At the end of February 2026, the US and Israel launched strikes on Iran, which have further escalated. The uncertainty caused by the war has affected market confidence, leading to falling prices.

The Middle East is a large exporter of oil, and the war has resulted in prices rising, which is likely to affect businesses and consumers around the world. In addition, the Strait of Hormuz, an important waterway for trade, has been affected by the conflict, which may harm international supply chains.

These external factors may be affecting the value of your investments.

Market volatility refers to changes in the value of assets

In simple terms, market volatility refers to the value of assets changing. When markets are experiencing greater volatility, prices will rise or fall more sharply than usual. Volatility can be affected by many factors, such as geopolitical tensions, economic news, investor sentiment, and interest rates.

While volatility can seem concerning and unusual, it’s a normal part of investing. Indeed, even over the last 20 years, investors have experienced many periods of high volatility, including during the 2008 financial crisis and the Covid-19 pandemic.

If you look at the performance of market indices, you’ll see they are not straight lines. Prices naturally fluctuate, and there will be points where they shift sharply. While performance cannot be guaranteed, markets have historically recovered from dips over a long-term time frame.

In many cases, staying the course, rather than reacting to market movements, is the best course of action. However, high levels of volatility may trigger some investors to act in a way that doesn’t align with their long-term strategy.

Here are two types of investor behaviour to be mindful of during volatility.

1. Panic selling

When you’re worried about losing money, you might feel as though you need to react. So, investors might be tempted to panic sell portions of their portfolio amid market volatility. As mentioned above, markets have recovered from downturns in the past, and by panic selling, investors could turn paper losses into real ones.

There might be times when selling assets and adjusting your strategy is appropriate. However, these decisions shouldn’t be driven by emotions, like panic. Instead, assessing your personal goals and circumstances could help identify where you might make changes.

 2. Following the crowd

When things seem uncertain, it can feel comforting to do what other people are doing. This can lead to an investor mentality of following the crowd. It might feel comforting, but it could also lead to inappropriate decisions.

While an investor might make a decision that’s right for them, it could be inappropriate for you because you have very different circumstances or goals.

So, if you feel tempted to alter your investments, it may be worthwhile assessing what’s driving the decision. You might be influenced by the actions of someone you know or by reading news articles that suggest other investors are reacting to market volatility.

We can answer your investment questions

If you have questions about your investment portfolio and how the current situation might affect you, we can help. Please get in touch to speak to one of our team.

If you’d like to work with us to create your investment strategy, or have us review your existing one, please get in touch to arrange a meeting. Please get in touch to arrange a free one-hour consultation with an independent financial planner.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

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5 insights from the investment market 

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What does diversified mean?

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.

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.

The post What past market volatility has taught us about investor behaviour appeared first on Innes Reid.

Currently, pensions are usually outside your estate for IHT purposes. As a result, your pension might provide a tax-efficient way to pass on wealth to your loved ones.

This will change on 6 April 2027, when most unused pension funds and pension death benefits will be included in IHT calculations.

According to HMRC (25 November 2025), the changes mean around 10,500 estates will become liable for IHT where previously they would not have been. In addition, it’s estimated that around 213,000 estates will now face a higher IHT bill.

Even if you have an existing estate plan in place that considers IHT liability, it may be worthwhile reviewing it in light of the changes.

The Inheritance Tax nil-rate band is £325,000 in 2026/27

To understand whether you’ll be affected by the IHT changes, you need to start with when you pay IHT.

Roughly 1 in 20 estates are liable for IHT, and if the total value of your estate, which includes property, savings, investments, and personal possessions, is under certain thresholds, no IHT will be due.

In 2026/27, the nil-rate band is £325,000. If the value of your estate is below this threshold, it won’t be liable for IHT.

In addition, the residence nil-rate band is £175,000 in 2026/27. Most estates can use this allowance if they leave their main home to a direct descendant. However, the residence nil-rate band may taper if your entire estate is worth more than £2 million.

If you’re married or in a civil partnership, you can pass on your entire estate to your partner without the assets being liable for IHT, and you can also pass on unused allowances. As a result, a couple planning together may be able to pass on up to £1 million before IHT is due.

While the threshold may seem high, once you factor in large assets, such as your pension or property, it may be easier to exceed it than you expect.

Furthermore, the IHT thresholds are frozen until at least April 2031. So, if the value of your assets rises, your estate might be pushed past the IHT threshold without you realising.

The good news is that there are often steps you can take to mitigate an IHT bill, including when the rules change and your pension is added to the calculations.

3 ways you might mitigate an Inheritance Tax bill on your pension 

1. Spend your pension

Perhaps the simplest way to avoid paying IHT on your pension is to spend it. After working hard to save for this chapter of your life, you could find you’re in a position to make some indulgent purchases, from exotic holidays to golfing equipment.

Remember that your pension might need to provide an income for the rest of your life, and it’s not uncommon for a retirement to span several decades. So, it’s important to balance spending now with long-term financial security, which a financial plan may help you achieve.

2. Purchase an annuity

If you have a defined contribution pension, you can access it in several ways. One option that could be effective from an IHT perspective is purchasing an annuity.

An annuity is a financial product you buy that then provides an income for the rest of your life. In some cases, the income provided may increase in line with inflation or a portion may continue to be paid to your partner if you passed away first.

You can use all or part of your pension to purchase an annuity. As the money is taken out of your pension, it’s effectively removed from your estate, which might reduce IHT liability. However, there is a risk that you’d pass away before getting the money back through the income.

Buying an annuity is often an irreversible decision, so it’s important to weigh up all your options when accessing your pension.

3. Pass on pension wealth to loved ones during your lifetime

If passing on wealth to loved ones is important to you, you could do so during your lifetime.

Gifting wealth from a pension could support your beneficiaries and potentially reduce an IHT bill by reducing the value of your estate.

However, not all of your gifts are considered immediately outside of your estate when calculating IHT. In some cases, gifts may be included in the calculations for up to seven years after they are given; these are known as “potentially exempt transfers”.

Some gifts are immediately outside of your estate for IHT purposes, making them useful if you want to mitigate an IHT bill. In 2026/27, they include:

• An annual exemption of £3,000, which can be given to one person or split between multiple people. If unused, your annual exemption can be carried forward for one tax year.
• Small gifts of up to £250 to as many people as you like, so long as you haven’t used a different allowance on the same person.
• Wedding gifts of £1,000, rising to £5,000 for children and £2,500 for grandchildren or great-grandchildren.
• Regular gifts that are given from your surplus income, such as paying into your grandchild’s savings account each month or helping with your family’s living costs. These gifts must be made regularly and come from your income, rather than depleting your capital. If you intend to use this exemption, it’s important to keep a record, so a clear pattern can be established.

Another factor to consider is how you’ll be taxed when withdrawing money from your pension. If your total income exceeds the Personal Allowance (£12,570 in 2026/27), withdrawals may be subject to Income Tax.

As a result, large withdrawals for gifts could be taxed and potentially push you into a higher tax band.

Again, it’s important to consider your long-term financial security. Gifting too much could leave you in a financially vulnerable position later in life. Making gifts part of your wider financial plan could give you confidence in your finances now and in the future.

Talk to us about your estate plan

There are other ways you might reduce or mitigate a potential IHT bill, such as passing on wealth through a trust or leaving a portion of your estate to charity.

Please get in touch to talk to an independent adviser about your objectives and how we could help you create an estate plan that’s tailored to your needs. We provide a free one-hour consultation with an independent financial planner. Its a great opportunity for you to have a personal conversation with no obligation to continue with us.

Call our team: 01244 347 583 |  info@innesreid.co.uk | Send a message

Subscribe for more  IHT tax, retirement and pensions practical guidance. Get helpful insights from us once a fortnight – subscribe to our latest insights.

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.

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

The post Why your pension could become liable for Inheritance Tax appeared first on Innes Reid.

A cashflow model could help you visualise changes to your wealth

A cashflow model is a powerful tool that financial planners can use to show how your wealth might change over the long term in various scenarios.

To start, you’ll input essential information, such as the value of your assets, your income, and how you use your money each month. Then you can make certain assumptions, such as the rate of inflation, potential investment returns, or your expected retirement date, to see how your wealth might change over the years.

