When you’re building a business, you might have little time to think about other aspects of your long-term finances. However, overlooking your pension in favour of your business could leave you in a difficult situation when you want to retire.

According to a survey carried out by think tank the Social Market Foundation (12 August 2025), just 20% of self-employed workers save into a pension, compared to 78% of employees. While not all self-employed workers will be business owners, the data points to a wider trend of underestimating the importance of retirement savings.

Why relying solely on your business as a retirement plan could be risky

Your business might be one of the largest assets you hold, and your focus may be on increasing its value. As a result, planning to sell your business to release funds to support you throughout retirement can seem like a straightforward option.

However, some risks could harm your retirement plans if you haven’t taken other steps to create a retirement income, such as contributing to a pension.

Whether you plan to sell your business to a family member or a third party, you’ll need the sale to go through to access the money you’ve earmarked for retirement. This presents a degree of uncertainty – what if the sale takes longer than you expect, or it’s difficult to find a buyer?

You could find yourself in a position where you’re ready to give up work, but are unable to until you find a buyer.

In some circumstances, delaying your retirement might be manageable. However, in some situations, delaying retirement could be harmful. For example, you might need to retire earlier than expected due to ill health, and a delay could place unnecessary pressure on you.

In addition to the challenge of finding a buyer, it’s worth considering how the value of your business could change. Factors outside of your control could mean your business doesn’t sell for the price you hoped, which could have a knock-on effect on your retirement income.

These challenges don’t mean your business exit strategy shouldn’t form part of your overall retirement plan. However, if your retirement plan only includes your business, it might be beneficial to carry out a financial review that considers pensions and other options alongside it.

3 practical reasons pensions can be valuable for business owners

1. Pensions are a tax-efficient way to invest

A pension provides a tax-efficient way to invest for your retirement for two key reasons.

First, you’ll benefit from tax relief when you contribute to your pension. Assuming your contributions don’t exceed the Annual Allowance, which, in 2025/26 for most people, is £60,000 or 100% of your annual earnings, whichever is lower, you’ll receive tax relief at your marginal rate of Income Tax, providing an instant boost to your pot.

Second, the money held in your pension can be invested in a range of assets with the aim of generating long-term returns. Returns on pension investments aren’t liable for Capital Gains Tax, so all the returns can be reinvested to benefit from the compounding effect. 

2. Contributing to your pension could be tax-efficient for your business

Pension contributions may also be tax-efficient for your business.

Pension contributions are an allowable business expense. As a result, you can deduct your pension contributions from your business’s profits before Corporation Tax is calculated, which may directly lower your firm’s tax bill.

In addition, employer pension contributions are not subject to National Insurance contributions for either the employer or employee.

3. You may use your pension to purchase business property

If you have a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS), you can use your pension to buy commercial property.

In effect, this could mean your pension owns your business premises and receives rent from your business. So, rather than paying a third-party landlord, your business’s rental costs will boost your pension.

The rules and tax relief around commercial property and pensions can be complex. Seeking tailored financial advice can help you assess if this is an option that might be right for you.

We can help business owners plan their retirement

As a business owner, your retirement finances might be more complex. We can help you create a retirement plan and exit strategy that complement one another. Please get in touch to talk to one of our team about your needs.

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

All information is correct at the time of writing and is subject to change in the future.

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.

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.

You might already know that salary sacrifice can be a practical way for your employees to bolster their retirement funds, while reducing their tax liability.

However, in the 2025 Autumn Budget, the government announced changes to how salary sacrifice is treated for National Insurance (NI) purposes.

From April 2029, a new cap will be introduced, limiting the portion of pension contributions exempt from NI to £2,000 a year.

While 2029 might seem a long way off, this is the ideal time to think carefully about how you and your business might be affected so you can be prepared.

Continue reading to discover exactly how the salary sacrifice pension cap will work, and what it means for your business’s retirement planning.

Salary sacrifice is a way for your employees to exchange a portion of their income for benefits

Salary sacrifice involves an employer and employee agreeing to a reduction in gross pay in exchange for non-cash benefits.

These might include:

• Employer-provided healthcare
• Gym memberships
• Financial advice
• Company cars (especially electric vehicles).

Perhaps the most popular non-cash benefit is pension contributions. For many other non-cash benefits (known as “benefits in kind”), tax might still be due. However, pension contributions made via salary sacrifice are typically exempt from both Income Tax and NI.

