The importance of remaining calm is often something that’s talked about when discussing investment market volatility. But there are other factors outside of your control that might lead to emotional decision-making, including uncertainty about the upcoming Autumn Budget.
Chancellor Rachel Reeves is expected to deliver an Autumn Budget at the end of October. Despite being weeks away, there’s already speculation about higher taxes and allowances being slashed.
With rumours featuring in the headlines, it can feel like you should be doing something to prepare for the potential changes. However, making knee-jerk decisions before changes are confirmed could harm your long-term financial plan.
For example, ahead of the 2024 Autumn Budget, there were attention-grabbing headlines suggesting the pension tax-free allowance would be scrapped. It led to some people taking a lump sum from their pension, even when it hadn’t been part of their financial plan. When the announcement didn’t materialise, some were unable to cancel the withdrawal or place the money back in their pension.
As pensions provide a tax-efficient way to invest, those who acted on speculation may pay more tax overall or find their pension now falls short when planning for retirement.
So, read on to discover some tips for remaining calm in the run up to the Autumn Budget.
It’s easier said than done, but try tuning out the noise in the lead-up to the Budget.
Reducing how much you’re exposed to speculation could reduce stress and mean you’re less likely to make decisions that could harm your long-term financial plan based on rumours.
That doesn’t mean you have to turn off the news completely. Simply being mindful of where the updates are coming from or only reading the headlines once a day could minimise the pressure you might feel.
Sometimes updates can make it seem as though a rumour is confirmed, particularly if you’re getting your news from social media.
So, before you respond to news or even worry, take some time to fact-check the source and understand if the reported change is speculation.
Headlines about changes may sound like they’ll affect everyone, or use average figures to highlight the potential implications. However, as financial circumstances and goals vary significantly, taking some time to understand what it means for you could be important; you might find an announcement won’t affect your long-term financial plan at all.
For instance, there are suggestions that the amount you could place into a Cash ISA may be reduced. That might seem like something you should worry about, but if you use your ISA to invest, it may have little effect.
Similarly, headlines might read that changes to Inheritance Tax (IHT) mean the average bill will increase by 10%. Yet, your estate might not be liable for IHT, or your existing estate plan could mitigate the effects.
Your financial planner is here to help you understand what speculation and confirmed changes could mean for you.
Often, an Autumn Budget announcement isn’t implemented immediately.
For example, in the 2022 Autumn Budget, it was announced that the Capital Gains Tax annual exempt amount would be reduced from £12,300 to £3,000. It fell to £6,000 in April 2023, and then to £3,000 in April 2024.
As a result, you usually have time to understand what the changes mean for you and carefully consider how you’ll respond before they come into force.
This isn’t always the case, and sometimes changes, including tax hikes, may be implemented right away. When this happens, it can feel like you need to act immediately. However, taking a step back to weigh up your options and speak to your financial planner, rather than making a snap decision, is often still valuable.
If you're tempted to make changes to your financial plan because of speculation, your financial planner could help you assess if it’s the right decision for you.
Remember, we’ll be here to help you navigate Autumn Budget announcements that might affect your financial plan. If changes happen, we can work with you to review and update your long-term plan to ensure it continues to reflect current legislation and your circumstances. Please get in touch if you’d like to talk to one of 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.
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 and estate planning.
While many people don’t rely on care later in life, planning for the potential cost of it could help you feel confident about the future and mean you have more options should you need support.
Needing residential or nursing care in old age is not a certainty. But, life expectancies in the UK are rising, with the Office for National Statistics life expectancy calculator showing that a 55-year-old man today has an average life expectancy of 84, with a 1 in 4 chance of living to 92.
For a 55-year-old woman, average life expectancy rises to 87, with a 1 in 4 chance of living to 95.
With an ageing population comes the increasing chance that you will need care in some respect, whether that’s moving to a facility or having carers come to your home.
So, while needing care might not be a foregone conclusion, it’s important to plan for it. Last month, you read about some of the reasons why you might consider care now. Read on to discover how you may make it part of your wider financial plan.
