Retirement can be a tricky time to manage your finances. Often, it represents a huge change as your regular income might stop and, instead, you start to deplete your assets. So, it’s natural that emotions might influence some of the decisions you make if you let them, but it could be harmful.
Here are three different ways emotions could affect your retirement outlook and how to manage them.
Retirement is often an exciting milestone and one you might have been looking forward to for years.
So, if you’re focused on enjoying the moment and ticking off some of those long-awaited dreams, you’re not alone. Perhaps you’ve booked an extravagant holiday now you don’t have to fit it around work, or you’ve finally got around to making the home improvements that have been on your mind for ages.
Celebrating the next chapter of your life is important – you’ve earned it – but it often needs to be balanced with a long-term outlook.
Many retirees have a defined contribution pension (also known as a personal pension), which doesn’t provide a regular income. Instead, you’ll need to manage how and when to access your savings to ensure they provide financial security for the rest of your life. There’s a risk that if you spend too much too soon, you could run out in your later years.
Meeting your financial planner to discuss how much you can sustainably withdraw from your pension could help you strike the right balance. Knowing that your plan considers your long-term financial security could mean you’re able to enjoy those early retirement celebrations even more.
During your working life, your pension is usually invested with the aim of delivering long-term growth. As modern retirements often span decades, it could make sense to leave your pension or other assets invested when you give up work to potentially generate returns.
One of the emotional challenges of investing is the temptation to react to market news. Whether it’s negative or positive, attention-grabbing headlines can leave you feeling like you need to make adjustments to your investments.
You might be excited about an opportunity or fearful of a potential downturn, and make a knee-jerk decision based on these emotions.
However, as with investing when you’re working, a measured, long-term approach often makes sense for retired investors. While investment returns cannot be guaranteed, markets have, historically, delivered returns over a long-term time frame.
Try to tune out the noise and emotions when you’re reviewing your investments and focus on your goals instead.
Reviewing your investment strategy as you near retirement could help you feel more confident about your long-term finances and identify if adjustments might be necessary, based on your changing circumstances rather than emotions.
While some retirees risk running out of money, the opposite can also be true.
Despite having saved diligently during their working life for a comfortable retirement, some people find that their concerns mean they feel nervous about using their pension or other assets. It could mean that a retirement that promised much is disappointing, even though they have the funds to turn their goals into a reality.
You might think of financial planning as a way to grow your wealth, but that’s not always the case. Financial planning is about helping you use your assets to reach your goals. In retirement, that could mean encouraging you to spend more if you’re in a position to do so.
If you’ve been putting off booking the safari you’ve been looking forward to or simply counting every penny when you go shopping, a meeting with your financial planner might be just what you need.
By understanding your assets and how the value of them might change during your lifetime depending on your spending habits, you can set out a budget that’s right for you and, hopefully, find the confidence to really enjoy this chapter of your life.
A retirement plan that’s been tailored to your lifestyle goals and financial circumstances could give you the confidence to dismiss potentially harmful emotions and focus on getting the most out of your retirement years. Please contact us to arrange a meeting with our team.
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.
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.
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.
Passing on your wealth to loved ones could transform their lives and mean they have more opportunities in the future. However, to get the most out of the “great wealth transfer”, younger generations need to be prepared to manage their inheritance.
According to September 2024 data from Vanguard, it’s estimated $18.3 trillion (£13.45 trillion) in wealth will be transferred globally by 2030. It’s expected to be the largest intergenerational transfer of assets in history, leading to it being dubbed the great wealth transfer.
In the UK alone, it’s estimated that £7 trillion will pass between generations by 2050.
Receiving an inheritance provides your loved ones with a chance to improve their financial security and reach lifestyle goals, from home ownership to travelling. However, with previous US research suggesting that up to 70% of affluent families lose their wealth by the next generation, you might want to think beyond assets.
When you’re creating an estate plan, taking steps to ensure your assets are passed on in line with your wishes is essential.
If you want to leave assets to loved ones after you pass away, writing a will is often a priority. A will lets you state what you’d like to happen to your assets when you die. Without a will, assets will usually be distributed according to intestacy rules, which could be very different from your wishes and mean some intended beneficiaries are disinherited.
