The last 12 months have been interesting for investors, with the market experiencing volatility. Read on to discover valuable insights from 2025.

1. Many markets have performed well despite volatility

If you simply read the headlines from 2025, you might think the markets performed poorly. Worries about high inflation, trade tariffs, and sluggish economic growth have dominated the media.

Yet in many cases, the overall trend has been upward.

The FTSE 100 is an index of the 100 largest companies listed on the London Stock Exchange by market capitalisation. On 2 January 2025, the FTSE 100 was at 8,260 points. During 2025, there were dips, but on 21 November 2025, it stood at 9,539 points.

It’s impossible to guarantee market performance. However, when you look at long-term trends, markets have trended upwards. Even after experiencing sharp dips, markets have typically recovered when you analyse market performance over several years.

While investors might worry about short-term dips, 2025 suggests focusing on the long-term can be reassuring.

2. Investors could benefit from tuning out the noise

One of the biggest factors influencing short-term market movements in 2025 has been trade tariffs imposed by the US.

Indeed, the FTSE 100 reveals several steep falls in April 2025 that coincide with announcements from US President Donald Trump about tariffs. Fears about the effect these tariffs might have on businesses around the world led to markets dropping.

However, as the overall trend of the FTSE 100 emphasises, the initial strong reaction was followed by a market bounce back as fears eased.

Investors who held their nerve through these downturns may have benefited from the subsequent recovery. By contrast, investors who panicked and sold their holdings might have suffered losses.

Tuning out the noise and focusing on your objectives and financial circumstances might deliver a stronger long-term performance.

3. The markets are impossible to consistently and accurately predict

If you made predictions about the markets at the start of the year, how accurate were your guesses?

So many factors affect market movements that it’s impossible to consistently and accurately predict what will happen. Even seasoned professional investors with a trove of resources at their fingertips get it wrong at times.

If you can’t foresee the exact market peaks and troughs throughout the year, it’s impossible to time the market. As a result, you may miss out on potential gains.

Rather than timing the market, investing in assets that align with your goals and holding them over the long term could yield better results.

4. Avoid following trends that don’t align with your investment strategy

2025 has seen a huge popularity boost for AI. More companies are adopting AI into their operations, and people are increasingly using it in their daily lives.

This led the value of some AI companies to soar, and towards the end of the year, fears of a market bubble emerged. According to the Guardian (18 November 2025), Sundar Pichai, CEO of Alphabet (Google’s parent company), said “no company is going to be immune” if the AI bubble bursts.

Those concerns caused the market valuations of AI companies to fall in November 2025.

Investors who only invested in AI stocks because of the hype may have been disappointed and suffered losses. While it can be difficult, avoiding herd behaviour and focusing on your strategy could be valuable.

5. Your investment goals are central to your strategy

As the above points highlight, short-term market volatility isn’t going anywhere. As an investor, sticking to a strategy that reflects your goals could deliver long-term returns.

So, reviewing your goals as you head into 2026 might be beneficial. If your objectives have changed, you may want to update your investment strategy to reflect this.

Talk to us about your investments

We can work with you to review or create an investment strategy that suits your objectives. Please get in touch to arrange a meeting.

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

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.

How your pension is invested will affect its value and the income it will provide you later in life. If you’ve put off reviewing your pension fund, find out why it could be a worthwhile task.

While most pension providers offer savers plenty of fund options to choose from, many leave their money in the default option. Indeed, according to PensionBee (19.02.2025), more than 90% of pension savers remain in the default fund.

When you start contributing to a pension, you will usually be paying into the default fund option. This is convenient, as you don’t need to do anything, you simply make your contributions and the money will be invested through this fund.

The default fund is designed to be suitable for most savers, but it doesn’t consider personal circumstances or long-term plans.

Practical reasons the default pension option might not be right for you

The default fund doesn’t align with your risk profile

One of the main reasons you might choose to switch your pension fund is if the risk profile of the default option doesn’t suit your financial goals or circumstances.

For example, if you’re young and have decades until retirement, a default pension fund might be more risk-averse than is appropriate for you. As a result, you could miss out on investment returns, which, thanks to the power of compounding, may mean the size of your pot is significantly smaller at retirement than it had the potential to be.

According to the PensionBee research, a worker earning £25,000 a year at the age of 21 who benefits from a 2% average annual salary increase, and contributes 8% of their salary, would have £194,185 in their pension at age 68 (after an annual management charge of 0.7%) if their pension returned 3% a year.

