The government is reportedly looking at increasing capital gains tax (CGT) rates to help those on the lowest incomes.

The prime minister Andy Burnham and chancellor John Healey are understood to be mooting raising capital gains tax rates to as high as 45% to pay for a potential £3,000 hike to the tax-free personal allowance from £12,570 to £15,570.

The proposal is presented in a Budget submission from the Labour donor and green energy entrepreneur Dale Vince, The Telegraph reports.

According to modelling by economic research institute the National Institute of Economic and Social Research (NIESR) commissioned by Vince and seen by the publication, a £3,000 increase in the personal allowance would leave the lowest fifth of earners £600 a year better off.

It would cost the Treasury £20 billion but could be funded by increasing CGT rates and ending interest payments on Bank of England reserves while Vince said giving money back to lower earners through a lower income tax bill would also help stimulate the economy.

The proposals are reportedly being considered by the Treasury and No.10 ahead of the Autumn Budget next month.

A Treasury spokesperson said: “As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”

What are the current rates of capital gains tax?

Currently, basic rate taxpayers pay a capital gains tax rate of 18%, while higher and additional rate taxpayers pay 24%.

The capital gains tax allowance is £3,000 per year, so you’re only taxed on any capital gains which exceeds this.

CGT has been targeted by both the previous Conservative Party government and the current Labour government in recent years.

The lower and higher rates of CGT were raised with immediate effect in the 2024 Autumn Budget while the tax-free allowance was slashed from £12,300 to £6,000 in 2023 and then halved to £3,000 in 2024.

Is there support for a capital gains tax hike?

A number of people close to Burnham have called for a change in the CGT rules to drum up cash for the Treasury.

In May, Louise Haigh, now first secretary of state, called for CGT to be brought closer to income tax rates.

“It would shift the taxation burden away from punishing work, and towards unproductive capital accumulation which does little to grow the everyday economy,” she said in an essay published in the Renewal journal.

In the same month, defence secretary Wes Streeting also called for CGT rates to rise in line with income tax bands.

Dan Neidle, tax lawyer and founder of the Tax Policy Associates think tank, said he thought Streeting’s proposal was “good”, suggesting the extra money brought in from raising CGT could be used to cut the basic rate of income tax.

“That would be a brave thing for a Labour politician to do, but in my opinion the right thing at this moment. Spend the rest on e.g. defence,” Neidle said.

However, the Centre for Policy Studies (CPS) has suggested significantly raising CGT rates could actually cost the Treasury money, as it would lead to behavioural changes.

Daniel Herring, head of economic and fiscal policy at the CPS, said: “It punishes the kind of productive investment the country needs to grow, those most likely to pay it can and will leave the country.”

Soaring oil prices have pushed UK inflation to a five-month high. Consumer prices rose 3.1% in the year to August. Motor fuel prices rose nearly a quarter, with petrol rising to 161.3p per litre and diesel hitting 181.8p. Brent crude is back above $100 a barrel. Trading at $108 as of Wednesday, it has risen 78% since the start of the year.

While there is no end in sight to America's war with Iran, until recently the White House had seemed to be gaining the upper hand in the economic battle. Despite the closure of the vital Strait of Hormuz artery, oil prices had stayed below $100 for several months. That was in large measure thanks to clandestine shipments through the strait – high-risk “dark crossings” made by crude tankers with their transponders turned off so as to evade Iranian detection, say Dmitry Zhdannikov and Anushree Ashish Mukherjee for Reuters.

Together with pipelines that circumvent the Strait of Hormuz, the “industry consensus” is that roughly two-thirds of pre-war Persian Gulf volumes are still making their way out of the region. All told, such “dark shipments” may have reached 500 million barrels between June and August, enough to put a meaningful dent in the world's thirst for fuel.

Now the pendulum is swinging the other way. Last week, Saudi Arabia was forced to close its vital east-west pipeline following attacks by Iranian-backed militias in Iraq. That may cut global oil supplies by as much as 3.6 million barrels per day, equivalent to 3.6% of global demand, according to analysis by Kpler.

Pipelines have been a major tool for bypassing Hormuz, but these strikes are a reminder that they can be destroyed, Anne-Sophie Corbeau of Columbia University tells the BBC. In war, pipelines are “sitting ducks”.

Meanwhile, the alternative Red Sea route is coming under renewed threat from Yemen's Houthi militia, says Gideon Rachman in the Financial Times. The Houthis are a tough nut to crack. They have been fighting better-equipped enemies for more than two decades. The persistence of the Taliban, another US adversary that ultimately outlasted Washington's patience, comes to mind. Another vital energy route is being squeezed just as the northern hemisphere enters winter.

Surging oil price at the root of the debt crisis

Surging energy prices and inflation are the root cause of the global spike in government borrowing costs, says Aaron Back in The Wall Street Journal. The benchmark US ten-year Treasury this week topped 5% to hit its highest level since 2007. After years of deficit spending and the “twin crises” of Covid-19 and Russia's invasion of Ukraine, the world's developed nations entered this year in a “weakened fiscal position”. That was “the dry timber that the Iran war now threatens to set ablaze”.

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“We really do earnestly believe AI could kill all humans!”, says Anthropic researcher Evan Hubinger on X. He thinks there is more than a 10% chance we could all be dead “within the next decade”. Talk of AI's apocalyptic potential is in the air. Senior figures at AI labs are said to be terrified by the capabilities of recent models, which could be used to create bioweapons or elude human control and go rogue. The panic hit a new level at the weekend when a group of AI CEOs, including Dario Amodei – Hubinger's boss at Anthropic – publicly backed calls for a slowdown in AI development.

Anthropic: the AI company at the centre of a media storm

Scary stuff. Perhaps Silicon Valley really has been seized by a collective spasm of conscience about the consequences of building AI. Or maybe this is a PR campaign so slick and devious that it would make Alastair Campbell weep. For one thing, the timing is highly suspicious. Anthropic, the AI startup at the centre of the current media storm, is preparing to launch the largest initial public offering (IPO) in history in a matter of weeks.

A basic tenet of critical thinking is to pay attention to vested interests. Dario Amodei is not a neutral commentator. He is trying to secure an IPO valuation of up to $2 trillion. Yet much of the tech media, keen for a dramatic story, uncritically treats the self-serving pronouncements of AI executives as objective statements of fact.

The more conspiratorially minded pointed out that the tweet by Jacob Coxon, the Anthropic researcher whose resignation triggered the latest news cycle, was viewed 140 million times despite the fact that his account had almost no prior activity. While Coxon's concerns are probably genuine, the way his message was picked up and boosted by multiple influential figures appears less than organic.

On the face of it, it's not obvious how dire warnings about existential risk would be beneficial to the AI industry. Big tobacco spent years suppressing information about the dangers of its products. So why are AI executives so keen to talk about how their technology could be used by terrorists or lead to the extinction of swathes of white-collar work?

Is Anthropic doom trolling?

The answer, as Cal Newport, a computer science professor at Georgetown University, argues, is the pervasive use of a marketing technique he calls “doom trolling” (a spin on phone addicts' “doom scrolling”). Fear sells. Outrageous claims about the dangers of large language models (LLMs – the currently favoured AI technology) go viral, generating vast amounts of free media coverage for the company that originated them. Talk of existential risk makes AI products appear hugely powerful and desirable.

This buzz helps to distract from the less exciting reality. Yes, LLMs can do impressive things in highly structured domains such as coding and translation, where clear failure conditions help limit their tendency to go off the rails. In other areas (including journalism), their catastrophic tendency to make up information greatly circumscribes their usefulness.

In short, the LLM is a new software category, but investors are not going to pay trillions of dollars for a newer version of Microsoft Excel. Instead, these tools must be imbued with a dark, apocalyptic glamour. Such doom-mongering is longstanding industry practice. As Parmy Olson notes on Bloomberg, in 2019 OpenAI said it would hold back its GPT-2 model from general release on the grounds that it was too dangerous – this for an LLM that struggled to answer primary-school-level reasoning tasks. Terrifying indeed.

This year the AI doom campaign has been turned up to max. Barely a week goes by without claims (all originating from within the AI companies themselves) that a bot has gone on a rogue hacking spree, CEOs, including Anthropic's Dario Amodei, have backed a slowdown in the development of AI or that a new model can't be released because it creates serious cybersecurity risks (it is then released shortly afterwards anyway). The effect has been to generate precisely the sort of frenzied atmosphere that one would want to surround a trio of high-stakes AI-linked IPOs: SpaceX in June, Anthropic scheduled for October, and OpenAI sometime next year.

Who benefits from AI doom trolling?

The AI industry's calls for regulation carry the whiff of “regulatory capture”. Government red tape is more burdensome for upstarts than it is for big established players. New safety regulations could help AI leaders throttle the competition. There is persistent suspicion that Anthropic's Amodei would like to see regulations that effectively excludes his main competitor – cheaper, open-source, often Chinese AI – from major Western countries. If you can't beat them, ban them.

It is also possible that calls for a slowdown represent an attempt to put a brave face on the fact that the AI arms race is becoming too expensive. OpenAI is on course to spend $45 billion this year alone on training and inference (the cost of running AI), but the performance of new models is running into diminishing returns. That isn't an ideal backdrop in which to successfully list a growth company. Instead of breaking the bad news to investors and tanking the valuation, why not piously tell the media you are choosing to slow down development because of your abundant love for humankind?

Don't fall for the hype

What does all this mean for ordinary investors? For starters, don't fall for the tech hype machine. Steer clear of this year's big flashy IPOs, a crowded trade if ever there were one. Secondly, diversify widely. Continue to look for the sort of underexplored investment themes that we cover in depth. And finally, keep your head. There is no knowing how long the current AI fever will last, nor exactly how wide the damage will be when it breaks, but you can at least regain some tranquillity by tuning out the endless talk of doom. Perhaps AI really will kill us all in some hypothetical future. But for now, it is the AI-marketing hype that represents a clear and present danger to our collective mental health.

