US Vice President JD Vance spelled it out in Munich – “there is a new sheriff in town” – and that sheriff’s policies are already having far-reaching consequences. While dealing with geopolitical uncertainties is clearly nothing new for long-term investors, Trump’s re-election has once sound investment approach based on careful planning and positioning of assets.

Global growth has stabilised

In its latest assessment of world economic prospects, the World Bank highlighted several positive developments in the global outlook. Specifically, it noted that global growth stabilised at 2.7% in 2024, after a series of negative shocks, and that this rate of expansion is expected to hold steady across 2025 and 2026. It also emphasised that, with appropriate policy  interventions, current global challenges could be transformed into opportunities, fostering a more resilient world economy.

Policy uncertainties

The World Bank did, however, warn that heightened uncertainty and adverse trade policy shifts represent key risks to global trade and economic growth prospects. Protectionism is back and could lead to shifts in global economic structures, YOUR WINDOW ON WEALTH including changes in trade alliances and manufacturing bases, while the increased costs of imported goods due to tariffs could have inflationary consequences.

A permanent fixture

Another aspect of Trump’s new tariff push is that it seems to represent a long-term policy shift with multiple objectives. It has a national security aspect, for instance, aiming to address immigration and drug-smuggling concerns; it has an economic leverage element designed to deal with trade imbalances, and is also viewed as a potential revenue generator to fund tax cuts. In essence, the trend to protectionism appears set to become the new norm, necessitating a need for strategic investment approaches in a shifting landscape.

Take control

Experienced investors know the importance of staying calm during periods of market uncertainty and the need to continue basing investment decisions on sound financial planning principles. And, right now, the adoption of appropriate diversification and risk management strategies undoubtedly offer investors the safest route through any volatility in an increasingly protectionist world.

The new tax year is a great opportunity to take charge of your finances and set yourself up for financial peace of mind by knowing you have a plan in place. By planning ahead and making the most of available allowances, you can optimise your wealth, reduce tax liabilities and work towards long-term financial security. Here are some key steps to consider:

Take advantage of tax-efficient opportunities

With the new tax year allowances in place, now is the time to make smart financial decisions:

• Maximise your ISA allowance Contribute up to £20,000 (the current annual allowance) into an Individual Savings Account (ISA) and benefit from tax-free growth
• Make the most of your Capital Gains Tax allowance Use your annual exemption to minimise tax on investment profits
• Boost your pension contributions Take advantage of tax relief while also potentially lowering your taxable income
• Plan for Inheritance Tax (IHT) efficiently Lifetime gifting can help reduce the impact of Inheritance Tax, allowing you to pass on more to loved ones.

Build a solid financial plan for a stronger financial future Taking time to review and refine your financial plan can help you stay on track for the future. With proactive tax planning and disciplined habits, you can build a stronger financial foundation and make informed decisions that align with your long-term goals.

Whether you’re looking to grow your savings, invest more efficiently, or plan for retirement, taking action now can make a significant difference. We’re here to help you explore your options and   ensure you’re making the most of the opportunities available. Your future self will thank you!

Chancellor Rachel Reeves announced plans to include unused pension funds and death benefits within the value of estates for IHT purposes, during the Autumn Budget 2024. Under the proposals, pension administrators will report and pay IHT directly to HMRC.

Death-in-service benefits paid out by employers have traditionally been separate from personal pensions for the purposes of calculating an IHT bill. By including unused pensions and
death-in-service benefits in IHT calculations, more estates could face higher taxes.

This announcement came as a surprise, particularly to those who have worked hard to build a pension as a tax-efficient way to pass wealth on to loved ones. Any changes are likely to have the greatest impact on people with established estate plans.

Timeline

A 12-week technical consultation on the proposed changes concluded on 22 January. Once the feedback has been reviewed, government consultation principles outline that responses should be published within 12 weeks. By the third quarter of the year, the government is expected to provide specific implementation guidance on how pensions and death benefits will be treated under the new regime. Any changes won’t take effect until 6 April 2027.

As proposals are not finalised, it’s wise to consider potential implications but await the final guidance before overhauling plans. This still gives us ample time to make changes before implementation in 2027. A review of existing pension arrangements would be useful so we can think about how the proposed changes could affect what your beneficiaries would receive.

Time and knowledge

Rest assured we are monitoring developments and will keep you in touch as we know more. When we have more certainty, we may suggest you consider alternative options that ensure your estate remains as tax efficient as possible and aligned with your goals. Together, we’ll help you secure your family’s future with confidence.