It’s important to note that the results of a cashflow model cannot be guaranteed, as they rely on the data added and assumptions that might prove inaccurate. However, they can provide a valuable way to visualise your long-term wealth and assess the effect of your decisions.

You could use a cashflow model to stress-test your finances

One of the reasons cashflow modelling is useful is that once it’s set up, you can adjust the assumptions to model different scenarios.

If you’re concerned about financial shocks, you can effectively use it to stress-test your finances and as an early warning system. Identifying potential gaps sooner could mean you’re in a position to close them.

As a result, cashflow modelling could help you manage worrisome “what if?” questions.

Imagine you’re the main income earner for your household and you’re worried that your family wouldn’t be able to cope if you were unable to work.

You can use a cashflow model to stress-test your finances and show how long they would last without an income. For example, you might assess how quickly your emergency fund would be depleted.

Armed with this information, you might be able to address potential weak spots in your finances.

In this case, if you found your emergency fund would only cover essential bills for two months, you might start by saving more to build it up. In addition, you may consider taking out appropriate financial protection that would provide an income if you couldn’t work due to an accident or illness, to further improve your financial resilience.

There are many other types of financial shocks where a cashflow model could be useful too, from a period of downturn leading to falling investment values to a large, unexpected household bill, such as needing to replace your home’s roof.

A cashflow model can help you assess the effects of a shock after it’s happened

If you experience a financial shock that you hadn’t previously considered, a cashflow model could still be useful.

It can be difficult to assess the long-term effect of a shock. By adding it to your cashflow model, you may be able to understand whether your goals remain on track and whether any adjustments are necessary.

Imagine you’d previously planned to retire at 65 and calculated that you’d have enough to take a sustainable income that would afford you the lifestyle you’ve been looking forward to.

However, ill health means you now need to bring forward your retirement by three years. This might not be something you’ve considered before. You’re now unsure whether you’ll be financially secure later in life or if you need to reduce your outgoings in retirement.

Updating your cashflow model following this life event could enable you to assess the long-term effects. It could give you the confidence to make decisions, even when life is unpredictable.

We could help you improve your financial resilience

If you’d like to understand if you’re vulnerable to financial shocks and how you might improve your resilience to them, please get in touch.

Speak to our team about a free one-hour consultation with an independent financial planner. It’s an opportunity to speak with an adviser about your personal circumstances and decide if financial planning is right for you.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

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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.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

The Financial Conduct Authority does not regulate cashflow modelling.

The post How cashflow modelling can act as an early warning system for financial shocks appeared first on Innes Reid.

Indeed, any investment returns generated within your fund are typically free from Income Tax and Capital Gains Tax.

Better yet, you can also receive tax relief on your contributions, significantly bolstering the value of your pot over time.

Despite these advantages, many people overlook one of the most valuable benefits pensions offer.

Research from PensionsAge (8 December 2025) found that 44% of UK adults don’t know what pension tax relief is, while just 31% could identify its purpose.

Over time, missing out on pension tax relief could be costly. So, continue reading to find out how pension tax relief works and how it could significantly improve your retirement income.

Pension tax relief is when the government tops up your contributions

When you pay into a pension, the government essentially “tops up” these contributions based on your marginal rate of Income Tax. Looking at it another way, tax relief acts as a “refund” of the Income Tax you have already paid on the money you put in your pot.

As a result, in England, Wales, and Northern Ireland, a £100 payment into your pension would typically cost:

• £80 if you pay basic-rate Income Tax
• £60 if you pay higher-rate Income Tax
• £55 if you pay additional-rate Income Tax.

Please note, Income Tax bands and rates are different in Scotland, which affects pension tax relief.

For most personal pensions, basic-rate tax relief is applied automatically using a system known as “relief at source”. Some schemes use net pay arrangements, where tax relief is applied differently (this article talks about relief at source only).

If you pay higher- or additional-rate tax, you’re usually entitled to relief at your marginal rate. However, this portion isn’t added automatically. Instead, you usually need to claim it through your self-assessment tax return or by directly contacting HMRC.

Many people forget to do this. Standard Life (24 February 2025) estimates that up to £1.3 billion of extra relief went unclaimed between the 2016/17 and 2020/21 tax years.

This can make a considerable difference:

• A £1,250 total pension contribution would cost a basic-rate taxpayer £1,000, as £250 is added by HMRC.
• For a higher-rate taxpayer, the same total contribution would only cost £750 once the extra relief is claimed.

As such, ensuring you claim everything you are entitled to could substantially increase the amount of money you can put towards retirement.

If you believe you have missed out in the past, it’s worth noting that it is possible to backdate your tax relief claims for up to four tax years.

There are limits to the amount you can tax-efficiently contribute to your pension

While the incentives of tax relief are generous, there are limits on how much you can pay into your pension each year tax-efficiently.

You can receive tax relief on any pension contributions worth up to 100% of your earnings for that tax year. But if you surpass the Annual Allowance, your contributions could face a tax charge.

The Annual Allowance sets the maximum amount that can be contributed across all your pensions in a single tax year without incurring a tax charge.

As of 2025/26, this is £60,000. While the Annual Allowance does reset each year, you may be able to carry forward unused allowances from the previous three tax years, provided you were still a member of a pension at the time. You also need to use all of the current year’s allowance before you can carry forward.

It’s vital to note that if you have a high income, you may face the Tapered Annual Allowance.

In 2025/26, this means that when your income exceeds £200,000, and your adjusted income (which includes your pension contributions) is above £260,000, the Annual Allowance falls by £1 for every £2 earned above that level. Just remember that the minimum it can fall to is £10,000.

What’s more, if you’ve already started accessing your pension wealth, you may have triggered the Money Purchase Annual Allowance.

This typically reduces the amount you can tax-efficiently contribute to your pension to £10,000 each year.

Compounding returns over time can make pension tax relief even more attractive

One of the most practical aspects of tax relief is that it’s added straight to your pension, where it is usually invested on your behalf by your provider.

Any growth is reinvested, allowing your savings to benefit from “compounding”. This is the “growth on growth” effect that further boosts your returns over a longer period of time.

Standard Life (21 August 2025) gives an example of how beneficial this can be.

If you contributed £200 to your pension each month from age 25 to 65, and your investments grew at an average rate of 5% each year, your pot could be worth around:

• £29,400 after 10 years
• £73,000 after 20 years
• £232,000 after 40 years.

While you might imagine that your pot would grow from £73,000 after 20 years to £146,000 after 40 years, it would actually increase in value significantly more. This is thanks to compounding returns and long-term growth.

As such, making regular payments, starting early, and making full use of tax relief can all improve your financial security later in life.

Get in touch 

We can help ensure you’re claiming all the pension tax relief you’re entitled to, helping you secure peace of mind for your retirement. Please get in touch to arrange a meeting.

We provide a free one-hour consultation with an independent financial planner. Its a great opportunity for you to have a personal conversation. You may come away with a clearer understanding of how much you should contribute to your pension to achieve the retirement you want.

Call our team: 01244 347 583 |  info@innesreid.co.uk | Send a message

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More on tax and pensions

Guide download – Everything you need to know about the State Pension

How much should you contribute to your pension?

Is the default pension fund right for you?

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.

The post How pension tax relief could boost your retirement income appeared first on Innes Reid.

Ahead of the Statement, Reeves reinforced the government’s commitment to “one fiscal event, one Budget, a year”. So, it will come as a relief to many, including business owners, that the Spring Statement included no additional tax-raising measures. Furthermore, no changes to pensions or Individual Savings Accounts (ISAs) were announced.

Reeves also said that household disposable income is set to grow at twice the rate that was forecast in the Autumn Budget – leaving the average person £1,000 better off each year by the next election.

That being said, previous announcements, including changes to the tax regime, remain in place, and may affect personal finances and business owners in 2026/27 and beyond.

Reeves gave an overview of the Office for Budget Responsibility’s (OBR) economic forecast for the years to come. Notably, the OBR’s forecasts and the Statement as a whole made no mention of the potential economic impact of the unfolding situation in the Middle East, which may contribute to increased oil and gas prices that could prove inflationary and cause stock market volatility.