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Challenger bank Monzo has launched a new credit card offering customers the chance to earn cashback and automatically invest it.

There are many cashback credit cards on the market, letting you earn rewards on your everyday spending, but Monzo’s new Aura card is the first in the UK to allow you to auto-invest any cashback you earn.

The card has a monthly £15 fee (£180 a year) and can be opened by existing Monzo customers aged 18 or over who have a Monzo current account.

The account is being gradually rolled out so might not be available to open yet. Monzo said it will contact customers to let them know when they can apply.

Luke Enock, general manager of borrowing at the bank, said: “We know our customers really value products that deliver both immediate benefits and longer-term financial progress in one.

“For the first time, Aura combines fee-free auto-investing and cashback as you spend, so every purchase has the potential to do more.”

What’s on offer from Monzo’s Aura credit card?

The Monzo Aura card offers 1% cashback on food shopping and 0.5% on everything else. Cashback is uncapped so there’s no limit on how much you can earn.

The average person spends £33 on food and non-alcoholic drinks each week, according to the government, or £1,716 a year. Someone spending this amount would get £17.16 in cashback a year from the Monzo Aura card.

If that person spent £10,000 a year on everything else, they would receive £50 in cashback.

The Aura card also comes with a range of perks which Monzo says are worth £360 a year, including an Apple TV subscription which is typically £9.99 a month and Google AI Plus which costs £4.49 a month.

You also get two airport lounge passes and two airport fast-track passes per year.

The card has a representative APR of 64.2% (variable) because of the high £15 monthly fee, but the purchase rate, which is applied if you don’t pay off your balance in full each month, is 29% per year (variable).

Credit cards in the UK come with Section 75 protection. This means the credit lender is jointly liable with the retailer if anything goes wrong with a purchase, if it is more than £100 and up to £30,000.

How does Monzo Aura’s auto-invest feature work?

The main unique selling point of the Aura card is the auto-invest feature on cashback earned. The feature can be turned on and off when you want.

You can invest in a range of exchange-traded funds (ETFs) including the FTSE 100, S&P 500 and Nasdaq, as well as exchange-traded commodities (ETCs) in gold and silver.

You will pay a fund management fee to asset management firm BlackRock, but it comes out of the value of your investments rather than as a separate charge.

The value of your investments could go up or down and you may get back less than what you put in.

How does Monzo’s Aura credit card compare?

The American Express Platinum cashback credit card is arguably more competitive – you can get 5% cashback (up to £125) on purchases for the first three months, dropping to 0.75% on spending up to £10,000 per year afterwards.

It also has a lower £25 annual fee versus Monzo’s £180 per year fee. Its purchase rate is a similar 29.1% per year (variable).

American Express also has an Everyday cashback credit card with no annual fee offering 5% cashback (up to £125) on purchases for the first three months, dropping to 0.5% on spending up to £10,000 per year afterwards. The purchase rate is 29.1% per year (variable).

Santander’s Rewards Credit Card comes with no monthly fee and offers 3% cashback on travel, eating out and takeaways and 0.25% on food shopping in your first year. After the first year, you earn 0.25% on everything.

You can also get 35% off Santander Travel Insurance.

Rachel Springall, finance expert at data firm Moneyfactscompare, said: “The Aura card will be of most benefit to consumers who use a credit card as their preferred choice when covering everyday expensive and frequent grocery bills, but also those who might want to automate small investments through the cashback they earn.

“As with every credit card, it’s important to pay off debts before interest applies, because interest charges could wipe out the benefits of the cashback offer. Clearing the balance every single month will be essential.”

One of the biggest appeals of investment trusts is their ability to pay out dividends, even during tougher economic times.

However, some investment trusts are better than others at consistently increasing the amount they return to their shareholders.

The Association of Investment Companies (AIC), an industry body representing investment trusts, tracks so-called ‘dividend heroes’ – investment trusts which have raised dividends for at least 20 consecutive years.

Annabel Brodie-Smith, director at the AIC, said: “Investment trusts can achieve these impressive long records of dividend growth because they can smooth their flow of dividends.

“A trust can retain up to 15% of the income it receives each year, and this reserve of income can be used to boost dividends when markets are difficult.

“Dividends are never guaranteed, but these long records of resilient dividend growth are much appreciated by income investors.”

The investment trust dividend heroes with the longest dividend-raising streaks

The City of London Investment Trust (LON:CTY) topped the AIC’s list, having increased its dividend payout every year for the last 60 years. The trust invests in UK-listed equities, with top holdings as of 31 July including HSBC, Shell and NatWest.

The trust says its focus is on providing a steady income stream to customers in dividends as well as delivering long-term growth on investments.

“By reaching this milestone we celebrate not only 60 years of consecutive annual dividend increases, but also the resilience of the UK market and indeed the benefits afforded to us by the investment trust structure,” said Job Curtis, fund manager at the investment trust.

“Our investment approach prioritises patience, valuation discipline and long-term thinking, all of which has allowed us to navigate the varied market conditions of the past six decades.”

Three investment trusts could join City of London in the 60+ threshold next year, having been consistently raising dividends for the last 59 years: Bankers Investment Trust (LON:BNKR), Alliance Witan (LON:ALW) and Caledonia Investments (LON:CLDN).

Bankers Investment Trust’s main focus is on holding a global portfolio of stocks selected for their potential to grow and generate increasing income over time.

Its largest holdings as of 31 August are in chip designer Nvidia, cloud and e-commerce giant Amazon and chipmaker Taiwan Semiconductor Manufacturing: holdings also include American aerospace and defence firm RTX as well as Japan Post Bank.

Alliance Witan is run by 11 fund managers who pick high-conviction stocks from around the world with the goal of delivering long-term returns through capital growth and a rising dividend.

Top holdings as of 31 July are Microsoft, Alphabet and Taiwan Semiconductor, alongside smaller holdings in drinks firm Diageo and Samsung Electronics.

Caledonia invests in public and private companies across the globe, but mostly in North American, UK and Asian-listed stocks, including family services company Stonehage Fleming and investment company Cobepa.

Which investment trust became a dividend hero in 2026?

BlackRock Greater Europe (LON:BRGE) became a dividend hero in May, when it reached its twentieth consecutive year of increased dividends.

The investment trust invests in equities across more than a dozen European countries, with 22.5% based in the Netherlands, 16% in France and more than 16% in Switzerland.

Stocks are held across a range of sectors such as technology, energy and healthcare. The trust has a dividend yield of 1.22% and has grown its dividend at an annualised rate of 3.06% over the last five years as of 11 September, according to Morningstar data.

Andrew Impey, chair of BlackRock Greater Europe Investment Trust, said: “We are pleased to have delivered 20 consecutive years of dividend growth to our shareholders, reflecting the resilience of BlackRock Greater Europe’s underlying portfolio holdings through different market cycles.

“This resilience is underpinned by BlackRock’s highly regarded and well-resourced European team, which seeks to identify the best investment opportunities across Europe, focusing on companies with durable competitive advantages and quality management teams committed to long-term value creation.”

Source: theaic.co.uk / Morningstar, as of 11 September, 2026

Investors holding cash in their stocks and shares ISA face a triple blow from next year when new rules come into effect.

From April 2027, any interest earned on uninvested cash held in a stocks and shares ISA will be taxed at 22%. Investors will also be barred from moving cash from their stocks and shares ISA into a cash ISA.

With many investment platforms paying low or no-interest on cash balances, experts are urging investors to check what interest their earning on uninvested cash held in their stocks and shares ISA, and consider if they could be left worse-off or trapped.

Almost half (46%) of stocks and shares ISA providers pay 0% interest on cash, according to research by consumer group Fairer Finance, while 84% of platforms pay less than 3% – a level below the average for a savings account.

Once the new rules come into force, investors who want to continue holding the cash will either need to swallow low interest rates and extra taxes, or use part of their annual ISA allowance to move it from the investment ISA into a cash ISA.

James Daley, managing director at Fairer Finance, said: “Consumers now face a triple blow: a new tax on cash held in their stocks and shares ISA, no ability to transfer back to a cash ISA, and investment platforms paying little or no interest.

“It’s quite normal for investors to hold cash in their investment accounts. Income that’s not automatically reinvested or maturing investments, can legitimately build up cash on account, and many investors may take their time to decide where to allocate it. Some investors may actively choose to increase their cash balances at certain parts of the market cycle.

“Penalising investors by not paying proper interest on cash holdings risks discouraging responsible investing rather than encouraging it.”

Investment platforms offering low interest rates on cash balances

Interest rates on uninvested cash have tumbled ever since the Bank of England started reducing the base rate, research from Fairer Finance shows.

Of the 49 providers analysed by Fairer Finance, 21 offer no interest at all, 33 offer rates of less than 2% and 37 offer less than 3%.

Britain’s largest investment platform, Hargreaves Lansdown, has halved rates on cash balances below £10,000 since August 2024, moving from 2.75% to just 1.3% today.

The highest interest rate available for uninvested cash in a stocks and shares ISA is currently 3.8%, offered by Trading 212, although this has fallen from a peak of just over 5% in 2024.

What ISA rules are changing?

From April 2027, the ISA regime will receive its biggest shakeup since the tax wrapper was introduced in 1999.

While the total £20,000 annual ISA allowance will remain in place, savers under 65 will only be able to save a maximum of £12,000 a year in cash ISAs.

They will still have the overall £20,000 annual ISA allowance, so if they put £12,000 into cash ISAs in 2027/28, the remaining £8,000 of allowance that year would need to go into a stocks and shares ISA.

The change was announced in the 2025 Autumn Budget by then-chancellor Rachel Reeves who said she wanted to “create more of a culture in the UK of retail investing like what you have in the United States, to earn better returns for savers”.

HMRC later confirmed a set of new anti-circumvention rules in a bid to stop people simply holding cash within a stocks and shares ISA.

A new tax of 22% will be introduced on interest earned from uninvested cash in a stocks and shares ISA.