It can be difficult to calculate how much care services could cost. After all, it’s impossible to know what’s around the corner. Setting out your preferences and doing some research could be valuable.
To start, you might consider different scenarios to understand how you’d feel about the options. For example, you may answer questions like:
With your preferences set out, you can start to calculate how much the different options may cost. The cost of care varies significantly across the UK, so doing some research in your local area alongside reviewing average figures could be beneficial.
Don’t forget you’ll need to consider how the cost of care is likely to change over the long term due to the effects of inflation.
When planning for care, it’s also important to consider a range of scenarios. If you only expect to get by with minimal support that your family could provide, you could find yourself in a difficult situation if your needs are more complex.
Being thorough when creating a care plan may mean you have more options should you need care and, hopefully, reduce financial worries at a time that might already be difficult.
There are many ways you might cover the cost of care. Here are four of the main options you could incorporate into your long-term financial plan.
1. Ringfence a portion of your wealth
Perhaps the simplest option is to ringfence a portion of your wealth for care costs. For example, you might earmark a portion of your savings or investments for care should it be needed.
2. Create a regular income
Another option is to create a regular income that would be enough to cover care costs.
You might do this by purchasing an annuity with your pension, which would then pay an income for the rest of your life. Alternatively, you might adjust your investment portfolio to create an income stream.
Your financial planner could help you assess how to create an income that offers reassurance about the future if you need care.
3. Take out long-term care insurance
It’s also possible to take out insurance that will pay a regular income if you need long-term care. The income may be paid directly to your care provider.
If you’re considering this option, it’s important that you understand the terms and conditions before taking out insurance. For instance:
You may need to pay regular premiums to maintain the cover, which will vary depending on a range of factors, including your health and lifestyle. In some cases, you might make a one-off payment instead.
Please note, life assurance plans typically have no cash in value at any time and cover will cease at the end of term. If premiums stop, then cover will lapse.
4. Use your property
Your home might be one of the largest assets you own. According to the Halifax House Price Index in June 2025, the average home in the UK was worth almost £300,000. So, if you’re thinking about how to fund a potentially large care bill, don’t overlook property.
There are several ways you might use property wealth to fund care.
If you’re moving into a care home, you might choose to sell your property to cover the cost.
Alternatively, you may use equity release to access some of the money tied up in your property without selling it. This could be a useful option if you want to remain living in your home.
However, there are drawbacks to consider before choosing equity release. The most common type of equity release is known as a “lifetime mortgage” and involves taking out a loan against your home.
With a lifetime mortgage, you don’t have to make any repayments, and the interest is rolled up. Instead, the loan is repaid when you pass away or move into long-term care. As a result, the amount owed could be significantly higher than the amount you initially borrowed and could affect the inheritance you leave for loved ones.
Seeking tailored advice could help you understand whether equity release is right for you.
It’s important to note that equity release will reduce the value of your estate and can affect your eligibility for means-tested benefits. A lifetime mortgage is a loan secured against your home. To understand the features and risks, ask for a personalised illustration.
If you’d like to review your existing care plan or would like our support creating one, please get in touch.
Next month, read our blog to discover some of the steps you might take to ensure your wishes around care are followed.
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.
Average life expectancies have increased significantly in recent years, both in the UK and the rest of the world. While people living longer is always good news, it also brings new challenges for your health and, crucially, your finances.
Maintaining your physical and mental wellbeing over a longer life requires more than just good luck. It involves making intentional choices about your diet, exercise, mental health, and lifestyle.
At the same time, increased longevity means your financial resources need to stretch further, and financial planning is an important part of ensuring you can enjoy later life without stress.
As well as practical wellbeing tips that could help you enjoy a longer retirement, this useful guide looks at how you might strengthen your financial security in the future. The guide explores some of the potential challenges that may arise, such as:
Download your copy here: “Planning for a longer life: Wellbeing tips and financial management strategies” to find out how a longer life could affect your long-term plans.
If you’d like to talk to us about planning for a longer life, please get in touch.
Please note: This article is for general information only and does not constitute advice. 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.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.
