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.

A fifth of respondents to a survey,³ have consistently spent more than they expected to during their retirement so far. Moreover, 11% of the over-55s surveyed also said their overspending had occurred early on in their retirement.

So, what were the biggest reasons behind the overspend? Cost of living (28%), housing costs, including mortgage payments and maintenance costs (21%), travel (14%), supporting family (7%) and leisure (6%).

Having worked hard all your life, the feeling of emotional and financial freedom that often accompanies retirement is enough to lead some retirees to spend more than they should. With reserves to draw upon and plenty of free time, it can prove a challenging financial situation for those who are less strategic with their money.

Plan for future expenses

To avoid a retirement overspend, we can work with you to understand what your spending needs might be and develop a plan that supports your desired lifestyle.
³PensionBee, 2024

Recent HMRC data shows that IHT receipts rose to £4.3bn during the period from April to September 2024, a £400m increase on the same period the previous year.

With 27% of 18 to 34-year olds (1.1 million people) holding out for an inheritance before going ahead with major life events and 12% of UK adults regifting to their children, grandchildren, or other family members, here’s a reminder of the vital gifting numbers to gen up on before the end of the tax year:

You can make gifts worth up to £3,000 in each tax year. These gifts will beexempt from IHT on your death, even if you die within the seven-year period that otherwise applies to lifetime gifts. You can carry forward any unused part of the £3,000 exemption to the following year but if you don’t use it in that year, the exemption will expire.

Certain gifts don’t eat into this annual exemption and don’t give rise to IHT, e.g. wedding gifts of up to £5,000 for a child, £2,500 for a grandchild (or great grandchild) and £1,000 for anyone else. Individual gifts worth up to £250 per year per recipient are also IHT free.

While these are relatively small sums, you should use these up where possible without compromising your own financial security, to gradually reduce your overall estate. A settled pattern of gifts from surplus income can also be made. Conditions apply, and advice would be needed to ensure that the gifts are made and evidenced in the right way.

A couple of months have passed since the Autumn Budget, a significant milestone for the Labour government. A comprehensive set of measures impacting individuals and businesses were announced, featuring £40bn in tax increases. Key announcements involved Inheritance Tax, Capital Gains Tax, domicile status, VAT on private school fees, Stamp Duty and Income Tax thresholds.

Inheritance Tax (IHT)
Following weeks of speculation, changes to IHT were widely expected. The freeze on IHT thresholds at £325,000 has been extended to 2030 and, from April 2027, pension pots will be considered part of taxable estates. This significant shift is likely to mean that more estates will be subject to IHT from the 2027-28 fiscal year, impacting those who have relied on pensions as a tool for inheritance planning. Reviewing your retirement and estate planning now, ahead of this change, is advisable.

Business Property Relief (BPR) and Agricultural Property Relief (APR) are also seeing changes. From April 2026, the first £1m of combined business and agricultural assets will not be subject to IHT; for assets over £1m IHT will apply with 50% relief at an effective rate of 20%. This reduction could impact succession planning, particularly for small business owners and family  farmers.

Capital Gains Tax (CGT)
CGT increases were announced, with the basic rate moving from 10% to 18% and the higher rate from 20% to 24%. These changes were effective from 30 October 2024. Additionally, the CGT rates on carried interest will rise to 32% from April 2025, with further reforms scheduled from April 2026.

The rate for Business Asset Disposal Relief and Investors’ Relief will increase to 14% from 6 April 2025 and then to 18% from 6 April 2026. The lifetime limit for Investors’ Relief was reduced to £1m for all qualifying disposals made on or after 30 October 2024, matching the lifetime limit for Business Asset Disposal Relief.

Non-domiciled (non-dom) status
The familiar non-dom tax regime will be phased out from April 2025, to be replaced by a residence-based scheme. This includes ending the use of offshore trusts to shelter assets from IHT and scrapping the planned 50% tax reduction for foreign income in the first year of the new regime. Individuals who opt in to the regime will not pay UK tax on foreign income and gains (FIG) for the first four years of tax residence. To incentivise investment, the Temporary Repatriation Relief will be extended to three years, offering reduced rates on gains and income for wealthy investors considering bringing assets into the UK.

