs. If you choose to invest in a Stocks and Shares ISA, the returns you make won’t be liable for CGT.

If you’re investing for the long term, a pension could also be suitable. Again, returns from investments held in a pension are not liable for CGT. In 2024/25, you can usually add up to £60,000 (your “Annual Allowance”) to your pension before you could face additional tax charges.

However, the amount you can tax-efficiently add to a pension could be as low as £10,000 if you’ve already taken a flexible income from your pension or if your adjusted income is more than £260,000 a year. If you’d like to understand your pension Annual Allowance, please get in touch.

Remember, you cannot normally access the money held in a pension until you’re 55 (rising to 57 in 2028). So, it’s important to weigh up your reason for investing and your wider financial circumstances before you increase pension contributions.

4. Pass assets to your spouse or civil partner

You can usually transfer ownership of assets to your spouse or civil partner without facing a tax bill. As many tax allowances and exemptions are individual, passing assets to your partner could be useful.

For instance, if you’ve already used your Annual Exempt Amount in the current tax year, you might transfer ownership of an asset to your partner before you dispose of it to use theirs. You might also do this if your partner would benefit from the lower CGT rate.

5. Offset your losses

Making a loss when selling assets can be disappointing, but it could be used to reduce a CGT bill.

You can often offset losses against the gains you’ve made, which may lead to a lower CGT bill and potentially mean you pay the lower CGT rate. In some cases, you may also carry losses forward to offset future profits.

If you plan to offset losses against your gains, it’s important to keep accurate records. You will also need to register losses with HMRC by completing a tax return.

6. Work with a financial planner

Making your CGT liability part of your wider financial plan could help you identify steps you might take to reduce a potential bill in a way that aligns with your long-term goals. Please contact us to arrange a meeting and discover how we may work together.

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 tax planning.

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

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 potential perils of accessing your pension at 55

Reaching the minimum pension age and being able to access your retirement savings might mean new possibilities opening up. You may start thinking about giving up work, withdrawing a lump sum to pursue a goal, or using your pension to boost your regular income.

It’s an exciting time, but it’s also important to evaluate your decisions and consider how they could affect your long-term plans. Indeed, spending too much too soon could lead to a shortfall later in life.

Usually, you can access your pension from age 55 (rising to 57 in 2028). For many people, this milestone will come before their planned retirement date.

Yet, January 2025 research from Legal & General suggests 1 in 5 people access their pension at 55.

32% of those withdrawing from their pension at 55 said it was to cover essential expenses. However, 46% simply said they did so “because they could”.

Worryingly, 27% of UK adults aged over 50 make decisions about their pension without seeking any advice or guidance. It could mean a significant proportion of those accessing their pension as soon as possible don’t fully understand the long-term implications it could have.

If you’re thinking about withdrawing money from your pension, here are three potential risks to consider first.

1. It could increase your risk of running out of money later in life

Pensions are often among the largest assets people own. So, it’s not surprising that some look at the value and believe they have enough to splurge.

Yet, it’s important to consider why you’ve saved into a pension – to create financial security once you give up work.

If you start accessing your pension at 55, you could be at greater risk of facing a shortfall later in life as it’s likely to need to last several decades. Indeed, according to the Office for National Statistics, the average 55-year-old woman will live until they’re 87. For a man of the same age, life expectancy is 85.

Even if you don’t plan to take a regular income from your pension straightaway, withdrawing a lump sum can have a significant effect on the value of your retirement savings.

Your pension is normally invested with the aim of delivering long-term growth. Taking a lump sum could mean investment returns are lower than expected, which, in turn, may lead to a lower income when you retire.

That’s not to say you shouldn’t access your pension at 55, whether you want to use the money to travel or start reducing your working hours. However, understanding the potential long-term implications of doing so and how it might affect your retirement lifestyle is important.

2. You may face an unexpected tax bill

You can usually withdraw up to 25% of your pension without facing a tax bill, either as a lump sum or spread across multiple withdrawals.

However, if you exceed the 25% tax-free portion, your pension withdrawals may become liable for Income Tax. According to the Legal & General study, around a third of those accessing their pension at 55 are withdrawing more than 25%.

The withdrawal above the tax-free amount would be added to your other sources of income when calculating your Income Tax liability. So, you might want to consider whether it would push you into a higher tax bracket and increase your overall tax bill.

It’s also worth noting that if you receive means-tested benefits, taking a lump sum or income from your pension could affect your entitlement – something a quarter of people didn’t realise.

3. It could limit how much you can tax-efficiently save in your pension

Accessing your pension might reduce how much you can tax-efficiently contribute to your pension each tax year.

