Author: Dacre Unsworth

Investing is often as much about emotions as it is about numbers. One emotion that might affect how you invest at times is fear. Learning how fear influences investment decisions and how to master it could support your long-term success.

Fear could strike investors in multiple ways

There’s more than one form that fear can take when you’re investing. You might experience a fear of:

• Losing money, which could lead to you being overly cautious. You might even avoid investing altogether because of the perceived risk of losing some or all of your money.
• Making the wrong decision. As an investor, you often have multiple options, and this form of fear could lead to decision paralysis because you overthink or feel overwhelmed.
• Missing out. There’s a lot of investment noise, including people proclaiming that one investment or another is a must-invest. For some investors, this might generate a fear of missing out (FOMO) that could lead to impulsive decisions.
• Not being in control. Multiple factors that aren’t in your control will affect the performance of your investments, and this can be scary. Investors experiencing this type of fear might miss opportunities due to their worries or react in a way that doesn’t align with their strategy when new information is released.

Many things could trigger fear when making investment decisions, such as market volatility or even being reminded that investing involves risk. Indeed, according to FT Adviser (4 June 2026), more than half of UK adults said that reading a risk warning when investing in stocks and shares puts them off investing.

It’s natural to feel some worries in these scenarios, but mastering your fears could improve long-term outcomes.

Fear could lead to decisions that don’t align with your long-term strategy

Fear isn’t necessarily a bad thing when you’re investing. It might prevent you from rushing into an investment that isn’t suitable for you, but it could also harm your decisions.

For example, investing might play an important role in your long-term financial plan. It might help you grow your pension savings with the aim of delivering a more comfortable retirement. However, if you fear losing money, you might choose to hold your assets in cash instead, which would mean missing out on potential investment returns.

Investment returns cannot be guaranteed, and past performance may not be replicated. However, historically, markets have delivered returns over long-term time frames and recovered from periods of downturn.

It’s also important to note that there are different levels of risk when you’re investing, so you can choose opportunities that align with your risk profile. In addition, a balanced portfolio will spread your investments across a variety of assets, so while you might lose money in one area, gains in another could create balance.

A key part of mastering fear so it doesn’t hamper your long-term goals is understanding the difference between perceived and actual risks.

Acting out of fear when investing could make it more difficult to achieve your financial goals and increase stress. So, here are three things to keep in mind when you’re investing.

3 steps that could reduce investment fear

1. Focus on your long-term objectives

Emotional responses are often temporary, as are the factors that trigger them. Instead, focus on what your long-term objectives are. This can help you put current events into perspective and potentially reduce your concerns.

Some investors may find it useful to implement a decision delay, such as waiting at least a day before making any changes. This could provide time for strong emotions to ease and an opportunity to review what’s driving your initial reaction.

2. Recognise that market volatility is normal

One factor that often affects investor emotions is market volatility. However, if you look at past performance, you’ll see that rises and falls in investment values are normal.

Rather than looking at investment values daily or weekly, take a longer-term view. When you look at performance over several years, you’ll often see that the peaks and troughs smooth out, which doesn’t seem as scary.

3. Understand your investment strategy

Take some time to understand why your investment strategy is appropriate for you. Discussing with your financial planner why your risk profile is suitable for your current financial circumstances and overall goals could help ease fears.

A financial planner could reduce the impact of emotions when making financial decisions

Working with a financial planner could help keep emotions, including fear, in check when you’re making financial decisions.

Your financial planner will understand your goals and strategy, so they could provide an objective review of your decisions and factors that you might be worried about. Knowing you have someone who could provide tailored guidance might also help you tune out some of the noise that could trigger emotional responses and allow you to focus on what matters to you.

Please contact us to arrange a meeting with one of our team.

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.

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 130 episodes of the Financial Wellbeing Podcast.

Once upon a time, there was a man who had come into a bit of money. Not a life-changing amount, but enough to pay off the mortgage and do some nice things.

Now, this chap’s wife wouldn’t discuss the money. She said that she wasn’t interested. In fact, she said that she wanted “nothing to do with it”.

The lack of interest was not due to the source of the money. It was just that she felt uncomfortable talking about money. She was happy to join him on a cruise around the Norwegian Fjords. She just didn’t want to think about the money.

As a consequence, she didn’t attend the meetings with their financial planner. She didn’t understand how pensions or investments worked. She just wasn’t interested.

