shirley

5 ways to reduce Inheritance Tax. Inheritance Tax (IHT) can substantially reduce the value of your estate. Between April and August 2025, HM Revenue & Customs collected £3.7 billion in IHT.  Moreover, this equates to £0.2 billion more than the same period last year.

Notably, the rules can appear complex.  However, there are legitimate and effective ways to reduce the amount of IHT payable.

How Inheritance Tax Works

Under current tax rules, IHT is charged at 40% on the portion of your estate that exceeds £325,000.  This is known as the nil-rate band. Ultimately, this threshold is frozen until April 2030.

An additional £175,000 residence nil-rate band may apply. As a result of passing your main home to direct descendants. Married couples and registered civil partners can combine their allowances.  Subsequently, allowing up to £1 million of assets to be transferred tax-free.

If your estate falls below these combined thresholds, no IHT is payable. However, for larger estates, careful planning can significantly reduce the tax due.

1. Writing your Will

A valid Will is one of the most important tools in IHT planning. It ensures your assets are distributed according to your wishes.

Without a Will, your estate is distributed under the rules of intestacy.  However, assets held as joint tenants are excluded and automatically pass to the surviving owner. Subsequently, this may not reflect your intentions or make full use of available tax allowances.

2. Obtaining a Life Insurance Policy

A whole-of-life insurance policy can provide a lump sum to help beneficiaries pay an IHT bill.

For example, placing the policy in trust keeps the payout outside your estate.  As a result, it is not subject to IHT.   Moreover, this can normally be paid quickly without waiting for probate.

Furthermore, if your policy is not currently held in trust, insurers typically provide a simple form to arrange this. However, if you are seriously ill when the policy is transferred and die within seven years, its value may still be included in your estate.

Accordingly, the rules for placing a policy into trust. The amount treated as a gift is usually the higher of the policy’s surrender value or the total premiums paid. Ultimately, if you are in poor health, a value closer to the expected death benefit may be used. Ongoing premiums are also treated as gifts unless they qualify for an exemption.

3. Gifting during Your Lifetime

Making gifts during your lifetime can reduce the value of your estate.

• You can gift up to £3,000 per tax year. With the option to carry forward one unused year.
• Small gifts of up to £250 per recipient per year are exempt. Provided no larger gift is made to the same person.
• Larger gifts may fall outside your estate if you survive for seven years after making them.

Also, you can make regular gifts from surplus income.  This is as long as they do not affect your standard of living. For example, monthly payments to children or grandchildren may qualify. Notably, if they are funded from income rather than capital.

4. Leaving your Pension invested

Currently, pension funds are exempt from IHT.  Ultimately, making them one of the most tax-efficient assets to pass on to beneficiaries.

However, the government intends to include pensions within IHT calculations from April 2027.  Hence, this may change how retirement wealth is managed.

Until then, leaving pension funds untouched for as long as possible may be beneficial. Reviewing your retirement income strategy in light of upcoming changes can help ensure you access your assets in the most tax-efficient way.

5. Choosing to Marry or enter a Civil Partnership

Marriage or a registered civil partnership can offer significant IHT advantages.

Assets passed to a spouse or civil partner are exempt from IHT.  Subsequently, any unused allowances can be transferred to the surviving partner. This effectively doubles the available threshold. Ultimately, £1 million can pass tax-free when the nil-rate band and residence nil-rate band are used.

For unmarried couples, the rules are less generous. Transfers between partners are not automatically exempt, and allowances cannot be combined. For couples with substantial shared wealth, formalising the relationship can offer tax benefits.

5 ways to reduce inheritance tax. Effective Inheritance Tax planning can help you safeguard more of your wealth for your family. For further help, call us on 01603-957599 to discuss your circumstances and explore your options.  For your free initial consultation, contact us today.

Autumn Budget for 2025. In this update, we’ll outline some of the key changes and what they might mean for you. 

Tax threshold freezes extended until 2031

In brief, Income Tax thresholds will remain frozen for a further 3 years beyond 2028. Notably, this will remain in place until April 2031. Similarly, the Inheritance Tax (IHT) threshold freeze is extended from 2030 to 2031.

