Author: Dacre Unsworth

Trade tariffs continued to affect investment markets in June 2025, though uncertainty did start to ease. However, rising tensions in the Middle East may have affected the performance of your investments. Read on to find out more.

Remember, it’s often wise to take a long-term view of your investments when reviewing returns, rather than focusing on short-term market movements.

In June, the Organisation for Economic Co-operation and Development (OECD) cut its global growth forecast to 2.9% in 2025 and 2026, down from 3.1% and 3% respectively, on the assumption that tariff rates in mid-May are sustained.

The OECD said: “Substantial increases in barriers to trade, tighter financial conditions, weaker business and consumer confidence and heightened policy uncertainty will all have marked adverse effects on growth prospects if they persist.”

Similarly, the World Bank lowered its growth forecasts for nearly 70% of all economies. It estimates that the 2020s are on course to be the weakest decade for the global economy since the 1960s.

Trade tensions ease, but uncertainty in the Middle East leads to volatility

On 2 June, a European market sell-off started in early trading as investors continued to react to the trade war. Stock indices, which track the largest companies listed on each stock exchange, were down, including Germany’s DAX (-0.25%), France’s CAC (-0.5%), and the UK’s FTSE 100 (-0.27%). Markets in the US also opened lower, including the S&P 500 dropping 0.3%.

However, there was some good news in the UK. Following the announcement of a new defence review, stocks in the sector jumped, with Babcock, one of the largest Ministry of Defence contractors, leading the way with a rise of 3.8%.

Germany’s sluggish economy received a boost on 4 June when a tax relief package worth €46 billion between 2025 and 2029 was unveiled. It led to the DAX rising 0.9%.

After weeks of tit-for-tat tariffs between the US and China, a trade deal was struck on 11 June. The US said a 55% tariff, inclusive of pre-existing levies, would be placed on China. The deal led to Chinese stocks rising. Indeed, the CSI 300 index, which tracks the largest stocks on the Shanghai and Shenzhen markets, was up around 0.8%.

Despite poor economic data from the UK, the FTSE 100 closed at a record high on 12 June. Among the top risers were health and safety device maker Halma (2.8%) and Tesco (1.8%).

In contrast, European markets dipped, with the DAX (-1.35%) and CAC (-1%) both falling.

The Iran-Israel crisis led to stock markets falling when they opened on 13 June. In London, the FTSE 100 was down 0.56% and almost every blue-chip share was in the red. It was a similar picture in Europe and the US, with indices dipping.

On 24 June, Donald Trump, president of the US, declared there was a ceasefire between Iran and Israel. It led to geopolitical fears easing and markets rallying around the world. However, some fears remain.

UK

UK economic data released in June was weak.

Data from the Office for National Statistics (ONS) shows the UK economy shrank by 0.3% in April. This was partly linked to trade tariffs as exports of UK goods to the US fell by around £2 billion.

In addition, the ONS revealed the rate of inflation remained above the 2% target at 3.4% in the 12 months to May. The news led to the Bank of England’s Monetary Policy Committee voting to hold interest rates.

However, think tank the Institute for Public Policy Committee said the central bank was harming households by not cutting the base interest rate. It also added that GDP was lower than expected because interest rates have been kept too high for too long.

A Purchasing Managers’ Index (PMI) involves surveying companies to create an economic indicator. A reading above 50 suggests a sector is growing.

In June, PMI readings for May show the manufacturing and construction sectors were contracting, but they had improved when compared to a month earlier, leading to hopes that a corner has been turned. In addition, the composite PMI, which combines service and manufacturing surveys, moved back into growth.

Europe

Eurostat figures show the rate of inflation across the eurozone fell to 1.9% in May, down from 2.2% in April, taking it below the European Central Bank’s (ECB) 2% target for the first time since September 2024.

In response, the ECB lowered its three key interest rates for the eighth time in the last 12 months.

There was also positive news from PMI data. The eurozone continues to hover just above the 50 mark that indicates growth, and German business activity returned to growth in June. As the largest economy in the eurozone, German activity is important to the bloc, and factory orders were also higher than expected.

Ireland is leading the EU in terms of growth. The country had expected its GDP to grow by 3.2% in the first quarter of 2025, but exceeded this with an impressive 9.7% boost. The jump was linked to strong exports in pharmaceuticals and other key sectors as companies tried to get ahead of tariffs.

US

In the 12 months to May 2025, the rate of inflation in the US increased slightly to 2.4% and remains above the Federal Reserve’s target of 2%.

A PMI conducted by the Institute of Supply Management shows the US manufacturing sector is slipping due to tariff uncertainty. Indeed, 57% of the sector’s GDP contracted in May, up from 41% in April.

The data from the service sector was also negative, with figures showing it contracted in May for the first time in June 2024, and new orders fell at the fastest rate since December 2022.

However, separate data suggests that businesses are feeling more optimistic about the future.

The National Federation of Independent Business’s Small Business Optimism Index increased three points in May. It was the first rise since Trump took office at the start of the year thanks to trade talks taking place between the US and China throughout June.

The US economy also added 139,000 jobs in May. The number was slightly higher than forecast and could suggest that businesses feel confident enough to expand their workforce.

Asia

Data from China showed it wasn’t immune to the effects of the trade war.

