Category: News

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.

After much speculation that the chancellor would announce an additional property tax, the new “mansion tax” was unveiled during the November 2025 Budget. Read on to find out whether it’ll affect you, and how the new tax works.

The mansion tax will apply to properties worth more than £2 million in England

Officially called the High Value Council Tax Surcharge, the mansion tax will be applied to most properties that are valued at more than £2 million from 2028. Social housing will be exempt from the tax.

In the Budget document (26 November 2025), the government estimates that the new tax will affect fewer than 1% of properties and will raise £400 million in 2029/30.

The Treasury (26 November 2026) said the introduction of the surcharge will improve fairness within England’s property tax system. It noted: “Under the current system, the average band D charge for a typical family home across England is £2,280. That is £250 more per year than a £10 million property in Mayfair, based on the band H charge in the City of Westminster, currently pays.”

While a relatively small proportion of households will pay the tax, it’s set to disproportionately affect homeowners in London and the south-east. According to a Yahoo article (25 November 2025), estate agent Hamptons estimates that 50% of homes worth more than £2 million are located in London, and 85% are located in the south-east.

The new tax will not automatically apply to properties in Wales, Scotland, or Northern Ireland. Property taxes are a devolved matter, which means each government has the power to set its own system. However, devolved governments may choose to introduce a similar tax.

The mansion tax will be collected alongside Council Tax from 2028

A consultation on the details of the scheme will take place this year, before the tax comes into force in April 2028.

Under current proposals, the tax will be collected alongside Council Tax. However, rather than the money going to local authorities, like Council Tax, it will go to the Treasury.

The proposals include four bands.

The tax could significantly affect the budgets of homeowners, who might need to review their finances to account for the additional expense.

It’s expected that properties in the top Council Tax bands (F, G, and H) will be revalued to estimate their current market value, with valuations conducted every five years going forward. As a result, homeowners could unexpectedly find they’re liable for the mansion tax.

Importantly, it is homeowners, not occupiers, who will need to pay the tax. So, if you’re a landlord with a property valued at more than £2 million in your portfolio, you may be liable for the tax.

So far, the government hasn’t revealed further details about reliefs and exemptions, including an appeal system, whether homeowners will be able to defer paying the mansion tax if they’re unable to pay immediately, and the treatment of those who are required to live in a property as a condition of their job. These areas will likely be considered during the consultation period.

The mansion tax could push down property prices at the top of the market

As the mansion tax will only apply to high-value properties, it’s unlikely to have a marked impact on the property market overall. However, it could push down property prices around each mansion tax band boundary to attract potential buyers.

Some homeowners might consider downsizing to avoid the tax altogether. However, Stamp Duty costs may make this option prohibitive for some families.

Contact us to talk about your mortgage options

If you’re searching for a new home, we could help you secure a mortgage. We’ll search the market for a deal that suits your needs, which could help you manage your budget if you need to consider the effects of the mansion tax. Please get in touch to talk about your mortgage.

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.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

In the Autumn Budget 2025, the chancellor announced that Inheritance Tax (IHT) thresholds would remain frozen for a further year, until 2031.

Upcoming changes will also see unused pensions included in an estate for IHT purposes for the first time from April 2027.

These measures could see estates facing a larger IHT liability, or coming into the scope of IHT when they may previously have been exempt.

Research has suggested that families concerned about being caught in the IHT net are taking steps to mitigate their bills. According to MoneyAge (6 October 2025), 23% of people are planning to give away money to reduce their IHT bill, with 8% saying they would even give away their home.

While gifting can help to lower your IHT liability, it’s not always a simple or straightforward solution.

Read on to discover five things you need to know before you consider gifting as part of your financial strategy.

Understanding the current Inheritance Tax landscape can help you clarify whether your estate is likely to incur any liability

There are a number of rules surrounding IHT, and having a grasp of them can help you decide whether gifting could be a beneficial option.

The current nil-rate band, the amount you can pass on free from IHT, is set at £325,000 (now frozen until 2031). This means that anything above £325,000 will be taxed at 40%.

However, the residence nil-rate band offers an extra allowance of £175,000 if you leave your main residence to your children or grandchildren (this can include those you’ve adopted or fostered, or stepchildren).

Together, these two thresholds mean that you could have an estate worth £500,000 free from IHT.

In most cases, anything you leave to your spouse or civil partner, even above the threshold, is free from IHT.

You can also transfer your allowances to your spouse or civil partner when you die, or they can do the same for you. This means that, in some cases, a couple could have a £1 million estate they can leave without generating an IHT bill.