The chancellor confirmed the changes announced in the 2024 and 2025 Budgets

In an effort to reduce speculation and prevent a chop-and-change approach, the chancellor confirmed that key tax measures, announced in the Autumn Budgets of 2024 and 2025, will remain in place.

Among the key changes that have been reconfirmed and will affect personal finances are: 

• Inheritance Tax (IHT) will be levied on most unused pension benefits from April 2027. It’s estimated that this change will result in an additional 10,500 estates being liable for IHT in 2027/28. This will contribute to a predicted rise in IHT receipts to £15 billion by 2030.
• Tax on income earned from property will rise by two percentage points from April 2027, increasing tax liability for landlords.
• There will also be a two percentage point increase in the basic and higher rates of Dividend Tax from April 2026, which may affect business owners and investors.
• Key tax thresholds, including those for Income Tax and the IHT nil-rate bands, will remain frozen until April 2031.

The lack of any tax-raising measures in the Spring Statement will be welcome news for many people. However, the previously announced changes could mean a review would still be beneficial.

The Office for Budget Responsibility has updated its forecasts for GDP growth, inflation, and house prices

The OBR has updated its real-terms GDP forecast every year between 2026 and 2029 when compared to the estimates it made in the 2025 Autumn Budget. The organisation now expects the economy to grow by:

• 2026 – 1.1% (a decrease of 0.3%)
• 2027 – 1.6% (unchanged)
• 2028 – 1.6% (an increase of 0.1%)
• 2029 – 1.5% (unchanged)

The OBR expects inflation to be at or around the Bank of England’s (BoE) 2% target over the next five years. Inflation easing would improve household spending power, which, in turn, could provide a boost for the economy and businesses. Indeed, real household disposable income is expected to grow by between 0.6% and 0.9% each year until 2030.

The BoE has already cut its base interest rate several times since the current government formed in July 2024, as inflationary pressures eased. If the OBR’s forecast is accurate, the BoE is likely to make additional cuts, which would reduce the cost of borrowing for households and businesses.

The OBR expects unemployment to rise from 4.75% in 2025 to a peak of 5.33% in 2026, driven by weaker demand for labour. After peaking in 2026, unemployment is expected to fall to 4.1% in 2030.

It also forecasts that house prices will rise by between 2.4% and 2.9% each year between 2026 and 2030.

The government reinforced its ongoing commitment to two key fiscal rules

In her speech, the chancellor confirmed the two fiscal rules set out in the Budget:

• Stability rule – Not to borrow money to fund day-to-day public spending by the end of this parliament (2029/30).
• Investment rule – To reduce government debt as a share of national income by 2029/30.

Addressing the stability rule first, although the cost of borrowing has risen during this period of heightened uncertainty, the chancellor vowed that the steps taken in the Statement will restore its headroom.

Turning next to the investment rule, Reeves also stated that this commitment will be met two years early, with net financial debt predicted to be 82.9% of GDP in 2025/26.

4 key Spring Statement measures

1. Boosting defence spending

At a time of growing worldwide tension, the chancellor announced increases to defence spending, aimed at making the UK a “defence industrial superpower”. Defence spending is set to reach 3.5% of GDP by 2035.

Defence innovation will include harnessing AI and drones, creating employment opportunities for engineers in the devolved nations, while a previously announced Defence Growth Board is also being created to support £400 million for defence innovation.

2. Tackling youth unemployment

The chancellor reconfirmed her commitment to getting those in Britain who can work into work. She stated that 1 in 8 young people is currently not in employment, education, or training.

The chancellor confirmed that reforms to the welfare system will produce welfare savings of £4.8 billion between 2026 and the end of the forecast period (2029/30).

3. Increasing property revenue

Previously announced property planning reforms will go ahead.

The reforms are expected to increase real levels of GDP by 0.2%, the equivalent of £6.8 billion for the economy, by 2029/30. Over 10 years, this is expected to increase to 0.4% of GDP (£15 billion). Reeves said this represents the biggest growth forecast for a policy with no fiscal cost.

4. Making government more efficient

The abolition of NHS England was announced back in March 2025 as part of wider efforts to increase NHS efficiency and productivity, and to cut spending. These measures will also include reducing costly agency outsourcing.

More widely, Reeves confirmed the £3.25 billion of investment in a new “transformation fund” that will drive modernisation across the public sector through digital reform and the adoption of AI. It’s hoped that these changes will result in a “leaner” and more efficient public sector.

After announcing a raft of changes in the Autumn Budget, the Spring Statement acts as a fiscal pitstop, upholding the government’s commitment to one significant fiscal event a year.

Get in touch

If you are new to financial planning and have any questions after reading about the Spring Statement do not hesitate to contact our team. We provide a free initial meeting worth up to £300 with one of our trusted, independent advisers.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

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Please note

All information is from the chancellor’s speech, the gov.uk website, the Spring Statement press release and the Autumn Budget documents published by HM Treasury.

The content of this Spring Statement 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.

The Financial Conduct Authority does not regulate tax planning.

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.

The post Spring Statement update and what it means for you appeared first on Innes Reid.

Making strategic use of your allowances before the deadline could reduce your tax bill, protect your wealth, and strengthen your long-term financial plan.

Here are the key opportunities to consider before 5 April 2026.

1. ISA Allowance – £20,000

You can contribute up to £20,000 across your ISAs in 2025/26.

ISAs remain one of the most tax-efficient wrappers available:

• No Income Tax on interest
• No Capital Gains Tax on investment growth
• No further tax on withdrawals

There are several types available, including Cash ISAs, Stocks and Shares ISAs, Lifetime ISAs, and Innovative Finance ISAs.

From April 2027, changes will limit how much under-65s can contribute to Cash ISAs. Planning ahead may help you maximise flexibility while current rules apply.

2. Junior ISA Allowance – £9,000

If you’re saving for a child or grandchild, you can contribute £9,000 per child in 2025/26.

Growth is free from Income Tax and Capital Gains Tax, and funds become accessible when the child turns 18.

If your child has a Child Trust Fund, you may wish to review whether transferring to a Junior ISA would be beneficial.

3. Dividend Allowance – £500

If you receive dividends outside of an ISA, you can earn £500 tax-free in 2025/26.

Dividend tax rates are set to rise from April 2026 for basic and higher-rate taxpayers. This makes reviewing dividend strategy particularly important before the tax year ends.

4. Capital Gains Tax Annual Exempt Amount – £3,000

When selling investments outside tax-efficient wrappers, you can realise gains of up to £3,000 before CGT applies.

The allowance cannot be carried forward. Strategic disposals before 5 April may reduce future tax liabilities.

Current CGT rates are:

• 18% (lower rate)
• 24% (higher rate)

5. Marriage Allowance – Transfer £1,260

If one spouse or civil partner earns below the Personal Allowance (£12,570), they may transfer £1,260 of unused allowance to their partner.

This could reduce your tax bill by up to £252 in 2025/26.

You can also backdate claims for up to four years — but the deadline to claim for 2021/22 is 5 April 2026.

6. Pension Annual Allowance – £60,000

The pension Annual Allowance for 2025/26 is £60,000.

Contributions benefit from tax relief, and you may be able to carry forward unused allowance from the previous three tax years.

However, higher earners and those who have flexibly accessed pensions may face reduced allowances.

With pensions offering powerful tax advantages, reviewing contributions before year-end can be highly valuable.

7. Inheritance Tax Annual Exemption – £3,000

You can gift £3,000 per tax year without it forming part of your estate for Inheritance Tax purposes.

Couples may gift £6,000, and if last year’s exemption was unused, potentially £12,000.

Early estate planning can significantly reduce a future Inheritance Tax liability.

Why planning now matters

Many allowances are “use it or lose it.” With tax thresholds frozen and some tax rates increasing, proactive planning is more important than ever.

Rather than rushing at the end of the tax year, building a structured financial plan can help you:

• Reduce unnecessary tax
• Improve long-term investment growth
• Protect your estate
• Align allowances with your goals

Download the full guide

This article highlights just some of the tax opportunities available before the end of the 2025/26 tax year.

To explore all 7 key allowances in detail, including important rule changes and planning considerations, download our full guide:

“7 Key Allowances You Might Want to Use Before the End of the 2025/26 Tax Year.”