This began to cause a bit of a problem. The man wanted to discuss it with her. He wanted to consider some life changes, such as her retiring earlier than planned. He nagged her about it. Eventually, she agreed to meet their financial planner.

This is how the conversation went.

The folded arms

Initially, the lady sat with her arms folded, waiting for the financial planner to start telling her all about investment markets and economic predictions.

Instead, the planner asked her about her work. She assumed that this was just small talk. A little impatient to get the meeting over with, she curtly answered the questions. When the planner asked what it was that she enjoyed about her work, and whether this might change in the future, she began to relax and to open up a little.

They discussed the nature of her work, how she didn’t like her boss, and how she had done the job for fifteen years now. How much she enjoyed volunteering at a local community farm on her day off on Fridays. How she and her husband liked to travel.

Half an hour later, she began to wonder if this was in fact small talk at all. They were now covering whether their children were happy, her love of singing and listening to choral concerts, and his hobby of making stained glass windows.

After an hour, she found herself feeling a little impatient. She finally asked a direct question. When are we going to talk about the investments?

The explanation

The financial planner thanked her for the question. They then explained that the human brain is not wired to make good financial decisions. Research (Caltech, 8 February 2010) has shown that when we think about money, we use the part of our brain that we use when frightened.

We are also not very good at thinking about our future self (Financial Wellbeing Podcast, 31 May 2023). The part of our brain we use when trying to think of ourselves in, say, 10 years is the same part that we use when we think about strangers.

Combine these two pieces of information, and we can start to see why financial planning is something that many people try to avoid.

The good news, however, is that financial planning isn’t really about money. It is about joy. It’s about wellbeing. It’s about planning for a happy future.

Sure, it is also about a reasonable mitigation of tax, management of investments, and some financial calculations. However, the planner explained, that’s my job, not yours. All you need to do is tell me what your happy future looks like. Which you’ve now done, so thank you.

Now, continued the planner, I did actually run some numbers before this meeting. And I can tell you that all the things that you would like to do in your life are possible. In fact, you only really need to work if you want to, not because you have to.

You could, in fact, stop work now, as long as your husband continued to work for another five years. Alternatively, you could reduce your hours from 4 days to 2 days a week and he can stop working in three years.

Furthermore, as you do not need to earn money during those days not working, you can spend more time volunteering at the community farm.

Oh, and you can have six weekends away each year, three of them in the UK and three of them abroad, to visit cathedrals and enjoy concerts.

Engagement

The planner stopped talking. She waited for him to resume, but he didn’t. Eventually, she spoke.

She expressed polite disbelief. How was all this possible? Surely, they couldn’t afford what he described.

The planner explained that it was all contained in the financial plan. He would be very happy to talk through it if she were interested.

She said that she was. She most definitely was interested.

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.

Conflict in the Middle East caused market volatility throughout March 2026. Find out what other factors may have affected your investments.

While the ongoing uncertainty may feel unsettling for investors, remember that your strategy reflects your long-term goals and considers periods of volatility.

Oil prices rising and ongoing uncertainty led to stock markets falling

On Saturday, 28 February, the US and Israel began strikes on Iran, which led to markets falling when they opened on Monday 2 March.

The FTSE 100 recorded its biggest loss since November 2025 when it fell 1.2%, with airlines, luxury goods makers, and banks particularly affected. In contrast, defence stocks increased, including the UK’s BAE Systems, which was up 7% at the start of trading.

It was a similar picture in Europe. The main indices in France, Germany, Italy, and Spain were down 2.2% or more. When markets opened in the US, the Dow Jones Industrial Average and the wider S&P 500 both dropped 1%.

As the Middle East is a major oil-exporting region, conflict there led to prices rising. Deutsche Bank stated Brent crude was up 8.4%, though it added it was only the 38th largest oil spike since 1990.

The volatility continued on 3 March, with the FTSE 100 recording the biggest daily loss in 11 months when it fell 2.75%. Germany’s DAX (-3.6%), France’s CAC 40 (-3.5%), and Italy’s FTSE MIB (-3.9%) also suffered losses.

Asia-Pacific markets weren’t immune to the effects of the war in Iran either. Japan’s Nikkei index fell 3.6%, and South Korea’s KOSPI was down 12% on 4 March due to concerns about shipping through the Strait of Hormuz, a key sea passage for trade, particularly for oil.