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 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.
Managing your tax liability could help reduce your overall tax bill and get more out of your money. If you’re unsure how and when you might pay Dividend Tax, read on to find out.
A dividend is one way a company can distribute profits to shareholders. You might receive dividends if you hold shares in dividend-paying companies or if you’re a business owner.
Changes over the last few years mean more people are paying Dividend Tax.
For example, the amount you can receive in dividends before tax is due, known as the “Dividend Allowance”, gradually fell from £5,000 in the 2017/18 tax year to £500 in 2024/25.
According to a September 2024 FTAdviser article, the number of people paying Dividend Tax for the 2024/25 tax year is expected to double when compared to 2021/22. It’s estimated that almost 3.6 million people will need to pay Dividend Tax for the 2024/25 tax year, leading to the Treasury collecting almost £18 billion.
So, it may be important to understand how current legislation might affect you and some of the ways you could reduce your liability.
If you receive dividends, understanding when Dividend Tax may be due and the rate you’ll pay is important.
As mentioned above, you won’t pay Dividend Tax if the total amount you’ve received is below the Dividend Allowance. For the 2025/26 tax year, the Dividend Allowance is £500.
Dividends above this threshold will usually be taxable, and the rate will depend on which Income Tax band(s) the dividends fall within once your other income is considered. As a result, when calculating your Dividend Tax liability, you may need to include the income you receive from your salary, savings, and other sources.
For the 2025/26 tax year, Dividend Tax rates are:
Depending on your circumstances, paying Dividend Tax on income could reduce your overall tax liability. For example, if you’re a business owner, choosing to reduce your salary and withdraw some money through dividends might result in you paying a lower rate of tax on a portion of your income.
Understanding tax rules and how they apply to you can be complex, and you might benefit from seeking tailored advice.
1. Use your Dividend Allowance
One of the simplest ways to reduce your Dividend Tax bill is to use your Dividend Allowance.
The allowance resets at the start of each tax year. If you can, spreading dividends across several tax years could reduce how much tax you’re paying.
The Dividend Allowance is also individual. So, if you’re married or in a civil partnership, managing tax liability together could be useful. You may pass some dividend-paying assets to your partner to use both of your Dividend Allowances.
2. Place dividend-paying shares in a tax-efficient wrapper
A Stocks and Shares ISA is a tax-efficient way to invest – you won’t pay tax on dividends from shares held in an ISA, and returns aren’t liable for Capital Gains Tax (CGT) either.
As a result, moving investments to an ISA could be an efficient way to reduce your tax bill.
You should note that the ISA subscription limit caps how much you can place into adult ISAs each tax year. For the 2025/26 tax year, it is £20,000.
In addition, pensions are a tax-efficient way to invest for retirement. Again, dividends you receive from investments held in a pension will not be liable for Dividend Tax, and investment returns won’t be liable for CGT.
The Annual Allowance (the amount you can save into a pension each tax year before tax charges may be applied) is £60,000 in 2025/26, or 100% of annual earnings whichever is lower. However, your Annual Allowance might be lower if you’re a high earner. If you’ve already taken an income from your pension, you might also be affected by the Money Purchase Annual Allowance (MPAA), which would reduce the amount you can tax-efficiently add to your pension to £10,000 in the 2025/26 tax year.
Keep in mind that you usually can’t access the money held in your pension until you are 55 (rising to 57 in 2028).
3. Reduce the number of dividend-paying shares you hold
Depending on your investment goals, you might choose to reduce dividend-paying shares if you’re focused on growth rather than income.
However, it’s important to note that this may not be appropriate for everyone and could increase your tax liability in other areas, such as CGT. Your financial planner could help you assess if adjusting your investment portfolio could be right for you.
If you’d like to discuss your tax liability and the steps you might take to reduce it, please get in touch. We’ll work with you to create a tailored plan that suits your circumstances and goals.
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.
Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
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.
The Financial Conduct Authority does not regulate tax planning.
Opting for a “boring” investment strategy could be the route to returns that allow you to make exciting lifestyle decisions in the future. If you’re looking for excitement in your investments, read on to find out why that approach could lead to disappointments.