If you would like personalised advice on how these allowances fit into your financial plan, please contact Innes Reid.

Talk to us

If you are new to financial planning and have any questions about your tax allowances do not hesitate to contact our team. We provide a free initial meeting worth up to £300 with one of our trusted, independent financial planners.

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

All information is based on our current understanding of legislation and correct at the
time of writing (January 2026), and is subject to change in the future.
The Financial Conduct Authority does not regulate tax planning.

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First you need to define what success looks like to you. With your goals outlined, you can start to think about an investment strategy. Here are some of the factors you may need to consider to be a successful investor.

Creating an investment strategy that suits your needs

To be a successful investor, you may think you simply need to choose the “best” shares that will deliver the highest returns. However, it’s impossible to consistently pick the top performers, as numerous factors affect outcomes.

Indeed, according to research from Schroders (29 August 2024), in 12 of the 18 years between 2006 and 2024, no US stock that was a top 10 performer in one year also made the top 10 the following year. Even staying in the top 100 was rare – an average of 15 companies each year managed to do so for two consecutive years.

Instead, creating a strategy that suits your needs could provide long-term investment success. The following steps could help.

Understand your investment goal

It’s important to set an investment goal. As you start to think about your investment strategy, going back to your goal may be useful.

Your goal might affect factors such as your investment time frame or the level of risk that is right for you.

Decide how much you will invest

To create an investment strategy, you need to define your starting point.

• How much do you plan to invest?
• Will you invest a single lump sum or drip-feed investments over a longer time frame?

Answering these two essential questions could help you compare the expected returns with the amount you need to reach your goals.

Understand your risk profile

All investments carry some risk. However, risk can vary significantly between opportunities, and it’s important that you select investments that align with your risk profile.

As a general rule, the longer your money is invested, the more risk you can take. This is due to a longer time frame providing more opportunities for investments to recover if they experience a dip.

However, time frame isn’t the only factor to consider when deciding how much risk is appropriate. You may also factor in the other assets that you hold, your reason for investing, and your ability to withstand financial losses. Your financial planner can work with you to help clarify your risk profile.

As well as financial factors, you might also want to consider your investment mindset. If you’re worried about losing money and could respond emotionally if markets experience volatility, you might opt for a more risk-averse approach. Again, your financial planner can offer guidance about what’s right for you and give you confidence in your investment strategy.

Ensure your investments are diversified

Once you’ve created an investment profile, you may start to look at what investments align with it.

Rather than investing in a handful of assets, most investors can benefit from diversifying their investment portfolio. This means investing in a range of asset classes, regions, and sectors.

Diversifying allows you to spread investment risk. So, if one company performs poorly, this may be balanced out by stability or gains in other areas of your investment portfolio.

Investment funds might provide a simple way for investors to diversify their portfolios. A fund will pool your money with that of other investors to invest in a range of companies and assets in line with its objectives.

Working with a financial planner who understands your goals means they can advise you on which investments or funds could create a balanced portfolio that’s right for you.

Talk to us about your investments

If you’d like to work with us to create your investment strategy, or have us review your existing one, please get in touch to arrange a meeting.

We can work with you to review or create an investment strategy that suits your objectives. Please get in touch to arrange a free one-hour consultation with an independent financial planner.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

Subscribe for more investments, retirement and pensions practical guidance. Get great insights from us once a fortnight – subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

More on investments:

5 insights from the investment market 

The outlook for 2026

5 powerful Warren Buffett lessons

What does diversified mean?

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.

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.

The post How to be a successful investor appeared first on Innes Reid.

Striking the right balance with pension contributions is important. Contribute too little, and you could leave yourself short in retirement. If you contribute as much as possible to your pension now, you might miss other goals or place pressure on your day-to-day budget.

So, asking “how much should I be paying into my pension each year?” is sensible.

You might have read answers to this question that apply a general rule to everybody, such as a certain percentage of your income or a target amount you should have at a particular age.

However, the reality is that there isn’t a simple answer that can be applied to everyone. A range of factors, from your current age to your desired retirement lifestyle, will affect how much you need in retirement.

Here’s a step-by-step guide on how to calculate what you may want to add to your pension.

1. Review your current pension and other assets

If you’re already contributing to a pension, or have in the past, gather your statements so you can understand your current position. The savings you’ve already made will act as a foundation for your future contributions.

Don’t forget to check for lost pensions. According to Pensions UK (24 October 2024), as much as £31.1 billion is sitting in unclaimed pension pots across the UK. Take some time to check if you’ve got any gaps – you might find a lost pot that could boost your retirement.

In addition to your pension, you may have other assets you plan to use to fund retirement, such as savings or investments held outside a pension, which you may want to include in this step.

2. Decide when you’d like to retire

When you want to retire will have a direct effect on how much you’ll need to save. If you hope to retire early, keep in mind that you’ll need to create an income for longer, and you may not receive any State Pension until you’ve been retired for some time.

3. Set out your desired retirement lifestyle

To accurately set a pension target, you need to understand what kind of lifestyle you hope to enjoy in retirement. If you’re envisioning plenty of luxury holidays, a new car every few years, and trips with friends, you’ll need to save more than if you’re happy with a more moderate lifestyle.

With a lifestyle set out, you can start to consider how much you’ll need as a regular income to maintain it. Remember to factor in unexpected costs and the effect inflation is likely to have on your cost of living.

With an estimated required annual income, you can work out how much you’ll need in your pension by considering how long you’ll spend in retirement.

It’s wise to look beyond the average life expectancy, as doing so could leave you facing financial difficulty if you live for longer. The Office for National Statistics life expectancy calculator (14 February 2025) suggests a woman aged 65 has an average life expectancy of 88. However, there’s also a 1 in 4 chance she’ll celebrate her 94th birthday.

4. Review how your pension will grow

The good news is you don’t need to contribute the total amount you need to secure your desired lifestyle.

First, your pension contributions benefit from tax relief at your marginal rate of Income Tax.

Assuming you don’t exceed the pension Annual Allowance (£60,000 in 2025/26 or 100% of your annual income, whichever is lower), you’d only need to contribute £80 to increase your pension by £100 as a basic-rate taxpayer. If you’re a higher- or additional-rate taxpayer, the amount you’d need to contribute would fall to £60 and £55 respectively.

Second, your pension is usually invested with the aim of delivering long-term growth.

As you’ll often be investing through a pension for decades, the compounding effect of investment returns can help your pension grow significantly over time.

However, it’s important to note that investment returns cannot be guaranteed.

5. Assess how much your pension contributions need to be

With all this information, you can work backwards to calculate how much you’d need to add to your pension each year to achieve your desired lifestyle.

Using a cashflow model as part of your financial plan can help you bring all this data together and visualise how your wealth might change. For example, you might model how your pension would grow if you increased your contributions by 2% compared to 4%.

You can also model other scenarios, such as the age you’ll retire and changing your income needs.

Regular pension reviews can help make sure you’re on track. The outcomes of a cashflow model cannot be guaranteed, but it can be useful when you’re trying to answer the question “how much should I contribute to my pension?” and others like it.

Calculate your retirement wealth today

Use a wealth calculator to give you a quick, personalised snapshot of where you are currently and whether you’re heading toward the lifestyle you want.

Try the wealth calculator for a clearer view of your retirement progress. Answer four simple questions:

👉 Tap here for a personal retirement calculation.

Work with us to create a retirement plan

Calculating how much you should contribute to your pension each year is just one part of your retirement plan. You might also need to know how the money will be invested when it’s in your pension, or how to access the savings when you’re ready to create an income.

We can work with you to create a complete retirement plan to prepare for the next chapter of your life.

Arrange a free consultation

We provide a free one-hour consultation with an independent financial planner. Its a great opportunity for you to have a personal conversation. You may come away with a clearer understanding of how much you should contribute to your pension to achieve the retirement you want.

Call our team: 01244 347 583 |  info@innesreid.co.uk | Send a message

Subscribe for more retirement and pensions practical guidance. Get great insights from us once a fortnight – subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

More on retirement and pensions:

• How to create a guaranteed income in retirement
• Is the default pension right for you?
• Pension consolidation to maximise you retirement savings

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.