There are other alternative options to consider as part of your estate plan, including:
With an estate plan setting out how you want to pass on wealth to your family, you can start to think about how to ensure your beneficiaries are equipped to manage it.
While wealth can be something of a taboo subject, talking about money and other assets could be hugely beneficial for your loved ones.
Talk to your beneficiaries about your wishes
Many people in the UK don’t discuss what they want to happen to their assets after they pass away. According to an October 2024 report from The National Will Register, 53% of adults haven’t done so.
As a result, it’s likely many beneficiaries are unsure about what they’ll inherit and how assets will be passed on. This could lead to them feeling overwhelmed when they receive the inheritance and potentially make poor financial decisions. Speaking to your loved ones about your wishes could allow them to make long-term plans.
However, it’s important to note that inheritances cannot be guaranteed. Changes to your circumstances could mean the inheritance is less than expected, so they should consider this.
Share your financial experiences and goals
Sharing your money experiences, both the positives and the negatives, can be powerful. It can be a way to pass on the knowledge you’ve amassed and encourage good financial habits.
It’s also an excellent opportunity to talk about the legacy you want to leave. If you have a clear idea about how you’d like your loved ones to use the wealth you’re leaving them, talking about the reasons why could mean they’re more likely to uphold your values and make decisions that align with your wishes.
As well as talking about your goals, take the time to understand theirs too. Listening to the challenges they face and their aspirations could help identify ways you might be able to offer support.
Create an intergenerational financial plan
If you currently manage your finances completely separate from your beneficiaries, you might want to consider creating an intergenerational financial plan that involves them.
An intergenerational plan may establish ways to improve tax efficiency and support the long-term goals of each person. It’s also an excellent way to introduce your loved one to financial planning and working with a professional if they don’t already, which may mean they’re better prepared for the great wealth transfer.
An intergenerational financial plan doesn’t mean you have to involve your beneficiaries in all your financial decisions or share the details of every asset; you can tailor the approach with your financial planner to suit you.
If you’d like to review your existing estate plan or discuss how we could work with you to financially prepare the next generation, please contact us.
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 Financial Conduct Authority does not regulate wills, trusts, Inheritance Tax planning, or estate planning.
It’s been 40 years since Back to the Future delighted cinema-goers with its time-travelling adventure. Teenager Marty McFly discovers the power of the “ripple effect”, and it’s something that could be valuable when you’re creating a financial plan as well.
One of the plot devices in Back to the Future is the ripple effect – the spreading impact of an initial event. Even a seemingly small change to the timeline has the potential to have far-reaching implications.
The ripple effect can change the course of your life, too. Small decisions or events outside of your control could have a far larger effect on your future than you might expect.
The good news is financial planning could give you a glimpse into the future too. While cashflow modelling doesn’t involve hopping into a DeLorean with your financial planner and reaching 88mph, it could offer you insights into your future that are just as valuable. This guide explains why.
There are other useful lessons you could pick up from Back to the Future as well, including:
Download your copy here: “What the Back to the Future ripple effect could teach you about financial planning” to discover more about these lessons hidden in the cult classic.
If you want to talk to us about how cashflow modelling could inform your decisions, or any other aspect of your financial plan, please get in touch.
Data from a May 2025 article from Morningstar suggests the amount invested in ESG (environmental, social and governance) funds fell in the first quarter of 2025. While the news might spark concerns about your portfolio, sticking to your long-term plan often makes sense. Read on to find out why.
ESG investing involves assessing other factors alongside financial ones when deciding how to invest. Depending on your goals, you might consider how operations contribute to climate change or if a company’s supply chain could contain human rights abuses. As an investor, you’d still consider areas like potential returns and investment risk.
An ESG fund would pool your money with that of other investors. The money would then be invested in a range of assets and businesses that align with the fund’s criteria. As a result, an ESG fund could be a useful way to reflect your values when investing without having to make regular investment decisions.
According to the Morningstar report, ESG funds experienced their worst quarter on record in terms of the amount being invested at the start of 2025.