Meanwhile, ISA portfolios made up of 100% ‘cash-like’ investments like money market funds will also be banned.

To stop people from putting cash in their stocks and shares ISA and then transferring it to their cash ISA, you will not be able to complete an ISA transfer between a stocks and shares ISA and a cash ISA.

More than 5,000 estates paid over £1 billion in inheritance tax on lifetime gifts between 2020/21 and 2023/24, according to new Freedom of Information (FOI) figures.

In 2023/24 alone, 1,390 estates paid £315 million in inheritance tax on lifetime gifts, an average of £226,000 per estate, the figures obtained from HMRC by financial advice firm NFU Mutual showed.

There are annual inheritance tax gift allowances, such as the annual exemption and small gifts allowance.

You can also give away any amount of money and no inheritance tax is owed if you die seven or more years after making the gift, but, if you die within seven years after making the gift, it may be liable for IHT.

These types of gifts are known as potentially exempt transfers (PETs).

NFU Mutual said families were increasingly gifting money or assets to loved ones to reduce their IHT exposure, a trend likely to accelerate with most unused pension pots set to be included within estates from April 2027. However, leaving gifting until too late can see your beneficiaries stuck with a significant IHT bill.

Ade Babatunde, senior financial planning director at wealth management firm Rathbones, said: “Many people start thinking about inheritance tax planning later in life, leaving less time for the seven-year clock to run.

“This is one of the reasons we frequently encourage families to start planning earlier than they think necessary.”

Source: HMRC FOI (submitted by NFU Mutual)

How the seven year rule applies to gifts

How inheritance tax is applied depends on when the gift was made and its size. If the gift is a potentially exempt transfer, meaning it isn’t within an inheritance tax gift allowance, the tax rate may apply on a sliding scale depending on the time between the gift being made and your death. This is known as taper relief and applies to gifts given three to seven years before your death.

It only applies if the value of the potentially exempt transfer goes over your £325,000 nil-rate band – this is a tax-free amount which you can pass on free from inheritance tax.

Source: Gov.uk

Gifts made within the seven years before death ‘eat’ your £325,000 tax-free allowance first, with the tapering of the tax applying to any part above that.

Sean McCann, chartered financial planner at NFU Mutual, gave an example of someone making a non-exempt gift of £100,000 then dying six years later. This would reduce their IHT-free allowance to £225,000 and no IHT would be owed on the gift by their beneficiaries.

However, if the gift was worth £425,000 and that person died six years later, the first £325,000 would ‘eat’ their tax-free allowance and the £100,000 would be chargeable based on the sliding scale.

In this instance, the rate of tax applied would be 8% on the £100,000 (£8,000), not the typical 40%, because the gift was made six to seven years before death.

After the £325,000 tax-free allowance was wiped out, the beneficiaries would have no tax-free allowance left to use against the rest of the person’s estate.

How else to use gifting to lower an inheritance tax bill

There are a number of allowances which are not subject to inheritance tax.

The first is the ‘annual exemption’, which lets you give away up to £3,000 each tax year to one or more people.

If the exemption was not used in the previous tax year, it can be carried forward for one tax year.

“This allows an individual to gift up to £6,000 immediately,” Babatunde, from Rathbones, said.

You can also make smaller gifts of up to £250 to as many people as you want each tax year, so long as you haven’t used another exemption, such as the annual exemption, on them.

In addition, parents can gift up to £5,000 to a child getting married or entering into a civil partnership, while grandparents can give a grandchild who is getting married or entering into a civil partnership £2,500.

You can also give £1,000 to someone getting married or entering into a civil partnership even if you’re not a parent or grandparent.

This wedding allowance can be combined with any other allowance, but not the small gift allowance.

Babatunde said: “For families with multiple children or grandchildren, this can be an effective opportunity to pass wealth at an important stage of life.”

Another avenue for gifting can be made through the gifting out of surplus income rule, with any gifts falling outside of your estate for IHT purposes.

There is no upper limit on how much you can gift using this method, but the gifts must be made as part of a regular pattern, be funded from income rather than capital and not reduce your standard of living.

Babatunde said: “For retirees who receive more pension, rental or investment income than they actually spend, this can be one of the most effective ways of reducing inheritance tax exposure.

“The challenge is ensuring the gifts are properly documented and that adequate records are retained.”

Pensioners will likely get a 3.9% increase in their state pension next April.

Under the triple lock mechanism, the state pension rises each April by the highest of the previous September’s Consumer Prices Index (CPI) measure of inflation, 2.5% or average earnings growth from the previous May to July.

Provisional figures published by the Office for National Statistics (ONS) today (15 September) confirmed average earnings growth between May and July was 3.9%.

Unless CPI inflation for September 2026 rises sharply from 2.9% in July, the 3.9% figure is likely to drive how much the state pension will go up by next April.

The 3.9% uplift will probably be confirmed by the chancellor John Healey in next month’s Autumn Budget.

The latest wages figures for May to July are initial estimates and potentially subject to change when revised data is published in October. However, revisions of this sort are typically minor.

Rachel Vahey, head of public policy at investment platform AJ Bell, said: “Although we still need to see September’s inflation figure and any revisions to July’s earnings growth before we know for definite how much it will increase by in 2027, it’s looking very likely that the value of the full new state pension will surge past £13,000 – and the personal allowance – for the first time.

“Even using the lowest measure of 2.5% under the triple lock means the full state pension amount would exceed the personal allowance of £12,570.”

How much will the state pension rise by?

The full new state pension, paid to men born on or after 6 April 1951 and women born on or after 6 April 1953, is likely to increase from £241.30 per week (around £12,547 per year) to £250.70 per week (around £13,036 per year).

The basic state pension, paid to older pensioners, looks set to increase from £184.90 a week (around £9,614 per year) to £192.10 (around £9,989 per year).

Some people don’t benefit from the state pension triple lock and those on the old state pension won’t see all elements of their pension rise in line with the mechanism.

For example, additional amounts such as SERPS or state second pension are inflation-linked.

Will retirees have to pay tax on their state pension?

More pensioners face paying income tax from April 2027 due to the ongoing freeze to income tax bands and the state pension rising each year.

A recent Freedom of Information (FOI) request submitted by Steve Webb, former pensions minister and now consultant at LCP, revealed hundreds of thousands of pensioners are gradually being pulled into paying more tax due to frozen tax thresholds and rising incomes.

With the full new state pension set to breach the £12,570 personal allowance, even pensioners whose sole income is the state pension will be pulled into the basic rate tax band.

However, former chancellor Rachel Reeves said these pensioners are not expected to have to pay the “small amount” of tax on the state pension.

Torsten Bell, minister for pensions, said the chancellor will “set out further details on how that commitment will be delivered at the Budget”.

Analysis by LCP suggests, as the policy currently exists, one in 16 pensioners will benefit from the move.

How to protect yourself from income tax

There are ways pensioners facing a greater income tax bill from next April can lessen the blow.

James Norton, head of retirement and investments at investment firm Vanguard Europe, said: “For those with other sources of retirement income, given the personal allowance remains frozen at £12,570 and the higher rate tax threshold has stayed at £50,270, a considered approach to tax and retirement is needed to make sure you keep as much of your hard-earnt savings as possible.”

Only draw the pension income you need. Leaving surplus funds in your pot will allow it to grow while reducing your taxable income.

You can also make the most of tax-free accounts like ISAs, ensuring any investment gains or interest earned from savings are shielded from tax.

Couples can make the most of each other’s allowances to lower overall tax bills as well. For example, if you’ve used up your capital gains tax (CGT) allowance for the tax year, you could transfer assets to a partner who hasn’t used their full allowance to lower your combined CGT bill.

Savers with Self-Invested Personal Pensions (SIPPs) could boost their retirement pots by tens of thousands of pounds by ditching platforms with costly platform fees and claiming tax relief, according to new analysis.

Research by investment platform InvestEngine suggests a basic rate taxpayer with a SIPP putting away £500 a month for 30 years could end up £18,000 worse off by choosing a platform with a 0.25% annual fee compared to a fee-free platform.

The same person choosing a platform with a 0.45% annual fee would be £32,000 worse off compared to a fee-free platform, the analysis suggests.

Higher rate taxpayers opting for costly platforms and failing to claim additional tax relief are losing out by even more.

Basic rate taxpayers with SIPPs have tax relief added automatically, but higher and additional rate taxpayers have to claim any extra relief on top, something many forget to do.

This is because tax relief on SIPPs is applied using the ‘relief at source’ rather than the ‘net pay’ method.

InvestEngine’s analysis found a higher rate taxpayer putting £500 a month in a SIPP for 30 years could end up £139,000 worse off based on choosing a platform with a 0.45% annual fee over one with no annual fee and by not claiming higher rate pension tax relief.

Bob Tronson, head of pensions at InvestEngine, said: “Pensions are a long-term product, which means small changes today will deliver surprisingly large improvements over time.

“A fraction of a percentage point in annual fees over decades can cost tens of thousands of pounds. Higher rate taxpayers not claiming the extra tax relief they're entitled to will miss out on even more.”

Source: InvestEngine, based on an initial pension value of £20,000 and annual investment growth of 5%

How do SIPP platform fees compare?

When considering what SIPP to get, there are typically a number of fees to consider. The account fee, sometimes known as platform fee, is one of the most important.

MoneyWeek analysed platform fees across some of the biggest providers to see how they compared.

Fees for trade shares or funds can vary across providers too.

For example, Hargreaves Lansdown charges customers with a SIPP £1.95 for each one-off fund trade and £6.95 per share trade (if they made 0-19 trades the month before) and £3.95 per trade (if they made 20 or more trades the month before).

SIPP customers with ii paying for the basic £5.99 per month ‘core’ package pay £3.99 per fund or share trade.

AJ Bell charges customers £5 per share trade or £3.50 if they had 10 or more share deals the previous month. Fund dealing costs £1.50 per trade.