The Financial Conduct Authority does not regulate cashflow modelling.

The post How much should you contribute to your pension? appeared first on Innes Reid.

After a remarkable career spanning more than four decades, it’s time to celebrate Clive Kingsbury as he steps into retirement, a milestone that feels perfectly apt for someone who has dedicated so much of his life to helping others plan theirs.

Clive joined Innes Reid in 2020, bringing with him a wealth of experience and a genuine passion for retirement planning. As a Fellow of the Personal Finance Society and Chartered Financial Planner, Clive has guided countless clients through some of the most important financial decisions of their lives. His relaxed, engaging manner, combined with his deep expertise, meant clients could always feel confident that their plans were in safe hands. For Clive, planning was never just about numbers it was about people, their dreams, and the reassurance of knowing their future was secure.

Starting his career at Bradford and Bingley in Leeds 1982, Clive enjoyed an outstanding career across the financial services industry. At Close Brothers Asset Management, he served as Regional Director for Northern England and Scotland. Earlier still, he played a pivotal rote at Nelson Money Managers, Clive progressed from Financial Planner to Regional Manager and Sales Director, shaping the business and supporting clients as they navigated major life transitions.

Educated at Liverpool Bluecoat School and the University of Kent, and holding both the Chartered Financial Planner designation and the Diploma in Financial Planning, Clive has always embodied the highest professional standards our industry aspires to.

Clive’s career has been remarkable not just for its length, but for the impact he’s had on the lives of those he’s advised. It’s wonderfully fitting that someone who has spent so many years helping others reach their retirement goals now has the opportunity to enjoy his own retirement to the fullest.

From all of us at Innes Reid, thank you, Clive for your wisdom, your guidance, and your unwavering dedication to our clients and colleagues. We hope your retirement is every bit as rewarding, exciting, and well-planned as the futures you’ve helped so many others achieve.

Here’s to long walks, new adventures, and plenty of time to enjoy all the things you’ve worked so hard to plan for!

The post Clive Kingsbury at retirement appeared first on Innes Reid.

There are several ways you might create a guaranteed income in retirement – here are three common options.

1. State Pension

While the State Pension often isn’t enough to cover all of your retirement spending, it can provide a reliable base income.

The new full State Pension pays an income of £230.25 a week in 2025/26. To qualify for the full amount, you’ll need to have 35 qualifying years on your National Insurance record. If you have fewer years, you’ll usually receive a portion of the full amount.

You can use the government’s State Pension forecast tool to understand how much you could receive and when you can claim it.

As well as providing a regular income from State Pension Age until you pass away, the State Pension is valuable because, under the triple lock, it’s guaranteed to rise by at least 2.5% each tax year. This annual increase helps maintain your spending power in retirement.

2. Defined Benefit Pension

If you have a defined benefit (DB) pension, also known as a final salary pension, it will provide you with a guaranteed income from the scheme’s pension age until you die.

The way your income is calculated varies between schemes, but it’s often linked to your average salary and how long you’ve been contributing to the pension. Usually, the income is linked to inflation, so the amount you receive will increase annually.

Compared to other pension schemes, DB pensions are often generous, and the guaranteed income they provide could put your mind at ease if you’re worried about financial security in retirement.

In addition, DB pensions may offer other valuable benefits. For example, some schemes will continue to provide a guaranteed income to your spouse or civil partner if you pass away first.

3. Annuity

If you have a defined contribution (DC) pension, you’ll have a pot of money you can use to create an income once you reach 55 (rising to 57 in 2028).

There are several ways you might access the money held in a DC pension, including purchasing an annuity if you value a guaranteed income.

Once purchased, an annuity will provide an income for the rest of your life. The income it provides will depend on annuity rates at the time of purchase. Rates can vary significantly between providers, so shopping around could help you get the most out of your money.

You can select an inflation-linked annuity so that your income rises each year, or a joint annuity, which would continue to pay a reliable income to your partner if you pass away first.

Income flexibility may suit your retirement lifestyle

We can work with you to create a retirement plan that’s tailored to your financial circumstances and lifestyle goals. Whether a guaranteed income is a priority or you’d prefer flexibility, please contact us to arrange a meeting with one of our financial planners.

Talk to our team today to arrange your free one-hour consultation. Its a great opportunity for you to have a personal conversation face-to-face or online with a financial planner. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

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.

The post How to create a guaranteed income in retirement appeared first on Innes Reid.

Creating goals on your own can be challenging, especially if they bring together several different parts of your financial plan or have a long-term time frame. If you’re overly ambitious, it can be disheartening if you don’t reach the target you’ve set. On the other hand, if you’re too cautious, you could miss out on opportunities.

Here are seven ways a financial plan could help you set realistic goals in 2026.

1. A financial plan can help you assess your starting point

A valuable aspect of a financial plan is understanding your current financial position. To assess what’s possible, you first need to know where you are.

A financial plan might involve reviewing your assets and budget so you’re in a better position to identify where changes could be made.

For example, if your goal is to retire in 10 years, you may benefit from increasing your pension contributions. By understanding where your money is going, you might find that you could reduce your day-to-day spending or divert some of your savings to your pension.

2. Your goals are at the centre of your financial plan

While managing your finances often conjures thoughts of figures and calculations, what’s really at the centre is your goals.

Working with a financial planner can create a space to explore what matters to you. Some goals might already be clearly defined, such as supporting children when they want to get on the property ladder or retiring by a set date.

However, other goals might become apparent through discussions with your financial planner, such as being in a position to overcome a financial shock or achieve peace of mind.

3. A financial plan can translate goals into numbers

Once your goals are set out, it’s time to consider what you’ll need to achieve them.

If you set a vague goal, such as “retire comfortably”, it can be difficult to assess if you’re on track.

A financial plan can help you get to grips with the numbers. So, your goal might become “to secure a retirement income of £40,000 a year”. You can then take it a step further to calculate what the size of your pension pot will need to be at retirement, and how you might need to alter current contributions.

4. A financial plan can help you balance multiple goals

Most people don’t have just one financial goal. It’s common to have several, often competing, priorities.

You might be paying off your mortgage, saving for retirement, putting money aside for your children, and hoping to go on holiday at the same time. A financial plan can bring together these different goals, so you’re able to strike the right balance between short- and long-term objectives.

5. Creating a cashflow model can help you visualise your changing wealth

One challenge of creating an effective financial plan is that you’ll usually need to consider how your finances will change over decades. It can be difficult to assess how the decisions you make today could have a positive or negative impact in the future.

A cashflow model is a tool that allows you to visualise how your wealth might change in different scenarios. For instance, you might use the model to see how adding different amounts to your investment portfolio each month will change your ability to reach your goals.

6. Working with a financial planner allows you to consider factors outside of your control

It’s not just the factors you can control that will affect the outcome of your financial plan. Sometimes, external influences, like the rate of inflation or stock market performance, might have an impact.

While you can’t know for sure what outside factors will occur, you can use a cashflow model to test different scenarios. For example, when investing, you might model several different average annual rates of return to assess what they’d mean for your goals.

This allows you to consider how your finances would cope in different scenarios, and you may be able to take steps to help ensure your goals stay on track.

7. A financial plan can create accountability

Every year, thousands of people make and break a new year’s resolution. According to a YouGov poll (17 December 2025), only 38% of people who made resolutions at the start of 2025 had kept all of them.

Working with a financial planner means you’ll have regular meetings and someone who can hold you accountable. With a clear strategy to follow, you’ll know when you’re straying from the path that could turn your realistic goals into reality. As a result, you might be less likely to break the commitments you’ve made.

Talk to us about your goals for 2026

If your goals have changed or you’d like a review to understand whether you’re on track, please get in touch to arrange a meeting.

Talk to our team today to arrange your free one-hour consultation. Its a great opportunity for you to have a personal conversation face-to-face or online with a financial planner. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward with some realistic goals in place.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, be sure to subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

Access our latest blogs:

Is the default pension fund right for you?

How pension consolidation can maximise your retirement savings.

How to access your pension.

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.

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 Financial Conduct Authority does not regulate cashflow modelling.