VAT on private school fees
As indicated in the Party’s election manifesto, the Chancellor confirmed plans to introduce VAT on private school fees (except for children below compulsory school age) from January 2025 and to remove private schools’ business rates relief from April 2025.

Stamp Duty
The Stamp Duty surcharge on second homes and investment properties will increase from 3% to 5% above standard residential rates, effective immediately. This change is expected to temper demand in second homes and the buy-to-let market, particularly in high-value areas like London.

Income Tax
The Income Tax Personal Allowance and higher rate threshold remain at £12,570 and £50,270 respectively until April 2028. From April 2028, these personal tax thresholds will be uprated in line with inflation.

Investments
• The annual subscription limits will remain at £20,000 for ISAs, £4,000 for Lifetime ISAs and £9,000 for Junior ISAs and Child Trust Funds until 5 April 2030. The government has confirmed it will not proceed with the British ISA due to mixed responses to the consultation launched in March 2024
• The starting rate for savings will be retained at £5,000 for 2025/26 • The Enterprise Investment Scheme and Venture Capital Trust schemes have now been extended to 2035.

Bottom line
If you have any questions, please get in touch. We’re here to help you understand the impact these changes could have on your specific circumstances and to help you adapt your financial strategies to ensure you stay on track towards your goals. With the 2024/25 tax year end ticking round, we can talk it through.

Research⁵ suggests a significant minority of over-55s either have or are planning to unretire. Worryingly, though, a majority in this group have not checked the tax implications associated  with such a decision, leaving many potentially at risk of falling foul of the unretirement ‘tax trap.’

The great unretirement continues

According to the research, more than a quarter of people aged 55 and over plan to continue with some form of paid work after retiring, with respondents citing a
variety of reasons for doing so. For some, a desire to generate additional income to pay for luxuries was a key driving force, while others felt it would keep their brains active or give them a better sense of purpose.

Unknown tax implications

However, the survey also revealed that almost two thirds of those that have or are planning to unretire had not checked the potential tax implications of doing so; additionally, six out of ten over 55s who are either working or plan to work in retirement had no plans to seek financial advice.

Minimising the tax burden
Clearly, anyone undertaking paid work in retirement needs to fully understand the tax implications, which include a possible increase in tax liability if extra earnings take someone’s income above the personal tax threshold or pushes them into a higher tax bracket. They also need to consider how any potential liabilities could be mitigated, for example by maximising the use of tax reliefs and allowances.

On an even keel
If you are currently working in retirement or plan to do so, we can provide you with personalised advice tailored to your unique set of circumstances that will help structure your finances in the most tax-efficient manner and ensure you avoid falling into the unretirement ‘tax trap.’

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Reassuringly for investors, the latest batch of projections from economic soothsayers continues to predict a period of steady, if unspectacular, global growth. The forecasts also highlight a number of economic concerns including ‘sticky’ inflation, large budget deficits and geopolitical uncertainties, which could inevitably create some investment challenges.

Growth rates beat expectations
Economic growth figures released over the summer generally proved stronger than analysts had expected, particularly in relation to Europe and the US (in Q2). And while economic momentum is expected to soften across the second half of this year, forecasters are still predicting steady rates of growth. The latest figures from the International Monetary Fund (IMF), for
instance, forecast global growth of 3.2% for the whole of 2024 with the rate rising slightly to 3.3% next year.

Inflation persistency
The IMF’s musings were contained in a report entitled ‘The Global Economy in a Sticky Spot,’ which highlighted two prominent near-term risks currently undermining growth prospects. Firstly, the IMF warned that ‘services inflation is holding up progress on disinflation’ which could result in interest rates remaining ‘higher for even longer.’ Secondly, a deterioration in public finances has left many countries in a position of fiscal vulnerability and this is ‘magnifying economic policy uncertainty.’