Some providers have better customer service than others too, while some platforms offer a wider choice of funds or shares to choose from than others.

How to find the best SIPP for you

Ultimately, the best provider for you will depend on what you want from your SIPP and how much money you have to invest.

According to research firm Kepler Trust Intelligence, ii is the best all-round choice for SIPPs based on its fee structure, broad choice of investments and strong customer service.

Freetrade is the best low-cost provider as it charges no trading fees across its plans and has a wide selection of education guides and market insights.

AJ Bell is considered the best for customer service, while also offering a wide range of investments to choose from.

If your choice of SIPP is based purely on platform fee then, generally, platforms charging fixed fees cost less for those with larger pension pots, according to Sam Richardson, editor of Which? Money.

If you’ve got a smaller pot, percentage-based annual platform fees tend to be the most cost-effective option.

Richardson also said it’s worth checking if a platform fee includes the cost of funds held within a SIPP as some providers will charge an additional ongoing fund charge.

He added that sometimes SIPPs with ready-made portfolios can prove cheaper, in terms of fees, than if those same funds were held within a DIY SIPP.

Nationwide has boosted the perks of its fee-free FlexDirect current account, meaning new customers could get up to £370 in free cash in their first year.

The building society has upped its cashback deal, with customers now able to get up to £120 in free cash from spending in their first year, double its previous offering of just £60.

Spending is rewarded through £5 a month cashback when you spend at least £500 on your debit card, up to a maximum of £60 a year.

An additional £5 a month cashback is available when you spend at least £300 through direct debits on anything from water bills to streaming subscriptions, up to a maximum of £60 a year.

In addition to its boosted cashback offer, Nationwide’s FlexDirect account also provides 5% interest on current account balances up to £1,500 in the first 12 months, giving customers up to £75 in interest. This interest rate drops to 1% after your first 12 months.

The FlexDirect current account is fee-free, meaning none of the free cash you earn over your first year with the account will be eaten away by monthly account costs.

Since 2023, Nationwide has also distributed an annual 'Fairer Share' payment of £100 to each individual with a qualifying account, and in previous years having an active FlexDirect account has made you eligible for the payment.

That means if the building society decides to make the payment again in 2027, you may receive an additional £100 bonus.

Fred Powell, head of current account at Nationwide, said: "With our new free FlexDirect account, customers can still earn interest on money in their account, get cashback on everyday spending and benefit from a £175 switching offer.

“It means new customers could get as much as £295 with Nationwide in their first 12 months and that’s without adding the 5% on current account balances [and] access to savings accounts,” he added.

How to get £370 of free cash by switching to Nationwide’s FlexDirect

FlexDirect’s perks mean some new customers could manage to get £370 in free cash in their first 12 months – as long as they keep enough money in the account.

Firstly, new Nationwide customers are eligible for a £175 switching bonus when changing their main bank account to Nationwide through the Current Account Switching Service (CASS).

To qualify for the switch incentive, customers need to complete a full switch using CASS within 28 days of opening the new FlexDirect account, switch from an account with at least two direct debits, and pay in at least £1,000.

Then, once you have an active FlexDirect account, you can get £5 a month in cashback from everyday spending of at least £500, and another £5 a month in cashback from direct debits of at least £300

Together, this cashback will come to £120 over the full 12 months.

Finally, you can get another £75 from the 5% interest on your current account balance over your first 12 months.

To get the maximum amount, you will need to have a current account balance of at least £1,500 and make sure it does not drop below this all year to get the full £75 interest.

Put together, these bonuses mean new customers switching to Nationwide can get a maximum of £370 in their first year with the FlexDirect account – or more if Fairer Share is repeated this year.

Rachel Springall, finance expert at Moneyfacts, said: “Households are no doubt looking for simple ways to make their money go further, so it is incredibly important to take time out to review all the financial products they have, including current accounts, which are often overlooked.

“Nationwide’s FlexDirect account could offer customers up to £470 in value in the first year, including cashback, credit interest, the switching incentive and, assuming the £100 Fairer Share is paid again.

“The account is highly attractive all-round and rewards customers on their day-to-day spending with cashback. Those who keep a bit of cash in the account will earn an inflation-busting interest rate.”

Are you eligible for a FlexDirect account?

To be eligible for a FlexDirect account, you need to be aged 18 or over and be a UK resident.

To keep the account active, you will need to pay in at least £1,500 every month. This would most likely come from your monthly salary, but could also come from other sources like savings.

You must also agree that your FlexDirect account is for personal use only, and you must hold no more than three existing sole or joint Nationwide current accounts.

When geopolitical shocks occur, like the conflict in Iran that has shaken markets since late February, knowing where to put your money to protect your wealth is key.

The Association of Investment Companies (AIC), an industry body representing the UK’s investment trusts, has identified the closed-ended funds that have shown the greatest resilience during the conflict’s duration.

Technology-focused investment trusts have led the way, with the continued demand for artificial intelligence (AI) stocks and funds lifting the sector in spite of global turbulence.

“Investment trusts in the technology sector have continued to power ahead as the AI investment boom goes on,” said Annabel Brodie-Smith, director of the AIC. “And the growth capital sector has thrived due to its big holdings in fast-growing private companies and potential IPOs such as Anthropic, ByteDance and Revolut.”

So which investment trust sectors proved the most resilient – and which ones have delivered the greatest returns for shareholders over the course of the conflict?

The investment trust sectors that have been most resilient

It wasn’t all about tech and growth sectors. Some of the other top-performing investment trusts since the start of the Iran conflict have come from less obvious sectors – particularly renewable energy.

^{Source: theaic.co.uk / Morningstar. Share price total return in % from 02/03/2026 to 31/08/2026. Excludes VCTs. See AIC sector definitions.}

“Shares across the [renewable energy infrastructure] sector have bounced as investors have warmed to renewable energy during a war that has exposed the weaknesses of our oil and gas supply chains,” said the AIC’s Brodie-Smith.

Commenting on the outperformance of the renewable energy infrastructure sector, Charlie Wright, co-lead investment manager of Foresight Environmental Infrastructure (LON:FGEN), said “Iran conflict has perhaps prompted investors to reassess the strategic value of renewables and environmental infrastructure, reminding investors that an overreliance on volatile imported fuels is not a wise position to take.”

Which investment trust sectors have outperformed since the start of the Iran war?

Foresight Environmental Infrastructure was one of two renewable energy infrastructure investment trusts to make the top-five in terms of share price total return since the start of the Iran conflict.

Growth capital trust Molten Ventures (LON:GROW), which holds stakes in Revolut and Finnish space economy start-up ICEYE, took the top spot, while the Biotech Growth Trust (LON:BIOG) took second and Allianz Technology Trust (LON:ATT) came third.

^{Source: theaic.co.uk / Morningstar. Share price total return in % from 02/03/2026 to 31/08/2026. Excludes VCTs and trusts in liquidation.}

Stephen Packwood, co-manager of Greencoat UK Wind (LON:UKW) said “investor interest in renewables has picked up since the start of the war given security of supply and cost of energy concerns” but that the trust’s “strong performance in terms of power and net cash generation” had been the main driver behind its outperformance, covering its dividend payout in the first six months of 2026 and providing further capital to grow the business.

“Renewables, in particular wind, are well placed to take advantage of the forecasted increase in electricity demand over the coming years,” he added.

While Andy Burnham's government will be left looking at ways to cut its spending as costs continue to rise, one quick win could be to remove the triple lock pensions system which could save the Treasury £3.3 billion.

The triple lock pension system promises to increase state pension payments each year in line with either inflation, wage growth or 2.5% – whichever is higher.

The system was introduced back in 2010 by the Lib-Dem coalition government, and successive governments have since promised to keep it in place.

But, 16 years on, it is considered one of the most expensive measures in place, draining government finances.

The British Chambers of Commerce (BCC), which represents more than 50,000 businesses in the UK, said the mechanism should instead rise in line with Consumer Prices Index (CPI) inflation each year.

The BCC is calling on the chancellor to address it in the Autumn Budget, arguing that the policy should be scrapped to fund a cut to employer National Insurance contributions (NICs) for businesses taking on younger workers.

Why should the government remove the triple lock?

The BCC said ditching the triple lock and uprating the state pension in line with the CPI would raise £3.3 billion for the Treasury over two years.

This money could instead be used to extend the existing zero rate of employer NICs to workers aged 21 to 24-years-old. This would lower costs for businesses employing entry-level staff and could get more young people into work.

Calculations by retirement firm Standard Life suggest had the state pension risen in line with inflation instead of wages in April 2026, those on a full new state pension would be £120 a year worse off.

In his first speech as chancellor, John Healey addressed the NEET crisis, which is young people ‘not in education, employment or training’.

With over one million young people labelled as NEETS, he acknowledged that the government and businesses had a moral duty to get young people into work.

Though, when asked about whether he would consider an alternative for the triple lock, Healey simply said he agreed that youth unemployment was an issue.

“We will outline our plans based on the outcomes and recommendations made by Alan Milburn," he said.

He made no comment about replacing the triple lock.

In a snapshot poll, 74% of MoneyWeek readers said they believed the triple lock was vital for pensioners while 22% agreed it was unfair and expensive.

In its submission to the Treasury, the BCC also proposed lowering energy costs and business rates for businesses while increasing support for firms wanting to export globally.

Shevaun Haviland, director general of the BCC, said: “Pro-growth choices have never been more important. The chancellor must use his first budget to cut the cost of doing business, allowing everyone to reap the economic benefits.

“Piling more taxes on firms, would be a road to ruin. The quickest way to destroy business confidence.”

Triple lock under pressure

The triple lock has been called into question by numerous think tanks in recent years, and now the BCC, due to its ever-increasing cost.

The Office for Budget Responsibility (OBR) projects the state pension will cost 9% of GDP by 2075/76, up from 5% now, in part due to an ageing population but also the cost of the triple lock.

But despite the soaring costs, policymakers are hesitant to touch the mechanism because it is so popular among voters, namely older ones.