Furthermore, when your employees sacrifice a portion of their salary, you might then decide to contribute the equivalent amount to their pension. Currently, this allows you to significantly boost their retirement fund.

Moreover, as an employer, you currently benefit from not paying Class 1 secondary National Insurance contributions (NICs) – 15% in 2025/26 – on the amount sacrificed by your employee. This results in a tax saving.

However, from April 2029, the government will limit the NI efficiency on these contributions. While your employees won’t pay Income Tax on your contributions, any amount sacrificed into a pension above £2,000 a year will attract NI.

For the portion exceeding the cap, employees will pay Class 1 NICs, while you will be liable for the 15% rate.

If you’re a business owner, you might want to review your pension strategy

As a business owner, these changes to the salary sacrifice regime can affect your company’s finances and your personal tax situation.

If you pay directly into your pension from your business, or do the same for your employees, nothing will change.

However, if you currently have salary sacrifice arrangements with your employees, or use salary sacrifice to fortify your own pension, the 2029 cap means that making pension contributions will become more expensive.

As an example, every £1,000 sacrificed over the £2,000 limit by you or your employees could see your business face a £150 NI charge.

Furthermore, if you currently share the employer NIC savings with employees to top up their pots, you may need to assess how the new NI charge might affect you.

Otherwise, if your business encourages higher pension savings, you might find your company costs rise significantly in 2029.

As such, it’s worth reviewing any existing salary sacrifice arrangements and employment contracts, and then modelling how contributions exceeding £2,000 might impact your business.

After building this model, you should confirm whether contributions are through salary sacrifice or as standard employer contributions. It might even be prudent to assess your remuneration approach for any key members of staff.

While April 2029 might seem like a long time in the future, taking steps to prepare your business now could help you soften any potential blows later down the line.

It’s useful to understand how the cap might affect your employees

While your own planning is important, it’s also a good idea to consider the impact the change could have on your employees, such as seeing their take-home pay drop as their NI bills rise.

For example, an employee earning £60,000 a year and contributing 6% of their salary into their pension through salary sacrifice would have annual contributions of £3,600. Since this would exceed the £2,000 cap by £1,600, they would pay NI on this amount.

Despite the cap, it may be worth informing your employees that salary sacrifice can still be a practical way to manage their tax liability.

Indeed, the higher-rate band for Income Tax starts at £50,271 as of 2025/26. If an employee earns £50,000 and receives a 5% pay rise to £52,500, they would normally be pushed into the 40% bracket.

They could, however, sacrifice that £2,500 into their pension to remain in the basic-rate band.

Even though they would now pay NI on the £500 of the contribution above the cap (assuming they make no other pension contributions), the Income Tax savings could still make this approach financially beneficial.

It’s is important to note that if salary sacrifice is a popular perk in your business, your company might seem less attractive to the talent you wish to hire from 2029 onwards.

A capped NI benefit might deter higher-level talent, turning them towards competitors who offer a higher base salary or more generous direct pension contributions.

To stay competitive, you may want to consider paying more into your employees’ pensions rather than offering a higher salary.

Get in touch

We could help you deal with some of the tax complexities of the new salary sacrifice rules well ahead of the deadline.

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.

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.

Workplace pensions are regulated by The Pensions Regulator.

The Financial Conduct Authority does not regulate tax planning.

In the Autumn Budget 2025, the chancellor announced that Inheritance Tax (IHT) thresholds would remain frozen for a further year, until 2031.

Upcoming changes will also see unused pensions included in an estate for IHT purposes for the first time from April 2027.

These measures could see estates facing a larger IHT liability, or coming into the scope of IHT when they may previously have been exempt.

Research has suggested that families concerned about being caught in the IHT net are taking steps to mitigate their bills. According to MoneyAge (6 October 2025), 23% of people are planning to give away money to reduce their IHT bill, with 8% saying they would even give away their home.

While gifting can help to lower your IHT liability, it’s not always a simple or straightforward solution.

Read on to discover five things you need to know before you consider gifting as part of your financial strategy.

Understanding the current Inheritance Tax landscape can help you clarify whether your estate is likely to incur any liability

There are a number of rules surrounding IHT, and having a grasp of them can help you decide whether gifting could be a beneficial option.

The current nil-rate band, the amount you can pass on free from IHT, is set at £325,000 (now frozen until 2031). This means that anything above £325,000 will be taxed at 40%.

However, the residence nil-rate band offers an extra allowance of £175,000 if you leave your main residence to your children or grandchildren (this can include those you’ve adopted or fostered, or stepchildren).