On 11 March, the International Energy Agency proposed the largest release of oil reserves in history to bring crude prices down. The news led to Asian shares climbing, with the main indices in Japan and South Korea rising by 1.4%.

However, energy fears continued to influence European markets. On 16 March, the FTSE 100 was down by 1.9%, and the index’s 2026 gains were wiped out on 20 March.

Markets briefly rallied on 23 March following news that negotiations would take place between the US and Iran. However, there were conflicting reports that led to confusion. Despite this, US markets improved, with the Dow Jones up 2%, and construction equipment firm Caterpillar leading the way with a 4.4% rise.

UK

The Office for National Statistics said the UK economy stagnated in January 2026. The data suggests the economy was weakening even before the effects of the conflict in the Middle East were felt. Furthermore, inflation in the 12 months to February 2026 was 3%, stubbornly sticking above the Bank of England’s (BoE) 2% target.

The British Chambers of Commerce commented that the UK is stuck in a “low-growth pattern”, after the 2026 GDP forecast was downgraded from 1.2% to 1%. The organisation said the revised estimate reflects weak productivity, subdued investment, and cautious consumer spending.

At the start of March 2026, Chancellor Rachel Reeves delivered the government’s Spring Statement. In it, she said inflation would fall faster than expected, economic growth would pick up in 2027 and 2028, and there was headroom in the budget.

However, the calculations were made before the conflict in the Middle East began, which is expected to affect the economic outlook.

For instance, rising energy prices could influence inflation. Indeed, the Office for Budget Responsibility estimated the Iran war would add 1% to UK inflation this year. In turn, high inflation may lead to the BoE increasing interest rates, which would place pressure on consumers and businesses.

Data from S&P Global’s Purchasing Managers’ Index (PMI) was positive for the manufacturing and service sectors.

In February 2026, the manufacturing PMI continued to grow, recording a reading of 51.7 – a figure above 50 indicates growth – and a rise in business both at home and abroad. The service sector fell slightly compared to the previous month to 53.9, but still shows growth.

In contrast, the construction sector fell to 44.5 in February, which marked 14 consecutive months of contraction.

Europe

Across the eurozone, the annual inflation rate was 1.9% in February 2026, up from 1.7% a month earlier, and very close to the European Central Bank’s (ECB) 2% target.

The ECB opted to hold interest rates in March, but warned that uncertainty could lead to higher inflation and pose risks to economic growth, which might lead to higher interest rates in the coming months.

The European Commission consumer confidence survey highlights this fear among consumers, with the reading falling amid worries that the Iran war could drive up energy costs.

The S&P flash report on output in the eurozone fell to 50.5 in March, down from 51.9 in February. The reading represents a 10-month low, and it is close to the 50 mark, which signals stagnation.

US

As expected, inflation in the 12 months to February 2026 remained stable at 2.4%.

However, data from the Bureau of Labor Statistics was less positive. The US economy lost 92,000 jobs in February, which could be a sign that the market is cooling, and the ongoing conflict might lead to businesses taking a more cautious approach in the coming months.

A consumer sentiment survey carried out by the University of Michigan indicates that the Iran war is already influencing how confident people feel about their financial future. The reading fell from 56.6 in February to 55.5 in March.

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.

Research suggests that many small business owners and self-employed workers aren’t prioritising their retirement and could face uncertainty later in life as a result. However, opening a pension could benefit both you and your business.

According to an article from Which? (1 March 2026), people who have spent most of their working life as self-employed are three times more likely not to have a private pension.

Fluctuating earnings and a reliance on your business could mean you overlook a pension

There are many reasons why small business owners are less likely to pay into a pension.

A key one is that your earnings might fluctuate, which may make it difficult to balance your short- and long-term financial priorities. Indeed, according to Which?, 4 in 10 self-employed workers cite this as their biggest barrier to retirement saving.

Working with a financial planner to create a tailored plan could help you understand how to manage retirement contributions.

Another reason small business owners might overlook a pension is the belief that their business will provide an alternative.

Whether you plan to sell your business or continue working later in life, having an alternative way to create income could be valuable, as it’s impossible to know what’s around the corner. For example, you might struggle to find a buyer who is willing to pay the price you want, or you may decide to retire earlier than expected due to ill health.

Without a pension to fall back on, you could face difficulties if things don’t follow your plan.

Working with a financial planner to create a cashflow model could help you assess your options. A cashflow model can help you visualise how your wealth might change depending on the decisions you make.