In 2024/25, the pension Annual Allowance is £60,000. This is the amount you can personally contribute while retaining tax relief benefits. However, you can only claim tax relief on up to 100% of your annual earnings.

You can normally withdraw your tax-free lump sum from your pension without affecting the Annual Allowance, but if you take a flexible income, you might trigger the Money Purchase Annual Allowance (MPAA).

The MPAA is just £10,000 in 2024/25. As a result, it can significantly reduce how much you’re able to tax-efficiently add to your pension and it might negatively affect your retirement income.

Financial planning could help you understand the effect of accessing your pension at 55

One of the challenges of understanding whether accessing your pension sooner is the right decision for you is that you often need to consider the long-term effects.

Financial planning could help you see how accessing your pension at 55 might affect your long-term finances and review other options as part of a wider financial plan. If you withdraw some of your pension now, it could help you feel more confident, or you might decide an alternative option makes more sense for you.

If you’d like to access your pension, we’re here to help you calculate the potential long-term consequences and more. Please get in touch to arrange a meeting.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

Why ongoing financial advice could ease your mental load

Handling finances is a part of life and something that most people do, but that doesn’t mean it isn’t stressful. Indeed, many people don’t feel confident making financial decisions, and financial advice could ease their mental load.

Even when you’re relatively comfortable, managing your finances can be a cause of concern. Indeed, you might find it even more stressful as you may be considering how to reduce tax liability or how to make use of allowances to pass on wealth to your loved ones.

Worries about the future are common too. You may feel confident in your ability to handle your finances now, but what would happen if you faced a financial shock? Or how will you manage your finances when you retire, and you may no longer receive a reliable income?

Fears about the future could harm your mental wellbeing and mean you don’t enjoy the things that are important to you.

While you might think of financial planning as a way to grow your wealth, the non-financial benefits are often just as valuable. Establishing a relationship with a financial planner could reduce your mental load. Read on to find out how.

A financial plan could give you confidence in the future

A survey published in IFA Magazine in January 2025 found more than half of over-55s – the equivalent of 10.5 million people – are worried their retirement savings won’t last their lifetime. Only 27% of those surveyed said they weren’t concerned about running out of money.

It’s not just retirement that can cause money worries either.

As a worker, you might worry about how you’d meet essential costs if you became too ill to work, or as a parent, you might want to set aside a financial safety net for your family in case the worst should happen.

As life is unpredictable, effectively managing your finances to ensure you’ll be secure in the future can be difficult. We can work with you to help you understand how the decisions you make now could affect your security in the future.

A cashflow model provides a way to visualise how your wealth will change over time.

You start by inputting the details of your assets now, and the actions you’re taking, such as how much you’re adding to your pension each month or the amount you plan to add to a Stocks and Shares ISA each year. In addition, you can estimate factors like investment returns.

With this data, a cashflow model can predict how the value of assets may change during your lifetime.

If you’re worried about your finances, a cashflow model can be particularly useful for calculating how financial shocks would affect you.

For example, you might use it to see how needing to retire five years earlier than expected due to ill health would affect your retirement income. Or, if you stopped non-essential outgoings, such as money into a savings account, because you’re unable to work, how that could affect long-term plans.

Understanding how your finances might be affected by these shocks could mean you’re able to take steps to secure your long-term finances. You might decide to take out appropriate financial protection or increase your pension contributions now to create a safety net and offer you peace of mind.

The outcomes of a cashflow model cannot be guaranteed, but it can provide a useful overview of how your finances might change and highlight potential gaps, which provides an opportunity to close them.

As a cashflow model relies on accurate information, regularly updating the data is important.

Working with a financial planner could enable you to focus on what’s important to you

According to a February 2025 survey from Moneybox, just a third of UK adults said they feel very confident in managing their personal finances. In fact, 64% believe they’ve missed out on financial opportunities in life due to a lack of financial knowledge and low confidence.

The financial world can seem like it’s filled with jargon, acronyms, and complexities to wrap your head around. So, it’s not surprising that many people don’t feel confident making decisions.

By working with a financial planner, you have someone to turn to when you don’t understand something or aren’t sure what the right choice for you is. The reassurance of knowing someone is there for you could ease financial stress.

The cognitive and emotional effort to plan, anticipate, prepare, and organise your finances may create a mental load that you struggle to manage, even when you’re confident about financial matters.

So, you might choose to work with a financial planner in a way that allows you to take a hands-off approach, with them reviewing assets like your investments or pension on your behalf, with regular reviews.

Handing over these tasks might mean you’re able to focus on what’s most important to you, whether that’s spending time with your family, working your way up the career ladder, or pursuing a passion.