The post 7 ways financial planning helps set realistic goals appeared first on Innes Reid.

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.

Here’s an example:

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.

Talk to a financial planner

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.

We provide a free one-hour consultation with an independent financial planner. Its a great opportunity for you to have a personal conversation. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward.

Call our team: 01244 347 583 |  info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, be sure to subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

More on pensions:

How to access your pension.

The potential perils of accessing your pension at 55.

State Pension: Everything you need to know in 2025/26

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.

The post Is the default pension fund right for you? appeared first on Innes Reid.

As I say every year, I think it is more useful to look forward than back. However, it is worth noting some of the issues we have experienced in 2025.

Believe it or not, President Trump was only inaugurated in January. That was rapidly followed by his meeting with President Zelensky in February, which was accompanied by the massive increase in spend on security and NATO by countries everywhere. Then the on/off/on introduction of US trade tariffs. The war in Ukraine is ongoing and the Israel / Palestine conflict came to a head.

Notoriously shy…Trump has been at the centre of all of the above events.

Trump certainly divides opinion; some see him as a toddler with a tomahawk whilst others laud him as an advocate for common sense who is challenging the accepted orthodoxy. Whatever your view, it is clear that he is making things happen.

The outlook for 2026

Inflation, which had been largely eradicated by the global financial crisis, inevitably reappeared following COVID and hasn’t gone back to the levels of the 2010s and it is unlikely to do so.

Central banks, such as the Bank of England are walking an interest rate policy tightrope between managing inflation and economic growth. So far, they have done a decent job, but a policy mis-step could mean falling off the tightrope. We believe policy makers should be more concerned about supporting growth and therefore should be cutting rates. UK being top of the list in our view.

We are likely to see a steeper downward path in the US, as the Chair of the Federal Reserve’s tenure ends in February. The new Chair will be a Trump appointee and, in all likelihood, an advocate of lower interest rates. That could lead to stronger growth, and inflation, and lead to some excitement in financial markets.

There is an expectation the global economy will strengthen over the course of 2026 as headwinds from higher tariffs, especially in the US, begin to fade and as various tailwinds kick in. They include the lagged effect of past cuts in interest rates, a modest boost from various governments’ fiscal policy, rising business investment in developing artificial intelligence (AI) and higher household disposable incomes.

We are increasingly conscious of the volume (and speed) of negative news we all continuously encounter in an era where we carry a portal to the world around in our pockets. It is difficult to switch off from the relentless negative noise from media outlets motivated by profits from click through advertising. Emotions can cloud good judgment and even the most resolute investors can find their pursuit of fundamentals tainted by the unstoppable tide of “content”.

We are also very conscious of some commentators referencing markets are at all-time highs and valuations look expensive by long term historical comparison. The commentators who predict a market adjustment will be proven right eventually, just like a broken clock tells the correct time twice a day.

Time in the market, not timing the market

As we always advocate, ignore the noise and it is “time in the market” that delivers results not “timing the market”.

On the back of a good year for investments, we are currently delivering valuations which we are sure you will be happy with and we go into 2026 cautiously optimistic but it is never a smooth ride and expect some shocks along the way.

The key point to remember when there is uncertainty is to think back to your long-term financial plan.  While we cannot control the markets or predict unstable geopolitics, we can choose to stay rational, disciplined and focused on your plan.

Thank you and a Happy New Year

On behalf of all of the Innes Reid team, we would like to thank all our valued clients for your continued support. We wish you a prosperous and enjoyable end to 2025 and a Happy New Year.

Mark Reidford APFS
Founder and Chartered Financial Planner

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.

The post The outlook for 2026 appeared first on Innes Reid.

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 free one-hour consultation with an independent financial planner.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

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.

The post 5 insights from the investment market in 2025 appeared first on Innes Reid.

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 is important to understand the Autumn Budget 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 Autumn 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.

Talk to us.

If you have any questions regarding the Autumn Budget and how it may affect your financial plan, please get in touch. We provide a free one-hour consultation with an independent financial planner.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

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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.

The post Autumn Budget 2025 update appeared first on Innes Reid.

When setting out your goals as part of your financial plan, your family might feature in them. Perhaps you want your retirement income to be enough so that you can treat them to an annual family weekend away? Or you might want to gift a deposit that will help each of your grandchildren get on the property ladder?

By incorporating family goals into your financial plan, you can take steps to turn them into a reality.

If you’re hesitant to offer support because you’re worried about how it will affect your long-term finances, using a cashflow model could be valuable.

Download your guide to cash flow modelling here: How financial planning could help you answer essential “what if” questions.

A cashflow model can give you an idea of how your wealth might change based on the decisions you make. It may ease your worries and give you the confidence you need to expand your financial plan to include your loved ones.

There are several ways you might support loved ones as part of your financial plan.

Providing gifts to support your loved ones’ finances now

You may want to support your loved ones immediately. Whether through providing gifts or covering regular expenses on their behalf, it’s an option that your family might welcome, particularly if they’re struggling to manage their short-term expenses.

One of the benefits of gifting during your lifetime is that it could reduce your estate’s Inheritance Tax (IHT) liability.

In 2025/26, the nil-rate band is £325,000. If the entire value of your estate is below this threshold, no IHT will be payable. Many people can also make use of the residence nil-rate band, which is £175,000 in 2025/26, if they leave their main home to direct descendants.

If the value of your estate exceeds these thresholds, IHT may be due.

Some gifts are immediately outside of your estate when calculating IHT. As a result, if you want to support loved ones now, you may want to consider using these gifting allowances:

• Up to £3,000 each tax year, known as your “annual exemption”
• Up to £250 to each person, so long as they have not benefited from another allowance
• £1,000 as a wedding gift, rising to £2,500 and £5,000 for grandchildren or great-grandchildren and children respectively.

Another exemption which could be useful if you want to support loved ones now is regular payments made to another person. You might use this allowance to:

• Pay rent for your child
• Give financial support to cover living costs
• Pay into a savings account for your grandchild.

Payments must be regular and funded from your monthly income after living costs. If you use this allowance to reduce an IHT bill, it’s a good idea to keep a record of the payments.

A financial plan can help you assess how gifts might affect your long-term wealth. So, when you gift a generous sum or commit to regular support, you can do so with confidence.

Offering gifts that support your family’s long-term goals

Another option is to set money aside for your family to support their long-term goals.

For instance, you might focus on building a nest egg for your grandchildren to help them through university, buy their first car, or travel the world.

Incorporating this into your plan helps identify the best way to save, depending on your goals and the beneficiary’s circumstances.

When saving for a child to provide a financial helping hand when they reach adulthood, you might choose a Junior ISA, which they gain access to when they turn 18. Whereas if you were helping your child increase their retirement fund, you might make contributions directly into their pension.

Incorporating these gifts into your financial plan can also help make them part of your regular outgoings and provide reassurance that you’re still on track to meet your other goals.

Leaving an inheritance

Receiving an inheritance could change your loved ones’ financial situation and mean they’re more secure.

If leaving assets behind for your family is important to you, it can be a central part of your financial plan. You might earmark a portion of your wealth to leave in your will or set aside particular assets for someone.

We can help you understand how much you could leave behind for loved ones, and how to do it tax-efficiently.

Contact us

A good financial plan helps you reach your goals, including those that involve your family, and we can help you. Whether you want to involve your loved ones in planning or build a nest egg to support them long-term, please get in touch.

Talk to our team today to arrange your free one-hour consultation. Its a great opportunity for you to have a personal conversation face-to-face or online with a financial planner. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, be sure to subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

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 cashflow modelling, Inheritance Tax planning, or estate planning.

The post How the benefits of your financial plan go beyond you to your family appeared first on Innes Reid.

In 2025/26, you can pass on up to £325,000 before IHT might be due. This is known as the “nil-rate band”. You can often use the residence nil-rate band, which is £175,000 in 2025/26, if you leave a qualifying property, including your main home, to a direct descendant.

In addition, you can pass on unused allowances to your spouse or civil partner. As a result, you might be able to pass on up to £1 million before IHT is due on your estate.

Both the nil-rate band and residence nil-rate band are frozen until April 2030. So, even if the value of your estate hasn’t exceeded the threshold for paying IHT yet, it might in the future as the value of your home and other assets rise.