When you’re reading financial headlines, they might say things like “stock market soars in best day ever” or “the best companies to invest in right now”. In other media, investing is often dramatic too. For example, in The Wolf of Wall Street, the main character, Jordan Belfort, is shown making a huge fortune through investing and fraud.
Yet, despite the perceived excitement of investing, acting on emotions, even ones that feel positive, could harm your decisions. The excitement of finding a tip that declares a company will be the “next Apple” could lead to you skipping further research, like assessing the risk profile of the firm and whether it fits into your existing portfolio.
Investors might even feel excited about the risks they’re taking – the anticipation of waiting to see if they were “right” can be addictive. So, some investors may take more risk than is appropriate because it adds to the excitement.
As a result, viewing investing as something that should be exciting has the potential to affect the long-term performance and could mean you’re at greater risk of losing your money.
So, what’s the solution? For many, it’s taking a boring approach to investing.
First, what does a “boring” approach to investing mean?
Focusing on your long-term goals and building an investment strategy around this and other factors, such as what an appropriate level of risk is and other assets you might hold. You’d try to remove emotions from your investment decisions and, instead, use logic.
If you’ve heard the mantra “buy low, sell high”, this approach might seem like it wouldn’t work. Yet, historically, investing with a long-term outlook, rather than responding to short-term market movements, is a strategy that’s worked for many investors.
March 2023 data from Schroders highlights the challenges of trying to time the market.
If you’d invested £1,000 at the start of 1988 in an index of the largest 100 UK companies and left the investment alone, it would have been worth £15,104 in June 2022 – a return of 8.31% on average.
However, if you tried to time the market and missed just the 10 best days, your average return would fall 6.1% and you’d have £7,503 in June 2022, less than half of the outcome had you remained invested.
While trying to buy low and sell high might be exciting, even just a few mistakes could mean you miss out on long-term returns.
Of course, it’s important to note that investment returns cannot be guaranteed, and past performance isn’t a reliable indicator of future performance. Yet, it can provide a useful insight into why taking a long-term view when making investment decisions could be beneficial.
A boring approach to investing doesn’t have to mean the outcomes are dull. In fact, taking a long-term approach could mean you have more opportunities to create the lifestyle you want.
A long-term investment strategy might allow you to tick items off your bucket list like:
Rather than looking for excitement when investing, finding it in your long-term plans and what investment returns may allow you to do could be far more rewarding.
If you’d like to talk about your current investments, or you have a sum you’d like to invest, please get in touch. We’ll work with you to create a long-term investment strategy that’s aligned with your goals and financial circumstances.
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.
Facing challenges later in life that might mean you need to rely on care can be difficult to think about. Yet, planning for care may be an important part of your overall financial plan and provide security should you need support in the future.
Read on to find out how care services could affect your finances.
Life expectancy in the UK has increased over the last few decades.
Indeed, in June 2025, data from the Office for National Statistics (ONS) show a 65-year-old man has an average life expectancy of 85, and a 1 in 10 chance of reaching 96. For a 65-year-old woman, the average life expectancy is 88, with a 1 in 10 chance of reaching 98.
Living for longer doesn’t automatically mean you’ll need to rely on care services. However, as health needs often become more complex later in life, it’s important to think about them.
According to ONS data, there were more than 372,000 care home residents in the UK at the end of February 2023. This was an increase of 3.1% when compared to a year earlier.
Notably, 37% of residents were funding their care themselves. So, making potential care costs part of your financial plan could be essential for your long-term financial security.
Other forms of care, such as carers coming to your home, may also need to be self-funded.
Whether you need to pay for care yourself depends on your financial circumstances and where you reside in the UK.
In England and Northern Ireland, you usually won’t be entitled to help from your local council if you have savings of more than £23,250, which is known as the “upper capital limit”. If you’ll be moving into a care home, you typically won’t be eligible for local council support if you own property.
As a result, many people find they’re responsible for funding their care costs, and it could place pressure on your finances if it’s not something you’ve considered.