Speaking on the recent MoneyWeek Talks podcast, Steve Webb, the former pension minister who was in place when the triple lock system was introduced, strongly defended the triple lock, saying it was there to do a job.

“The problem with that is if you earn and earn and then stop earning, then the thing you fall onto when you stop earning needs to be connected to some proportion of what you were earning. Otherwise, you just fall off a cliff and your standard of living crashes," Webb said.

"So, the state pension needs to be pegged to a proportion of what people are earning and for 30 years, [prior to the triple lock] that had not happened."

You can watch the full interview here - or listen to it on any podcast platform.

New chancellor John Healey has laid out the principles of his economic policy, saying he will stick to the existing fiscal rules and seek to control public spending while trying to boost growth in Britain.

Healey emphasised his commitment to fiscal discipline and stimulating growth in his first major speech in his new position, delivered at a manufacturing plant in Coventry on 7 September.

The cost of borrowing was a major focus. Gilt yields reached record highs last week with the yield on 10-year UK government bonds (gilts) rising above 5.29% on 2 September, the highest level for 19 years.

"Staying true to our values means being honest about the need to control government spending,” Healey said.

He noted that government debt as a share of GDP has soared from 64% in 2009 to almost 100% today and placed the blame at the foot of successive Conservative governments.

He said borrowing costs were around the G7 average until the Truss budget “crashed the economy [...] Since 2022 we have been paying that Truss penalty as we battle to re-establish belief in Britain.”

“There's nothing progressive about the government spending £1 in £10 on debt interest,” he added.

Healey also sought to reassure markets that he will not let borrowing get out of control or ignore Britain’s self-imposed fiscal rules, saying: “On my first day in the Treasury I said fiscal discipline was my first priority as chancellor.

“It underwrites every promise this government makes and the Prime Minister and I are in lockstep in our commitment to meeting the fiscal rules at the upcoming budget: to balancing the books, with a buffer to protect against uncertainty, to controlling borrowing to bear down on inflation and reducing long term pressures on our public finances.

“This isn’t about lines on a graph, or numbers on a spreadsheet. It’s a matter of values.”

What will happen in the Budget?

As Healey’s speech was mostly in broad strokes, he did not provide specifics on what new policies may be announced in the Budget and refused to answer any questions about it.

Responding to questions from journalists on the subject, Healey said: “If I respond to speculation now that will only fuel more speculation. Every chancellor would say ‘that’s for the Budget’, and I will set out my plans and the future route for the government for this country at that Budget.”

Although we will have to wait for a full economic plan, Healey did make some broad announcements.

On devolution he said: “At the Budget, I will set out a roadmap to fiscal devolution, a permanent transfer of power and resources from Whitehall to our regions, with greater business rates retention for local councils and strategic authorities, grants from central government replaced by a share of local income tax for every mayoral strategic authority beginning in 2028.”

He also made a new commitment to reduce the regulatory burden on businesses by 25% before the end of this parliament in 2029 by taking “an axe to the thicket of consultation, litigation and administration that has a stranglehold too often on private investment.”

The chancellor also said he will make changes to the Treasury Green Book, the guidance on how to evaluate public spending, to skew investment into projects with “more long-term potential.”

Meanwhile, the way the government decides where to invest will start to include “economic potential analysis” in business case decisions to judge regions not on their current state, but on what they could become in the future.

Will taxes rise in the Autumn Budget?

Although Healey did not directly address whether or not taxes will be hiked in his first budget, he stood by the 2024 Labour manifesto which he said made “very strong, very clear, very specific" commitments on tax.

That manifesto pledged that none of the ‘big three’ taxes – income tax, national insurance, and VAT – would be raised on ‘working people’, ruling out the possibility that these taxes will rise.

However, these commitments still leave the door open for alternative tax hikes. For example, Rachel Reeves emphasised this same commitment in her first two budgets but still raised taxes in alternative ways.

Average UK house prices fell 0.4% in the year to August 2026, with prices down 0.2% over the previous month, according to Lloyds Bank.

The average UK property price dropped from £299,569 a year ago to £298,468, according to Lloyds’ latest house price index (HPI).

Prices fell during the month of August from an average of £299,153 in July.

It is the first time annual house price growth has trended negatively since November 2023, according to Lloyds’ data, and comes amid rising mortgage rates and lack of demand in the market.

Mortgage rates have ticked up in recent months as lenders have passed on higher wholesale costs to consumers due to the conflict in the Middle East.

The average two-year fixed-rate deal is 5.63% as of 7 September, up from 4.83% on 27 February, according to data firm Moneyfacts, the day before the US first launched airstrikes on Iran.

Andrew Assam, mortgages director at Lloyds, said the housing market was being stifled by these higher mortgage costs and sellers holding out for higher offers.

“The housing market has faced a more difficult backdrop in recent months, with the impact of global events on inflation and borrowing costs creating greater economic uncertainty,” said Assam.

“What we're not seeing is a rush of homeowners cutting prices. But more are choosing to sit tight, with sellers reluctant to accept offers they feel are too low, while some buyers are waiting to see how conditions develop. As a result, fewer homes are changing hands.”

North-South divide remains

There continues to be a strong regional divide when it comes to how well house prices are performing, according to Lloyds.

House prices in Northern Ireland were up 6.9% in the year to August, with the average property price now sitting at £231,245.

Scotland also continues to see strong growth, with prices rising 3.5% to an average of £223,437. Property values in Wales rose by 0.6% in the year to August to £230,282.

The North East and North West regions of England also saw positive movement, recording respective annual rises of 2.7% (£184,370) and 2.0% (£248,675).

In contrast, the story is much less positive across southern England and London.

The average house price in the South East fell by 1.6% in the year to August to £381,729, followed by Greater London where the average property value dropped by 1.5% to £534,177 over the same time period.

The South West and Eastern England both recorded annual house price declines of 1.2%, with average house prices now sitting at £298,807 and £331,410, respectively.

Jonathan Hopper, chief executive officer of search agent Garrington Property Finders, said a glut of supply in London and the South East of England was “attracting too few serious buyers” which was dragging prices down.

Hopper added: “High property values in these areas mean that many buyers need a large mortgage in order to afford the home they want, and the jump in interest rates over recent months has squeezed the amount they can afford.

“This has made buyers highly price-sensitive. As a result many are asking for, and getting, reductions on the prices of properties that have been on the market for a while.”

In contrast, the market was more “free-flowing” in northern England and Scotland, Hopper said, “with prices there still ticking up amid more balanced supply and demand”.

What could come next for house prices?

Activity in the housing market tends to slow in the summer and tick back up in the autumn, increasing demand and sellers’ opportunity to drive a higher asking price.

Tom Bill, head of UK residential research at estate agent Knight Frank, said that whether or not that trend played out this year will depend on any pre-Budget speculation and how the conflict in the Middle East, and any possible inflationary impact, unfolds.

Sarah Coles, head of personal finance at investment platform AJ Bell, added: “If the market grinds to a halt and prices remain depressed, it will make life even tougher.

“It’s difficult to muster enthusiasm for a purchase when you’re faced with having to pay higher monthly mortgage costs for a house that could lose value. It means more buyers are likely to sit tight.

“At that point there’s a decent chance that the market could suffer even more. We could see more widespread falls, as sellers are forced to cut prices. Alternatively, we could see the property market stall entirely, as nobody is prepared to blink.”

Bonds are central to the global financial system, and when their yields rise it can have a significant impact on your finances.

Bond yields – the amount that bonds pay in interest as a percentage of their price – are reaching all-time highs.

In August, yields on 30-year US government bonds (Treasuries) rose to over 5.3% , the highest level since June 2007. The yield on 10-year UK government bonds (gilts) rose above 5.29% on 2 September, the highest level for 19 years.

While higher yields might sound l positive, they actually reflect falling bond prices and a lack of confidence in the bond’s issuer’s ability to meet payment obligations.

In the case of gilts, when yields rise, the market price of existing gilts fall, making them less attractive for investors. Rising bond yields will also make any debt you hold more expensive, and could lead to tax hikes.

That said, from a macroeconomic standpoint, it could be argued that higher bond yields are necessary.

“One argument is that the rise in bond yields is not bad news, but good news, because it is a logical result of healthy economic growth rates,” said Russ Mould, investment director at investment platform AJ Bell. “It may also represent a return to normality after the crazy days of the 2010s and early 2020s, when headline interest rates and benchmark bond yields were near zero. That implied a cost of money, and time, of almost zero, which made little real sense.”

Why are bond yields rising

The current bond sell-off is being driven by several factors: in part including the threat of higher inflation due to the ongoing Middle East conflict, as well as the increased likelihood of central banks hiking interest rates in order to combat this inflation.

“Markets are now pricing in three hikes from the Bank of England over the next year,” said Matthew Amis, investment director, rates management at Aberdeen Investments. “Gilt yields look elevated here but until oil and gas start freely moving in the Straits of Hormuz, gilt yields are going to struggle.”

At the same time, bond markets are spooked by escalating levels of government debt. US government debt recently passed $40 trillion; in 2025, US government debt was already over 123% of the country’s GDP.

Oliver Faizallah, head of fixed income research at wealth manager Raymond James, attributes the bond yield spike specifically to US Federal Reserve (Fed) chair Kevin Warsh’s recent comments at the central bank’s Jackson Hole Economic Symposium on 28 August.

“We received no new information in the form of new macroeconomic data points, however a firmly hawkish tone from Warsh was enough to move markets,” said Faizallah. Warsh pointed to the strength of the US economy as well as his commitment to bringing inflation below the Fed’s 2% target.

“This resulted in markets pricing in more than two hikes by the Fed over the next 12 months,” said Faizallah.

How are bond prices, inflation and interest rates linked?

Bonds are sensitive to inflation. The amount that a bond pays to its holder is fixed in nominal terms (which is why bonds are referred to as ‘fixed income’), so if inflation rises, the real value of the bond to its holder falls. When bond prices fall, yields rise.