China’s National Bureau of Statistics data shows inflation was -0.1% in May as prices dropped. Deflation affecting the country highlighted the importance of the US and China reaching a trade deal.

In addition, manufacturing activity in May shrank at the fastest pace in two and a half years. Firms were hit by falls in new orders and weaker export demand. The PMI reading was 48.5, down from 50.4 in April.

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.

Do you consider yourself an optimist or a pessimist?

The “blue dot theory” could suggest that humans are hard-wired to be pessimists, after psychologists discovered that once our brains are primed to see something (such as a blue dot), we see it everywhere, even when it’s not really there.

Read on to learn more about how the blue dot theory could be affecting you and how you can stop it from negatively impacting your life.

The “blue dot” theory

In 2017, Harvard researchers asked participants to identify blue dots among thousands, ranging from very blue to very purple.

During the first 200 trials, the participants could accurately identify the roughly equal proportion of blue and purple dots. However, as the experiment progressed and fewer blue dots appeared, participants began to label more obviously purple dots as blue.

To confirm their findings, the researchers attempted another trial with the same concept where they replaced the blue and purple dots with photos of threatening and non-threatening expressions. Once again, as they reduced the number of threatening photos, participants still identified the same ratio of pictures as threatening.

They concluded that our brains are designed to look for threats and problems regardless of our environment or whether the issues exist.

In practice, this often affects social lives. If your brain is looking for problems, you are more likely to interpret other people’s expressions, comments, or silences as judgments against you.

The blue dot theory also means that when you solve the big problems in your life, instead of being pleased with your progress, the smaller annoyances become more significant to you to fill the space.

How to combat the blue dot effect

If your brain is hard-wired to be pessimistic, you might be thinking there’s nothing you can do to change it – but have a bit of optimism!

The more aware you are of how the blue dot theory impacts your day-to-day life, the easier it is for you to change your mindset and combat the negative effects it can have on your relationships.

1. Stop projecting assumptions

The blue dot theory often leads us to leap to assumptions about other people based on our own thoughts, feelings, or intentions.

For example, you might interpret your colleagues’ neutral behaviour as personal attacks on you based on insecurities. Next time you find yourself wondering if someone you know is displeased with you, stop and consider whether you have concrete evidence to prove this.

Separating facts from assumptions can help you to quash the negative thoughts and remind you that most people are too focused on themselves to analyse your every move.

2. Try to avoid snap judgments

Our ability to make fast decisions is an evolutionary device that has kept humanity alive for centuries, but it can also lead to you making wrong judgments about your loved ones.

For example, if your friend seems quiet, your first assumption might be that they are upset with you. However, this snap judgment is based on limited evidence and might not be true.

Next time, you find yourself making a snap judgment about something important, pause and allow yourself to wonder what else could be the reasoning behind someone’s behaviour. For example, simply asking your friend what is wrong could help you to support them and deepen your friendship, rather than assuming the worst straight off the bat.

3. Practise gratitude

The blue dot effect can make your life seem a lot worse than reality by turning every inconvenience into a monumental problem and every social interaction into an anxiety-inducing spiral.

Although we can’t prevent ourselves from finding problems and seeing the bad parts of life, it’s important to focus on the good things.

Take five minutes out of your day to reflect on all the progress you have made in life and some good things that have happened to you recently. You can even record the things you are grateful for in a journal every morning for a positive start to your day, or every night to help you sleep peacefully.

While it can seem difficult to find the positives at first, practising gratitude can help you weaponise the blue dot theory against your brain. If you prime yourself to focus on the good things in life, you are more likely to see them, helping you to have a more optimistic outlook on life.

4. Be compassionate towards yourself

We are often our own worst critics. When we’re quick to judge ourselves, blue dot theory means we are even faster at interpreting other people’s actions as judgments against us.

Being kinder to yourself will mean you assume other people have good intentions and can help you put a positive spin on any problems you might face.

To start practising self-compassion, try talking to yourself as you would someone you care about. Every time you catch yourself thinking negative thoughts, consider whether you would say those things to someone you love, and offer yourself the same kindness.

After more than five decades at the helm of Berkshire Hathaway, legendary investor Warren Buffett has announced he’s retiring at the age of 94. He’s credited with turning the failing textile maker into a successful holding company. In May 2025, the BBC estimated Berkshire Hathaway was worth $1.16 trillion (£870 billion).

Considered by many to be the most successful investor of the 20th century, Buffett has regularly featured on lists of the world’s wealthiest people, despite giving away vast sums.

While Buffett has a huge number of resources at his disposal, many of his idioms may be useful for ordinary investors, including these five.

1. Invest with a long-term view

Throughout his career, Buffett has focused on the potential long-term value of stocks and shares.

Indeed, he said: “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

It’s a useful reminder that trying to generate quick returns could lead to investors missing out on long-term gains. With so many different factors influencing the value of investments, it’s impossible to consistently time the market.

While investment markets often experience short-term movements, historically, they have delivered returns over longer time frames. Investors who plan to hold investments over the long term could benefit as a result.

2. Avoid investing FOMO

Buffett earned the moniker “oracle of Omaha” for his ability to make long-term investment decisions, and he did it without following the crowd.