For example, you might use it to calculate how much you’d need to sell your business for to provide “enough” in retirement, or how much to contribute to a pension to provide a base income.

The outcomes of a cashflow model cannot be guaranteed. However, it could provide useful insight when you’re making long-term decisions, such as whether to contribute to a pension.

3 practical reasons small business owners could benefit from a pension

While most employed workers are now automatically enrolled into a pension, as a small business owner or self-employed worker, it is your responsibility to open a pension. Here are three practical reasons to do so.

1. A separate pension pot could offer peace of mind

While you may hope to use your business to fund your later years, a separate pension pot could act as a safety net in case something unexpected happens.

Separating some of your finances from those of your business could help keep your retirement on track. However, you should note that you cannot usually access your pension savings until you turn 55 (rising to 57 in 2028). As a result, you might want to consider your pension contributions in a wider context, such as other savings and investments that could help you meet short- and medium-term goals or expenses.

2. A pension is a tax-efficient way to save for your retirement

If you’re saving for retirement, a pension is often a tax-efficient way to do so.

First, your contributions will usually benefit from tax relief, which means some of the tax you’ve paid is added to your pot, providing an immediate boost to your retirement savings and reducing your tax liability.

Tax relief is paid at your rate of Income Tax. Typically, basic-rate tax relief will be added to your pension by your pension provider automatically. If you’re a higher- or additional-rate taxpayer, you can claim your full entitlement through a Self Assessment form.

Second, returns made from investments held in your pension will not be liable for Capital Gains Tax, which may not be the case for investments that aren’t in a tax-efficient wrapper.

3. Pension contributions may be an allowable business expense

Paying into your pension could be tax-efficient from a business perspective. In some cases, contributions are treated as an allowable business expense, which could reduce taxable profit and the business’s overall tax bill.

Contact us to talk about your retirement

If you’d like to create a retirement plan as a small business owner, please get in touch. We could help you assess your options, including opening a pension, and create a plan that’s tailored to your needs and goals.

Please note: This article is for general information only and does not constitute advice. The information is intended only for individuals.

All information is correct at the time of writing and is 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. 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.

Managing your pension doesn’t stop once you retire and start to draw an income from it. In fact, your pension still needs careful attention in retirement – just as much as when you were contributing – to ensure you don’t deplete it too quickly.

Research suggests that many retirees aren’t taking professional advice and are potentially making financial decisions they’ll regret in the future.

According to the Financial Conduct Authority (FCA) (22 September 2025), in 2024/25, less than a third of people accessing their pension for the first time took regulated financial advice.

In addition, an FTAdviser article (5 March 2026) noted that a previous survey found that many retirees will deplete their pension by their late seventies if they maintain their current withdrawal rate, leaving the average person with a nine-year shortfall. 1 in 7 already regret how much they’ve withdrawn.

Pension Freedoms provide retirees with greater flexibility but also risk

Pension Freedoms were introduced in 2015 and changed how you could access your defined contribution pension.

With a defined contribution pension, you and your employer both contribute to a pot, which is usually invested. When you retire, you use this pot to create an income. Under Pension Freedoms, you have several options, which can provide retirees with the flexibility to create an income that suits them.

However, you’re also responsible for ensuring your pension provides an income for the rest of your life. As a result, there’s a risk that you could spend too much too soon, or that a poor financial decision has a long-lasting impact.

6 steps that could help you manage pension withdrawals in retirement

1. Consider your life expectancy

The research reported by the FTAdviser suggests the average person could deplete their pension nine years before the average life expectancy, which could leave them in a financially vulnerable position.

According to the Office for National Statistics, the average 65-year-old woman has a life expectancy of 88. For men of the same age, it’s 85.

Yet, using the average figure when assessing your pension withdrawals could still leave a gap, as many people exceed this. For example, 1 in 4 65-year-old women will celebrate their 95th birthday, and 1 in 4 65-year-old men will reach 92.

2. Calculate the effects of inflation

One of the challenges of retirement planning is that you need to consider how your expenses will change over several decades. One of the factors that will affect your outgoings is inflation.

The Bank of England inflation calculator shows that an annual retirement income of £30,000 in 2015 would need to have grown to more than £41,000 by the end of 2025 simply to maintain your spending power.

As retirements are likely to span several decades, failing to factor in inflation when creating a withdrawal strategy could leave you struggling financially day to day or at risk of depleting your pension too soon.