Passing on assets during your lifetime may be an effective way to reduce the value of your estate, though gifts may be included when calculating IHT for up to seven years after they are given.

As a large asset, gifting your home to your children could be useful, but how does it work, and what are the risks?

HMRC will not recognise a gift if you retain an interest in it

One of the challenges of gifting your home to your children for IHT purposes is that you often want to remain living in your home, which can add a layer of complexity.

If you gifted your home to your child and remained living in it rent-free, it would be considered a gift with reservation of benefit as you retain an interest in the property. In this case, HMRC would not recognise this as a gift when calculating IHT, so your estate would still potentially be liable for IHT on the property.

Usually, you’ll have two options to gifting your home to reduce an IHT bill:

1. Leave your home forever, as if you had sold it. This might be a useful option if you own multiple properties and wish to pass on your home or other property during your lifetime.

2. Remain in your home and pay market rent to your child, who would now be the owner. While this option may reduce an IHT bill, your child might need to pay Income Tax on the rent they receive.

As well as understanding the IHT rules, there are also risks that are important to consider before you gift your home to your children. Once the property transfer has been completed, you will no longer be the homeowner, and it’s an irreversible decision.

Your child would be able to make decisions regarding the property, including selling it, which can be particularly risky if you plan to remain living there.

While you might not have concerns about them selling the property while you live there, it’s impossible to know what’s around the corner. For example, what would happen if your child faced financial difficulties and needed to sell the property as a result? This could leave you in a financially vulnerable position with fewer options.

Transferring equity to your child could be an alternative option

One alternative option is to transfer equity to your child. In this scenario, you’d remain on the legal title as the original owner, and your child will be added as an additional owner. This could provide you with some security while still passing on a portion of your property wealth during your lifetime.

Transferring equity can be a complex process, especially if you’re still paying a mortgage. Seeking legal advice could help you avoid mistakes and ensure it’s the right option for you.

There are also tax considerations to assess before you transfer equity to your child.

First, any equity you gift might be included in your estate for IHT purposes for up to seven years after it was given. Second, in some cases, your child could be liable for Stamp Duty when they receive the equity.

Again, seeking professional financial and legal advice could help you understand the tax implications of transferring equity.

Contact us to talk about gifting your home to your children 

If you’d like to talk about passing assets, including your property, to your children or other beneficiaries as part of your estate plan, please get in touch.

Contact our team to take advantage of a free-one hour consultation worth up to £350 with an independent adviser. Arrange a meeting today and gain clarity in your decisions.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

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More on Inheritance Tax and Wealth Transfer

How to prepare your loved ones for the “great wealth transfer”

3 Way your bias could affect your approach to estate planning

How to use gifting from income to reduce your Inheritance Tax

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 Financial Conduct Authority does not regulate estate planning or inheritance tax planning.

The post Gifting Your Home to Your Children: Taxes, Ownership, and Estate Planning appeared first on Innes Reid.

Losing track of your pensions can be costly. Across the 3.3 million pension pots considered lost, the average fund value is £9,470 – rising to £13,620 for those aged 55 to 75.

By consolidating multiple workplace and private pensions into fewer schemes – or even just one – you could make it easier to track and manage your retirement savings. Additionally, bringing multiple pots together may help you grow your funds more efficiently and reduce your administration fees.

Generally, you can consolidate any defined contribution (DC) schemes, regardless of whether they are workplace or private pensions. However, pension consolidation may not always be appropriate, with a variety of fees, rules, and the potential loss of benefits to consider.

Read on to discover three reasons why pension consolidation could boost your retirement income, and when consolidation might not be appropriate.

1. It’s often easier to manage your pensions and calculate whether you’re on track

By bringing more of your pension pots together under one provider with a single set of rules, features, and benefits, you may be able to simplify your pension management.

According to an August 2022 study from Standard Life, the average person in the UK changes jobs every five years. As a result, people often accumulate multiple workplace pensions throughout their working life – making it easy to lose track over the years.

With fewer pension providers, policy details, and fund values to keep track of, you can reduce the administrative burden of managing multiple pensions. This helps you maintain a clear view of your total retirement funds and monitor how well your investments are performing, while reducing the risk of losing money in forgotten pots.

With a greater understanding of how much you currently have, you can more easily determine how much you need to grow your funds to achieve your retirement goals.

2. Your money could have higher growth potential if it’s all invested in one place

Generally, investment options vary from one pension to another. While some older pensions may be limited to investment funds managed by the provider, others could offer a wider choice and more flexibility for you to decide where your pension is invested.

Some schemes may perform better than others, delivering a higher rate of return on your pension savings. Additionally, having a larger pot may present more investment opportunities, with some requiring a minimum investment size.

Plus, since your investment returns compound over time, consolidating your pensions could enable them to grow more quickly.

Indeed, by moving more of your funds into a pension that offers potentially higher returns, you could accelerate your pension’s growth. According to HM Treasury in May 2025, the average earner could boost their retirement savings by £6,000 through consolidating their funds.

3. You might pay reduced fees

When you have several pension pots, you could unnecessarily pay duplicate fees. Each scheme generally comes with varying administrative charges, ranging from less than 0.5% to more than 1% of your fund. Typically, older pensions are likely to have higher fees.

While individual fees may sometimes appear nominal, the amount you’re charged is likely to grow as time passes and your fund value increases. Considering you could be paying such fees across multiple schemes and over several years, the total charges paid over your lifetime can be significant.

However, some schemes may also charge an exit fee. For pensions set up before 31 March 2017, you could be charged up to 10% of your fund. If you set up your scheme after this date, or are aged 55 or over, exit fees are capped at 1%.

As a result, consolidating your pension pots can boost your retirement savings by reducing your costs. However, choosing which plan to transfer your funds into requires careful consideration.

The benefits of pension consolidation depend on your circumstances

Consolidation isn’t appropriate for everyone. In some cases, partial consolidation can be a good option, whereby you bring some of your funds together while leaving other pots separate. For some people, consolidation might not be necessary at all.

Smaller pension pots

If you have pots worth less than £10,000 and plan to withdraw from them before retirement, it could be worth leaving them separate from your other funds because of the “small pots exemption”.

As of 2025/26, you can generally draw down up to three of these pots in your lifetime without triggering the Money Purchase Annual Allowance (MPAA). This allowance permanently reduces the amount you can pay into your pension tax-efficiently from £60,000 to £10,000 a year.

Defined benefit schemes

If you have a defined benefit (DB) pension, consolidation is unlikely to be a sensible option. Unlike DC schemes, DB pensions generally offer a guaranteed retirement income based on your salary and years of service with your employer.

In fact, you may be required to seek advice from a qualified financial adviser before transferring funds out of a DB scheme that contains over £30,000.

Your current workplace pension

If you and your employer are still contributing to a workplace pension, it may be worth keeping that scheme open. By closing it to consolidate with other funds, you’ll likely surrender your employer contributions, which may prove significant over time.

Protecting scheme benefits

In some cases, your pension schemes may offer valuable guarantees or benefits that are more common with older schemes, such as:

• Guaranteed annuity rates
• The ability to access your funds before age 55, although this is rare
• Flexible ways to take retirement or death benefits.

If it’s not possible to consolidate your other pensions into your preferred scheme – for example, if your employer is contributing to a different pot – it might be worth leaving your funds where they are.

It’s often worth seeking advice before consolidating

While pension consolidation may deliver a range of administrative and financial benefits, creating a strategy for bringing multiple pots together can be complex.

There are a variety of rules, fees, benefits, investment opportunities, and personal factors to consider before consolidating. In fact, in September 2025 IFA Magazine reported that poorly informed pension transfers made in the year to 30 June 2025 may have cost savers £1.7 billion.

By seeking guidance from a qualified financial planner, you could help determine the most effective consolidation strategy for your needs and circumstances. Get in touch to learn more about how we can support you in boosting your retirement funds.

Talk to us

Talk to our team today about pension consolidation. We provide a free one-hour consultation with an independent financial planner. Its a great opportunity for you to have a personal conversation. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, be sure to subscribe to our latest insights and follow us on Facebook, Instagram or LinkedIn

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.

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.