Gifting is a popular way to reduce the value of an estate to bring it below these thresholds.

However, it’s not as simple as just giving your money away, and the government has introduced rules to prevent people from simply offloading their wealth to avoid IHT.

1. Gifts aren’t automatically exempt from Inheritance Tax

You can gift up to £3,000 annually free from IHT, and you can also make smaller one-off gifts of up to £250 per person. Gifts of any amount to your spouse or civil partner are also IHT-free.

Gifts above £3,000 are usually known as potentially exempt transfers (PETs), which means they only become fully exempt from IHT after seven years.

In some cases, PETs can be eligible for taper relief over the seven years, with the level of IHT applied dropping incrementally until it reaches 0%.

Another option is to make regular gifts, as opposed to lump sums, out of your everyday income. These can be tax-free if they meet three specific criteria.

• They are regular, forming part of your normal expenditure.
• Gifts are made from your income, such as pension, rental, or dividend income.
• You can still maintain your usual standard of living after making the gift.

Talk to us to find out if making any of these gifts could help to lower your IHT liability.

2. Gifting could potentially affect your long-term finances

You need to give careful consideration to how much you’re gifting, so that your generosity doesn’t leave you short in later years.

The rising cost of living means you may need to factor in an increased income to cover your everyday expenditure and household bills.

Health and care costs are another significant later-life consideration. It’s impossible to know if you’ll need care, or to what extent, but care costs in particular can really whittle away your wealth.

According to the UK Care Guide (1 October 2025), the average cost of a live-in home carer ranges from £650 to £1,500 per week, while average care home fees range from £27,000 to £39,000 per year, with costs rising further if you need nursing care.

It’s always a good idea to talk to your financial planner before gifting, to ensure your strategy is robust enough to withstand inflation and potential care costs.

3. There could be challenges associated with gifting certain assets

While gifting your home may seem both extremely generous and a logical way to mitigate IHT, there can be some complications you need to navigate.

If you plan to continue living in your home, this will be considered a “gift with reservation of benefit” and will still count as part of your estate for IHT purposes.

However, if you pay full market rent (not just a nominal amount), this can remove the property from your estate, but you need to be willing and able to make rental payments.

4. Is the gift right for your loved ones?

While gifting is a generous gesture, it’s always worth checking that it won’t backfire. For example, if you make large gifts to your adult children, they could potentially push them into a higher tax bracket or make them no longer eligible for benefits.

If you gift them your property, as well as the issues outlined earlier, they could face a Capital Gains Tax (CGT) bill if it isn’t their main residence and they sell it.

Doing some due diligence before making any gifts can ensure they’re beneficial for the intended recipient.

5. Could there be a more tax-efficient way to pass on your wealth?

Gifting isn’t always the most tax-efficient way to pass on your wealth, either. In some cases, putting some of your wealth into a trust can be an option to remove it from your estate.

You could also take out a life insurance policy, which is then written in trust. The policy would then pay directly to the trustees, rather than your estate, and can be used to pay an IHT bill.

Trusts can be extremely complex, and we’d always urge you to take financial advice before proceeding.

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

Language is powerful. The words you use to describe different scenarios can change how you perceive events, and the language used for retirement could lead to a pessimistic outlook.

Writing in an article for Saga (21 October 2025), lexicographer Susie Dent explains that in English, “retire” has its roots in a Latin word meaning “to withdraw”. This can conjure images of people withdrawing from the world once they give up work. You might envision retirees staying at home, with the pace of life slowing down.

Yet, for many people, that’s far from their ideal retirement. In other languages, “retirement” has a more optimistic root that could resonate with modern retirees.

Other languages celebrate the retirement milestone

Dent notes that in Spain, retirement is “jubilación”, a cousin of “jubilation”. It’s a translation that’s more likely to encapsulate the hopes many workers have as they prepare to retire.

Similarly, in Japan, post-retirement is known as “dai-ni no jinsei”, or “second life”, which encourages people to think of new beginnings rather than endings.

Other languages, including Arabic and Italian, use honorifics for retirees to signal their experience. It’s a small change in language that marks retirement as an achievement, rather than something that’s happened because you’ve aged.

This upbeat language around retirement could embolden retirees to seize the next chapter of their lives. Rather than images of retirees putting their feet up with a newspaper, this language shift could mean you’re more likely to think of retirees pursuing hobbies, keeping active, and visiting new destinations.

Whatever you want your retirement to look like, an optimistic mindset as you near the milestone could help you get more out of your next stage of life.