In the first three months of the year, the figures show the sector registered net outflows of $8.6 billion (£6.4 billion). This is in sharp contrast to the $18.1 billion (£13.5 billion) inflows that were recorded in the final quarter of 2024.
So, why did this reversal happen? There isn’t a simple answer, but there are two key factors that are likely to have played a role.
First, Donald Trump, president of the US, has deprioritised climate goals and is, instead, focusing on defence and economic growth. Other policy measures may also affect how companies promote their ESG credentials. For example, an executive order targeting diversity, equity, and inclusion (DEI) could present legal risks.
Second, both the UK and EU are set to introduce requirements on fund names to provide greater clarity over what terms like “sustainable” or “responsible” mean for investors. This has led to some funds rebranding.
Indeed, Morningstar reports that an estimated 225 European funds with ESG-related terms in their names rebranded in the first quarter of 2025, including removing ESG terms completely.
Seeing data that shows ESG investing is falling, may be a cause for concern if you consider ESG issues when making financial decisions.
So, should you change your strategy now? While the answer will depend on your goals and circumstances, the short answer is often “no”.
Here are three reasons to stick to your long-term ESG investment strategy.
1. Investing with a long-term goal makes sense for most investors
You may feel uneasy when it seems like everyone else is doing something different to you, including when you’re investing.
However, letting news sway your decisions could mean your investment portfolio no longer reflects your long-term goals or other important factors that were considered when creating a strategy, such as your risk profile.
If you want to review your investments, take a long-term view rather than making knee-jerk decisions based on data that might only show part of the bigger picture.
2. All investments carry some risk
Some investors withdrawing their money from ESG funds may be doing so because they fear there’s now a greater risk that they’ll lose their money. However, all investments carry some risk and reacting to negative emotions could mean you’re more likely to miss out on potential returns.
Of course, no investment can offer guaranteed returns. So, it’s important to ensure the level of risk you take is appropriate for you.
3. Your values still matter
There are plenty of reasons why an investor might decide they want to incorporate ESG issues into their investment decisions. However, for many, reflecting their values in their finances is key.
An ESG investment strategy may involve investing in companies that share your beliefs and avoiding those that operate in a way that doesn’t align with your values. If this is important to you, other people moving away from ESG funds shouldn’t change your strategy – your values still matter.
Whether ESG issues are already part of your wider investment strategy or not, we’re here to answer your questions. We could work with you to create a balanced investment portfolio that considers your values, risk profile, and financial goals. Please get in touch to arrange a meeting.
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.
A Junior ISA (JISA) is often an effective way for parents to start putting money aside for their children to help them reach their goals when they reach adulthood. One important question parents need to consider is: Should the money be held in a Cash JISA or invested through a Stocks and Shares JISA?
Read on to find out what you need to know about JISAs, and how to choose between saving and investing.
Like their adult counterparts, JISAs are efficient as the interest or returns generated are not liable for tax. In the 2025/26 tax year, you can deposit up to £9,000 across all JISAs for each child.
Only a parent or guardian can open a JISA, and once it’s set up, other loved ones can pay money into it.
The money placed in a JISA is not usually accessible until the child turns 18. So, it’s a useful option if you’re saving to help them reach a long-term goal like funding university, paying for driving lessons, or buying their first home. However, keep in mind that the child will have control of the money and how it’s used once they turn 18.
Government statistics published in December 2024 show that around £1.5 billion was added to JISAs in 2022/23, and more than 40% was placed in Cash JISAs. So, what’s the difference between a Cash JISA and a Stocks and Shares JISA?
Interestingly, an April 2025 report from the Investment Association indicates that parents who have a Cash ISA are almost twice as likely to open a Cash JISA for their child. While cash may be the right option for some families, choosing it because it’s what you’re familiar with could mean your child misses out on potential long-term returns.
If you’re unsure whether to select a Cash JISA or a Stocks and Shares JISA, these three questions could help you identify which one is right for your needs.
1. When does your child turn 18?
How long the money will be held in a JISA before it’s accessed might influence your decision for two key reasons.