Investing FOMO (fear of missing out) leads some people to invest in a way that doesn’t align with their strategy because they believe investments are “good” or “safer” if others are choosing them. However, making investment decisions based solely on what others are doing may be harmful.

Buffett once said: “When everyone wants in on it, that’s probably not the right time to jump in.”

When everyone is talking about the latest stock that’s sure to deliver big returns, the buzz has often already led to prices rising. As a result, following the latest trends could lead to disappointment.

It’s also important to note that what is a “good” investment for one person may not be right for another. As your circumstances and goals will play a role in your investment strategy, acting based on FOMO might mean you make investment decisions that don’t align with your financial plan.

3. Invest in what you know

Buffett once advised budding investors that they didn’t have to be experts in every company, but only had to evaluate companies within their “circle of competence”. In other words, stick to what you know, even if an opportunity outside of your knowledge sounds enticing.

Recognising when you could benefit from expert advice or support is beneficial too.

Buffett considered this when thinking about his estate plan. He’s instructed the trustee of his estate to invest 90% of his money into a passive fund, so his wife doesn’t need to make investment decisions day-to-day.

As a financial planning firm, we could help you create a balanced investment portfolio that you can have confidence in, including if you want to take a hands-off approach.

4. Don’t be seduced by a “bargain”

Finding a bargain, whether you’re out shopping or assessing investments, can be thrilling – everyone wants to get something for less if they can. However, looking only at the price when you’re weighing up an investment opportunity might mean you make a decision that isn’t right for you.

Instead, look at the bigger picture. How would the investment fit into your wider portfolio, and does it align with your investment goals?

As Buffett said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

5. Make investing part of your wider financial plan

When you’re setting out or reviewing an investment strategy, it can be easy to look at it in isolation. Yet, by making it part of your wider financial plan, you could improve the decisions you make.

For example, your financial circumstances and goals will play a role in your investment risk profile. Incorporating these areas when weighing up investments could help you strike a balance that suits your needs. Without this approach, you could find yourself taking more risk than is appropriate.

Buffett once noted: “It is insane to risk what you have and need to obtain what you don’t need.”

Contact us to talk about your investment strategy

An investment strategy that’s been tailored to your needs could lead to returns that help you reach your long-term goals. Please get in touch to talk to us about your investments.

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.

Opting for a “boring” investment strategy could be the route to returns that allow you to make exciting lifestyle decisions in the future. If you’re looking for excitement in your investments, read on to find out why that approach could lead to disappointments.

The media can make investing seem exciting

When you’re reading financial headlines, they might say things like “stock market soars in best day ever” or “the best companies to invest in right now”. In other media, investing is often dramatic too. For example, in The Wolf of Wall Street, the main character, Jordan Belfort, is shown making a huge fortune through investing and fraud.

Yet, despite the perceived excitement of investing, acting on emotions, even ones that feel positive, could harm your decisions. The excitement of finding a tip that declares a company will be the “next Apple” could lead to you skipping further research, like assessing the risk profile of the firm and whether it fits into your existing portfolio.

Investors might even feel excited about the risks they’re taking – the anticipation of waiting to see if they were “right” can be addictive. So, some investors may take more risk than is appropriate because it adds to the excitement.

As a result, viewing investing as something that should be exciting has the potential to affect the long-term performance and could mean you’re at greater risk of losing your money.

So, what’s the solution? For many, it’s taking a boring approach to investing.

Why boring investments work

First, what does a “boring” approach to investing mean?

Focusing on your long-term goals and building an investment strategy around this and other factors, such as what an appropriate level of risk is and other assets you might hold. You’d try to remove emotions from your investment decisions and, instead, use logic.

If you’ve heard the mantra “buy low, sell high”, this approach might seem like it wouldn’t work. Yet, historically, investing with a long-term outlook, rather than responding to short-term market movements, is a strategy that’s worked for many investors.

March 2023 data from Schroders highlights the challenges of trying to time the market.

If you’d invested £1,000 at the start of 1988 in an index of the largest 100 UK companies and left the investment alone, it would have been worth £15,104 in June 2022 – an annual return of 8.31% on average.

However, if you tried to time the market and missed just the 10 best days, your average annual return would fall to 6.1% and you’d have £7,503 in June 2022, less than half of the amount had you remained invested.

While trying to buy low and sell high might be exciting, even just a few mistakes could mean you miss out on long-term returns.

Of course, it’s important to note that investment returns cannot be guaranteed, and past performance isn’t a reliable indicator of future performance. Yet, it can provide a useful insight into why taking a long-term view when making investment decisions could be beneficial.

Boring investing could lead to exciting lifestyle opportunities

A boring approach to investing doesn’t have to mean the outcomes are dull. In fact, taking a long-term approach could mean you have more opportunities to create the lifestyle you want.

A long-term investment strategy might allow you to tick items off your bucket list like:

• Retiring earlier to travel the world
• Sampling dishes at award-winning restaurants
• Creating a disposable income to attend gigs or the theatre
• Purchasing a holiday home to spend time with your family.

Rather than looking for excitement when investing, finding it in your long-term plans and what investment returns may allow you to do could be far more rewarding.