Workplace pensions are regulated by The Pensions Regulator.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

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 Financial Conduct Authority does not regulate tax planning.

The post How Pension Consolidation Can Maximise Your Retirement Savings appeared first on Innes Reid.

An estate plan sets out how your assets will be managed during your lifetime and distributed after your death. It might include writing a will or creating a trust to provide for young children.

As estate planning can be emotional, it’s not surprising that behavioural biases could affect how you approach the task. So, here are three ways biases might affect your estate plan.

1. Putting off your estate plan due to emotions or overconfidence

Trying to avoid confronting difficult emotions means some people put off estate planning altogether.

A February 2025 survey carried out by JMW Solicitors found that 77% of people believe having a will is important. Yet, 58% don’t have a valid will, and avoiding the sometimes difficult conversations that might form part of estate planning could be a reason why.

Overconfidence may also be a reason for not creating an estate plan. For example, you might believe you’re “too young” to worry about writing a will or that you’re healthy now, so you can leave the task for the future. However, life is unpredictable and it’s impossible to know what’s around the corner.

Putting off estate planning because it’s difficult or you assume you don’t need one yet could leave your family in a vulnerable position should the unexpected happen.

While estate planning can be daunting at first, view it as a step that allows you to take control of your legacy. Once the task is complete, you may find it reassuring to know you’ve set out your wishes.

2. Under or overvaluing assets could have implications for your estate plan

A common financial bias that affects investors is tying the value of certain assets to a particular piece of information. For example, you might view shares as being worth £100 because that’s what you initially paid for them, even if the value has changed.

Under or overvaluing your assets could have implications for your estate plan.

You might want to split your estate evenly between your children while giving them specific assets. However, if you don’t have accurate information when doing this, they could end up with very different proportions of your wealth, which might lead to disputes.

Alternatively, if you undervalue assets, you might not realise your estate could be subject to Inheritance Tax (IHT). For instance, if you’ve “anchored” the value of your home to the price you paid for it 20 years ago, your estate could unexpectedly be liable for IHT due to rising property prices.

Regular financial reviews with your financial planner can help you track the value of your assets, and how they could rise or fall in the future.

3. Loss aversion could mean you are reluctant to pass on assets

Loss aversion suggests that you feel the pain of a loss twice as strongly as the pleasure of an equivalent gain. This bias can lead to people avoiding taking action, even when it would make sense.

As part of your financial plan, you might want to gift assets to your beneficiaries now instead of leaving them an inheritance. It’s an option that could provide much-needed financial support to your loved ones, such as covering university fees or helping them renovate their home.

Gifting during your lifetime can be rewarding, but loss aversion might also mean you’re reluctant to part with assets.

A reason for this is that you might worry about an unexpected event creating a financial shortfall in the future. So, you choose to hold on to the assets.

A financial plan could help you see the effect of gifting during your lifetime, including whether you could still overcome a financial shock. Discussing your gifting plans could give you the confidence to pass on assets and ease your worries.

Contact us to talk about your estate plan

Working with a professional who understands your circumstances and goals can make estate planning easier. We’ll be on hand to offer support and guidance from the outset.

Please contact us to arrange a meeting to discuss your estate plan.

Talk to our team today to arrange your free one-hour consultation. Its a great opportunity for you to have a personal conversation face-to-face or online with a financial planner. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

More on Inheritance Tax…

Passing on your wealth to loved ones could transform their lives and mean they have more opportunities in the future. Find out How to prepare your loved ones for the “great wealth transfer”.

There are a series of straightforward measures you can make use of to reduce your IHT liability. One of these, which is often overlooked, is known as “gifting from surplus income”. Find out more.

We hope you enjoyed this article. For more, be sure to subscribe to our latest insights or follow us on Facebook, Instagram or LinkedIn

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 Financial Conduct Authority does not regulate estate planning, will writing, or trusts.

The post 3 ways behavioural bias could affect your approach to estate planning appeared first on Innes Reid.

While you might have a better understanding of what you want to get out of life than when you were younger, finances can often become more complex, making it difficult to understand what’s possible. A financial midlife MOT gives you a chance to examine your finances now and calculate if you’re on track to reach your aspirations.

Here’s how a financial MOT can prepare you for retirement.

1. Merging your finances with a partner

As you start to consider retirement and your future, you may opt to merge finances with your partner if you don’t already.

Bringing together your finances can be challenging at any time, but particularly when you’re older, as you may both already hold assets, such as pensions or property. Working with a financial planner could help you take stock of your assets and start to understand how they might form part of your financial plan as a couple.

As well as juggling two sets of assets, you might have different views on financial priorities and long-term goals.

As your financial plan places your aspirations at the centre, a midlife MOT could help you clarify your priorities and balance them with your partner’s.

2. Planning for your retirement

66% of people aged between 45 and 49 feel unprepared for retirement, according to research from LV published in June 2025.

Retirement might feel years away, but it’s a milestone that benefits from early preparation. The decisions you make now could affect your income in your later years, so weighing up your options is essential.

A midlife financial MOT can include reviewing your pensions and other assets you intend to use in retirement to calculate if you have “enough” to live the retirement lifestyle you’re looking forward to.

You could find you’re already on track and enjoy peace of mind as a result. If you discover there’s a potential shortfall, knowing this sooner puts you in a stronger position to bridge the gap, and a financial plan highlight the steps you might take.

Blog: Understand how financial planning could help you emotionally prepare for retirement here

3. Balancing care responsibilities

While you might no longer have young children to care for, you could find that you still have care responsibilities during your midlife.

In fact, according to December 2024 research from Legal & General, 1 in 6 middle-aged people support other adults financially, such as grown-up children or elderly parents.

If this isn’t something you’ve considered as part of your financial plan, it could make it harder to budget now and may affect your financial security in the future.

It’s not just your finances that care duties may affect. 1 in 7 mid-lifers said they provide unpaid care, with hours equivalent to a part-time job. Around half said they feel overwhelmed by their weekly commitments. This can take a toll on your overall wellbeing.

A financial plan that’s focused on what’s important to you could help you balance new responsibilities with your personal goals. For example, you might pay for a carer a few times a week so you’re still able to attend social clubs that you enjoy.

4. Improving your financial resilience

While you might have ticked off some financial commitments, such as paying your mortgage or children’s school fees, it’s still important to ensure you could withstand a financial shock. Your income stopping or facing an unexpected bill often has the potential to derail your plans.

A midlife review gives you the opportunity to evaluate your financial security and assess how you’d cope with an unexpected event.

You might check if you hold enough cash in your emergency fund or review your financial protection to see if you have an adequate safety net. While you hope never to need it, a financial safety net can provide reassurance and protection if the unexpected happens.

For more information on how to plan for the unexpected download our guide: How financial planning could help essential “what if questions?

5. Setting out your legacy

It’s easy to think that you don’t need to consider how you’ll pass on assets to your loved ones yet. However, it’s impossible to know what’s around the corner, and there may be benefits to passing on wealth during your lifetime rather than waiting to leave an inheritance.

Putting together an estate plan can be difficult. Not only are you bringing together all your assets and considering how circumstances may change in the coming decades, it’s also an emotional topic. So, if it’s something you’ve been putting off, you’re not alone.

It may be daunting at first, but your estate plan allows you to take control of your legacy. As your financial planner, we can help you create an estate plan that gives you long-term security while supporting the people who are important to you.

Talk to us about a midlife financial MOT

Get the most out of your life by feeling confident about your finances. If you feel under-prepared for retirement you may find reassurance speaking to an independent adviser.

Talk to our team today to arrange your free one-hour consultation. Its a great opportunity for you to have a personal conversation face-to-face or online with a financial planner. You may come away with a clearer understanding of your circumstances and a welcome reassurance moving forward.

Call our team: 01244 347 583 | Send an email: info@innesreid.co.uk | Send a message

We hope you enjoyed this article. For more, be sure to subscribe to our latest insights or follow us on Facebook, Instagram or LinkedIn

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.

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.

Note that life insurance and financial protection plans typically have no cash in value at any time, and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

The Financial Conduct Authority does not regulate estate planning.

The post How a financial MOT can prepare you for retirement appeared first on Innes Reid.