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

Also, 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. Notably, 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. This will be across all tax bands to 22%, 42%, and 47% respectively.

It is proposed that 90% of taxpayers will still pay no tax on their savings. However, these changes are set to impact business owners and landlords.

ISA allowance will be reformed for under-65s

From April 2027, the Individual Savings Account (ISA) allowance will change for under-65s.

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

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

Over 65s 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. Notably, at £9,000 and £4,000 a year, respectively.

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

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.

It is cited that many of those on low and middle incomes will be able to continue using salary sacrifice as normal. Meanwhile, high earners can expect to pay increased NI.

New “mansion tax” on high-value properties

A “mansion tax” will affect the top 1% of properties. The new property surcharge will be paid alongside Council Tax.

In summary, there will be four price bands. Thus, £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.

Welfare reforms expected to increase by 2029/30

The two-child benefit cap will be removed.

State Pension: Committing to the triple lock 

The government confirmed its commitment to the triple lock. From April 2026, this will increase the basic and new State Pension by 4.8%. Subsequently, giving an additional £575 per year to pensioners, depending on their entitlement.

National Living Wage

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%. Notably, from £12.21 to £12.71 an hour. This increases 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. Therefore, 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%. Rising from £7.55 to £8 an hour.

Other announcements that may affect you

• Household energy bills will fall. The Energy Company Obligation (ECO) scheme is being scrapped. Hence, families will save £150 a year, on average, in 2026.
• New tax on electric vehicles. The Electric Vehicle Excise Duty (eVED) will come into effect in 2028. This equates to 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. This will save 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. This includes 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. However, horse race betting will be exempt from the changes.

Please note

All information is from the Budget documents.

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. Subsequently, we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Accordingly, please obtain professional advice before entering into or altering any new arrangement.

Autumn Budget for 2025. To understand how we can help you with your financial planning and long-term retirement goals, call us today. For a free initial consultation, call us on 01603-957599.

Is there a gender gap in taking financial risks? Recent research from  Flagstone  shows a persistent confidence gap between men and women when it comes to managing investments. 

Just one in five women feel comfortable taking financial risks.  Such as investing in stocks and cryptocurrency, to grow their wealth (20%). By comparison, over a third of men are willing to do so (36%). Notably, this suggests women are less likely to take financial risks to grow their wealth. 

Furthermore, women are also less inclined to invest a large sum of money compared to men. Hence, roughly one in 10 women would prioritise investing for the future.  Particularly, if they inherited a large sum (11%), compared to 17% of men. Instead, women tend to favour traditionally ‘safer’ financial decisions. Notably, investing in property (25%), paying off debts (24%), and saving in a bank account (14%).  

Ultimately, this mirrors findings from Flagstone’s Savings Inertia Report.  Similarly, women frequently show passive patterns in managing their finances. According to the report, men are twice as likely to have substantial savings that could earn significant interest.  

Furthermore, stress appears to contribute to women’s lower financial confidence. Women are more likely to avoid making financial decisions because they find them stressful (17%).  Although findings showed 12% of men feel similarly. 

The impact of the Gender Pay Gap

As a result, these differences in financial behaviour are only widened by the gender pay gap. Although the pay gap is narrowing, women still earn less than men throughout their careers. Many also take prolonged career breaks.  Subsequently, women would need to work for an additional 19 years on average to build the same pension pot as a man. 

This helps to explain why there are 3.3m fewer female investors than male investors. Based on those currently investing, the average amount invested is £70,000 for women and £115,000 for men. 

Proactive investment can help women regain momentum for their financial future. Additionally, seeking the right financial advice can help break the confidence barrier women face. Yet only 14% of women say they seek advice from a financial adviser. 

Women are more likely to rely on family and friends to make financial decisions (17%). Men, on the other hand, are more likely to rely on advice from financial advisers (20%). 

This habit is risky. Friends and family rarely see the full picture of your finances, and their advice often reflects their own experiences. Research shows those who take financial advice from family and friends alone are £42,000 worse off on average. 

Is there a Gender Gap in taking financial risks? To understand how we can help you with your financial planning and long-term retirement goals, call us today. For a free initial consultation, call us on 01603-957599.