First, the effects of inflation compound over time. So, if your child is still young, the rising cost of living could have a much greater effect on the value of savings than if they were a teenager.
Second, it’s usually sensible to invest with a minimum time frame of five years. This is due to markets experiencing volatility – a longer investment period provides more opportunity for the peaks and troughs to smooth out.
So, if your child is nearing 18, a Cash JISA may be more suitable, while you might want to consider investing if they’re younger.
2. What are your goals?
How you want the money to be used will often play a role in how much risk you feel comfortable with. As a result, setting out your goals may be useful.
For example, if the money is essential for helping your child pursue further education, you might be less inclined to take a risk than if it may be used to fund a holiday.
A financial planner could work with you to understand your risk tolerance and assess if investing is right for your goals.
3. What other steps are you taking to build a nest egg?
You might also be taking other steps to build a nest egg for your child. For instance, you could have a savings account for them or simply be putting money to one side in your own account.
If you are, it’s important to look at your JISA decision in a wider context – if your child will already receive cash savings on their 18th birthday, choosing a Stocks and Shares JISA may make financial sense.
Depending on your circumstances, you might decide to open more than one JISA for your child. As a result, you could save and invest at the same time.
Remember, the £9,000 JISA allowance in 2025/26 applies to all JISAs, so you may need to keep track of deposits going into each account, including those made by other people.
As well as opening a JISA for your child, other steps could make their future more financially secure. For example, you may pay into a pension on their behalf, make them a beneficiary of your will, or pass on a one-off financial gift during your lifetime.
Please get in touch to discuss your financial goals and how you could build a nest egg for your child.
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.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances. Investments do not give the same capital security as cash deposits
If you’ve been keeping up with the news recently, you’ll likely know that global economic growth is under increasing pressure.
In February 2025, the Bank of England halved its forecast for UK growth this year from 1.5% to just 0.75%, the BBC reports.
Meanwhile, the Guardian reveals that US Gross Domestic Product (GDP) shrank by 0.3% in the first quarter of 2025, partly due to uncertainty surrounding Donald Trump’s questionable economic policy.
GDP – which reflects a nation’s total economic output – remains a key measure of financial health. It indicates how much a country produces and whether its economy is growing or contracting.
Two consecutive quarters of negative GDP growth usually signal the start of a recession, a time when incomes tend to fall, the job market is weaker, and – crucially, if you’re planning to retire soon – potential market turbulence occurs.
Several financial organisations seem to take this risk seriously, too.
Indeed, the International Monetary Fund (IMF) recently increased the probability of a global recession from 17% to 30%, while JP Morgan has placed chances even higher at 60%.
Whether a recession actually occurs or not, this could be a sensible moment to consider how prepared you are.
If you’re approaching retirement, the next few years might seem especially uncertain, but you can take several proactive steps to recession-proof your plans. Continue reading to discover four ways of doing so.
Now could be the ideal time to assess your overall financial health. Even if you already have a retirement plan in place, it’s important to remember that it should evolve as your circumstances change and new challenges, such as the threat of a recession, emerge.
You could start by reviewing your monthly spending, and in doing so, you may identify non-essential costs you could cut back.
Even small reductions can add up, freeing up extra wealth to act as a helpful buffer during times of economic uncertainty.
It might also be prudent to address any outstanding unsecured debt. High-interest debt – such as that from credit cards and overdrafts – can quickly snowball and drain your financial and mental wellbeing.
Clearing these, where possible, could free up funds to act as a financial cushion during any potential global recession.
As markets tend to respond to economic uncertainty, you may find that the value of any investments held within your pension fluctuates more than usual.
While this volatility can be unsettling, it’s vital to remain calm and maintain a long-term view.
Still, it could be wise to review your pension investments now, as doing so could help you feel more confident.
One area to assess is your diversification. If your pension portfolio is spread across various asset classes, sectors, and geographical areas, it might be more likely to withstand periods of downturn in specific areas.
You essentially reduce the risk of being overexposed to any given part of the market, which is especially valuable during a recession.