Contact us to talk about your investments

If you’d like to talk about your current investments, or you have a sum you’d like to invest, please get in touch. We’ll work with you to create a long-term investment strategy that’s aligned with your goals and financial circumstances.

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.

Retirement can be a tricky time to manage your finances. Often, it represents a huge change as your regular income might stop and, instead, you start to deplete your assets. So, it’s natural that emotions might influence some of the decisions you make if you let them, but it could be harmful.

Here are three different ways emotions could affect your retirement outlook and how to manage them.

1. Retirement excitement could lead to overspending

Retirement is often an exciting milestone and one you might have been looking forward to for years.

So, if you’re focused on enjoying the moment and ticking off some of those long-awaited dreams, you’re not alone. Perhaps you’ve booked an extravagant holiday now you don’t have to fit it around work, or you’ve finally got around to making the home improvements that have been on your mind for ages.

Celebrating the next chapter of your life is important – you’ve earned it – but it often needs to be balanced with a long-term outlook.

Many retirees have a defined contribution pension, which doesn’t provide a regular income. Instead, you’ll need to manage how and when to access your savings to ensure they provide financial security for the rest of your life. There’s a risk that if you spend too much too soon, you could run out in your later years.

Meeting your financial planner to discuss how much you can sustainably withdraw from your pension could help you strike the right balance. Knowing that your plan considers your long-term financial security could mean you’re able to enjoy those early retirement celebrations even more.

2. Investment market movements could lead to emotional decisions

During your working life, your pension is usually invested with the aim of delivering long-term growth. As modern retirements often span decades, it could make sense to leave your pension or other assets invested when you give up work to potentially generate returns.

One of the emotional challenges of investing is the temptation to react to market news. Whether it’s negative or positive, attention-grabbing headlines can leave you feeling like you need to make adjustments to your investments.

You might be excited about an opportunity or fearful of a potential downturn, and make a knee-jerk decision based on these emotions.

However, as with investing when you’re working, a measured, long-term approach often makes sense for retired investors. While investment returns cannot be guaranteed, markets have, historically, delivered returns over a long-term time frame.

Try to tune out the noise and emotions when you’re reviewing your investments and focus on your goals instead.

Reviewing your investment strategy as you near retirement could help you feel more confident about your long-term finances and identify if adjustments might be necessary, based on your changing circumstances rather than emotions.

3. Fear of overspending may hold back your retirement dreams

While some retirees risk running out of money, the opposite can also be true.

Despite having saved diligently during their working life for a comfortable retirement, some people find that their concerns mean they feel nervous about using their pension or other assets. It could mean that a retirement that promised much is disappointing, even though they have the funds to turn their goals into a reality.

You might think of financial planning as a way to grow your wealth, but that’s not always the case. Financial planning is about helping you use your assets to reach your goals. In retirement, that could mean encouraging you to spend more if you’re in a position to do so.

If you’ve been putting off booking the safari you’ve been looking forward to or simply counting every penny when you go shopping, a meeting with your financial planner might be just what you need.

By understanding your assets and how the value of them might change during your lifetime depending on your spending habits, you can set out a budget that’s right for you and, hopefully, find the confidence to really enjoy this chapter of your life.

A retirement plan could help keep emotions in check

A retirement plan that’s been tailored to your lifestyle goals and financial circumstances could give you the confidence to dismiss potentially harmful emotions and focus on getting the most out of your retirement years. Please contact us to arrange a meeting with our team.

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.

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. 

This guest blog was written by Chris Budd, who wrote the original Financial Wellbeing Book as well as The Four Cornerstones of Financial Wellbeing. He founded the Institute for Financial Wellbeing and has written more than 100 episodes of the Financial Wellbeing Podcast.

Life can be complicated, can’t it? There are so many distractions, sometimes it’s hard to keep focus on the main objectives of life, one of which surely must be to maintain our wellbeing.

Being happy doesn’t come easily. It takes work and nurture. We need to actively ensure that we spend our time and money promoting the things that will bring us joy.

Some of these things are fairly obvious – a roof over our heads, food on the table, good health, love, and kindness.

Some are less obvious. Indeed, some are actually part of the problem, things we think will bring wellbeing that turn out to be false objectives, like a bigger house or an expensive car.

There is one particular piece of research, however, that reveals the secret to a happy life, something that has been shown to be the main contributor to our long-term wellbeing. It is the thing on which we should surely focus our time and money, and, as a result, our financial plan.

The Harvard longitudinal study

Researchers at Harvard University asked a cohort of young people – some of them Harvard students, and some from poor areas of Boston – what they thought would make them happy as they went through life.

Overwhelmingly, these young people reported two anticipated sources of wellbeing: money and fame.

The researchers then went back to those young people every two years. They asked them how happy they were, and what factors were helping or hindering their wellbeing.

They have been doing so ever since, for the last 80 years or so. They brought on new cohorts, and so now have a huge bank of information about the contributory factors to a happy life and long-term wellbeing.

The secret to wellbeing

Perhaps unsurprisingly, those who became famous reported no higher levels of wellbeing than those who did not. What may be more of a surprise, however, is that those who became wealthy also reported no greater levels of wellbeing than those who were not wealthy.

There was, however, one overriding factor that affected the levels of wellbeing – the quality of their social relationships.