If this individual changed their pension fund and received a 7% annual return, their pension would reach £697,247 over the same period. The higher returns could make a dramatic difference to the retirement lifestyle you can afford.

Before you switch your pension to a fund with a higher potential return, remember to balance the risks and assess what’s appropriate for you. Investment returns cannot be guaranteed, and typically, the higher the potential returns, the greater the risk.

As your financial planner, we can work with you to assess which pension fund is right for your circumstances and goals.

You are paying higher fees in the default fund

The fees you pay to your pension provider will affect the value of your pension. Take some time to review the fees you’re paying now and whether alternative options could reduce these charges.

Often, you’ll pay an annual management charge, which is typically a percentage of the value of your pension. You might also pay management or service fees.

Over the decades you’ll be saving for retirement, even a small difference in the fees you’re regularly paying could have a sizeable effect on the value of your pension when you retire.

You want your pension investments to reflect your values

Alongside financial factors, some investors may choose to consider ESG (environmental, social, and governance) factors. This could align your personal values with your financial decisions. For example, you might want to ensure your pension isn’t invested in fossil fuel companies if you’re concerned about climate change.

Pension providers will usually offer one or more ESG funds for you to switch your pension to. However, you should note that the aim of the funds can vary, and the investment decisions might not perfectly align with your values.

In addition, it’s still important to consider your risk profile and other financial factors when deciding if an ESG fund suits your needs.

Switching your pension is usually simple

The good news is that pension providers usually offer a range of funds with different risk profiles and goals. If the default pension fund isn’t the right option for you, you can often switch online in minutes.

When comparing options, you may want to look at the risk profile, the aim of the fund, and what the fund is invested in.

If you’d like to talk to a financial planner about the different investment options offered by your pension provider, and which might be right for your goals, please get in touch.

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.

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.

While phasing into retirement can offer you greater flexibility, it may make your finances more complex. Read on to find out more about five key considerations.

1. Calculate if you’ll need to supplement your income

While you might still earn a salary as you phase into retirement, if you’ve chosen to reduce your working hours or switch roles, it might not be enough to maintain your lifestyle.

If this is the case, you may opt to supplement your salary with income from other sources. For example, you might start to take an income from your pension or deplete your cash savings.

A financial plan can help you assess what income you need and whether there’s a gap to close.

Remember, money taken from your pension will usually be added to your other income when calculating your Income Tax liability. As a result, it’s important to keep track of your different income sources so you don’t face an unexpected bill.

If you’re using assets to support your lifestyle as you phase into retirement, it’s also important to consider longevity and the effect of triggering the Money Purchase Annual Allowance (MPAA) if you access your pension. Both points are covered in greater detail below.

2. Decide if you’ll continue to contribute to your pension

Contributing to your pension as you phase into retirement could mean you’re able to afford a more comfortable lifestyle when you give up work. A financial planner can help you assess how your contributions will add up and whether contributing is advisable for you.

If you’ll be supplementing your income, you should be aware of the MPAA and how much you can add to your pension each tax year.

In 2025/26, the maximum amount that can be paid into your pension before paying an extra tax charge is £60,000. This is known as the Annual Allowance. However, if you withdraw a flexible income from your pension, you may trigger the MPAA, which would reduce the amount to £10,000.

According to a Wealthify survey (17.09.2025), just 3% of pension holders understood what “MPAA” meant. Yet, this little-known allowance could limit your future pension contributions and affect the income you receive later in life.

3. Determine when to claim your State Pension

The current State Pension age is 66, and it will rise gradually to 68 by 2046.

When you reach State Pension Age, you won’t automatically start receiving payments. You must claim it. This means, if you choose to, you can defer claiming your State Pension until you stop working completely.

The money you receive from the State Pension is added to your other sources of income when calculating Income Tax liability. Deferring your State Pension might reduce your overall tax bill as a result.

In addition, for every nine weeks you defer the State Pension, the income you’ll receive from it when you do claim it will rise by 1%.

4. Assess how your pension and other assets are invested

Your pension is typically invested, and you might have other investments that are earmarked for retirement. If your plans have changed to include a period of phasing into retirement, you may benefit from assessing how your money is invested.

Often, your pension will be moved to investments that are more stable as your retirement age approaches. If your money will now remain invested for longer, this may not be the most appropriate option for you.

5. Establish your long-term income needs

It can be difficult to understand how the value of your pension and other assets will change during your retirement, particularly if your income needs will shift.

