You may have seen the recent headlines about Marks & Spencer (M&S) and the significant cyberattacks the retailer has been a victim of, causing immense disruption to its online operations and costing an estimated £300 million in profits.

In this case, scammers have stolen key customer information, which the BBC reported could include names, email addresses, telephone numbers, and dates of birth, and are using this data to scam people through a process called “social engineering”. This involves them pretending to be an authority, such as your bank or the police, and using the small amount of information they have illegally obtained to trick you into giving away more of your personal details, or even steal money from you.

Even if you are not an M&S customer, the story may have left you feeling concerned about being contacted by fraudsters and scammed yourself.

When it comes to financial fraud, knowledge is power. That’s why we’ve produced a brand-new guide, featuring everything you need to know about scams and how to avoid them.

The guide contains all kinds of useful insights into scams, including:

• The cost and impact of scams on victims
• 10 common scams and how to spot them
• How to spot a cloned firm, and five signs of a pension scam
• Why people fall for scams, and how you can prevent yourself from being a victim
• Who to turn to if you’re worried about scams.

To read more about scams and staying safe, download your copy by clicking the button below.

Download the guide

If you’d like to speak to us about keeping your wealth safe and secure from fraud, please get in touch today.

A recent article published by an influential think tank, the Institute for Fiscal Studies (IFS), has suggested that the Labour government should consider increasing the basic rate of Income Tax in order to boost revenue and curb the amount of money it has to borrow.

Doing this would break a so-called “taboo” as no chancellor has increased the basic rate of Income Tax for 50 years. Indeed, for much of that time, the aim of most chancellors has been to cut the basic rate as a symbol of their commitment to low personal taxation.

In this article, you can discover why the IFS is suggesting the government make this move, and how it could affect your finances.  

The basic rate of Income Tax has been gradually reduced over the last 50 years

The last chancellor to increase the basic rate of Income Tax was Dennis Healey in 1975, who raised it from 33% to 35%. At the time, the UK government was facing the combined financial threats of economic weakness at home, together with global uncertainty driven by the oil crisis. 

Since that time, the basic rate has only ever been reduced, with the final reduction to its existing rate of 20% made by the former chancellor, Gordon Brown, in 2007.

In reality, however, the freeze in tax thresholds and the Personal Allowance since 2021 has actually resulted in many individuals paying more Income Tax. The Personal Allowance stands at £12,570 and is set to be frozen at this level until 2028, meaning that the more a person earns, the higher their Income Tax is likely to be. This is commonly known as a “stealth tax”.

Previous governments have sought alternatives to Income Tax to raise revenue

Instead of increasing the basic rate, successive governments have used other methods to raise revenue, such as implementing higher taxes on businesses and capital gains.

The rate of VAT has also increased markedly in the last 50 years, from 8% in 1975 to 20% in 2025/26, as chancellors have seen taxing consumption more politically acceptable to the electorate than taxing income.

Previous governments have also put up the rate at which individuals pay National Insurance contributions (NICs) on their income. While having the same effect as an increase in Income Tax, this does seem to be somewhat less emotive. This could be down to the fact that NICs receipts are hypothecated and used to fund the State Pension and other benefits such as Maternity Allowance, so earners understand where their contributions are going.

Election promises have restricted the government’s revenue raising options

During the 2024 general election campaign, the Labour Party manifesto pledged no increases in:

• The standard rate of VAT
• Employee NICs
• Income Tax.

Labour made it clear that the government intends to fund increased public spending through the proceeds of economic growth rather than higher taxes. It has also committed to only increase borrowing to fund growth.

To this end, this government has announced a series of measures, including a massive house-building programme, along with big infrastructure projects such as airport expansion and the Oxford-Cambridge corridor.

However, all those measures will take time to come to fruition and deliver growth. In the meantime, public services, such as the NHS, schools, and local government, remain in need of financial support.

External events have blown government plans off course

As well as internal challenges, the government’s financial position has been made even more precarious by two external events:

1. The reduction in the US financial and military commitment to Ukraine, which has forced other nations, including the UK, to boost defence spending.
2. The imposition by President Trump of a 10% tariff on all UK exports to the US.

While increased military expenditure could ultimately be an effective growth driver, it poses an immediate funding problem for the treasury.

Tariffs on UK goods and services entering the US provide a more immediate challenge. A paper issued by the Department for Business and Trade confirmed that these have led to a reduction in business confidence, and a report in the Guardian suggesting that this would hinder the very growth the government is hoping for.