Note that it is not the quantity, but the quality.

Those who reported high quality levels of social relationships were happier than those who did not. This even ran so deep that those who reported being lonely often died younger.

The application to financial planning

Buying a luxury item might make us happy for a while. However, it is unlikely to have a significant impact on longer-term wellbeing. If owning bigger and more things is not a source of wellbeing, but quality of social relationships is, how does this impact our relationship with money?

The key question of financial planning is: how much is enough? This Harvard study tells us that we need to extend this question – how much is enough, and for what?

One of the keys to increasing financial wellbeing is having a clear path to identifiable objectives. What are those identifiable objectives that your financial plan aims to make real? Do they include any references to the quality of your social relationships?

In practical terms, this might be a trip to visit friends or loved ones living far away. It could be moving to a four-day week to spend more time supporting a charity or other organisation you are involved with. Or you may change jobs to one that pays a bit less, but allows you to walk the kids to school and tuck them into bed at night. I’m sure you could think of many other examples.

With so many distractions and complications, it is so easy to get distracted from the main contributor to our wellbeing. This is what your financial plan is actually for. To create that clear path to identifiable objectives, and then to review progress regularly. In this way, you can ensure that your financial plan is helping you to focus on the things that are the secret to happiness.

You can read all about the Harvard study on happiness in the book The Good Life by Robert Waldinger and Mark Schulz.

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.

Trade wars and fears that tariffs could spark recessions meant investment market volatility continued in March 2025 and the start of April 2025. Read on to find out more about some of the factors that may have affected the value of your investments recently.

Tariffs imposed by US President Donald Trump affected markets negatively and, as other countries react to the measures, there continues to be uncertainty.

While market volatility and periods of downturn can be worrisome, remember it’s part of investing. Historically, markets have delivered returns over long-term time frames, even after periods of downturn, and often sticking to your investment plan makes financial sense. So, if you’re tempted to react to the news, reviewing your long-term plan and goals could be useful.

UK

Chancellor Rachel Reeves delivered the Spring Statement at the end of March, setting out the government’s spending plans, against a challenging backdrop.

The UK economy contracted by 0.1% in January 2025 when compared to a month earlier following a decline in factory output. In addition, while the rate of inflation is declining, at 2.8% in the 12 months to February 2025, it’s still above the Bank of England’s (BoE) 2% target.

The news prompted the BoE to hold its base interest rate at 4.5%, which will have disappointed households and businesses that were hoping for a cut to ease the cost of borrowing.

Data from Purchasing Managers’ Indices (PMI) was pessimistic too.

According to S&P Global, the manufacturing sector continues to face tough conditions. The headline figure was 46.9 in February. It’s the fifth consecutive month that the reading has been below the 50 mark which indicates growth. There were declines in output, new orders, and employment.

The construction data was similar, with the headline figure falling to 46.6, the biggest downturn since 2009 aside from the 2020 pandemic. There were steep declines in housebuilding and civil engineering activity.

Despite speculation that Reeves would increase taxes and reduce tax thresholds or exemptions, the Spring Statement focused on cutting the welfare budget. Indeed, the announcements made in the 2024 Autumn Budget remain intact.

Investment markets were affected by US trade wars and the war in Ukraine.

On 3 March, European leaders met in London for a summit to draw up a Ukraine peace plan. The meeting led to the pound and European stock market soaring as investors hoped for a resolution. Perhaps unsurprisingly, defence stocks saw the biggest gains, including the UK’s BAE Systems, which jumped by more than 14%.

However, the boost was short-lived. On 4 March, trade wars between the US and Canada, Mexico, and China triggered a drop of 1.27% on the FTSE 100 – an index of the 100 biggest companies on the London Stock Exchange.

There was an uptick in optimism towards the end of the month.

On 24 March, investors hoped that President Donald Trump would show flexibility ahead of the unveiling of new global tariffs in April. The FTSE 100 opened 0.5% up, with mining stocks leading the rally – winners included Anglo American (3.9%), Antofagasta (3.3%), Glencore (3%), and Rio Tinto (2.5%).

However, in early April, Trump unveiled tariffs on many countries, including the UK, which led to markets falling.

However, in early April, Trump unveiled tariffs on many countries, including the UK, which led to markets falling.

Europe

Data from the European Central Bank (ECB) shows inflation is moving closer to the 2% target. It was 2.4% in the 12 months to February 2025 across the eurozone.

The news prompted the ECB to cut the base interest rate by a quarter of a percentage point to 2.25%.

Data suggests the wider European economy is facing similar challenges to the UK.

Indeed, S&P Global PMI figures show a factory downturn. In addition, the headline PMI figure fell from 45.5 in January to 42.7 in February. Worryingly, the two largest economies in the EU, Germany and France, experienced the sharpest downturns.

The Euro Stoxx Volatility index, which tracks investor uncertainty, found stock market volatility hit a seven-month high in February and has more than doubled since mid-December 2024 due to investors feeling nervous about the global outlook.

So, it’s not surprising that there have been ups and downs for investors.

The 3 March summit in London benefited wider European stock markets. Again, defence stocks saw the biggest gains – Germany’s Rheinmetall, France’s Thales, and Italy’s Leonardo all saw an increase of at least 14%.