Bonds are also sensitive to interest rates – the rate of interest that central banks, like the Bank of England, pay to banks and other financial institutions that deposit money with them. Higher rates typically mean lower bond prices and higher yields, particularly on short-dated bonds, and these are the ones that have the biggest impact on mortgage and cash savings rates.

When anyone borrows money – be it the government or a couple buying a property – they have to offer the lender a better return than they would get by depositing their money at the central bank. So interest rates directly impact bond prices; when they rise, the cost of borrowing rises for everyone – governments, businesses and individuals.

What higher bond yields mean for your personal finances

Higher borrowing costs will have impacts across your finances.

“Credit card, mortgage and auto loan interest rates will rise if bond yields rise, as the lenders seek to preserve loan book margins and manage their risk,” said AJ Bell’s Mould.

Worryingly, higher bond yields could also lead, indirectly, to higher taxes. High gilt yields mean that the UK government is paying more interest on its debt. That will limit what chancellor John Healey can do when he announces the Autumn Budget in October.

The government’s fiscal rules prevent it from borrowing money to pay for day-to-day spending, and require debt to be falling as a share of the economy by 2030; any increase in current borrowing costs will have to be made up for with higher tax take.

On the other hand, higher interest rates would mean that you earned more money as interest on savings and cash.

How do higher bond yields impact the stock market?

Higher bond yields can also have a large impact on the stock market.

When professional (and some more sophisticated amateur) investors estimate the present value of an investment, they will do so by comparing the future returns they expect from it to current bond yields (in other words, the alternative ‘safe’ investment they could make instead). This is known as a discounted cash flow model.

The higher bond (and especially gilt) yields rise, the less appealing, in relative terms, a stock whose price is based on years worth of future returns becomes. Why take the risk on a company which could fail if you can make good returns with less risk in the bond market?

Higher bond yields could therefore mean “lower theoretical equity valuations, especially for companies whose strongest years of profit and cash generation may be some time in the future, such as technology and biotechnology companies”, said Mould.

“For now, higher bond yields are not unduly inconveniencing the FTSE 100, which still trades close to all-time highs, within touching distance of the 11,000 mark and up by more than 100% from the Covid-19 lows of March 2020,” Mould continued. “But in the end, weight stops trains and racehorses and higher returns on cash and fixed-income securities slow down stock markets – it is a matter of degree.”

Mould added that if the Bank of England hikes interest rates or if bond yields rise further, the UK’s stock market could start to struggle. “In a worst case: earnings growth could take a hit if higher borrowing costs cool consumer spending and corporate investment; takeovers could dry up if the cost of any debt used to fund them means such deals are no longer attractive; and higher yields on bonds make the yield on equities look less appealing.”

Should you invest in bonds?

Bond prices are falling; the returns you’re making on them (the yield) is rising, so is this a good time to buy bonds?

The issue is always one of risk. With corporate bonds, the risk is that the company you’re buying the bond from might default.

Government bonds in a developed economy like the UK would almost certainly never default on its debt. It is more likely to print money – thereby devaluing the currency – in order to meet its obligations. That means the main risk with government bonds is inflation.

Raymond James’s Faizallah believes that, while the recent bond sell-off isn’t unwarranted, it means the risks to bonds are now priced in.

“As it stands, bond yields are priced for higher and prolonged second round inflation, consequent central bank hikes, and further government spending driven by an increase in bond sales,” he said. “With the bad news in the price, there is a limitation to how much further bond yields can keep climbing.”

Investors pumped £278 million into funds in July, but sold off billions of pounds of equities amid domestic political uncertainty and global volatility.

While some investors were spooked, fund flows narrowly remained positive according to the latest data from the Investment Association, an industry body representing the UK’s investment managers.

Although on balance investors were confident in July, with more money invested than cashed out, the month’s figures are a sharp drop from the £3.6 billion inflow recorded in June.

In particular, investors continued to sell off their equities in July, with the asset class having outflows of £2.1 billion amid the continuing war between the US and Iran.

The UK saw the largest fund outflows in July as retail investors took a collective £1.6 billion out of British equities, the highest figure since January 2025. Overall net outflows from the UK were £1.3 billion across all asset classes.

This was likely a result of political uncertainty at home as Andy Burnham ousted Keir Starmer as prime minister, leading investors to take a more cautious stance as they waited to see the new premier’s plans for the country.

While equities fell out of vogue in July, more retail investors turned to fixed income amid the global and domestic uncertainty, with net flows in the month reaching £863 million, the fourth consecutive month of inflows for the asset class.

Miranda Seath, director of market insight & fund sectors at the Investment Association, said: “As domestic and geopolitical uncertainty grows, July saw modest net retail sales of £278 million and a six-month low for gross sales at £30.1 billion, a sharp decline to the inflows experienced in H1.

“The composition of flows points to more cautious positioning, with investors continuing to favour fixed income and mixed asset funds while stepping back from equities.

“While July’s uncertainty has led to muted flows, this month’s data suggests that many investors are not withdrawing from markets altogether, but are remaining selective and continuing to seek diversified, lower-cost exposure alongside more defensive allocations.”

What did Brits invest in in July?

The asset class with the largest inflows in July was fixed income, with £863 million placed in it.

Government bonds were the most popular fixed income investment (£333 million), followed by strategic bonds (£319 million), mixed bonds (£181 million), and specialist bonds (£122 million).

Mixed asset investments had the second-largest inflows of £733 million, followed by miscellaneous other investments (£589 million), and money markets (£206 million).

On the other hand, property saw minor outflows of £0.05 million, while equities saw the highest outflows of £2.1 billion.

While British retail investors sold off investments in their home country, they kept investing in America.

North America funds had the largest retail inflows during July, as Brits poured £192 million into them. This was followed by global funds (£50 million), and Europe funds (£23 million).

UK funds saw the largest outflows, as a massive £1.6 billion was taken out of British funds. Seath suggested the outflows were a result of the political uncertainty in Britain.

“Investors will be looking ahead to the new Government’s first Autumn Budget and the forthcoming 10-year plan for Britain in order to inform investment decisions based on the direction of economic, tax and investment policy, particularly in light of renewed inflationary pressure further tightening the UK’s fiscal headroom.”

Overall Asia funds had the second-largest outflows of £97 million, followed by Japan funds with outflows of £81 million.

Will net inflows turn to net outflows?

While investor sentiment has been buoyant so far this year, with net flows not turning negative for all of 2026 despite geopolitical headwinds, how long will the optimism last?

Not for long, seems to be the answer as investor confidence fell sharply in August, according to Boring Money’s index.

The index fell 12% from 52 to 46 in August as investors became increasingly pessimistic about both the UK and global economy after an optimistic June and July.

Meanwhile, 29% of investors say they are planning to move more investments into cash over the next six months, according to the research, indicating we could see more money taken out of the stock market in the remainder of 2026.

Holly Mackay, CEO of Boring Money, said: “June and July were positive months as investors reacted well to the memo of understanding ending the Iran conflict and closer to home, Burnham enjoyed a brief honeymoon period. However August’s data show a less positive mindset as investors exhibit lower confidence in both local and global economies and report plans to move more to cash and to invest less.

“Continued geopolitical turmoil, higher energy bills, early thoughts on the upcoming October Budget, and assumed tax hikes coupled with looming higher interest rates are weighing on investors who are a lot more bearish than they were in the summer.”

High earners can now get £500 when switching to one of NatWest’s premier current accounts, which are tailored to the wealthy.

While the offer is one of the best bank switching deals on the market, it is only open to high earners and those with large savings or investments with NatWest.

You need either a minimum income of £100,000 a year (or £120,000 for a joint account), savings and investments of at least £100,000, or a NatWest mortgage of at least £500,000 to qualify for the Premier account.

The new switching offer runs from 2 September and has no fixed end date, but NatWest says it can be pulled at any time.

Tamara van den Ban, managing director of NatWest Premier Banking, said: “We’re here to help our customers feel confident about their money, so they can make the most of the lives they’ve worked hard to build – whether that’s planning for the future, protecting what matters most or experiencing more from life today.

“Our £500 welcome bonus is an invitation for new customers to experience the help and support we can provide.”

What is the NatWest Premier account?

There are three tiers of Premier accounts. The £500 bonus applies when an eligible person switches to any of them.

Customers on all tiers get access to a support service from NatWest’s financial experts who can provide guidance on managing your finances, including on starting investing, tax planning, and mortgages. You may need to pay additional fees for specialist and targeted guidance.

The lowest, free tier is Premier Select. It gives access to 24/7 support from NatWest, fee-free transactions in foreign currencies, and you pay no interest on the first £500 of an arranged overdraft.

The middle-tier Premier Reward account costs £2 a month and gives all the benefits above, along with some extras.

You can get £9 a month in rewards if you pay at least two direct debits per month of at least £4.50 each. You can also earn £1 a month when you log into the NatWest mobile app, and at least 1% cashback at selected retailers when using your NatWest debit card.

The highest and most expensive tier is the Premier Reward Black account.

It costs £36 a month and gives you the benefits of all the previous tiers as well as access to airport lounges, travel insurance, mobile phone insurance, breakdown cover, 25% cashback on tickets to concerts and shows, and discounts at cinemas, and more.

From 1 October, the monthly fee for this account will increase to £39 per month.

Who is eligible for the NatWest £500 welcome bonus?

To be eligible for NatWest’s switching offer, you must meet the following criteria:

• You must have an income of at least £100,000 (£120,000 for joint accounts), or at least £100,000 in savings/investments, or at least a £500,000 mortgage with NatWest
• You must not currently have a NatWest current account as of 2 September
• You must not have already redeemed a different NatWest switching offer
• You must complete a full switch using the Current Account Switch Service (CASS)
• You must pay at least £15,000 into your NatWest Premier account within 90 days of opening the account. This can be done in any number of payments and each payment must stay in your account for at least 24 hours.

If you have met the above criteria, your £500 bonus will be paid within 30 calendar days.