Dent suggests that English needs a new word for retirement that is “full of the spirit of a second life”. While you wait for the Oxford English Dictionary to reflect modern retirement, there are things you might do to change the narrative and how you think about stepping away from work.

How to turn your retirement into a joyful second life

If you want to retire from work but not from life, here are five ways you can make this milestone a celebration that suits you.

1. Focus on the freedom you’re gaining

Rather than seeing retirement as a withdrawal, think about what’s next. Retirement could present you with endless opportunities to fill your time with the things you enjoy doing.

Suddenly having the freedom to use your time as you wish can feel overwhelming. Listing what you’re most looking forward to can help you focus on the positive instead of what you might be losing.

2. Set meaningful goals

For decades, your goals might have focused on work. Perhaps you pursued a promotion or developed a skill that could advance your career. Without these goals, you might feel lost.

The good news is that you can set meaningful goals in retirement.

Some people find that volunteering or mentoring can give their retirement purpose, and they dedicate a certain number of hours a week to this goal. Others take pleasure in building new skills. Perhaps you’ve always wanted to learn woodworking or attend history lectures at your local university; now’s your time to make these goals a priority.

3. Create a social circle

Social connections are essential for wellbeing and are something you might lose when you leave the workplace.

Building a social circle, whether by meeting with family or attending groups to meet new people, could make your retirement happier. Indeed, a Harvard University study has tracked what makes people happy for more than 80 years and highlighted the importance of a social life.

Speaking to Forbes (15 August 2025), Dr Robert Waldinger, director of the Study of Adult Development, notes that close relationships and social connections are crucial for wellbeing as people age. Having supportive and nurturing relationships acts as a buffer against life stresses and protects overall health.

So, the view that retiring means “withdrawing” could be harmful. Instead, a retirement that’s filled with people who share your interests and who you enjoy spending time with could support your wellbeing.

4. Give your days some structure

Spending more time at home without the commitments of work can lead to some people feeling unmotivated or listless. Giving some structure to your days can be valuable and help you get more out of your time.

The structure doesn’t need to be rigid or account for every hour of the day – one of the joys of retirement is the freedom it offers. However, adding regular outings or tasks to your diary can prevent the days from blurring together.

5. Prepare your finances for retirement

Money worries can hold back your retirement plans and mean you’re not able to focus on getting the most out of the next chapter of your life.

A survey carried out by the Financial Conduct Authority (16 May 2025) found that 3.8 million retirees worry they don’t have enough money to last their retirement. In addition, 22% of non-retirees felt unprepared for retirement, and 31% had not thought about how they will manage financially once they stop working.

Preparing your finances before you retire could help you feel confident and embrace everything retirement has to offer. If you’d like to talk about your retirement plan and how to manage your finances, 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.

AI adoption has rapidly increased in recent years, and it has affected the stock prices of businesses operating in the sector. Find out more about the financial biases that could be driving this boom.

The rise of Nvidia, which provides essential hardware and software for AI development, demonstrates the scale of the AI boom.

In 2023, Nvidia became the seventh US company to reach a valuation of $1 trillion (£0.74 trillion). Just two years later, the BBC reported (9 July 2025) that Nvidia became the first company in the world to surpass a valuation of $4 trillion (£2.97 trillion).

Financial bias refers to unconscious emotional or cognitive tendencies that can affect your judgement when making decisions. While AI could present valuable investment opportunities, it can also be a breeding ground for financial bias.

In fact, experts have recently voiced concerns that a stock market bubble — where stock prices surpass their intrinsic value due to hype — may have formed.

According to the BBC (2 December 2025), the Bank of England warned that share prices in the UK are close to the “most stretched” they have been since the 2008 financial crisis, while equity valuations in the US are reminiscent of those seen during the dotcom bubble in the 1990s. The central bank added that a “sharp correction” could occur as a result.

4 types of financial bias that could affect decisions to invest in AI

1. Fear of missing out

The innovation of AI is exciting, and it’s easy to get swept up in it. As a result, some investors may be making decisions based on the fear of missing out (FOMO).

FOMO can mean you’re focused on what other people are doing and their outcomes. Rather than basing your decisions on logic, emotions may drive your thought process. This can lead to chasing opportunities that don’t align with your overall investment strategy.

2. Confirmation bias

Confirmation bias is the tendency to select information that confirms your existing beliefs, or to interpret data in a way that supports them.

With AI featuring heavily in the news, if you believe it’s a good investment, there are plenty of sources you can draw on. For example, the rise of Nvidia’s stock and other major technology companies could reinforce your assumptions.

While the information you use might be accurate, confirmation bias often means you dismiss data that contradicts it, even if it’s valuable. As a result, you could base decisions on only a snapshot instead of the full picture.