3. Understand your guaranteed income

Having a guaranteed income that could cover your essential outgoings could offer peace of mind.

Most retirees will receive a reliable income for life from the government once they reach the State Pension Age. In addition, you may use your pension to purchase an annuity, which would provide a regular income for the rest of your life.

The amount you receive from an annuity will depend on the rates you are offered, which may be affected by your personal circumstances and external factors. You might also select an annuity where the income rises in line with inflation to preserve your spending power or provide an income for your partner if you pass away first.

You can use some or all of your pension to purchase an annuity to suit your needs. The decision is often irreversible, so it’s important to assess if an annuity is right for you first.

4. Assess your drawdown strategy

One way you might access your pension is known as flexi-access drawdown. This allows you to withdraw money from your pension and adjust the amount to suit your needs.

For many retirees, their income needs will change. So, this option can be valuable, and it’s important to calculate what your sustainable spending rate is to avoid running out of money.

Working with your financial planner to create a cashflow model could help you visualise how long your pension would last, depending on different withdrawal rates, including if your income needs rise and fall. It’s important to note that while a cashflow model can be useful when making financial decisions, the outcome isn’t guaranteed.

5. Make potential risks part of your retirement plan

You can’t always prevent events from affecting your finances, but you might be able to take steps so you’re in a better position to manage them.

For example, maintaining an emergency fund in retirement could help you cover unexpected costs, such as property repairs, or you might draw income from it during a period of market volatility if your pension remains invested.

6. Schedule regular reviews with your financial planner

Finally, scheduling regular reviews with your financial planner could provide you with an opportunity to ask questions and assess whether your withdrawals remain sustainable. By checking your pension throughout retirement, you might be in a better position to spot potential risks to your financial security.

If you’d like to arrange a meeting to talk about your pension and retirement, please get in touch.

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.

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.

Deciding how you’d like your assets to be managed later in life and after you pass away may be intimidating. However, a cashflow model could help you answer both financial and emotional questions, so you’re in a better position to tackle your estate plan.

According to a survey conducted by Aegon (5 March 2026), 1 in 3 UK adults has done nothing to prepare for death. Even among adults who have taken steps to prepare, many haven’t completed the full process. For example, while 38% said they’d written a will, only 18% had organised their core financial documents, such as pension information, insurance details, or account records.

While it may seem that estate planning is something you can put off until later, being proactive can be valuable. Not only could it offer peace of mind, but a longer time frame could present opportunities to pass on gifts during your lifetime and make tax-efficient decisions.

Cashflow modelling can project how your wealth will change

Cashflow modelling is a powerful tool that allows you to input information about your current finances and then use assumptions to project how the value of your assets might change. You may incorporate variables like expected investment returns, planned outgoings, or when you hope to start using your pension to create an income.

The output of cashflow modelling might help you make more informed decisions.

For example, when you’re planning for retirement, you might model several different scenarios to understand how your retirement age may affect your income. Or you could use it to calculate what a sustainable income throughout retirement would be for you.

It’s important to note that the output of a cashflow model cannot be guaranteed and will be based on the information you input and the assumptions made.

However, a cashflow model could be valuable when you’re making important decisions, including those relating to your estate plan. Here are five reasons why you might benefit from using a cashflow model when you’re thinking about how to use or pass on your assets in the future.

1. Assess the impact of gifting during your lifetime

For many people, gifting to loved ones during their lifetime is a goal. You might want to help adult children get on the property ladder, boost their income, or cover the cost of a grandchild’s school fees.

However, you may be worried about how it’ll affect your financial security in the long term. A cashflow model could help you visualise the potential impact of gifting to understand if it’s an option you want to consider.

2. Decide how to pass on your estate

The value of your estate may affect how you choose to divide your assets. As a result, a cashflow model can be a useful tool when thinking about inheritances.

Understanding the value of your assets could be useful for your beneficiaries too, as their expected inheritance might influence their financial decisions.

3. Highlight when you might benefit from Inheritance Tax planning

Inheritance Tax (IHT) is a tax on your estate after you pass away if its value exceeds certain thresholds. As the value of your assets is likely to change during your lifetime, it can be difficult to assess whether IHT is something you might need to consider.

A cashflow model could highlight if your estate may be liable for IHT and potentially help you find ways to reduce the bill.

4. Support creating a care plan

Planning for care costs can be challenging. However, it may be an important part of your long-term plan.