It’s also worth taking a look at your current risk profile. As retirement draws closer, you may want to think about reducing your exposure to higher-risk investments. Or, you could ensure that your investments still reflect your appetite for risk and your time frame for drawing an income.
A financial safety net in the form of an emergency fund is helpful at the best of times, and could be even more so during a recession.
Generally, it’s worth setting aside between three and six months’ worth of essential household expenses in an easy access savings account.
This could protect you from unexpected costs without having to access funds ringfenced for other purposes.
If you’re already retired, it might be prudent to save more, potentially between one and two years of expenses.
Doing so could mean that you don’t have to sell investments at a time when their value is temporarily lower due to recession.
You won’t have to deplete your savings as quick, either, and you will be less likely to be subject to “sequence risk”, when the timing of retirement withdrawals negatively affects your overall returns.
Protection might also be practical, especially critical illness cover. This form of cover pays a tax-free lump sum if you’re diagnosed with a serious condition covered by your provider.
This might allow you to fund your recovery without prematurely exhausting your retirement fund, all while offering some peace of mind at an already challenging financial time.
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.
It’s entirely understandable to feel anxious when the media is constantly discussing reports of economic slowdown and market uncertainty. Even the word “recession” might be enough to spark fear.
Yet, staying calm and focused on your long-term plan is essential, and this is where working with a professional can help.
A review with your financial planner could provide the ideal opportunity to step back and assess how your retirement plans hold up to various scenarios.
Your planner could walk you through some of the potential risks, and help you identify whether any adjustments are needed. This might involve rebalancing your investments, assessing your budget, or even ensuring that your financial safety net is adequate.
With a clearer picture of your finances, you could move forward with greater clarity and confidence, even if a global recession does materialise.
Please get in touch with us today if you’d like some support.
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.
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.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
Achieving “financial freedom” is an aspiration many people have. Yet, it can mean different things to each person and is influenced by other lifestyle goals, so defining how to measure it for you could help you turn it into a reality.
Securing financial freedom so you can retire with confidence is a common goal.
A January 2025 Legal & General survey asked people what their perfect retirement would look like. The top answer was “living stress-free without financial worries”. Correspondingly, the biggest barrier to retirement was financial concerns, which ranked higher than potential health issues and fear of boredom.
Some modern money trends have arisen from the desire to achieve financial freedom too.
For example, FIRE, which stands for “financial independence, retire early”, involves workers devoting large portions of their income to savings and investments. Followers of the movement aim to retire from traditional work as soon as possible and live off the passive income their assets generate.
The common theme among people working towards financial freedom is to live the lifestyle they want, including giving up work if they choose, while maintaining their financial security. However, how much you need to do this can vary enormously.
So, setting out what financial freedom would look like to you could be useful. Answering these two questions may provide a useful starting point.
Read on to find out what you might consider when reflecting on these questions and how financial planning could help you create an effective road map to financial freedom.
To calculate how much you need to secure financial freedom, you need to understand how much your desired lifestyle will cost. This is where you think about what you want the freedom to do.
Some people would prefer to live more frugally if it meant they could step back from work sooner, while others might be looking forward to a more luxurious lifestyle. From how often you’d like to eat out to what holidays you’d like to take, setting out lifestyle expectations is an essential step.
So, answering questions like those below may help you define what financial freedom means for you.
It may be useful to break down your income needs into essential and non-essential spending. This way, you could understand how adjusting your lifestyle might mean you’re able to reach financial freedom sooner – would you choose a lifestyle that involves spending less if you could retire earlier than expected?
To fully enjoy the lifestyle you want, you often need to have confidence in your finances. So, when you’re thinking about what you want to be free from, concerns and worries are common.
For example, to make the most of financial freedom, you might benefit from being free from worrying about:
Addressing these concerns when you’re setting out what financial freedom means to you could help you take steps to protect your long-term financial security and ease your mind.
Armed with your answers to the above questions, your financial planner can work with you to create a financial plan that focuses on securing financial freedom.
As you’ll typically need to consider the long-term effects of saving, investing, spending, and more, a cashflow model may be a valuable tool. Cashflow modelling could help you visualise how the value of your assets might change over time.