3. Recency bias

Recent events and the latest information are more likely to come to mind than older data when you’re assessing an investment opportunity. However, ignoring historical data could make you more susceptible to short-term trends and volatility.

Investment opportunities in the AI sector could draw your attention more than others simply because you’ve read or heard about it recently.

4. Narrative bias

Finally, AI is part of a good story. You have the chance to invest in technology that feels futuristic and has the potential to revolutionise how the world works.

You might never have expected to see AI used day-to-day in your lifetime, and this narrative can be a compelling reason to invest. A story can draw your attention, and narrative bias can also mean investors overlook facts or misinterpret them to suit the story they’ve invested in.

AI could present investment opportunities, but investors shouldn’t be driven by bias

These financial biases do not automatically mean that investing in AI isn’t appropriate for you. However, it’s important to take a measured approach.

Rather than investing because you have FOMO, you want to invest because it aligns with your risk profile and investment objectives. Recognising when bias might be influencing your decisions could allow you to take a step back and assess the situation.

Get in touch to discuss investing in AI

If you’re interested in learning more about how your portfolio already invests in technology, or if you would like to discuss opportunities, 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.

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.

Sometimes, when we make major financial decisions, the question of money must come first. Specifically: “Can I afford it?” and “Is it good value?”

However, there are other times when this question of affordability and value for money gets in the way of good financial decisions. Here are a few examples, and some tips on how to make financial decisions that support wellbeing.

The endowment effect

There is a behavioural bias known as the endowment effect. This is where we value things that we already own more than the same thing if we did not already own it.

In one experiment carried out in 1990, people were shown a coffee cup and asked how much they would pay for it. Half of the respondents were given the mug for a week first, and half were seeing it for the first time. Those who already owned the mug valued it twice as highly as those who did not.

This common tendency can lead to you wanting more money when you sell an item than you would be prepared to pay to buy it yourself.

This can spill into investing as well. For example, you may not want to sell investments even if they are no longer performing well, especially if they were inherited.

Similarly, you might value your own house higher than people are willing to pay for it.

What is value?

I once had a wealthy client who wanted to buy a painting. It was a lot of money – £20,000.

We had a long discussion, and did some financial planning to show that he could afford to buy it. He and his wife loved the look of the painting, and the subject matter of the painting was very personal to him. There was a particular place in their house where he and his wife wanted to hang it. They had several personal viewings at the gallery. In short, he really wanted that painting.

He hired an art specialist to give him advice. The specialist researched the history of the painting and discovered that the gallery had bought the painting only a few months previously for just £2,000. The client felt that he was going to be ripped off and decided not to proceed.

The net result: They don’t own that painting that they really wanted and could afford.

By focusing only on the financial element of the transaction, the client ended up not getting what he wanted.

Assessing financial decisions

Here are a few criteria one might use when making a significant financial decision. You might allocate points to each one. This process might help make the decision a little clearer.

1. Affordability

Clearly, it would be foolish to make a purchase you cannot afford, or an investment where you cannot afford to lose the money. Getting into debt to buy something you want but don’t need is unlikely to be a wise move.

However, how do you know it’s not affordable? If you have a financial plan, it can be used to test whether the purchase or investment is likely to delay achieving future objectives ,or might create financial difficulties in the long term.

Sometimes we are put off buying or investing in something because it seems like a lot of money, rather than considering whether we can afford it or if it is a good thing to buy.

2. Emotional wellbeing

Many people choose to pay their mortgage off early if they can afford to. This can be argued to be a poor financial decision – the return on investments might be higher than the interest on the mortgage. However, the feeling of being mortgage-free and living in a house that you own, for many, far outweighs a small improvement in their financial returns.

Sometimes, it is important to listen to our emotions.

3. Emotional reactions

We all have many emotional reactions which affect the decisions we make. Sometimes these emotions keep us safe and help us make good decisions. Sometimes, however, they are less helpful, as they are informed by a previous experience which may not be relevant to the current decision.

If you have an emotional reaction to a proposed financial decision, it can be a good idea to slow down. What is the cause of that emotional reaction? It might be an indication that this is not the right decision for you. It could also be that something has happened previously that you are applying inappropriately, and which is getting in the way of a good decision. Discussing this with an independent third party, such as your financial planner, may be helpful.

Focusing on the wider issues around a purchase or investment, not solely on the financial aspect, can result in better financial decisions. In this, “better” means a decision that is appropriate for your financial circumstances, and thereby leaves you feeling more comfortable and confident.

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.