Contact us to talk about your financial plan

If you’d like to learn more about the benefits of financial planning and find out how we could support you, please get in touch.

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 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.

How financial planning could help you overcome decision paralysis

How long do you leave essential tasks on your to-do list? If you’ve put off tasks because they feel overwhelming, you’re not alone, but delays could be harmful. Read on to find out how financial planning may help you overcome decision paralysis.

According to a January 2025 study from the Post Office, half of adults in the UK have delayed important tasks because they feel too overwhelmed. As well as potentially affecting your plans, procrastinating can harm your wellbeing. Indeed, 63% of survey participants said they feel “weighted down” by their to-do lists.

Commonly delayed tasks include writing a will (25%) and filling in tax returns (18%). For those under 35, managing a pension was also a common sticking point, with 87% feeling overwhelmed by the task.

For some, procrastination can be due to having too many options or worrying about making the “right” decision, leading to decision paralysis – where you know you should tackle a task but don’t know where to start or what to do next.

If it’s financial tasks you’ve been putting off, working with a financial planner could help you overcome decision paralysis.

We can help you prioritise your to-do list

If you have a long to-do list, one of the first challenges might be deciding where to start. Should you write your will first, or spend some time reviewing your pension options?

As your financial planner, we could help you prioritise the tasks depending on your circumstances and needs. Having a clear order could mean your list feels more manageable and give you the confidence to focus on one thing at a time, which could be more productive than trying to multitask.

We can explain the different options to you

Modern life often means you have a lot of options. While this can be a good thing, it may also feel overwhelming as well – how do you sift through all the different options and decide what’s right for you?

This can affect many aspects of your to-do list, including financial tasks. Perhaps you want to start investing but aren’t sure where to invest or how to create a balanced portfolio that reflects your goals. Or maybe you want to set up a trust to protect assets for your child, but you aren’t sure how to compare the different types of trust.

Working with a professional means you have someone to turn to when you have questions. It might mean your options are clearer and you feel empowered to make a decision.

With 30% of people telling the Post Office survey too much information was a barrier for them completing tasks, having someone who can simplify the details and highlight which parts might be important for you could be invaluable.

We can help you understand the long-term effect of your decisions

Financial decisions may be complex and could affect your long-term financial security. So, decision paralysis might occur if you’re worried about making the “right” choice.

Let’s say you’re ready to retire and access your pension. You may be concerned about withdrawing too much and running out later in life. Or you may be unsure if purchasing an annuity or taking a flexible income is right for your lifestyle.

A financial planner could help you understand the long-term effects of your decisions, so you can feel confident about the future.

This may include using cashflow modelling to visualise how your wealth might change depending on how much income you withdraw from your pension each year. You could even use it to model financial shocks to see how you might create a safety net, which may put your mind at ease and help you move forward with a decision.

We can handle tasks on your behalf

43% of UK adults told the Post Office survey that they would hire a personal assistant to help them with life admin if they could.

If you want to take a hands-off approach to managing your finances, building a long-term relationship with a financial planner could be right for you. We’d take the time to understand your aspirations and how your assets might be used to support them to create a tailored plan.

With regular reviews, we can work with you to ensure your plan continues to reflect changes to your circumstances and wishes and make adjustments if necessary.

Contact us to create a financial plan that works for you

If you’d like to review your finances and how they might support long-term goals, please get in touch. We could work with you to create a tailored plan that suits your needs, offers a clear direction, and provide ongoing support should you have any questions or concerns.

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

Is your estate worth more than £2 million? Your Inheritance Tax liability could be higher than you expect

Often dubbed the “most hated tax” in the media, Inheritance Tax (IHT) is a tax on your estate when you pass away, which could reduce how much you leave behind for family and friends. If your estate is worth more than £2 million, the potential IHT bill might be higher than you expect. Read on to find out why.

Frozen thresholds mean the number of estates liable for IHT is on the rise. Indeed, according to a November 2024 BBC report, around 4% of estates were liable for IHT in 2024 and it’s expected to rise to 7% by 2032.

HMRC statistics show £6.3 billion was collected through IHT receipts between April 2024 and December 2024 – £0.6 billion higher than the same period in 2023.

As the standard IHT rate is 40%, it could significantly reduce the value of your estate if it’s liable. So, it’s important to understand if your estate exceeds IHT thresholds.

The residence nil-rate band is reduced if your estate is worth more than £2 million

Usually, when passing on assets to loved ones, you can make use of two key thresholds.