Expectations that US tariffs will hit the automaker industry led to stocks in the sector falling on 4 March. Among the shares affected were tiremakers Continental, which saw a 9% drop, as well as Daimler Truck (-6.6%), BMW (-5.5%), and Mercedes-Benz (-4.5%).

Similar to the UK, European markets were negatively affected by US tariffs at the start of April.

Similar to the UK, European markets were negatively affected by US tariffs at the start of April.

US

US inflation is nearing the Federal Reserve’s 2% target after a rate of 2.8% was recorded in the 12 months to February 2025.

However, there was negative news from the labour market. According to the Bureau of Labor Statistics, the unemployment rate edged up to 4.1% in February.

PMI readings for the manufacturing sector also reflected this trend. New orders fell in February and companies continued to lay off staff, which may suggest they don’t feel confident in the future. Yet, the sector has grown for two consecutive months.

On 3 March, in contrast to Europe, Wall Street dipped slightly. The technology-focused Nasdaq index was down 0.8% and the broader market indices Dow Jones and S&P 500 both fell 0.3%.

The following day, Trump declared 25% tariffs on imports from Canada and Mexico and 10% tariffs on imports from China. The news led to the dollar weakening, and indices tumbling further – the Nasdaq fell 2.6% and S&P 500 was down 1.7% – and the declines continued into the next week.

Technology stocks in particular have been hit hard by the market volatility. AJ Bell warned since the start of 2025, $1.57 trillion (£1.21 trillion) had been wiped off the value of the Magnificent Seven – seven influential and high-performing US technology stocks – as of 4 March.

Carmaker Tesla is among the biggest losers. As of mid-March, its share price had halved since it benefited from a post-election rally at the end of 2024, which has partly been driven by sales in the EU falling by almost 50%.

Once again, the uncertainty caused by trade wars led to volatility in the US markets.

Once again, the uncertainty caused by trade wars led to volatility in the US markets.

Asia

As a country with a trade surplus and a large US market, tariffs are expected to hamper growth in China.

China’s GDP target is 5% for 2025, the same target it hit in 2024. However, economists believe replicating this in 2025 will be difficult. China succeeded in reaching the 2024 target thanks to an export boom at the end of the year – exports increased by 10.7%, as some businesses tried to beat the expected tariffs.

In contrast, between January and February 2025, Chinese imports fell by 8.4% year-on-year after economists had expected growth of 1%. The data might suggest that Chinese manufacturers are cutting back on buying raw materials and parts due to trade concerns.

Tariffs imposed by the US led to China unveiling similarly high tariffs at the start of April. The trade war is likely to affect China’s economy and its ability to reach GDP goals in 2025.

Tariffs imposed by the US led to China unveiling similarly high tariffs at the start of April. The trade war is likely to affect China’s economy and its ability to reach GDP goals in 2025.

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.

Geopolitical tensions have led to a bumpy start to 2025 for investors. If you’re worried about volatility and what it might mean for your long-term finances, there are reasons to remain calm despite the uncertainty.

The ongoing war in Ukraine has resulted in some anxiety in Europe, with the UK and other countries committing to increasing defence spending. In addition, the new Trump administration in the US has imposed several trade tariffs on partners and suggested more will follow.

As a result, many companies and sectors have seen share prices rise and fall more sharply than usual.

Indeed, according to the Guardian, the euro STOXX equity volatility index, which tracks market expectations of short- and long-term volatility, reached a seven-month high at the start of March 2025. The index has almost doubled since mid-December 2024, suggesting investors are feeling nervous.

As an investor, these external factors are likely to have affected the value of your investments over the last few months.

Investment markets don’t like uncertainty

Uncertainty is one of the key factors that contributes to volatility in investment markets.

Unknown policies or other events can make it difficult to understand how a company will perform financially over the long term. This uncertainty can affect the emotions of investors, who may be more likely to make knee-jerk decisions as a result.

Imagine you hold investments in an electronic goods company based in China. In the news, you read the US will impose a 10% tariff on all Chinese goods. As a major export market, this decision by the US could significantly affect the profitability of the company.

After hearing the news, you might worry about your finances and whether you should still invest in the company. If enough investors act on these concerns, it may result in the value of the shares in the company falling.

With so much global uncertainty at the moment, your investments and the wider market could experience more volatility than usual in the coming months.

Level-headed investors could improve investment outcomes over the long term

While it may be difficult, remaining level-headed during times of uncertainty could make financial sense. Here are four reasons to remain calm.

1. Periods of volatility have happened before

When markets are volatile, it may feel unusual or unexpected. However, market volatility is a normal part of investing.

While investment returns cannot be guaranteed, historically, markets have delivered returns over a long-term time frame. Even after downturns, markets have bounced back.

Remembering this could help put your mind at ease and allow you to focus on the bigger picture rather than short-term market movements.

2. Diversified investments could smooth out volatility

Newspaper headlines are designed to grab your attention, and they’re likely to focus on the parts of the market that are experiencing the greatest volatility. For example, you might read that “technology stocks have plunged 10%” or “markets in Japan are booming”.

While these headlines aren’t inaccurate, they don’t tell you the whole story.

In reality, a balanced investment portfolio will typically include investments across a range of assets, sectors and geographical locations.