Do you plan to enjoy a comfortable retirement when you stop working? If so, you may need to review your pension savings.  The amount of money you may need could come as a shock!

According to the latest data, a single person now needs £43,900 a year. Meanwhile couples need £60,600 a year[1].

But what does a “comfortable” retirement mean, and why does it cost so much?

By exploring this and understanding the associated costs, you can better plan for a financially secure retirement.

A “comfortable” retirement is defined as one that enables financial independence. As well as allowing for the enjoyment of a few luxuries. This might mean a Mediterranean holiday each year, several weekends away, and regular meals out.

Other indicators include a comprehensive broadband and TV package, clothing budgets, and other allowances. For a single person, these costs total £43,900 annually after tax. To cover this, they would need a pre-tax income of £40,245, in addition to the State Pension, which is £11,973 for the 2025/26 tax year. If you’re relying on a pension pot to provide this income through an annuity, the total savings required ranges from £540,000 to £800,000.

Breaking down the numbers:
The figures account for essential expenses and discretionary spending. These projections include weekly averages of £75 for groceries, £42 for dining out, and £21 on takeaways. As well as annual costs for holidays and clothing. They aim to reflect realistic living standards rather than extravagant lifestyles. For couples, their combined expenses raise the financial requirement.

Annuity rate calculations vary based on factors such as health, age, and the type of annuity selected. Currently, they range from £5,000 to £7,500 for every £100,000 of savings. While annuities provide a guaranteed income for life, fluctuations in rates and individual circumstances can significantly impact your retirement planning.

How to improve your retirement outlook:

Start early: Time is your greatest asset. Regular contributions made earlier in your career allow savings to grow due to compounding interest.

Maximise employer contributions: Take full advantage of workplace pension schemes. Also match your employer’s contributions whenever possible.

Consider investments; These may provide higher returns than a traditional pension plan, although they carry higher risks.

Delay retirement: Working a few extra years can give your savings longer to grow. Furthermore, this reduces the number of retirement years your funds need to cover.

Review your spending: Budget carefully during your working years to prioritise retirement savings.

Seeking professional advice can help you identify the right approach to suit your individual circumstances and goals.

What’s your retirement strategy?
Your retirement should be a time to enjoy financial freedom and live the life you’ve always wanted. However, achieving this requires careful planning and preparation. The sooner you begin taking action, the better your chances of building a secure future,

How much for a comfortable retirement? Early planning provides you with the opportunity to fully capitalise on growth over time. To understand how we can help you with your financial planning and long-term retirement goals, call us today. For a free initial consultation, call us on 01603-957599.

[1] Data from the Pension and Lifetime Savings Association (PLSA) 04.06.25

Reaching your 60’s – the retirement decade? What you need to consider

Should you continue working?

You may intend to keep working a little longer, or you may consider reducing your hours.  Your state pension will not now be accessible to you until your 67^th or 68^th birthday.  The maximum you can get is based on 35 years of full National Insurance contributions.  But you may have a personal pension that you have already accessed at 55. Besides, this will increase to the age of 57 from 2028. Ultimately, this may give you different options for your working life.

Review your budget?

What do you want your ‘retired life’ to look like.  How much will you realistically need a year to fulfil this. 

Reaching your 60’s – Consider downsizing?

If you own your own home you may consider moving to a smaller home.  This is a good way to release some capital and also save money. As a result, you can use this for other things such as holidays and hobbies.  Or you may wish to consider Equity Release.

Your Will and LPAs (Lasting Power of Attorney)?

If you haven’t done so already, you should write a Will. Alternatively, you may need to update your existing Will.  Also you should consider putting in place a Lasting Power of Attorney. Notably, should you become incapacitated and need someone to make important decisions on your behalf.  There are two LPAs, one to cover Property and Financial matters and the other Health and Welfare needs.

Reaching your 60’s – Estate Planning?

It is important to speak to a Financial Adviser. Moreover, to ensure you’re protecting your financial future as well as your loved ones in the most tax-efficient way.

Reaching your 60’s – the retirement decade? To understand how we can help you with your financial planning and long-term retirement goals, call us today. For a free initial consultation, call us on 01603-957599.