Together, these two thresholds mean that you could have an estate worth £500,000 free from IHT.

In most cases, anything you leave to your spouse or civil partner, even above the threshold, is free from IHT.

You can also transfer your allowances to your spouse or civil partner when you die, or they can do the same for you. This means that, in some cases, a couple could have a £1 million estate they can leave without generating an IHT bill.

Gifting is a popular way to reduce the value of an estate to bring it below these thresholds.

However, it’s not as simple as just giving your money away, and the government has introduced rules to prevent people from simply offloading their wealth to avoid IHT.

1. Gifts aren’t automatically exempt from Inheritance Tax

You can gift up to £3,000 annually free from IHT, and you can also make smaller one-off gifts of up to £250 per person. Gifts of any amount to your spouse or civil partner are also IHT-free.

Gifts above £3,000 are usually known as potentially exempt transfers (PETs), which means they only become fully exempt from IHT after seven years.

In some cases, PETs can be eligible for taper relief over the seven years, with the level of IHT applied dropping incrementally until it reaches 0%.

Another option is to make regular gifts, as opposed to lump sums, out of your everyday income. These can be tax-free if they meet three specific criteria.

• They are regular, forming part of your normal expenditure.
• Gifts are made from your income, such as pension, rental, or dividend income.
• You can still maintain your usual standard of living after making the gift.

Talk to us to find out if making any of these gifts could help to lower your IHT liability.

2. Gifting could potentially affect your long-term finances

You need to give careful consideration to how much you’re gifting, so that your generosity doesn’t leave you short in later years.

The rising cost of living means you may need to factor in an increased income to cover your everyday expenditure and household bills.

Health and care costs are another significant later-life consideration. It’s impossible to know if you’ll need care, or to what extent, but care costs in particular can really whittle away your wealth.

According to the UK Care Guide (1 October 2025), the average cost of a live-in home carer ranges from £650 to £1,500 per week, while average care home fees range from £27,000 to £39,000 per year, with costs rising further if you need nursing care.

It’s always a good idea to talk to your financial planner before gifting, to ensure your strategy is robust enough to withstand inflation and potential care costs.

3. There could be challenges associated with gifting certain assets

While gifting your home may seem both extremely generous and a logical way to mitigate IHT, there can be some complications you need to navigate.

If you plan to continue living in your home, this will be considered a “gift with reservation of benefit” and will still count as part of your estate for IHT purposes.

However, if you pay full market rent (not just a nominal amount), this can remove the property from your estate, but you need to be willing and able to make rental payments.

4. Is the gift right for your loved ones?

While gifting is a generous gesture, it’s always worth checking that it won’t backfire. For example, if you make large gifts to your adult children, they could potentially push them into a higher tax bracket or make them no longer eligible for benefits.

If you gift them your property, as well as the issues outlined earlier, they could face a Capital Gains Tax (CGT) bill if it isn’t their main residence and they sell it.

Doing some due diligence before making any gifts can ensure they’re beneficial for the intended recipient.

5. Could there be a more tax-efficient way to pass on your wealth?

Gifting isn’t always the most tax-efficient way to pass on your wealth, either. In some cases, putting some of your wealth into a trust can be an option to remove it from your estate.

You could also take out a life insurance policy, which is then written in trust. The policy would then pay directly to the trustees, rather than your estate, and can be used to pay an IHT bill.

Trusts can be extremely complex, and we’d always urge you to take financial advice before proceeding.

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 estate planning, tax planning, or trusts.

Language is powerful. The words you use to describe different scenarios can change how you perceive events, and the language used for retirement could lead to a pessimistic outlook.

Writing in an article for Saga (21 October 2025), lexicographer Susie Dent explains that in English, “retire” has its roots in a Latin word meaning “to withdraw”. This can conjure images of people withdrawing from the world once they give up work. You might envision retirees staying at home, with the pace of life slowing down.

Yet, for many people, that’s far from their ideal retirement. In other languages, “retirement” has a more optimistic root that could resonate with modern retirees.

Other languages celebrate the retirement milestone

Dent notes that in Spain, retirement is “jubilación”, a cousin of “jubilation”. It’s a translation that’s more likely to encapsulate the hopes many workers have as they prepare to retire.

Similarly, in Japan, post-retirement is known as “dai-ni no jinsei”, or “second life”, which encourages people to think of new beginnings rather than endings.