For example, you could see how the value of your investment portfolio might rise over the next decade as you divert more of your income to it. Once you give up work, you might draw an income from your investments. A cashflow model could show how the value would change depending on the withdrawal rate, investment returns, and how long it’ll be used to create an income.
As a result, cashflow modelling could help you calculate how much you need to be financially secure.
You can also model different scenarios on a cashflow model, which may be useful for addressing the concerns you want to be free from. For instance, you might adjust expected investment returns to understand how a period of volatility could affect your long-term finances.
Being aware of the potential risks often gives you an opportunity to create a financial buffer or take other steps to mitigate the effects. So, cashflow modelling could mean you’re able to enjoy your financial freedom, rather than worrying about what’s around the corner.
It’s important to note that the outcomes of a cashflow model cannot be guaranteed, but the information can provide valuable insights and help you make more informed financial decisions.
If you’d like to talk to one of our team about your financial plan or how we could help you reach your goals, please get in touch.
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.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). 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.
The Financial Conduct Authority does not regulate cashflow modelling.
This guest blog was written by Chris Budd, who wrote the original Financial Wellbeing Book, and also the Four Cornerstones of Financial Wellbeing. He founded the Institute for Financial Wellbeing and has written more than 100 episodes of the Financial Wellbeing Podcast.
Financial wellbeing is a broad term that encompasses all aspects of the relationship between money and happiness.
Some of these aspects are things that we can do to improve that relationship and thereby enable better financial decisions. In particular, there are many things that we can do to change how we deal with money daily. We might call this “financial resilience”.
There are five parts to improving our financial wellbeing:
The first of these describes having a financial plan. In particular, the importance of taking time to think about those objectives from a wellbeing standpoint.
This is a longer-term view. But to achieve that plan, we also need to think about our relationship with money over the short term to ensure that we have control over our daily finances.
There is one overarching principle to having a better relationship with money: engagement.
Too often, we ignore money, hoping that things will “sort themselves out”. This is the enemy of wellbeing. Engaging with money means understanding its importance in our lives (hint: it’s a lot less important than we often think!).
By engaging with our money, we start to understand what it enables us to do – and what we don’t need it for. For example, why not take some time to look at your bank statement and do some quick sums on how you are spending your money? Just this small act can be revelatory!
It’s also a good idea to make sure that your dependents also know some details of your financial affairs. Get control of the finances, and this act alone will increase your resilience.
Once you have begun to engage, there are a few specific actions you might take. Some are obvious, such as getting your will up to date (tip: if appointing a third party as executor, be wary of using an institution such as a bank. Clarify future fees beforehand, or you might leave an unpleasant problem behind).
It’s always best to use a solicitor to draw up a will, and it’s a good idea to make sure your financial adviser has a copy.
Gaining a better understanding of what brings joy into our lives helps us reduce the time that we spend comparing ourselves with others. We rarely compare down and feel good – it’s far more common to compare up and feel bad. Taking time to understand what brings joy to our lives reduces the negative impact of those comparisons.
Just getting things in order can be of great help. Make sure all your loved ones have been introduced to your financial adviser. Even just compiling a list of policies, savings and pension plans can help reduce worries and thereby increase resilience.
If we spend our money on buying stuff, the wellbeing we get tends to be relatively short-lived. Once we have worn, read, listened to, looked at, and eaten the thing that we have bought, the wellbeing we get from it diminishes rapidly.
In contrast, if we spend money on an experience, the wellbeing we get comes in the form of memories, which are much longer-lasting.
Consequently, we can increase our financial wellbeing by spending money on experiences – and if those experiences are with our loved ones, or perhaps even a trip to see someone you haven’t seen for a long time, then the wellbeing increase is even greater.
Buying tickets for future events as presents is a great way to increase wellbeing. There is the wellbeing of giving the present, the anticipation of the event, and then the memories from it.
Financial resilience comes from having control. By engaging with our finances, we can develop a better relationship with money. In this way, we can develop a better understanding of how money can improve our wellbeing, and reduce how it inhibits our wellbeing.