Should you switch to NatWest Premier?

Just because you are wealthy enough to qualify for the NatWest Premier account, it doesn’t mean it is necessarily the best option for you.

Consider which, if any, tier of Premier fits your needs and whether the benefits justify the monthly fee. You could also look at alternative packaged accounts from other banks and compare their benefits.

For example, HSBC is also offering a £500 welcome bonus to switchers who open a Premier Account. This account includes benefits like free travel insurance, preferential rates on loans, digital GP appointments, and more for no monthly fee.

Caitlyn Eastell, personal finance analyst at Moneyfacts said: “NatWest’s new £500 premier switching incentive is a significant move in the battle for affluent current account customers. The headline bonus puts NatWest firmly alongside the most generous premier switching offers.

“For consumers who qualify, the offer makes switching considerably more attractive, particularly because NatWest also bundles in dedicated premier support and financial planning.”

However, Eastell warned the welcome bonus “should be viewed as a sweetener rather than the main reason to switch. Customers should compare the ongoing benefits, eligibility requirements and any fees against their existing bank.”

SpaceX’s initial public offering (IPO) was a landmark moment for many investors, opening up a new galaxy of opportunities.

Its historic June debut saw the space exploration company valued at $1.77 trillion at its IPO and its share price surging by 50% in the first three days of trading. .

SpaceX’s (NASDAQ:SPCX) share price has fallen back since, but the appetite for space investing is only ramping up, with investors having more ways to access the sector than ever before.

Opportunities to invest in space are being fuelled by the ongoing artificial intelligence (AI) boom.

“Old space put humans on the Moon. New space is building the commercial infrastructure of the global economy,” said Mark Boggett, CEO of space tech investment firm Seraphim Space. “The convergence of AI and space tech, together with rising demand for connectivity, defence and sovereign capability, is creating one of the most compelling investment opportunities of the coming decade.”

How SpaceX and Nvidia are joining space and AI

It’s tempting to think of artificial intelligence (AI) and space as two separate themes, but they are increasingly closely linked.

SpaceX, for example, is largely an AI company since it merged with xAI, Elon Musk’s AI company and maker of the Grok LLM suite, earlier this year. SpaceX identified a $28.5 trillion total addressable market in its IPO prospectus, of which $26.5 trillion was attributed to AI – compared to $1.6 trillion for satellite connectivity and $370 billion for space launch services, which have historically been the pillars of SpaceX’s business.

One of the most visible crossovers between the space and AI themes is the concept of the orbital data centre – essentially, a data centre in space. These don’t exist yet, but they may not be far away: Starcloud, a start-up dedicated to making orbital data centres a reality, raised $250 million at a $2.3 billion valuation in August.

Among the list of investors in Starcloud’s latest investment round are tech hardware giants Nvidia and Cisco.

“Orbital data centres have gone from science fair to a funded race in a matter of months, with Nvidia neatly hedging both sides by backing Starcloud and SpaceX's rival Starmind,” said James Lockyer, research analyst at investment bank Peel Hunt said.

Nvidia especially is increasingly central to the space industry’s designs. Colette Kress, the company’s chief financial officer, confirmed at Nvidia’s Q2 earnings call that SpaceX is among a number of leading partners that the firm’s latest generation of chip, Vera CPU, is being shipped to.

Nvidia also holds a stake in SpaceX via an earlier investment into xAI.

“The chip cycle and the space cycle are fusing,” said Lockyer. “Nvidia funding, supplying, and holding equity in SpaceX ties the single most valuable name in AI to the most valuable name in space, and for investors it makes SpaceX a compute story as much as a launch one.”

How to invest in the new space economy

As the space industry develops, investors have greater access than ever before. While SpaceX is the largest company in the space sector and is readily available to buy since its IPO, other stocks such as Rocket Lab (NASDAQ:RKLB) and AST SpaceMobile (NASDAQ:ASTS) offer space exposure too.

Companies like these can be accessed through thematic exchange-traded funds (ETF), such as the WisdomTree Space Economy UCITS ETF (LON:WSPG) or the Seraphim New Space UCITS ETF (LON:SERA), which launched on 2 September.

Seraphim New Space UCITS ETF is based on the Seraphim New Space Index, which identifies and weights companies across various components of the space investment ecosystem. Its representative holdings include SpaceX, as well as companies like space infrastructure company Intuitive Machines (NASDAQ:LUNR) or BlackSky (NYSE:BKSY) which offers “space-based intelligence” by using AI and machine learning to instantly analyse imagery captured from satellites.

The ETF also holds a position in Seraphim Space Investment Trust (LON:SSIT), which gained 56% in 2026 through to 28 August. Unlike the ETF, which will mostly hold publicly-listed companies, Seraphim’s investment trust mostly holds private companies related to the space economy.

Santander has launched a new bank switching bonus which is currently the highest-paying deal on the market.

The high-street lender is offering new and existing customers £240 to move banks, but you will need to open both a current account and a regular saver with the bank to qualify.

There are currently six bank switching deals on the market, and Santander’s offer is the highest-paying for non-Premier accounts.

Santander’s switching deal – what’s on offer?

Santander’s £240 bonus is available to new and existing customers. To be eligible, you must do the following:

• Request to switch your account before 7 October using the Current Account Switch Service.
• Pay in at least £1,500, which can be done through one or more payments, within 60 days of requesting the switch.
• Set up at least two qualifying household direct debits.
• Fund a Santander Regular Saver with at least £200. You can either open a new account or fund an existing one, if you have one.

You must do this within 60 days of the initial switch request. You are not eligible if you held a Santander current account on 1 January 2026.

If you qualify, you will receive the cash bonus within 90 days of requesting the switch.

Is Santander’s switching deal worth it?

Rachel Springall, finance expert at Moneyfactscompare.co.uk, says: “Santander’s new current account switching offer of £240 could be an enticing choice for customers who might need a financial boost after the summer holidays. It is one of the highest free cash payments available on a fee-free account, ideal for those who want a simple, straightforward account for their everyday banking.”

Currently, there are six bank switching deals on the market.

HSBC’s switch offer pays £500 and another £290 in cashback, but it is only available for higher earners (£100,000+ salary) or those with at least £100,000 in savings or investments. This means Santander offers the best deal for most customers.

Santander’s regular saver pays the most on the market, a top rate of 8% that comes with a fixed 5% bonus for 12 months. You can save up to £200 each month, and the rate is variable. Springall adds: “Unlike some other regular savers on the market that revert to a flexible saver earning a much poorer return, Santander’s account will continue for another year, paying 3% AER.”

You can also access Santander’s inflation-beating fixed-rate ISAs and its new cashback credit card that returns 3% on eligible everyday spending in the first year.

Santander has also promised to keep its Santander and TSB bank branches open for at least two years, following a significant round of closures which took place earlier this year.

If your local branch is affected, another option is Nationwide Building Society, which is currently paying £175 to customers. While that doesn’t make it a market-leading deal, the building society has pledged not to close any more of its branches until 2030.

Plus, Nationwide ranks as one of the best current account providers in the country, and is well-known for its £100 Fairer Share Payment that it has offered for four consecutive years.

Ultimately, you should pick a bank account that offers you more than just a switching bonus and can actually meet your current account needs.

A Premium Bonds holder has won a £1 million jackpot prize with a bond bought just nine months ago.

The saver, from London, bought the winning bond in January 2026 and has a total holding of £45,500. The winning bond number is 659VC982054.

The second jackpot winner is from Norwich and bagged the £1 million with a bond bought in January 2022. Their winning bond number is 484QT130447 and they hold the maximum total of £50,000 in Premium Bonds.

How many prizes will be issued in September’s Premium Bonds draw?

As well as the two £1 million jackpot payout, almost 100 Premium Bonds prizes worth £100,000 will be handed out in the September draw by NS&I. There will also be 192 £50,000 prizes and 381 £25,000 prizes.

More than 6.5 million prizes worth £497 million will be distributed in the September draw.

A total of 858 million prizes worth £42.8 billion have been awarded since the first Premium Bonds draw in 1957.

Here is the breakdown of all the prizes that will be shared out this month:

Source: NS&I

How to check if you've won in September’s prize draw

The two £1 million winners are notified in person by NS&I’s Agent Million each month.

Winners of the £100,000 and lower Premium Bonds prizes can check if they have won the day after the first working day of each month. For September 2026, that date is 2 September.

You can do this by using the Premium Bonds prize checker app, visiting the NS&I website or via Amazon Alexa.

The prize checker app and website will show you prizes you’ve won that month, anything you’ve won in the previous six draws and any older prizes you haven’t claimed yet.

Make sure you have your bond number or NS&I number so you can access your account.

There is no time limit to claim a Premium Bonds prize so you should check if you’ve won anything before and didn’t realise, even if you bought the Premium Bonds years ago.

NS&I says over 99% of prizes have been paid to winners since draws began in 1957, but there are still 2.8 million left unclaimed.

Average asking prices for homes in Glasgow and Manchester’s commuter hubs have soared in the past year, new research shows.

Property portal Rightmove analysed asking price growth in commuter towns linked to six of Britain's largest cities: London, Manchester, Birmingham, Bristol, Glasgow and Cardiff.

Of the cities analysed, the strongest asking price growth is concentrated in commuter locations by Glasgow and Manchester, with 10 of the top 15 fastest-growing hotspots located here.

Asking prices are rising fastest in more affordable commuter areas, Rightmove said, but falling in some higher-priced locations.

Colleen Babcock, property expert at Rightmove said the research shows two very different stories playing out in the UK’s commuter markets.

“In the more affordable locations around Glasgow and Manchester, asking prices are rising strongly as buyers look for value within reach of major cities,” she said.

“Meanwhile, some of the more expensive commuter hotspots are seeing prices ease, which could create opportunities for buyers who may previously have been priced out.

“For anyone considering a move, it's a reminder that looking a little further beyond the main city locations can often open up more options and better value for money."