After months of speculation and rumour, chancellor Rachel Reeves has delivered the Autumn Budget for 2025. In this update, we’ll explain the key changes and what they mean for you.

Last year, in her maiden Budget, the chancellor sought to balance the public finances with tax rises to cover a reported £22 billion black hole.

This year, Reeves arguably faced an even more difficult landscape. In turn, she has announced an estimated £26 billion of tax rises by 2029/30.

The chancellor had to start her speech, however, by acknowledging the “deeply disappointing” and “serious error” of the Budget announcements being released early by the Office for Budget Responsibility (OBR).

It’s also notable how many predictions ultimately proved to be wide of the mark.

Now that we know exactly what’s included, it’s important to understand the changes and how they could affect you.

The headlines regarding GDP, national debt, and inflation

The chancellor says the government’s plans will reduce borrowing more over the rest of this parliament than any country in the G7.

GDP is expected to grow by 1.5% in 2025, higher than the OBR’s 1% forecast from earlier this year. In subsequent years, the estimations are as follows:

• In 2026, the economy is forecast to grow by 1.4%, below the previous forecast of 1.9%.
• In 2027, GDP is forecast to expand by 1.6%, falling short of March’s estimate of 1.8%.
• In 2028, GDP is estimated to rise by 1.5%. In March of this year, the OBR said this figure would be 1.7%.
• In 2029, the economy will expand by 1.5%, again falling short of the previous estimate of 1.8%.

Due to weaker underlying productivity growth, the OBR estimates that tax receipts will be £16 billion lower in 2029/30 than initially forecast in March 2025.

Average inflation is expected to fall over the next three years.

• In 2025: 3.5%, an increase of 0.2% from the OBR’s original forecast.
• In 2026: 2.5%, up from the OBR’s 2.1% forecast from March.
• In 2027: 2%.

National debt will stand at £2.6 trillion this year. £1 in every £10 the government spends is on debt interest.

Tax threshold freezes extended until 2031

The Labour manifesto promised not to increase Income Tax or National Insurance (NI), and despite pre-Budget speculation, the government has kept to that promise in this Budget.

However, the chancellor did announce that the Income Tax thresholds will remain frozen for a further three years beyond the previous 2028 freeze, staying where they are until April 2031. This move will raise £8 billion for the government. Similarly, the Inheritance Tax (IHT) threshold freeze is extended from 2030 to 2031.

While this will not increase your Income Tax or IHT bills directly, this fiscal drag means more of your income and wealth may be exposed to tax over time.

The government is also upholding its commitment to bringing pension pots into the scope of IHT from April 2027, and reforms to relief for business and agricultural assets from April 2026.

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

Tax rates are set to rise for dividends, savings, and property income.

• Dividends: From April 2026, ordinary and upper rates of tax on dividend income will rise by two percentage points to 10.75% and 35.75% respectively. There is no change to the additional rate, which will remain at 39.35%.
• Property and savings: From April 2027, the rate of tax on property and savings income will increase by two percentage points across all tax bands to 22%, 42%, and 47% respectively.

The government confirmed that, even after these reforms, 90% of taxpayers will still pay no tax on their savings. However, these changes are set to impact business owners and landlords.

The chancellor says these increases will raise £2.2 billion in 2029/30.

The ISA allowance will be reformed for under-65s, and some allowances have been frozen

The chancellor announced that from April 2027, the Individual Savings Account (ISA) allowance will change for under-65s.

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

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

Savers over the age of 65 will continue to be able to save up to £20,000 in a Cash ISA each year.

The allowances for Junior ISAs and Lifetime ISAs are frozen until April 2031 at £9,000 and £4,000 a year, respectively.

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

The chancellor put a cap on NI-efficient pension contributions made under salary sacrifice.

Salary sacrifice schemes cost the government £2.8 billion in 2016/17, but this figure was set to triple to £8 billion by 2030/31.

The government will charge employer and employee National Insurance contributions (NICs) on pension contributions above £2,000 a year made via salary sacrifice. This will take effect from 6 April 2029.

The chancellor says that many of those on low and middle incomes will be able to continue using salary sacrifice as normal, while high earners can expect to pay increased NI.

New “mansion tax” on high-value properties

The chancellor announced the much-speculated “mansion tax” that will affect the top 1% of properties.

The new property surcharge will be paid alongside Council Tax.

There will be four price bands starting with £2,500 for a property valued between £2 million and £2.5 million. For properties valued more than £5 million, the levy will be £7,500.

The measure is estimated to raise £400 million by 2031.