Setting out your income needs at each phase of your retirement and using a cashflow model could help you visualise how your pension and other assets could change. This can help you see if your assets will provide you with security for the rest of your life or if there’s a shortfall.

A cashflow model will make certain assumptions, such as the average annual return of your pension or the rate of inflation. The outcomes aren’t guaranteed, but they can provide a useful insight into your long-term finances and the effect of your decisions.

A financial plan can identify retirement considerations that are important to you

Alongside these five considerations, you might have other important questions to weigh up when you’re retiring, including whether to phase into the next chapter of your life. A tailored financial plan can help you understand your finances now and how they might change as you gradually give up work and eventually stop completely.

Please get in touch if you’d like to talk to us about your retirement plan.

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.

The Financial Conduct Authority does not regulate tax planning or cashflow modelling.

Humans are programmed to act in certain ways. We have behavioural biases built into us, created over the history of mankind, to keep us safe in the face of danger.

For example, we don’t like losing things. This is because our ancestors would be faced with a very nasty situation if they stumbled across a beast while out hunting, and realised that they had left their spear at home.

In today’s society, however, we are considerably less likely to be faced with a sabre-toothed tiger. Some of our behaviours don’t always act in our best interests, and some can even be taken advantage of by others. This is especially true around financial decisions.

Here, then, are three behaviours that we all exhibit to one degree or another, how they might not be serving us well, and what we might do about it.

The endowment effect

Researchers asked candidates to value a coffee mug. Half of those candidates were given the mug in advance, and half were not. The candidates who already owned the mug valued it around twice as highly as those who had not seen it before.

This is called the endowment effect. It describes how we tend to value something we already own more highly than its real worth.

There could be many reasons for this. Perhaps it holds sentimental value. Perhaps we overpaid in the first place, but we don’t want to admit it.

This also means that we often pay more for something than it is worth. Marketing and advertising take advantage of this. Take the trial period. At the end of that trial period, you are not only more likely to buy, but you are likely to be willing to pay more than you would before you had used the product.

Awareness is the enemy of the endowment effect. To stop ourselves from overpaying for something, or overvaluing stuff we already own, we should try and take a dispassionate and arm’s length view, and perhaps do some research on real valuations.

Framing

Framing describes a form of expectation.

An example of this is the 17-year-old daughter going to a party. She wants to be out until midnight, but knows that her parents wouldn’t normally allow this.

 As she’s getting ready, her father asks: “What time will you be home?”

The daughter replies: “About 2 o’clock.”

“You will not, my girl,” says the father. “You’ll be back by midnight.”

Framing happens all the time with money. For example, when you visit a financial adviser, what are you expecting? Presumably, advice on your finances. And yet the adviser is just as interested in hearing about your plans for the future.

Framing is used in marketing all the time. It is why prices are so often stated as £9.99. Why is yoghurt 90% fat-free, not 10% fat? Once you understand framing, you will start to see it everywhere.

We can also positively use framing. Just a focus on strengths rather than weaknesses can result in making better financial decisions. This can make us feel more able to manage our finances and address some of those issues that we might have been avoiding.

Loss aversion

We feel the loss of something significantly more than its equivalent gain. Consequently, we try to avoid losses.

This is why the special offer with a limited time is used so much. Research from Which? suggests that most products on sale on Black Friday are actually cheaper at other times of the year.

Loss aversion is often applied to investments, whereby we might be less likely to invest if there is a risk of loss, even though the potential upside might be high. It can also lead to poor financial decisions as we try to avoid poor outcomes, which prevents potential positive outcomes.

Framing can actually help here. Taking some time to properly understand the potential loss (‘What’s the worst that can happen?’) can reframe the decision to fully take into account the upside.

Bonus tip: Avoid advertising

I go to great lengths to avoid adverts. When I go to the cinema, my family go in to watch the trailers and adverts. I sit outside.

Research has shown that advertising makes us unhappy. It presents unrealistic and unattainable images, then suggests that the only way we might achieve those versions of success is to buy that particular product.

Marketing and advertising are all around us, and they’re all designed to get us to spend money that we might not necessarily want to, or even able to afford to, spend. A little bit of work and knowledge to understand our behaviours and how to change our habits can make a big difference to our relationship with money.

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.

After months of speculation and rumour, chancellor Rachel Reeves has delivered the Autumn Budget for 2025. In this update, we’ll explain the key changes and what they mean for you. 