As people live longer lives, the number of individuals who require support is expected to rise. Indeed, according to research from the Joseph Rowntree Foundation (22 August 2024), the number of people who could benefit from support with daily activities will rise from 1.7 million in 2015 to 3 million in 2040.

A cashflow model could help you assess how you’d pay for care costs should you need support later in life.

5. Test “what if” scenarios

One challenge when making decisions is understanding the long-term impact. A cashflow model could allow you to test “what if” scenarios and assess the impact they might have on your assets.

For instance, you may use a cashflow model to answer questions like:

• How would increasing my annual spending impact what I leave behind for loved ones?
• How would gifting each of my children £25,000 now affect my financial security in the long term?
• How would leaving a percentage of my estate to charity affect the inheritance my beneficiaries will receive?

Being able to visualise the effect of these decisions on your wealth might give you the confidence to move your plans forward or identify potential gaps before you act.

Get in touch

If you’d like to create an estate plan or review an existing one, please contact us.

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.

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.

The Financial Conduct Authority does not regulate estate planning, tax planning or cashflow modelling.

The current situation in the Middle East has led to market volatility. While it might seem new, similar movements have happened before, and looking at how these events have affected investor behaviour could be useful.

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.

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.

How your brain works can affect how you view wealth and different assets. For many, this can mean cash feels like a safer option than alternatives, but it’s not always the right one. Indeed, sometimes choosing to hold cash could mean you miss growth opportunities.

3 reasons why cash might feel like the “safe” option

1. Cash can feel more tangible than alternatives

One of the benefits of cash is that you can withdraw the money and hold it. This makes it feel more tangible as an asset. Even when cash is held in an account, knowing that you can access it and it’s typically simple to manage online might mean it feels more comfortable than assets like bonds or stocks.

2. Cash is accessible when you need it

You can usually access cash when required. This means it can act as a valuable safety net and feel like the safe option as a result.

3. Cash can seem more stable than other assets

While the value of cash assets does change due to inflation, the effect is often gradual. When you compare this to market movements that may affect your investments, this stability might seem attractive.

These factors, as well as others, might lead people to choose cash over alternatives because it’s perceived as safer.

According to an article published by IFA Magazine (7 March 2026), cash is taking on a more prominent role in the portfolios of high-net-worth individuals. Indeed, 38% of this group say they hold more cash than they did three years ago, with cash accounting for around £1 for every £5 of their wealth.

Inflation could mean the value of your cash falls in real terms

The value of cash can feel static. After all, when you place a sum into an account, the figure doesn’t rise and fall as other assets might. However, inflation can erode the value of cash if the interest rate doesn’t keep up.

As the cost of goods and services rises, your cash will gradually buy less as its spending power is reduced. Over the short term you might not notice this, but it can have an impact over the long term.

According to the Bank of England’s inflation calculator, if you deposited £10,000 into a savings account in 2014, it would need to have grown to £13,390 by 2024 to have the same spending power. This is due to an average annual inflation rate of 2.96%.

So, while holding cash might feel safe and be appropriate in some circumstances, you could benefit from examining the alternatives.

When you might consider investing instead of cash

Investing might be an appropriate option when your goal is long term.

Over a long-term time frame, investments have the potential to deliver returns that are above interest rates. As a result, you may consider it if your goal is more than five years away. This is because the ups and downs of market movements typically smooth out over a long period.

However, it’s important to note that investment returns aren’t guaranteed. All investments carry some risk, and assessing what level of risk is appropriate for your circumstances and goals is an essential step when creating an investment strategy.

Contact us

If you’d like to discuss how to manage your wealth, including cash, as part of a wider financial plan, please get in touch.

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.

Just over three months after her lengthy Autumn Budget, chancellor Rachel Reeves has addressed the House of Commons and delivered the government’s 2026 Spring Statement.

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.

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.

After a year filled with uncertainty and rising trade tensions, markets were calmer in December 2025. Find out what may have affected the performance of your portfolio at the end of the year.

Market volatility eased in December 2025

Markets were downbeat at the start of the month. Most European markets were in the red on 1 December, including Germany’s DAX (-1.2%), France’s CAC 40 (-0.55%), and the UK’s FTSE 100 (-0.13%).

The Bank of England (BoE) carried out stress tests on 2 December, which all major banks involved passed. This led to bank stocks rising, including Lloyds (1%), Barclays (0.95%), and HSBC (0.7%).