Welfare reforms expected to increase by 2029/30

The BBC reported that changes to the government’s previously announced winter fuel payments and health-related benefits will cost £7 billion in 2029/30.

In addition, Reeves revealed she would remove the two-child benefit cap. This will cost £3 billion by 2029/30.

State Pension: Removal of overseas access to Class 2 National Insurance contributions and committing to the triple lock 

As a result of a loophole in the Class 2 voluntary NICs regime, overseas individuals with a limited connection to the UK can build a State Pension entitlement through cheaper rates.

The government is looking to end this by removing access to the cheapest Class 2 NICs for these individuals. Additionally, it will increase the initial residency or contribution requirements for those living outside the UK.

The chancellor also confirmed the government’s commitment to the triple lock. From April 2026, this will increase the basic and new State Pension by 4.8%, offering up to an additional £575 per year to pensioners, depending on their entitlement.

A range of significant changes for business owners

In addition to the Dividend Tax increase, the chancellor announced a range of changes that could affect business owners, including:

• Increases to both the National Living Wage (NLW) and National Minimum Wage (NMW). From 1 April 2026, the NLW paid to workers aged 21 and over will rise by 4.1%, from £12.21 to £12.71 an hour, increasing annual income by approximately £900 a year for full-time employees. For those aged 18 to 20, the NMW will rise by 8.5% from £10 to £10.85 an hour, equivalent to around £1,500 a year if working full-time. For 16- and 17-year-olds, and those on apprenticeships, the NMW will rise by 6%, going from £7.55 to £8 an hour.
• Listing Relief from Stamp Duty Reserve Tax for some businesses. The chancellor said this will “make it easier for entrepreneurs to start, scale, and stay in the UK”.
• Reduced Capital Gains Tax (CGT) relief for Employee Ownership Trusts (EOTs). When a business is sold to an EOT, CGT relief will fall from 100% to 50% starting from November 2025. This will raise £0.9 billion from 2027/28 onwards.
• Fully funded apprenticeships for under-25s. This will make them effectively free for small- and medium-sized businesses (SMEs) from April 2026.
• Lower business rates for more than 750,000 retail, hospitality, and leisure properties. That move will be funded through higher rates on properties worth £500,000 or more, such as warehouses used by online retail.
• Customs duty will apply to parcels of any value from March 2029 at the latest. There is an existing exemption for parcels worth less than £135, favouring large-scale importers.

Other announcements that may affect you

• Household energy bills will fall. Reeves is scrapping the Energy Company Obligation (ECO) scheme, saying that on average, families will save £150 a year in 2026.
• A new tax on electric vehicles. The Electric Vehicle Excise Duty (eVED) will come into effect in 2028 and equal 3p per mile for battery electric cars and 1.5p per mile for plug-in hybrids. The rate per mile will increase annually in line with the CPI.
• Fuel duty will be frozen until September 2026. In addition, a new “fuel finder” will help drivers find the cheapest fuel, saving the average household £40 a year.
• Reducing the levy threshold on soft drinks. From 1 January 2028, the sugar tax will also be applied to milk-based drinks, including bottled milkshakes and lattes.
• A spousal exemption for agricultural and business asset IHT relief. Unused combined business and agricultural asset IHT relief will become transferable between spouses and civil partners.
• Tobacco Duty and Alcohol Duty will both be uprated. Tobacco Duty will be uprated as announced last year, and Alcohol Duty will now rise with inflation.
• Rising taxes on online gambling. From April 2026, Remote Gaming Duty will increase by 21% to 40%. A new Remote Betting Rate set at 25% will be introduced from April 2027, though horse race betting will be exempt from the changes.

Other key thresholds that remain the same

More broadly, the chancellor made no mention of other key thresholds that will remain the same. These include:

• The pension Annual Allowance
• Stamp Duty Land Tax for residential properties
• The headline rates of Income Tax, NI, and VAT, as outlined in the government’s election manifesto.

Please note

All information is from the Budget documents on this page.

The content of this Autumn Budget summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

While we believe this interpretation to be correct, it cannot be guaranteed, and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.

There were ups and downs for investors during September 2025, with disappointing economic data dampening the market at times. However, some positive outcomes also emerged. Read on to find out what might have influenced your investment portfolio’s recent performance.

Investors turn to gold as market uncertainty continues in September 2025

The price of gold reached a record high of $3,508.50 (£2,600) an ounce on 2 September. Gold is often viewed as a “safe” asset, so the rising value could signal that investors are feeling nervous about the outlook for the equity market.

As gold prices rose, markets in the UK, Europe, and the US declined.