By engaging with our finances, we can improve our financial resilience and thereby ensure that money acts as our servant, rather than our master.
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 Financial Conduct Authority does not regulate wills.
Uncertainty continued to lead to market volatility in May 2025. However, there was some good news for investors as some markets recovered the losses they experienced in April 2025. Read on to find out more and what factors may have influenced your portfolio’s performance recently.
While market movements may be worrisome, remember, it’s a normal part of investing. Keep your long-term goals and strategy in mind when you review how the value of your investments has changed.
The month got off to a good start for investors – the FTSE 100, an index of the largest 100 companies listed on the London Stock Exchange, recorded its longest-ever winning streak. On 3 May, the index had made gains for 15 consecutive days and almost recovered all the losses that followed tariff announcements in April.
The European markets experienced some volatility at the start of the month as Friedrich Merz lost the vote to become Germany’s chancellor. It led to some calling for a fresh election, and also uncertainty – on 6 May, the German index DAX fell 1.9%.
After a tit-for-tat trade war sparked investor fear in April, many were optimistic when trade discussions between the US and China began on 7 May. Combined with the People’s Bank of China cutting interest rates by half a percentage point, this led to Asian stocks lifting. Indeed, the Shanghai Composite rose by almost 0.5%.
This was followed by Donald Trump, president of the US, announcing a “full and comprehensive” trade deal with the UK. When markets opened on 8 May, Wall Street was up 0.6%.
Hope that other countries will also reach agreements with the US lifted European markets. The DAX in Germany increased by 0.6% to reach a record high, while France’s CAC was up 0.5% on 9 May.
Wall Street surged on 12 May when it was revealed the US and China had agreed to a 90-day pause on tariffs. The Dow Jones Industrial Average (2.3%), S&P 500 (2.6%), and Nasdaq (3.6%) all rallied.
Similarly, when markets opened in Asia, Chinese indices jumped, particularly technology and financial stocks.
However, the positive news didn’t last throughout the month.
On 19 May, credit ratings firm Moody’s downgraded the US’s rating from triple-A to Aa1. The decision was linked to the growing US national debt, which is around $36 trillion (£26.6 trillion) and rising interest costs. The announcement led to global volatility.
What’s more, on 23 May, Trump threatened further tariffs, which led to markets falling.
In a bid to encourage technology giant Apple to make its iPhone in the US, Trump suggested the company could face a 25% tariff. Apple’s shares fell by around 3% before markets opened after the comments were made.
Trump also said EU imports would face a 50% tariff from the start of June. He added he wasn’t looking to make a deal with the bloc, but instead wanted EU businesses to build plants in the US. The news led to falls across European markets, including the DAX (-1.6%), FTSE 100 (-0.24%) and Italy’s FTSE MIB (-2%).
However, just a few days later, Trump agreed to delay EU tariffs and suggested meetings would be arranged to discuss a trade deal.
The Bank of England (BoE) decided to cut its base interest rate by a quarter of a percentage point to 4.25% – the lowest rate in two years – at the start of the month.
However, inflation data may raise concerns for the BoE. While inflation was expected to rise, it was higher than predicted. In the 12 months to April 2025, inflation was 3.5%, with increasing energy costs playing a key role in the rise.
GDP data was positive. The UK grew by 0.7% in the first quarter of 2025, making it the fastest-growing G7 economy. Yet, the think tank Resolution Foundation warned a rebound is unlikely, and it expected April data to be weaker.
The UK unveiled a trade deal with India, covering a range of products from cosmetics to food. The agreement represents the biggest trade deal since Brexit in 2020 and is expected to increase bilateral trade by more than £25 billion over the long term.
While many businesses are worried about the potential effects of trade tariffs, aerospace and defence firm Rolls-Royce said it could offset the impact. CEO Tufan Erginbilgic said the company expected to deliver an underlying operating profit of between £2.7 billion and £2.9 billion in 2025 on 1 May, which led to share prices increasing by 2.7%.
The firm benefited from a further boost of 4% on 8 May when the UK-US trade deal was announced.