Other languages, including Arabic and Italian, use honorifics for retirees to signal their experience. It’s a small change in language that marks retirement as an achievement, rather than something that’s happened because you’ve aged.

This upbeat language around retirement could embolden retirees to seize the next chapter of their lives. Rather than images of retirees putting their feet up with a newspaper, this language shift could mean you’re more likely to think of retirees pursuing hobbies, keeping active, and visiting new destinations.

Whatever you want your retirement to look like, an optimistic mindset as you near the milestone could help you get more out of your next stage of life.

Dent suggests that English needs a new word for retirement that is “full of the spirit of a second life”. While you wait for the Oxford English Dictionary to reflect modern retirement, there are things you might do to change the narrative and how you think about stepping away from work.

How to turn your retirement into a joyful second life

If you want to retire from work but not from life, here are five ways you can make this milestone a celebration that suits you.

1. Focus on the freedom you’re gaining

Rather than seeing retirement as a withdrawal, think about what’s next. Retirement could present you with endless opportunities to fill your time with the things you enjoy doing.

Suddenly having the freedom to use your time as you wish can feel overwhelming. Listing what you’re most looking forward to can help you focus on the positive instead of what you might be losing.

2. Set meaningful goals

For decades, your goals might have focused on work. Perhaps you pursued a promotion or developed a skill that could advance your career. Without these goals, you might feel lost.

The good news is that you can set meaningful goals in retirement.

Some people find that volunteering or mentoring can give their retirement purpose, and they dedicate a certain number of hours a week to this goal. Others take pleasure in building new skills. Perhaps you’ve always wanted to learn woodworking or attend history lectures at your local university; now’s your time to make these goals a priority.

3. Create a social circle

Social connections are essential for wellbeing and are something you might lose when you leave the workplace.

Building a social circle, whether by meeting with family or attending groups to meet new people, could make your retirement happier. Indeed, a Harvard University study has tracked what makes people happy for more than 80 years and highlighted the importance of a social life.

Speaking to Forbes (15 August 2025), Dr Robert Waldinger, director of the Study of Adult Development, notes that close relationships and social connections are crucial for wellbeing as people age. Having supportive and nurturing relationships acts as a buffer against life stresses and protects overall health.

So, the view that retiring means “withdrawing” could be harmful. Instead, a retirement that’s filled with people who share your interests and who you enjoy spending time with could support your wellbeing.

4. Give your days some structure

Spending more time at home without the commitments of work can lead to some people feeling unmotivated or listless. Giving some structure to your days can be valuable and help you get more out of your time.

The structure doesn’t need to be rigid or account for every hour of the day – one of the joys of retirement is the freedom it offers. However, adding regular outings or tasks to your diary can prevent the days from blurring together.

5. Prepare your finances for retirement

Money worries can hold back your retirement plans and mean you’re not able to focus on getting the most out of the next chapter of your life.

A survey carried out by the Financial Conduct Authority (16 May 2025) found that 3.8 million retirees worry they don’t have enough money to last their retirement. In addition, 22% of non-retirees felt unprepared for retirement, and 31% had not thought about how they will manage financially once they stop working.

Preparing your finances before you retire could help you feel confident and embrace everything retirement has to offer. If you’d like to talk about your retirement plan and how to manage your finances, please get in touch.

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

Savvy singers and songwriters can generate an annual income by releasing a Christmas hit. As you shop for loved ones, consider giving a gift that will continue to give value over time.

Many Christmas songs are replayed every year. Indeed, songs you’ve listened to this year can evoke nostalgic childhood Christmas memories. For the artists behind the tracks, a Christmas hit provides an income boost over the festive period.

According to The Standard (19.12.2024), Mariah Carey’s 1994 hit ‘All I Want For Christmas Is You’ brings in around $3 million (£2.28 million) a year. Similarly, Canadian newspaper Times Colonist (26.12.2024) suggests Michael Bublé could earn as much as $6 million (£4.56 million) during the festive season from two songs – ‘Holly Jolly Christmas’ and ‘It’s Beginning to Look a Lot Like Christmas’.

Despite being released years ago, these singles continue to make money for the artists.

While you’re browsing festive perfume sets or the latest gadgets, you may want to consider how you could offer a gift that will do the same for your loved ones.

Of course, singers can’t guarantee that their tune will be a hit the year it comes out, let alone decades later. Similarly, it’s impossible to know exactly what’s around the corner and guarantee how your gift might grow in the coming years. It’s important to weigh up the different options, understand the potential risks, and assess what’s right for you and the recipient.