American technology firm Oracle Corporation missed its revenue forecast and hiked expenditure plans by $15 billion (£11.3 billion). This led to the company’s shares dropping by 15.7% when trading started on 11 December – knocking almost £100 billion off the company’s market capitalisation.

The news dragged down other AI stocks as well, including Nvidia, which became the biggest faller on the Dow Jones Industrial Average index after it tumbled 2.7%.

Despite the concerns about AI, the Dow Jones Industrial Average hit a record high after rising 0.95% on 11 December following news that US interest rates had fallen.

On 17 December, the FTSE 100 was up 1.6% following a bigger-than-expected drop in inflation, leading gains in European markets.

With Christmas nearing, festive optimism swept through London. On 19 December, the FTSE 100 closed at an almost record high, with leading firms including Rolls-Royce (2.7%) and precious metal producers Endeavour Mining (3.1%) and Fresnillo (2.8%). However, housebuilders and retailers suffered falls.

UK

UK inflation slowed to 3.2% in the 12 months to November 2025, according to the Office for National Statistics. The news led the BoE’s Monetary Policy Committee to vote to cut the base interest rate from 4% to 3.75%, with further cuts anticipated in 2026.

The headline GDP figure was weak in the UK. The economy unexpectedly shrank by 0.1% in October, according to official data.

In addition, UK unemployment hit a four-year high of 5.1% in the three months to October. This could signal a weakening economy.

However, forecasts suggest the economy could pick up in 2026. The Organisation for Economic Co-operation and Development (OECD) expects the UK to be the third fastest-growing economy among G7 members in 2026, falling behind only the US and Canada.

This view is supported by a return to growth in the manufacturing sector.

According to S&P Global’s Purchasing Managers’ Index, manufacturing grew for the first time in a year. The reading came ahead of the Budget, when uncertainty was likely to have been playing on the minds of businesses, so the improvement is particularly encouraging.

Sadly, it’s a different picture for retail.

The Confederation of British Industry (CBI) reported that retail volumes fell at an accelerated pace in December despite the festive season, and firms don’t expect any relief in the opening months of 2026.

Europe

The European Central Bank (ECB) opted to hold its interest rates in December as it noted that it’s on track for inflation to settle around its 2% target.

The ECB also raised its growth forecast for the economic bloc, driven by rising domestic demand. The bank now expects GDP to rise by 1.4% in 2025 and 1.2% in 2026.

An industrial recovery is likely to play a crucial role in the higher GDP forecasts. According to Eurostat data, industrial output increased by 0.8% in October as businesses benefited from trade uncertainty fading and falling energy costs.

However, not every part of the region is as optimistic.

The German Ifo Institute’s business climate index fell in December, despite analysts predicting a rise. The gloomy outlook is linked to two years of economic contraction in manufacturing, confidence in the service sector falling, and unhappy retailers facing lower-than-expected sales in the lead-up to Christmas.

US

US inflation unexpectedly fell to 2.7% in the 12 months to November 2025. Experts had predicted inflation would be 3.1%.

While falling inflation is good news for struggling families, rising unemployment could suggest further difficulties ahead. The unemployment rate hit 4.6%, amid apprehension about the strength of the US economy.

However, job growth was higher than anticipated in November. A total of 64,000 jobs were added, against the predicted 40,000.

The economic news led to the Federal Reserve cutting the base interest rate by a quarter of a percentage point. The base rate is now at its lowest point since 2022.

President Donald Trump permitted technology giant Nvidia to ship H200 chips to China in exchange for a 25% surcharge for the US. The move could allow Nvidia to win back billions of dollars in lost revenue, which led to its shares rising by 2.3% on 9 December.

While good news for Nvidia, the move has been criticised for being an “economic and national security failure” by some Democratic senators.

Asia

The International Monetary Fund (IMF) raised its growth forecast for China. The organisation now expects the country’s economy to grow by 5% in 2025 and 4.5% in 2026, thanks to lower-than-expected tariffs on Chinese exports.

However, the IMF also urged China to fix “significant” imbalances in its economy, primarily by shifting from export-led growth to domestic consumption.

The positive news from the IMF was supported by official trade data.

China’s trade surplus hit $1 trillion (£0.74 trillion) for the first time in November 2025, as the economy appeared to shrug off concerns about the impact of trade with the US. Exports grew by 5.9% year-on-year in November following a 1.1% contraction in October.

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.