However, other firms aren’t expected to fare as well.
Drinks company Diageo, which produces around 40% of all Scotch whisky, predicts it will lose around $150 million (£111 million) due to tariffs.
Inflation in the eurozone continued to hover above the 2% target at 2.2% for the 12 months to April 2025.
Eurostat lowered its estimate for economic growth in the eurozone in the first three months of the year to 0.4%. In the first quarter of 2025, Ireland boasts the fastest-rising GDP (3.2%), while contractions were measured in Slovenia, Portugal, and Hungary.
Unsurprisingly, the European Commission also cut its growth forecast for the eurozone in 2025 from 1.3% to 0.9%. It said this was “largely due to the increased tariffs and the heightened uncertainty caused by recent abrupt changes in US trade policy”.
HCOB’s PMI output index for the eurozone fell from 50.9 to 50.4 in April – a reading above 50 indicates growth. While still growing overall, it’s notable that France’s private sector contracted for the eighth consecutive month and Germany’s output barely rose. However, there was a strong increase in Ireland, and Spain and Italy also expanded.
There is potentially good news on the horizon. Germany’s factory orders jumped by 3.6% in March as companies tried to get ahead of tariffs.
Trump's tariffs, which aim to reduce the trade deficit, have initially, at least, had the opposite effect.
As businesses tried to stock up before new tariffs were imposed on goods from abroad, the US trade deficit reached a record high in April. The deficit increased by $17.3 billion (£12.8 billion) to $140.5 billion (£104 billion).
GDP data also suggests Trump's policies are having a negative effect on the economy. In the first three months of 2025, GDP fell by 0.3%; this is in stark contrast to the 2.4% rate of growth recorded in the final quarter of 2024. It marks the first time the US economy has shrunk in three years.
The University of Michigan’s index of consumer sentiment indicates households are worried about their finances. Americans are concerned about potentially weakening incomes, with the index falling 26% year-on-year.
Tariffs are expected to affect a range of businesses, including the car manufacturing sector.
The three big US car manufacturers – General Motors, Ford, and Stellantis – all have some manufacturing facilities in Mexico or Canada that serve the US market and are likely to be affected by trade tariffs.
General Motors expects tariffs to cost the company as much as $5 billion (£3.7 billion) this year. Similarly, Ford has said tariffs will cost around $1.5 billion (£1.1 billion) in profits this financial year and has suspended its guidance while it seeks to understand the full impact of consumer reaction and competitive response.
At the start of the month, the Bank of Japan cut its economic growth forecast for the fiscal year ending March 2026 from 1.1% to 0.5%. The bank cited trade policies as the reason for the fall.
Indeed, GDP for the first quarter shows Japan’s economy contracted by 0.7% due to a decline in exports and private consumption as households cut back their spending.
Trade between China and the US fell sharply in April. Shipments to the US fell 21% year-on-year, and imports declined by 14%. However, the data suggests that Chinese manufacturers have found alternative markets. Overall exports jumped by 8.1% compared to the forecast rise of 1.9%.
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.
When a 1920s ad referred to compound interest as “the eighth wonder of the world”, the quote was left unattributed. But that didn’t stop it from becoming synonymous with the celebrated physicist, Albert Einstein.
The link was likely intended to lend credibility to a statement that at first glance seems bold. And yet, compounding could be key to the success of your long-term financial plans.
As Einstein did or didn’t say, “He who understands it, earns it, he who doesn’t, pays it.” Whoever did say this, knew what they were talking about.
The compounding effect – essentially growth on growth that snowballs over time – can have an enormous impact on your finances. It can significantly increase the size of your savings and investments in the long term but, if not carefully managed and understood, it can also work against you.
This handy guide clearly explains how compounding works, and provides examples of how it might boost or harm your financial circumstances.
Download your copy here: “The compounding effect: How it could boost or harm your finances” to find out why compounding may be an essential part of your long-term financial plan.
Please get in touch if you’d like to speak to one of our team about how we could work with you.
Please note: This guide is for general information only and does not constitute advice. 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.
The Financial Conduct Authority does not regulate cashflow planning.
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.