On 2 September, the FTSE 100 fell 0.43%. Among the biggest losers were retailers Marks & Spencer (-3.6%) and Sainsbury’s (-2.5%), and housebuilders Taylor Wimpey (-3.4%) and Barratt Redrow (-2.5%).

Similarly, key indices fell in Europe and the US, including Germany’s DAX (-1%), Spain’s IBEX (-0.9%), Italy’s FTSE MIB (-0.9%), and the US’s S&P 500 (-1.2%).

Shares in airlines tumbled on 4 September after Jet2 told investors it expected earnings this year to be on the lower end of forecasts. The announcement sent the company’s shares down 14% and had a knock-on effect on other airlines, including easyJet (-4.2%) and IAG (-2.3%).

Rising tensions between Russia and Europe led to defence company BAE Systems’ share price rising 2.9% on 11 September. The jump made the company the biggest riser on the FTSE 100, which gained 0.37%.

On 11 September, hopes that the US Federal Reserve would cut interest rates lifted the major Wall Street indices, including the Dow Jones (0.5%) and S&P 500 (0.25%).

Then, on 24 September, after President Donald Trump said that Nato aircraft should shoot down Russian aircraft entering its airspace, European defence stocks jumped. The two biggest risers on the FTSE 100 were Babcock International (1.9%) and BAE Systems (1.5%). Other companies whose share prices increased included France’s Thales (1.7%), Germany’s Rheinmetall (1.4%), and Italy’s Leonardo (2.8%).

After signs that the US trade war had eased in August, Trump unveiled new tariffs on 26 September.

From 1 October, medicines and pharmaceutical goods will face a 100% tariff when entering the US. Unsurprisingly, this caused shares in firms within this sector to fall, including AstraZeneca (-1.4%). The US will also impose tariffs of between 25% and 50% on other goods, including heavy-duty trucks and kitchen cabinets.

UK

Official data for July showed GDP was unchanged from the previous month.

The inflation rate for the 12 months to August was 3.8%, prompting the Bank of England to keep interest rates static.

UK borrowing costs reached a 27-year high in September due to higher interest rates on national debt. The additional cost ate into the headroom available in the November Budget, placing pressure on the chancellor, who reportedly needs to plug a £50 billion gap in the public finances.

The effect of Trump’s trade war was also visible in the figures released in September. According to the Office for National Statistics, the trade deficit widened by £400 million to £10.3 billion in the three months to July 2025.

Data from S&P Global’s Purchasing Managers’ Index (PMI), an economic indicator, painted a weak picture for the manufacturing sector. The PMI reading was 47 in August (readings above 50 indicate growth). This was the 11th consecutive month the PMI remained below 50.

However, the PMI data wasn’t all negative. The service sector hit a 16-month high in August 2025 with a reading of 54.2. Encouragingly, sales to the EU and US rose, which could suggest long-term growth.

Technology investors welcomed the news that US tech giant Nvidia pledged to invest £2 billion in UK firms, which could boost the sector.

Europe

Inflation across the eurozone was 2.1% in the 12 months to August 2025, only slightly above the European Central Bank’s (ECB) target of 2%. Cyprus recorded the lowest inflation rate in the European Union at 0%, while Romania had the highest rate at 8.5%.

The ECB raised its eurozone growth forecast for this year to 1.2%, up from 0.9% in June. However, it tempered this rise with a slightly lower forecast of 1% for 2026.

The bloc also received other positive news. HCOB’s eurozone manufacturing PMI was 50.7 in August, a 14-month high. Meanwhile, unemployment dipped to a record low of 6.2% in July, according to data from Eurostat.

The European Commission’s economic sentiment tracker improved in September, suggesting greater confidence in the outlook after the EU struck a trade deal with the US.

This month also saw an interesting initial public offering for investors. Swedish fintech company Klarna is set to debut on the New York Stock Exchange with a value of more than $14 billion (£10.9 billion).

US

US inflation continued to be above the Federal Reserve’s 2% target at 2.9% in the 12 months to August 2025. This was partly due to businesses passing on the cost of tariffs to consumers.

The data led to the Federal Reserve cutting the interest rate by 25 basis points, and economists expect further cuts before year-end.

Job data from the Bureau of Labor Statistics may suggest that businesses aren’t feeling confident enough to hire new employees. The US economy added only 22,000 new jobs in August, well below the expected 75,000.

Alphabet, Google’s parent company, reached a new high on 15 September after shares increased by almost 4%, pushing its value to $3 trillion (£2.2 trillion) for the first time.

News was less positive for Tesla. The company’s share of the US electric vehicle market fell to 38%, down from more than 80% at its peak, amid rising competition.