Last year, in her maiden Budget, the chancellor sought to balance the public finances with tax rises to cover a reported £22 billion black hole.

This year, Reeves arguably faced an even more difficult landscape. In turn, she has announced an estimated £26 billion of tax rises by 2029/30. 

The chancellor had to start her speech, however, by acknowledging the “deeply disappointing” and “serious error” of the Budget announcements being released early by the Office for Budget Responsibility (OBR). 

It’s also notable how many predictions ultimately proved to be wide of the mark.

Now that we know exactly what’s included, it’s important to understand the changes and how they could affect you.

The headlines regarding GDP, national debt, and inflation

The chancellor says the government’s plans will reduce borrowing more over the rest of this parliament than any country in the G7.

GDP is expected to grow by 1.5% in 2025, higher than the OBR’s 1% forecast from earlier this year. In subsequent years, the estimations are as follows:

• In 2026, the economy is forecast to grow by 1.4%, below the previous forecast of 1.9%.
• In 2027, GDP is forecast to expand by 1.6%, falling short of March’s estimate of 1.8%.
• In 2028, GDP is estimated to rise by 1.5%. In March of this year, the OBR said this figure would be 1.7%.
• In 2029, the economy will expand by 1.5%, again falling short of the previous estimate of 1.8%.

Due to weaker underlying productivity growth, the OBR estimates that tax receipts will be £16 billion lower in 2029/30 than initially forecast in March 2025.

Average inflation is expected to fall over the next three years.

• In 2025: 3.5%, an increase of 0.2% from the OBR’s original forecast.
• In 2026: 2.5%, up from the OBR’s 2.1% forecast from March.
• In 2027: 2%.

National debt will stand at £2.6 trillion this year. £1 in every £10 the government spends is on debt interest.

Tax threshold freezes extended until 2031

The Labour manifesto promised not to increase Income Tax or National Insurance (NI), and despite pre-Budget speculation, the government has kept to that promise in this Budget. 

However, the chancellor did announce that the Income Tax thresholds will remain frozen for a further three years beyond the previous 2028 freeze, staying where they are until April 2031. This move will raise £8 billion for the government. Similarly, the Inheritance Tax (IHT) threshold freeze is extended from 2030 to 2031. 

While this will not increase your Income Tax or IHT bills directly, this fiscal drag means more of your income and wealth may be exposed to tax over time. 

The government is also upholding its commitment to bringing pension pots into the scope of IHT from April 2027, and reforms to relief for business and agricultural assets from April 2026.

The tax rates on dividends, savings, and property income will rise by two percentage points 

Tax rates are set to rise for dividends, savings, and property income.

• Dividends: From April 2026, ordinary and upper rates of tax on dividend income will rise by two percentage points to 10.75% and 35.75% respectively. There is no change to the additional rate, which will remain at 39.35%.
• Property and savings: From April 2027, the rate of tax on property and savings income will increase by two percentage points across all tax bands to 22%, 42%, and 47% respectively.

The government confirmed that, even after these reforms, 90% of taxpayers will still pay no tax on their savings. However, these changes are set to impact business owners and landlords.

The chancellor says these increases will raise £2.2 billion in 2029/30.

The ISA allowance will be reformed for under-65s, and some allowances have been frozen

The chancellor announced that from April 2027, the Individual Savings Account (ISA) allowance will change for under-65s.

As it stands, adults can contribute £20,000 across their ISAs, including Cash ISAs and Stocks and Shares ISAs, each tax year. 

From April 2027, £8,000 of this allowance will be reserved exclusively for investments, leaving an available £12,000 that savers can pay into their non-investment accounts, such as Cash ISAs.

Savers over the age of 65 will continue to be able to save up to £20,000 in a Cash ISA each year. 

The allowances for Junior ISAs and Lifetime ISAs are frozen until April 2031 at £9,000 and £4,000 a year, respectively. 

Salary sacrifice on pension contributions to be capped at £2,000

The chancellor put a cap on NI-efficient pension contributions made under salary sacrifice.

Salary sacrifice schemes cost the government £2.8 billion in 2016/17, but this figure was set to triple to £8 billion by 2030/31.

The government will charge employer and employee National Insurance contributions (NICs) on pension contributions above £2,000 a year made via salary sacrifice. This will take effect from 6 April 2029.

The chancellor says that many of those on low and middle incomes will be able to continue using salary sacrifice as normal, while high earners can expect to pay increased NI.