3 ways you can gift wealth to support life goals  

1. Deposit money into a savings account

One of the simplest ways for your gift to increase is to deposit the money into a savings account, where it will earn interest.

This could be a great option if you want to improve the financial security of your loved one by creating a buffer or helping them reach short-term savings goals.

Keep in mind that interest rates might not keep pace with inflation, which could lead to the value of savings falling in real terms over the long term. Speaking to your loved one about how they intend to use the money could help you identify if a savings account is the best place for it.

2. Contribute to an investment portfolio

If your loved one is working towards a long-term savings goal, investing the gift might be an option you want to explore.

Investments provide an opportunity for your initial gift to grow at a faster pace than inflation and increase in real terms over a long period. However, volatility and risk are part of investing, and returns cannot be guaranteed.

Be sure to speak to your loved one about why they’re saving and their current financial circumstances to assess if investing the gift is the right option.

3. Add money to your loved one’s pension

Finally, you could aid your loved one’s retirement dream by adding money to their pension.

A pension provides a tax-efficient way to invest as the returns aren’t liable for Capital Gains Tax. Instead, the pension holder may pay Income Tax on withdrawals. With many workers struggling to balance short- and long-term goals, a pension boost could ease some of their concerns about security in retirement.

You should note you cannot usually access the money held in a pension until you turn 55 (rising to 57 in 2028). As a result, be sure that your recipient wants to use the gift to support their retirement.

Gifting assets could make sense from an Inheritance Tax planning perspective

If your estate could be liable for Inheritance Tax (IHT), gifting your assets during your lifetime might be tax-efficient.

In 2025/26, the nil-rate band is £325,000, and if the total value of your estate is below this threshold, no IHT will be due. In addition, your estate can use the residence nil-rate band, which is £175,000 in 2025/26, if you leave your main home to children or grandchildren.

You can pass on unused allowances to your spouse or civil partner. In effect, this means couples can leave behind up to £1 million before IHT is due, when planning together.

The portion of your estate that exceeds IHT thresholds will usually be taxed at 40%, so this could significantly reduce how much you leave behind for loved ones.

As a result, some people choose to gift assets during their lifetime to reduce the value of their estate. However, this isn’t as straightforward as it first seems. Not all gifts are considered immediately outside of your estate for IHT purposes.

So, working with a financial planner to make gifting part of your estate plan could help you pass on your assets tax-efficiently.

Contact us to discuss gifting

While gifting might be associated with the festive season, you can make it part of your wider financial plan too. Please get in touch to talk about how you’d like to pass on your wealth and ways to do so tax-efficiently.

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 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 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. 

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

One of the biggest factors affecting investment markets in November 2025 was concern about an AI bubble. Despite this, there were still market highs recorded during the month.

Remember to consider your risk profile when you invest and review your portfolio’s performance with a long-term outlook.

AI concerns led to volatility throughout November 2025

With UK chancellor Rachel Reeves set to deliver a fiscal Budget at the end of the month, speculation led to market volatility on 4 November. Indeed, the FTSE 100 fell during a speech Reeves delivered, but clawed back most of the losses, with shares in housebuilders rising.

On 5 November, worries that AI stocks were overvalued led to global volatility.

In Europe, the falls were modest, with London’s FTSE 100 down 0.1%, and Germany and Spain’s main indices both declining by 0.8%. The falls were more dramatic in Asian markets, including Japan’s Nikkei (-2.5%) and South Korea’s KOSPI (-2.85%).

The US technology-focused index, Nasdaq, was also down 2%. All of the “Magnificent Seven” – seven of the largest and high-growth companies in the world, made up of Nvidia, Amazon, Apple, Microsoft, Tesla, Meta, and Alphabet – suffered falls.

On 7 November, Wall Street continued to fall amid economic and valuation worries. The Dow Jones index, which consists of the 30 largest US companies, was down 0.45%, while the broader S&P index fell 0.6%.

The Financial Times calculated that $750 billion (£566 billion) was wiped off major AI stocks – including Nvidia, Meta, Palantir, and Oracle – in the first week of November.

Hopes that the US government shutdown was coming to an end led to both US and European markets rising, including London’s FTSE 100 hitting a new high on 10 November.

The rally continued in London, with the FTSE 100 hitting a record high on 12 November, nearing the 10,000-point mark for the first time. The biggest riser was energy company SSE. Its share prices jumped 11% after the firm announced a five-year investment plan.