The effect of an Income Tax rise on your income

Clearly, there is no danger of Income Tax rates reverting to the level they were at in 1975.

However, according to the government, just a 1% increase in the basic rate would raise £6.55 billion in 2025/26 and £7.9 billion the following year. Additionally, if the government were to announce an increase of 1% on all Income Tax rates, this would raise £8.1 billion next year.

So, how would an increase in Income Tax affect your take-home pay?

According to Forbes, the UK national average salary is £37,430, as of April 2025.

Assuming you are entitled to the full Personal Allowance of £12,570, the table shows the comparative amounts of Income Tax you would pay.

Annual income £37,430	Income Tax payable
Basic rate of 20%	£4,970.30
Basic rate of 21%	£5,220.60
Annual increase in Income Tax	£250.30

Source: Government website

While any potential increase in Income Tax is likely to be relatively small, it’s clear that this would be controversial, especially given the manifesto commitment the Labour Party made not to take such a step.

However, the government could justifiably argue that it could not have foreseen the issues around defence spending and US tariffs.

As a result, it may be tempted to earmark any Income Tax rise for defence spending, which may well help to increase the public’s acceptance of it.

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.

The Financial Conduct Authority does not regulate tax planning.

According to a Citywire report, forecasts from the Office for Budget Responsibility (OBR) suggest the amount of Inheritance Tax (IHT) paid to HMRC will have increased by 11.6% in 2024/25 compared to 2023/24.

This will mean that the total amount of IHT paid in the 2024/25 financial year will have reached a record high of £8.4 billion.

The report suggests that the big year-on-year increase has been primarily driven by the long-term freeze of the level at which IHT becomes chargeable, and the increase in asset values.

With the freeze on thresholds due to continue until 2030, this highlights the importance of ensuring you are taking effective estate planning measures to mitigate the amount of IHT payable on the value of your assets. Doing this can help ensure that your beneficiaries are not left with an unwelcome and substantial tax charge on your death.

There are series of straightforward measures you can make use of to reduce your IHT liability. One of these, which is often overlooked, is known as “gifting from surplus income”.

In this article you can read about how it works, and help ensure that as much of your wealth as possible passes to your beneficiaries rather than HMRC.  

Gifting assets is an effective way to reduce your IHT liability

In the 2025/26 tax year, IHT is normally charged at 40% on the value of your estate in excess of the £325,000 allowance, commonly referred to as your “nil-rate band”.  

If your primary residential property is included in your estate and it is passed to a direct descendant, your total tax-free allowance will likely increase to £500,000.

It’s also important to bear in mind that these allowances apply to individuals, so a couple can enjoy a combined tax-free allowance of up to £1 million.

The most common and straightforward way to reduce your IHT liability is by gifting assets – belongings, investments, or cash – to your beneficiaries during your lifetime, so they no longer form part of your estate.

You have three annual gift allowances you can make use of:

1. A £3,000 annual exemption, which can be split among as many recipients as you like. You can “carry forward” any unused allowance from one year into the next. This means that you and your spouse or partner could gift £12,000 immediately if you have not previously made any gifts
2. Wedding gift allowances of £5,000 for a child’s wedding, £2,500 for a grandchild’s wedding, or £1,000 for anyone else. This exemption counts in addition to the standard annual exemption.
3. Unlimited small gifts of £250 or less to other individuals, provided they have not been the recipient of another of the above exemptions.

Beyond these three allowances, all other gifts you make will be treated as potentially exempt transfers (PETs) and subject to the “seven-year rule”.

This means that if you live for seven years from the date of making the PET, no IHT will be payable. Within those seven years, however, a taper relief system is applied, which means that the amount of IHT will depend on how long you live after making the gift.  

Years between gift and death	IHT payable on the gift
Less than 3 years	40%
3 to 4 years	32%
4 to 5 years	24%
5 to 6 years	16%
6 to 7 years	8%
7 or more years	Nil

As well as allowable gifts and PETs, a further effective way to mitigate your IHT liability is by utilising the “gifts out of surplus income” rule.

Gifts out of income are usually Inheritance Tax-free

Making gifts out of your regular income is an effective estate planning measure. Not only are these gifts usually IHT-free, making them carries the added benefit of you being able to provide the recipient of your gifts with valuable ongoing financial support. 