So, while a fall in technology stocks might affect you, it may not have as large of an effect as you expect if you only read the headlines. Gains or stability in other areas of your investment portfolio could balance out the dip.

3. Market volatility may present an opportunity to buy low

If you’d previously planned to invest a lump sum or you invest regularly, market volatility may cause you to rethink. However, halting your investments might mean you miss an opportunity.

When markets fall, you might have a chance to invest when the price of stocks and shares is lower, allowing you to buy more units for your money. Over the long term, this could lead to better yields.

While investing during a low period could result in higher returns over the long term, you should ensure investments are appropriate. You may want to consider your financial risk profile and wider circumstances when deciding how to invest your money.

4. Trying to time the market can prove costly

Finally, if you’re focused on what the market is doing today, it can become tempting to try and time the market – to buy low and sell high.

However, with so many external factors affecting markets, it’s impossible to consistently time it right. Even professionals, who have a team and resources, don’t always get it right.

Rather than trying to time the market, remaining calm and sticking to your long-term investment strategy is often a better course of action.

Contact us to talk about your investments

If you have any questions about how your investments are performing or would like to review your investment strategy, please get in touch. We’re here to answer your questions and help you feel confident about your financial future.

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.

An incoming change to the way pensions will be taxed when they’re inherited might mean you’re rethinking how you use your pension. Before you dive into updating your retirement plan, it’s important to understand what the changes could mean for you and how to balance passing on wealth with your retirement aspirations.

During the Autumn Budget in October 2024, chancellor Rachel Reeves announced that from April 2027 unspent pensions are likely to be included in Inheritance Tax (IHT) calculations. The government predicts the move will affect around 8% of estates each year.

In 2025/26, if the value of your entire estate is below £325,000, no IHT will be due. This is known as the “nil-rate band”. In addition, if you leave your main home to direct descendants, you may also benefit from the residence nil-rate band, which is £175,000 in 2025/26. Both thresholds are frozen until April 2030.

Your estate covers all your assets, such as property, savings, and material items. Currently, pensions fall outside of your estate, but you may want to consider how the value might change once pensions are included ahead of the new rule in 2027. Reviewing your retirement and estate plan could help you identify ways to improve long-term tax efficiency.

According to a February 2025 survey from interactive investor, 54% of UK adults are already planning to adjust their retirement or estate plan in response to IHT changes.

3 ways you might adjust your retirement plan to reflect Inheritance Tax changes

If the inclusion of your pension in your estate could increase the amount of IHT due, you might decide to update your retirement plan. Here are three options you could consider.

1. Spend more in retirement

The IHT changes could provide an excellent opportunity to update your retirement plan and consider what’s possible. Spending more of your pension during your life may bring the value of your estate under IHT thresholds or reduce a potential bill.

In the interactive investor survey, 19% of respondents said they plan to withdraw more money from their pension and gifting it (more on this later). What’s more, 6% are thinking about retiring earlier than previously planned.

So, if you want to deplete your pension during your lifetime, rather than leaving it as an inheritance, what would you do? You might start to think about a once-in-a-lifetime trip or how an income boost could allow you to do more of the things you enjoy, whether that’s visiting the theatre, supporting good causes, or keeping active.

Of course, spending more often needs to be balanced with long-term sustainability. A financial plan could help you understand if increasing pension withdrawals in retirement may lead to you running out of money later in life.

One thing to keep in mind is how increasing pension withdrawals could increase your Income Tax liability in retirement.

Your pension withdrawals will be added to other sources of income when calculating your Income Tax bill. As a result, taking a higher income from your pension could unexpectedly push you into a higher tax bracket.

2. Use your pension to gift wealth to your loved ones

If you’d previously planned to leave your pension to loved ones as an inheritance, gifting during your lifetime could provide a solution. You might withdraw a regular income or a lump sum to pass on to your beneficiaries.

A gift during your lifetime could be more beneficial to your loved ones than an inheritance later in life. It may allow them to purchase their first home, get married, pay education fees, or simply improve their day-to-day finances.

When gifting wealth, you may need to consider the “seven-year rule”. If you pass on assets and die within seven years of the gift being given, the asset could be included in your estate for IHT purposes. So, gifting during your early years of retirement could make sense if your goal is to reduce a potential IHT bill.

Again, keep in mind that withdrawing lump sums from your pension might increase your Income Tax liability and that gifting could affect your long-term financial security.

3. Reduce your pension contributions

8% of participants in the interactive investor survey suggested they planned to cut pension contributions due to the IHT changes.

For some people, this might be the right decision. For example, if you’ve already built up enough pension wealth to support yourself throughout retirement and you’d like to divert your money to other assets you could pass on tax-efficiently. However, it’s important to carefully assess your options to prevent knee-jerk decisions.

While your unspent retirement savings could become liable for IHT when you pass away, pensions are often tax-efficient in other ways. For instance:

• Your pension contributions will typically benefit from tax relief
• You can normally withdraw 25% of your pension (up to £268,275) tax-free
• Returns generated from investments held in your pension are not usually liable for Capital Gains Tax.

So, while your pension’s value may affect your estate’s IHT liability, maintaining, or even increasing, pension contributions could be tax-efficient when you look at them in the context of your wider financial plan.