Asia

The effects of Trump’s trade war were evident in official figures from China.

Chinese export growth slowed to a six-month low in August. Exports increased by 4.4% year-on-year, down from 7.2% in the previous month. Shipments to the US fell 33%, and a 22.2% rise in exports to Southeast Asian nations wasn’t enough to offset the decline.

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.

Your home is likely to be one of the largest assets you own. Indeed, according to the Halifax House Price Index, in August 2025, the average house in the UK was worth almost £300,000. So, you might be wondering how to efficiently pass on your property, including gifting your home to your children, to minimise an Inheritance Tax (IHT) bill.

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

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

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

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

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

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

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

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

Usually, you’ll have two options to gift a property to reduce an IHT bill:

1. Leave your home forever, as if you had sold it. This might be a useful option if you own multiple properties and wish to pass on your home or other property during your lifetime.
2. Remain in your home and pay market rent to your child, who would now be the owner. While this option may reduce an IHT bill, your child might need to pay Income Tax on the rent they receive.

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

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

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

Transferring equity to your child could be an alternative option

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

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

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

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

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

Contact us to talk about how to make your property part of your estate plan

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

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

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

On 26 November, the chancellor, Rachel Reeves, will deliver the government’s Autumn Budget, setting out fiscal plans for the year ahead and beyond. There’s speculation that some of the announcements could affect homeowners, including changes to Stamp Duty.

According to a September 2025 article from the BBC, the National Institute of Economic and Social Research estimates the chancellor will need to plug a £50 billion gap in public finances.

While the chancellor has played down this figure, it has led to expectations that taxes will increase or public spending will be cut. One such tax that headlines suggest could be mentioned in the Budget is Stamp Duty.

Stamp Duty is a tax you pay when you purchase property or land

In England and Northern Ireland, Stamp Duty is a type of tax you pay when you purchase land or property.

In 2025/26, the Stamp Duty rates are:

Usually, if you own another residential property, you’ll pay an additional 5% on the rate above.

If you’re buying your first home, you may benefit from a relief. This could mean you don’t need to pay Stamp Duty (if you’re buying a property for £300,000 or less) or you pay Stamp Duty at a reduced rate (if the property is worth between £300,001 and £500,000).

There are similar taxes in Wales and Scotland, though the thresholds and rates are different. As these taxes are set by the Welsh and Scottish governments, an announcement in the Budget about Stamp Duty may not affect homebuyers in these areas.

Stamp Duty has been criticised for discouraging moving

Stamp Duty has been criticised as inefficient in the past.

As home movers face a large, one-off cost, Stamp Duty can be a deterrent for moving, which may lead to people staying in homes longer than they otherwise would. For example, empty nesters might put off downsizing because they don’t want to pay Stamp Duty.  Not only does this affect the family that decides not to move, but it can also mean there isn’t as much choice on the property market overall.

It seems that movers expect there to be changes in the Budget and are worried about the uncertainty.

According to research published by the Intermediary in October 2025, 1 in 5 homeowners have said they are putting plans to sell on hold ahead of the November Budget.

3 ways the chancellor could change property taxes in the Budget

It’s important to note that reported changes to property taxes are just speculation at this stage. We won’t know exactly what changes, if any, will be implemented until 26 November.

However, here are three options Rachel Reeves may be weighing up.

1. Increasing Stamp Duty rates

If Reeves is looking to raise taxes, one simple option might be to increase the existing Stamp Duty rates. However, this could have a damaging effect on mobility, and lead to property sales falling, which could cut government tax receipts and make it harder for first-time buyers.

2. Introducing an annual property tax

One proposal suggests scrapping Stamp Duty and replacing it with an annual property tax. This would likely be a tax paid by homeowners in properties valued above a certain threshold, reportedly £500,000, and could potentially replace both Stamp Duty and Council Tax.

While this would be welcome news for some homemovers, it’s likely to disproportionately affect buyers in London and the south-east, where property prices are higher.

3. Creating a “mansion tax”

There’s also talk of a possible “mansion tax” for homes valued at more than £1.5 million. Under this proposal, homeowners would lose private residence relief on their main home and would pay Capital Gains Tax (CGT) on any increase in the property’s value when they dispose of it.

It could result in large bills, as higher-rate taxpayers pay CGT at a rate of 24% in 2025/26.

Contact us to talk about your mortgage

Choosing the right mortgage option for you could cut your costs over the long term. So, if you’re planning to move home in the coming months and need to take out a new mortgage, contact us to find out how we could help.

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.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.