While there is no limit to the amount you can gift in this way, there are three strict conditions you need to comply with:

1. You must be able to demonstrate that the gifts you make are from your income, such as your salary or regular pension, rather than your accrued capital.
2. The gifts must be made on a regular basis and not simply be one-off transfers.  
3. By gifting from your income, you must ensure that you are not reducing your own standard of living, and that the income in question is surplus to your requirements.

As well as not reducing your living standards, you will also need to assess how making such gifts on a regular basis could affect your own long-term financial plans.

You will need to review your own arrangements to confirm that the gifts you make are affordable when set against your other priorities, and that you are not creating future problems for yourself if the money you are gifting could be better allocated for other uses.

For example, you might you better off setting money aside for future care provision, or to cover moving costs if you intend to downsize to a smaller property.

You should also carefully consider how any gifts of this kind will be used. Earmarking these for a specific purpose can often be advantageous. This could include paying annual school fees for your grandchildren, or putting regular amounts into a Junior ISA, that they can then access when they are 18.

You should keep accurate records of all gifts you make

As with all your personal finance transactions, it’s important to keep detailed records of all gifts you make, whether they are out of income, within your gift allowance, or PETs.

This is certainly the case when it comes to gifts out of income and substantial PETs, as your executors are likely to need to provide these to HMRC when they are dealing with your estate on your death.  

Accurate records can help expedite the process of obtaining probate, and ensure that your beneficiaries are able to enjoy your bequest to them without any unnecessary delay.

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.

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

Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.

Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.

Financial protection may provide you or your loved ones with a financial injection when you need it most. Calculating what level of cover is appropriate for you is an essential step to take when comparing options.

Over the last couple of months, you’ve read about why financial protection is important and the different types that might be useful to you. Now, read on to find out how three questions could help you assess the level of cover you’d need to offer peace of mind.

The level of cover refers to how much you or your family would receive should you need to make a claim. Usually, you can select a level of cover that suits you and your circumstances.

So, what questions might be useful to answer?

1. What are your outgoings?

When certain circumstances are met, financial protection can provide either a regular income or a lump sum. To calculate the level of cover you need, you may want to start by reviewing your regular expenses – what are your essential household bills?

Knowing your monthly expenditure is useful when you’re taking out income protection or family income benefit, which would provide a regular income.

Life insurance and critical illness cover would pay out a lump sum. As a result, you might need to consider how long you or your family would potentially need to rely on the payout when assessing the level of cover you’d need to provide long-term security.

2. What existing cover do you have?

Before you start looking at your options for financial protection, take some time to review your existing cover.

If you have previously taken out financial protection, check if you’re still covered, in what circumstances it would pay out, and what the level of cover is.

You might also benefit from financial protection you haven’t personally taken out. For example, some companies, like banks, may offer life insurance or another form of financial protection when you open an account with them.

In addition, your employer may provide benefits that are similar to financial protection, such as:

• Enhanced sick pay: Statutory Sick Pay would leave most families struggling to meet essential outgoings. However, your employer might offer enhanced sick pay, which could help you bridge the gap. Be sure to check what portion of your salary your employer would pay if you were unable to work and for how long.
• Death in service: Some firms may also offer a death in service benefit, which would provide your family with a lump sum if you passed away while employed at the company. This is usually a multiple of your salary, so it’s important to review what your loved ones may receive and if there are any restrictions.

Understanding the protection you already have in place could ensure you’re able to pick options that complement these and potentially lower your premiums. For instance, if your employer would provide sick pay for six months, you might take out income protection that has a longer deferment period to reflect this, which could reduce the cost of cover.

3. What other assets do you have that might support you?

As part of your financial plan, you might have taken other steps to help you or your family overcome a financial shock, like creating an emergency fund. So, considering your wider financial circumstances when assessing if financial protection could be right for you is often valuable.

Financial protection can bridge the gap between your income and your expenses

With this information, you can start to assess what level of cover is right for you.

If you’re considering income protection, you can calculate the potential gap between your essential expenses and expected income if you were unable to work. You can then select cover that would bridge this gap and allow your family to maintain their current lifestyle.

Similarly, if you want to take out life insurance to ensure your loved ones would be financially secure if you pass away, you may multiply the outgoings to calculate the lump sum they’d need to meet expenses for a certain number of years.

Get in touch to talk about your financial protection

If you’d like to discuss taking out financial protection or want to review your existing cover, please get in touch. By reviewing financial protection alongside your wider financial plan, you could understand which option may be right for you.

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.

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.

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