Concerns about an AI bubble reared again on 14 November, with indices down globally, and the tech sell-off continued on 15 November.

Google’s boss warned that “no company is going to be immune” if an AI bubble burst happens. The FTSE 100 fell 1%, with mining companies Fresnillo (-6.4%) and Endeavour Mining (-4.7%) among the biggest losers. It was a similar picture across the wider European market, with the main indices in Germany, France, Italy, and Spain all experiencing volatility.

There was some investor relief on 20 November when AI firm Nvidia revealed its sales were up 62% year-on-year. The company beat expectations and reported revenue of $51.2 billion (£38.6 billion) from data centre sales in the third quarter of 2025. The firm expects revenue to reach $65 billion (£49 billion) in the final quarter of 2025.

The news led to Asian-Pacific markets soaring, including Japan’s Nikkei (2.6%), South Korea’s KOSPI (2%), and Taiwan’s TW50 (3.6%). Wall Street also rallied, and the Nasdaq was up 2.18%.

The UK’s Budget also affected markets, particularly the FTSE 100.

Ahead of the speech, it was reported that UK banks would be spared a tax raid, which led to shares in the sector jumping on 25 November. Among those benefiting were NatWest (2.2%), Barclays (2.9%), and Lloyds Bank (2.95%)

Betting companies didn’t fare so well. The chancellor revealed a new tax hike on gambling firms, which led to shares sliding on 27 November. Rank Group told its shareholders it expected a hit of around £40 million to its annual operating profit, leading to shares falling by 10%. Similarly, Evoke shares fell 5% after it estimated duty costs would increase by around £125 million a year.

UK

Inflation in the 12 months to October fell to 3.6%, suggesting it has peaked.

The Bank of England (BoE) opted to leave interest rates where they are, but the latest inflation data suggests a cut could happen before the end of 2025 or at the start of 2026. Indeed, Goldman Sachs predicts interest rates will fall to 3% by July 2026.

Economic growth was disappointing. Between July and September 2025, GDP increased by just 0.1%. Once GDP is adjusted for population growth, it remained unchanged when compared to the previous quarter. The figure is the slowest quarterly growth recorded since the short recession experienced in the second half of 2023.

The BoE’s data suggests that economic growth will pick up in the final quarter of 2025. The economy is expected to grow by 0.3% between October and December.

Official data also shows the impact of US trade tariffs on economic growth.

In September, the value of UK exports to the US fell by £500 million, or 11.4%, to the lowest level since January 2022. More broadly, UK goods exports fell by £1.7 billion, a 5.5% decrease. This led to the trade deficit widening to £59.6 billion in the third quarter of the year.

However, there was some good news, with UK factory output rising for the first time in a year. S&P Global’s Purchasing Managers’ Index (PMI) was 49.7 in October. While this is still below the 50 mark that indicates growth, it’s heading in the right direction.

Europe

The European Commission has increased its growth forecast for the eurozone economy.

The eurozone is now expected to grow by 1.3% in 2025, compared to the earlier spring forecast of 0.9%. The upward revision was linked to a surge in exports as companies tried to beat incoming tariffs. Looking ahead, the European Commission anticipates growth of 1.2% in 2026 and 1.4% in 2027.

As the largest EU economy, Germany’s economy plays an important role in the bloc. However, it’s a gloomy picture.

The German Economic Council revised its 2026 growth forecast down to 0.9%. In addition, an Ifo report found that German business morale is low, as companies lose faith in the economic recovery.

US

On the surface, US manufacturing data appears positive, with output and new orders rising, according to S&P PMI data. However, Chris Williamson at S&P Global Market Intelligence said the underlying picture is “not so healthy”. He explained there was an unprecedented rise in unsold stock due to weaker sales, especially in export markets.

Job data also appears positive initially. Official figures show more than 119,000 jobs were created in September, helping to recover from a summer lull. The figure is more than twice the number expected.

However, data from recruitment firm Challenger, Gray & Christmas, suggests the data could be very different in October. The firm suggests job cuts hit a 22-year high as employers embraced AI, which led to employers shedding more than 153,000 jobs in October – up 175% when compared with 2024.

Asia

Economic data from Japan revealed the economy contracted in the third quarter of 2025. The country’s GDP was down 0.4% between July and September when compared with the same period a year earlier. The fall was partly linked to exports falling 4.5% when compared with 2024 amid US trade tariffs.

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

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

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