Geopolitical uncertainties
In what was dubbed ‘the year of the election’, geopolitical uncertainties unsurprisingly continue to be a key concern as well. Indeed, their impact on global growth prospects can only be expected to rise in the near-term as the US presidential election looms ever closer. Continuing geopolitical conflicts and the rise in geoeconomic competition is also creating ongoing challenges for the global economy.

Elements at play
Economic resilience has flowed through to central bank monetary policy as global institutions have largely adopted a cautious approach. Slower but still positive growth, lower inflation and interest rate reductions are a positive combination for investors. Whatever uncertainties do lie ahead, one investment fundamental remains constant: long-term investors are best served by holding a well-diversified, multi-asset portfolio based on sound financial planning principles and thorough research. We’ll help ensure your portfolio remains well-balanced and with the right
mix of assets; we’re always focused on finding investment opportunities.

The value of investments can go down as well as up and you may not get back the full amount you invested.
The past is not a guide to future performance and past performance may not necessarily be repeated.
The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.

Have you ever made an irrational or impulsive purchase you’ve later regretted? We all make decisions based on our emotions or personal biases, but when it comes to investing, such mistakes can be very costly.

What is behavioural investment?Behavioural investment is an approach that acknowledges how our emotions and our biases can sometimes make decisions for us. During periods of geopolitical uncertainty and heightened risk, behavioural investment biases can become even more pronounced, tempting you into making poor decisions. Here are some impulses that often lead to bad investment decisions:

• Loss aversion: Investors worry about their investments falling further in value, so they sell them prematurely, locking in losses and missing out on potential rebounds
• Herd mentality: When markets fall, people tend to panic, follow the crowd and sell their investments. This ‘herd mentality’ means markets keep falling, as more people panic and sell, creating a spiral.
• Confirmation bias: Investors let their own opinions dictate their actions and often seek out information that confirms their existing fears, ignoring evidence that contradicts their own impulses
• Overconfidence: Some investors believe they can predict the market’s reaction to geopolitical events, leading them to make risky bets that could ultimately backfire.

Avoiding behavioural biases

Investors often need to worry less about geopolitical events and more about avoiding making poor decisions. Worry not, you’re in safe hands. We can create a plan and stick to it, so we focus on longer-term goals, rather than risk getting distracted by short-term noise. We will build a resilient portfolio, spreading your investments across different asset classes to manage risk. Rest assured, we will make well-considered, researched investment decisions to increase your chances of achieving your long-term financial goals.

At times in the past two years, it seemed to some that inflation would never come down. Double-digit inflation became routine. Now, with price rises back near normal levels, optimism is returning to financial markets.

Disinflation diaries

Inflation has fallen well below the multi-decade highs witnessed in many countries since 2022. In response, central banks around the world now
look set to ease monetary policy in the coming months.

Indeed, some central banks, including those in emerging markets, have already started cutting rates. In recent months, policymakers in Mexico, Brazil, the Czechia, Hungary and Colombia have started, or increased, easing efforts.

The ‘last mile’

As developed countries bring monetary policy back towards more normal levels, some analysts are talking about the ‘last mile’ for disinflation.

Certainly, after a long period of high inflation, falling inflation rates are a welcome relief for many. In the UK, inflation has eased significantly from the 41-year-high of 11.1% recorded in October 2022.

For all this optimism, however, there are some warnings that the final stretch will not be a stroll in the park.

Bumps in the road

In Australia, consumer price inflation rose to a five-month high in April, a figure that surprised analysts. The uptick was blamed on increases in petrol, health
and holiday costs.

Meanwhile, the International Monetary Fund (IMF) has released a Global Financial Stability Report warning that geopolitical tensions, strains in commercial real estate and debt vulnerabilities all remain acute risks for the global economy in the months and years ahead. The IMF pointed to recent evidence that disinflation may have stalled in some countries, suggesting that inflation may be persistent in some sectors.