New “mansion tax” on high-value properties

The chancellor announced the much-speculated “mansion tax” that will affect the top 1% of properties. 

The new property surcharge will be paid alongside Council Tax. 

There will be four price bands starting with £2,500 for a property valued between £2 million and £2.5 million. For properties valued more than £5 million, the levy will be £7,500. 

The measure is estimated to raise £400 million by 2031. 

Welfare reforms expected to increase by 2029/30

The BBC reported that changes to the government’s previously announced winter fuel payments and health-related benefits will cost £7 billion in 2029/30.

In addition, Reeves revealed she would remove the two-child benefit cap. This will cost £3 billion by 2029/30.

State Pension: Removal of overseas access to Class 2 National Insurance contributions and committing to the triple lock

As a result of a loophole in the Class 2 voluntary NICs regime, overseas individuals with a limited connection to the UK can build a State Pension entitlement through cheaper rates.

The government is looking to end this by removing access to the cheapest Class 2 NICs for these individuals. Additionally, it will increase the initial residency or contribution requirements for those living outside the UK.

The chancellor also confirmed the government’s commitment to the triple lock. From April 2026, this will increase the basic and new State Pension by 4.8%, offering up to an additional £575 per year to pensioners, depending on their entitlement.

A range of significant changes for business owners

In addition to the Dividend Tax increase, the chancellor announced a range of changes that could affect business owners, including:

• Increases to both the National Living Wage (NLW) and National Minimum Wage (NMW). From 1 April 2026, the NLW paid to workers aged 21 and over will rise by 4.1%, from £12.21 to £12.71 an hour, increasing annual income by approximately £900 a year for full-time employees. For those aged 18 to 20, the NMW will rise by 8.5% from £10 to £10.85 an hour, equivalent to around £1,500 a year if working full-time. For 16- and 17-year-olds, and those on apprenticeships, the NMW will rise by 6%, going from £7.55 to £8 an hour.
• Listing Relief from Stamp Duty Reserve Tax for some businesses. The chancellor said this will “make it easier for entrepreneurs to start, scale, and stay in the UK”.
• Reduced Capital Gains Tax (CGT) relief for Employee Ownership Trusts (EOTs). When a business is sold to an EOT, CGT relief will fall from 100% to 50% starting from November 2025. This will raise £0.9 billion from 2027/28 onwards.
• Fully funded apprenticeships for under-25s. This will make them effectively free for small- and medium-sized businesses (SMEs) from April 2026.
• Lower business rates for more than 750,000 retail, hospitality, and leisure properties. That move will be funded through higher rates on properties worth £500,000 or more, such as warehouses used by online retail.
• Customs duty will apply to parcels of any value from March 2029 at the latest. There is an existing exemption for parcels worth less than £135, favouring large-scale importers. 

Other announcements that may affect you

• Household energy bills will fall. Reeves is scrapping the Energy Company Obligation (ECO) scheme, saying that on average, families will save £150 a year in 2026.
• A new tax on electric vehicles. The Electric Vehicle Excise Duty (eVED) will come into effect in 2028 and equal 3p per mile for battery electric cars and 1.5p per mile for plug-in hybrids. The rate per mile will increase annually in line with the CPI. 
• Fuel duty will be frozen until September 2026. In addition, a new “fuel finder” will help drivers find the cheapest fuel, saving the average household £40 a year.
• Reducing the levy threshold on soft drinks. From 1 January 2028, the sugar tax will also be applied to milk-based drinks, including bottled milkshakes and lattes.
• A spousal exemption for agricultural and business asset IHT relief. Unused combined business and agricultural asset IHT relief will become transferable between spouses and civil partners.
• Tobacco Duty and Alcohol Duty will both be uprated. Tobacco Duty will be uprated as announced last year, and Alcohol Duty will now rise with inflation.
• Rising taxes on online gambling. From April 2026, Remote Gaming Duty will increase by 21% to 40%. A new Remote Betting Rate set at 25% will be introduced from April 2027, though horse race betting will be exempt from the changes. 

Other key thresholds that remain the same

More broadly, the chancellor made no mention of other key thresholds that will remain the same. These include:

• The pension Annual Allowance
• Stamp Duty Land Tax for residential properties
• The headline rates of Income Tax, NI, and VAT, as outlined in the government’s election manifesto.

Please note

All information is from the Budget documents on this page.

The content of this Autumn Budget summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice. 

While we believe this interpretation to be correct, it cannot be guaranteed, and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.