The nil-rate band, which is £325,000 in 2024/25 and frozen until April 2030. If the entire value of your estate falls below this threshold, no IHT will be due.
The residence nil-rate band could increase how much you’re able to pass on before IHT is due if you leave your main home to your children or grandchildren. In 2024/25, the residence nil-rate band is £175,000 and is also frozen until April 2030.

You can leave assets to your spouse or civil partner without them being liable for IHT, and you may also pass on unused IHT allowances. So, if you’re planning as a couple, you could leave up to £1 million to loved ones before your estate may be liable for IHT.

However, a little-known rule could mean the amount you’re able to pass on before IHT is due is lower.

If the value of your estate is more than £2 million, a taper reduces the residence nil-rate band. For every £2 that the value of your estate exceeds this threshold, the residence nil-rate band will reduce by £1. So, if your estate is worth more than £2.35 million, it will not benefit from the residence nil-rate band.

As a result, your loved ones could face a higher bill than you expect.

5 proactive steps you could take to reduce a potential Inheritance Tax bill

The good news is there are often steps you can take to reduce a potential IHT bill if you’re proactive. So, making IHT part of your wider estate plan could mean you’re able to pass on more to loved ones.

Here are five steps you may want to take if you’re concerned about IHT.

1. Write a will

Writing a will is a way to ensure your assets are passed on in a way that aligns with your wishes. It may also be used to pass on your assets tax-efficiently.

For example, you might state that certain assets are to go to your spouse or civil partner, so they aren’t considered for IHT purposes.

While you can write your will yourself, seeking legal support may be useful. A solicitor could minimise the risk of mistakes occurring and ensure your will clearly sets out your wishes.

As your circumstances and wishes can change, it’s often a good idea to review your will following major life events or every five years.

2. Gift assets during your lifetime

One way to cut an IHT bill is to reduce the value of your estate by passing on wealth during your lifetime.

This option could have other benefits too. You’ll be able to see the effect your gifts have and you might be able to offer financial support when your loved ones would benefit from it most. For instance, a gift to your child when they’re struggling to get on the property ladder could be more useful to them than an inheritance later in life.

However, it’s important to note that not all gifts will be considered immediately outside of your estate for IHT purposes. Usually, gifts will be considered for up to seven years. These are known as “potentially exempt transfers”.

Some gifts will be immediately outside of your estate when calculating IHT, including:

Up to £3,000 each tax year known as the “annual exemption”
Small gifts of up to £250 to each individual, so long as they have not benefitted from your annual exemption
Wedding gifts of up to £1,000, rising to £5,000 for your child or £2,500 for grandchild
Regular gifts from your surplus income that are part of your normal expenditure and do not affect your usual standard of living.

It’s often a good idea to keep a record of gifts, particularly if you plan to gift from your surplus income as HMRC may check to see if the gifts are part of a pattern.

A financial plan could assess the effect of passing on assets during your lifetime and help you understand how gifting might affect your financial security later in life.

3. Place assets in a trust

You may take assets outside of your estate by placing them in a trust and potentially reduce the IHT bill your estate pays as a result.

You can specify who you’d like to benefit from the assets held in a trust, known as the “beneficiary”, and who will manage the trust on their behalf, known as the “trustee”.

Trusts can be complex and once you’ve transferred assets you may not be able to reverse the decision. As a result, taking professional advice could help you assess what’s right for you.

As a financial planner, we could help you understand the effects of placing assets in a trust and how you might do so in a way that aligns with your wishes. A solicitor could also offer support in writing a trust deed, which would establish the trust and set out any rules or conditions you may have.

4. Leave 10% of your estate to charity

If you leave at least 10% of your entire estate to charity in your will, the IHT rate your estate pays may fall from 40% to 36%.

In some cases, leaving a portion of your estate to charity could mean passing on more wealth to your loved ones while supporting a good cause.

5. Take out life insurance

Life insurance won’t reduce an IHT bill, but it could provide your loved ones with a way to pay it.

If you took out whole of life insurance, it would pay out a lump sum on your death to your beneficiary, which they may then use to pay an IHT bill. It’s an approach that could mean you’re able to pass on your estate intact and reduce stress for your loved ones.

You may need to calculate the potential IHT bill to ensure the payout would cover the entire amount. You’ll also need to pay regular premiums to maintain the cover.

It’s also important that the life insurance is placed in trust, otherwise, the payout could be included in your estate when calculating IHT and lead to a larger bill.

Get in touch to talk about your estate’s potential Inheritance Tax liability

There are often other steps you might take to reduce your estate’s IHT liability too. If you’d like to discuss your estate and how you might pass on wealth to your loved ones efficiently, please get in touch to arrange a meeting.

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 estate planning, tax planning, trusts, or will writing.