Please note, the threshold for paying for care is different in Scotland and Wales.
So, how much should you expect to pay if you need care later in life?
The cost of care can vary significantly depending on the level of support you need and where you live. According to the NHS, on average, you can expect to pay:
Even if you expect to rely on family, there might be some costs to consider. For example, if your child is regularly visiting your home to lend support, you may choose to cover travel expenses. Or your child might need to reduce their working hours, so you may help them financially.
Even over a single year, the cost of care can add up to a significant expense. If it’s not something you’ve thought about, you could be overlooking an outgoing that may have a huge effect on your long-term finances and the wealth you expect to leave for loved ones when you pass away.
As a result, making it part of your financial plan from the outset could offer you peace of mind and avoid potential delays should you need support. You might:
You might not need any support later in life, but being proactive could make potentially difficult decisions around care easier.
If you have any questions about your current care plan or would like to discuss how we could help you create one, please contact us.
Next month, read about how you might create a care fund that could give you confidence and financial security if you need support later in life.
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.
The Financial Conduct Authority does not regulate estate planning or Lasting Powers of Attorney.
In April 2028, the age you can usually access your pension, known as the “normal minimum pension age” (NMPA), will rise from 55 to 57. So, if you hope to retire at 55, you might need to update your retirement plan.
Even if your planned retirement date seems far away, creating a plan now could help you bridge a potential shortfall so you’re still able to give up work when you’re ready to.
As well as the NMPA, the State Pension Age is set to rise. From 6 May 2026, the age you can claim the State Pension will gradually increase from 66 to 67 in 2028 for both men and women. So, you might also need to factor in creating a larger income from your pension or other assets for an additional year before you can claim the State Pension.
Understanding your potential later-life income could help keep your retirement on track, even when policy changes.
According to government figures published in October 2024, the median expected age to retire in the UK is 65. If you’re among those who expect to retire at this age, the change to the NMPA may not affect you.
However, with around 10% expecting to retire before the age of 60, thousands of workers could find they need to delay their retirement if they can’t access their pension when they expect.
So, if you hope to retire at 55 or even earlier, here are four important steps that might allow you to do so.
1. Check the details of your pension
While the NMPA applies to most pensions, there are some exceptions.
If you have an older workplace or personal pension, it may have a “protected pension age”, which might give you the right to access your savings earlier. So, it’s worth checking the details of your pensions before you make changes to your retirement plan.
2. Calculate your retirement income needs
The retirement lifestyle you want will affect how much income you need, and at what point you can afford to retire.
Thinking about your desired retirement lifestyle now could help you assess how you might retire at 55 if you cannot create an income from your pension straight away.
You might also want to consider how you’ll retire. More people are choosing to phase into retirement by gradually reducing working hours or moving to a role with greater flexibility.
According to a September 2024 article published by Global Recruiter, almost half of workers aged over 50 start to phase into retirement. Most of these workers plan to phase into retirement over a long period, such as 10 years.
A phased retirement might mean you’re able to move away from your current role sooner, so you have more time to focus on what’s important to you.
3. Consider all your assets when making a retirement plan
Often, when you think about creating a retirement income, your focus is on your pension. However, other assets, such as savings, investments held outside of a pension, and property, may be useful, especially if you want to retire before the NMPA.
As your financial planner, we could work with you to create a long-term financial plan that brings together different assets to support you in reaching your retirement goals.
4. Schedule regular reviews
There are two key reasons why regular retirement plan reviews are important.
First, your circumstances and goals might change. Second, further changes in government policy could affect your retirement plans in the future.
Regular reviews provide an opportunity to ensure your plan is still appropriate and reflects your wishes and pension policy.
Changes to the NMPA don’t automatically mean you need to update your retirement plan. However, being informed could offer peace of mind as you move towards the exciting milestone.
Working with a financial planner could help you assess how you’ll create an income once you step back from work and identify potential gaps. Please contact us to talk to one of our team about your retirement.
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 and is subject to change.
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.
Workplace pensions are regulated by The Pensions Regulator.
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.