Get in touch to talk about your pension and estate plan

If the incoming changes mean you’re unsure how to manage your pension or pass on wealth to loved ones, please get in touch. We can work with you to create or adjust a tailored financial plan that considers your circumstances and goals as well as regulation.

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 estate planning or Inheritance Tax planning.

Worrying about your finances in retirement could dampen your excitement as you start the next chapter of your life. As you’ll often be responsible for generating your own income once you give up work, it’s not surprising that a February 2025 report from Which? revealed half of over-55s are worried about running out of money.

Indeed, just 27% of those who have retired or are nearing the milestone said they weren’t concerned about draining their pension or other assets in retirement.

Some apprehension about your finances as you retire is normal.

Retirement is likely to represent a significant shift in how you create an income. No longer will you receive a regular wage for your work. Instead, you’ll often start depleting your assets, such as your pension, savings, or investments. As you can’t predict how long your assets need to last, it may be difficult to assess if the income you create is sustainable.

Here are five strategies that could give you confidence in your retirement finances, so you’re able to focus on what’s most important – enjoying this next stage of your life.

1. Consider inflation before you retire

A key obstacle when planning your finances in retirement is that inflation often means your outgoings will increase.

According to the Bank of England, between 2014 and 2024, average annual inflation was 3%. So, an income of £35,000 in 2014 would need to have grown to almost £47,000 to maintain your spending power in 2024.

As a result, if you planned to take a static income throughout retirement, you could face a growing income gap in your later years or deplete assets at a faster rate than you anticipated.

As part of your retirement plan, a cashflow model could help you visualise how your income needs might change, and the effect this would have on the value of your assets. While the outcomes cannot be guaranteed, it could highlight where you might face potential shortfalls and allow you to take steps to improve your long-term financial security.

2. Keep an eye on retirement lifestyle creep

It’s not just inflation that could affect your outgoings. Lifestyle creep, where you spend more on luxuries, could have an effect too.

As you may be in control of how much you withdraw from your pension, it can be easy to slowly increase the amount so you can indulge in an exotic holiday, new car, or regular days out. Over time, these luxuries can become new necessities in your mind and part of your normal budget.

Spending more in retirement isn’t necessarily negative. However, increasing your spending without considering the long-term consequences might mean you face an unexpected shortfall in the future. Regular financial reviews during your retirement could help you keep an eye on lifestyle creep that may be harmful.

3. Assess if investing in retirement is right for you

In the past, it wasn’t uncommon for retirees to take their money out of investments to reduce exposure to market volatility. However, keeping some of your money, including what’s held in your pension, invested might make financial sense for you.

Retirements are getting longer. With the average life expectancy of a 65-year-old now in the 80s for both men and women, you could spend three decades or more in retirement. So, continuing to invest with a long-term time frame during retirement could help grow your wealth and mean you’re at less risk of running out of money.

It’s important to choose investments that are appropriate for you and recognise that investment returns cannot be guaranteed. If you’d like to talk about investing in retirement, please get in touch.

4. Be proactive about retirement tax planning

While you might no longer be working, you’re very likely to still pay Income Tax in retirement. Indeed, according to the Independent, in March 2025, retired baby boomers were paying more Income Tax than working people under 30.

If your total income exceeds the Personal Allowance, which is £12,570 in 2025/26, Income Tax will usually be due. With the full new State Pension providing an income of £11,973 in 2025/26, most retirees will pay some Income Tax even if they’re only taking small sums from their personal pension.

It’s not just Income Tax you might be liable for either. You might need to pay Capital Gains Tax if you sell assets and make a profit or Dividend Tax if you hold shares in dividend-paying companies.

An effective retirement plan could identify ways to reduce your tax bill, so you have more money to spend how you wish and are less likely to run out during your lifetime.

5. Maintain an emergency fund throughout retirement

During your working life, you may have had an emergency fund in case your income stopped or you faced an unexpected expense. In retirement, a financial safety net might still be important.

Having a fund you can fall back on in case you need to pay a large, unforeseen cost, like property repairs, could be essential for keeping your retirement finances on track.

In addition, it may be prudent to contemplate how you’d fund the cost of care if it were needed. According to an August 2024 report from the Joseph Rowntree Foundation, the number of older people unable to perform at least one instrumental activity of daily living without help will increase by 69% between 2015 and 2040.

This rise is partly linked to a growing population of elderly people and rising life expectancies leading to more people relying on informal care, such as family members, or formal care, like a nursing home.

Whether you need to pay for care will depend on a variety of factors, such as the value of your assets and where you live. However, in most cases, you’ll often need to pay for at least a portion of the costs if you require formal care.

So, considering care when you assess your emergency fund could be essential. Knowing you have the savings to pay for care could provide you with peace of mind and mean that should it be required, you have more options to explore, such as choosing a care home with facilities you’d enjoy or one that’s easily accessible for loved ones.

Get in touch to discuss your retirement finances

As your financial planner, we could work with you to build a retirement plan that reflects your circumstances and goals. Whether you’re worried about running out of money or you have other concerns, we’re here to listen and discuss your options. Please get in touch to arrange a meeting.

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

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.

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. 

The Financial Conduct Authority does not regulate cashflow planning.