Glasgow and the North dominate list of commuter hotspots with the fastest rising asking prices

Asking prices for homes in Falkirk, a commuter town of Glasgow, had the highest annual change among the cities listed, with growth of 13.5%.

The average asking price for home in the town is now £183,596, just lower than the average asking price in Scotland of £199,888, according to Rightmove in August.

Clark Gillespie, director at Forth and Clyde Property, an estate agent in Falkirk, said the city is “an attractive choice for buyers because it offers a combination of affordability, strong transport links and excellent family amenities”.

The town has good transport connections to nearby hubs like Edinburgh and Stirling too, meaning “it's a practical option for commuters who want to stay connected to major cities while getting more for their money”.

Beyond Falkirk, towns near Glasgow dominate the list of commuter hotspots with the fastest-growing asking prices, with six locations earning a place in the top 15.

Several of Manchester’s commuter towns have also seen strong asking prices growth, with four ranking in the top 15.

Asking prices for homes in Rochdale have grown by 8.7% in the past year, the second-fastest of those analysed, bringing the average to £238,115. The suburb has asking prices lower than the average for the North West, which stood at £273,421 according to Rightmove in August.

Other notable Manchester commuter towns with fast-growing asking prices are St Helens (7.8%), Wigan (6.2%), and Stalybridge (5.6%).

Source: Rightmove, 24 August

London’s commuter hubs dominate list of asking price falls

Average asking prices in many towns serving London have fallen, representing 11 of the bottom 15 commuter towns.

Haywards Heath in West Sussex, a commuter town for the capital, has seen the biggest price fall of 4.8% since last year, Rightmove’s analysis found. Here, the average asking price is now £461,066, just below the average of £469,604 in the South East of England.

Meanwhile, asking prices in Maidenhead, Berkshire have fallen by 3.9% in the past year, bringing them to £571,686.

London does have one commuter town that bucks this trend. Broxbourne in Hertfordshire had the third-strongest asking price growth at 8.1%.

Some of Bristol’s commuter hubs have also seen asking prices fall. Asking prices for homes in Bath fell by 3.8% in the past year, while those in Yate, a suburb of the city, fell by 2.3%.

Source: Rightmove, 24 August

The number of individuals liable for dividend tax is estimated to have reached 3.2 million in 2025/26, up from 3.14 million in 2024/25, according to new Freedom of Information (FOI) figures.

The number of people having to pay dividend tax has almost doubled in the six years since 2020, when 1.81 million were liable to pay it.

The spike comes after successive cuts to the dividend tax allowance. The allowance was lowered from £2,000 to £1,000 in April 2023, then halved again to £500 in April 2024.

Around 630,000 individuals were brought into paying dividend tax when the allowance was cut from £2,000 to £1,000, according to the FOI figures obtained from HMRC by wealth management firm Quilter shared exclusively with MoneyWeek.

A further 480,000 were dragged into paying dividend tax when the allowance was cut from £1,000 to £500.

Rachael Griffin, tax and financial planning expert at Quilter, said: “These figures show how dramatically the dividend tax net has expanded in a relatively short period.

“While much attention is given to frozen income tax thresholds, the sharp reduction in the dividend allowance has quietly pulled hundreds of thousands of people into paying tax on investment income for the first time.

"The government has repeatedly said it wants to encourage greater participation in investing, but reducing the tax-free allowance has moved in the opposite direction by increasing both the tax burden and administrative complexity faced by ordinary investors,” Griffin added.

Source: Quilter

How does dividend tax work?

Dividends are paid to you if you own shares in a company. You don’t pay income tax on any dividends if your income is less than the £12,570 personal allowance.

You also receive a dividend allowance which means if you do pay income tax you can earn up to a certain amount before owing income tax on dividends. For the 2026/27 year, the dividend allowance is £500.

The tax rate you pay depends on your income tax band:

• Basic rate - 10.75%
• Higher rate - 35.75%
• Additional rate - 39.35%

As an example, if you received £3,000 in dividends and earned £29,570 in wages in the 2026/27 year, your total income would be £32,570.

Taking your personal allowance of £12,570 off this figure would leave you with a taxable income of £20,000.

As you are in the basic rate income tax band, you would pay 20% tax on £17,000 of wages, no tax on £500 of dividends because of the dividend allowance and 10.75% tax on £2,500 of dividends.

How to protect your dividends from the taxman

You can’t do much about falling dividend tax allowances, but there are ways to lower your dividend tax bill with HMRC.

Use a stocks and shares ISA

Dividends paid on investments held in stocks and shares ISAs are free from tax and don’t take up any of your £500 dividend allowance.

You can put up to £20,000 into a stocks and shares ISA each tax year.

Griffin, from Quilter, said: “Making full use of ISAs remains one of the most valuable planning opportunities available, particularly as the dividend allowance is now just £500.”

Do a ‘Bed and ISA’

If you have investments held outside a tax-wrapper, for example in a General Investment Account (GIA), you could consider transferring them across to an ISA.

The process is known as ‘Bed and ISA’, and involves selling investments in a taxable investment account and immediately buying them back inside a tax-wrapped account.

Investments transferred into an ISA will benefit from tax-free growth.

Transferring assets between spouses

You can transfer shares to a spouse or civil partner who either pays income tax at a lower rate or hasn’t utilised some or any of their dividend allowance.

By doing this, you’re effectively making the most of two sets of allowances.

Ade Babatunde, senior financial planning director at wealth manager Rathbones, said: “Sharing ownership of company shares between spouses or civil partners can allow both parties to utilise their allowances and lower-rate tax bands before higher dividend tax rates begin to apply.”

Consider alternative investments

If you’ve got the risk appetite, you could invest your money in a Venture Capital Trust (VCT).

VCTs are set up to fund younger businesses with high growth potential, and dividends and capital gains on ordinary shares aren’t taxed.

You also receive 20% income tax relief on up to £200,000 held in shares in a VCT, so long as those shares are held for at least five years.

One major drawback to VCTs is that because they invest in early-stage companies, there is a greater risk they could fail and your investments drop in value. For that reason, they can be a good option if you have maxed out your ISA and pension allowances for the financial year.

When you’re planning your retirement, one of the key decisions you’ll need to make is whether you will live in your own home, or spend your golden years renting.

The latter is not a cheap option. Renting in retirement will cost an average of £419,000 as rents are expected to more than double in the next 20 years, according to research from retirement specialist Standard Life.

Data from the Office for National Statistics (ONS) shows that while rents are an average of £1,160 today, this could climb to £2,350 by 2046 if they continue to grow by an average of 3.8% a year.

The high cost means those who plan to rent during their retirement will need to ensure their pension pots support that choice. Despite this, over six million people who expect to pay housing costs in retirement don't know how they'll afford them, according to data from Royal London.

The data showed those who expect to pay housing costs in retirement have an average pension pot of just £34,948, a figure far lower than needed to cover rental costs during a 20 year retirement, let alone pay for other essentials.

Those who describe themselves as being in financial crisis are particularly affected. Nearly six in ten of this cohort say they expect to pay rent or mortgage costs in retirement, compared to just 11% of those who say they are financially comfortable.

Is renting in retirement on the rise?

Despite it being expensive, more people are now renting in retirement as higher housing costs mean buying a home is not possible for some.

Data from the government’s Pensions Commission shows the proportion of households renting privately in retirement has more than doubled in the last 20 years.

Sarah Pennells, consumer finance specialist at Royal London, said: "For generations, reaching retirement often meant reaching the point where housing costs were behind you. But for millions of today's retirees and future retirees, that simply isn't the reality.

"What's particularly worrying is that over six million people who expect to pay rent or mortgage costs in retirement don't know how they'll cover those payments. If you're heading towards retirement and expect to have housing costs, it's important to factor these into your retirement planning as early as possible.”

The true cost of renting in retirement where you are

If you are planning to rent during your retirement, you will need to take a careful look at your pension pot and work out if you can afford to do so where you are as prices vary wildly across the UK.

The most expensive place to rent as a pensioner is London, where the average price of a year’s rent is £28,520.

That works out to £859,000 when over the course of a standard 20-year retirement, factoring in rental price growth.

The region with the second-highest expected renting cost is the South East, where the average for a year is £17,610 or £531,000 over 20 years – much lower than the price in the capital, but still far more than in cheaper regions of the UK.

Royal London’s data shows people in London, the South East and the South of England are also among the most likely to expect to pay housing costs in retirement, with 34% saying they expect to still be paying rent or a mortgage after they retire.

As with house prices, there is a large North-South divide in rental costs as the North of England and the devolved nations are much cheaper than the South of England.

The cheapest region to rent in retirement is the North East of England, where a year’s rent costs an average of £9,670. This amounts to £291,000 over 20 years.

Meanwhile, the second-cheapest region is Yorkshire and the Humber, where the average rent for a year is £10,650 – or £321,000 over a 20 year retirement.

The interactive map below shows the projected cost of renting during a 20-year retirement.

Should you rent in retirement?

While renting in retirement is expensive, there are also some positive sides to renting rather than owning your own home.

“If you decide to rent, then you have the flexibility to move around without the burden of having to sell a home,” said Helen Morrissey, head of retirement analysis at wealth manager Hargreaves Lansdown.

This may mean you can be closer to your loved ones, or you may choose to move to a cheaper part of the country or one that fits your lifestyle better.

Certain maintenance problems with the home you rent will also be the responsibility of the landlord, meaning you will not need to fork to fix a leaky roof, for example.

Additionally, if you do not expect to pay off your mortgage before the end of your retirement, renting can be a more flexible solution and potentially a cheaper option depending on where you live.

There are of course drawbacks, the main one being that the home you rent is owned by your landlord, so you do not have the final say on what happens to the property.

In the worst-case scenario, you may be evicted from your home, though the new Renters’ Rights Act means this is much more difficult for landlords.

If you own your home instead, you will not need to worry about being evicted or getting approval to make changes to your property. Once you have paid off your mortgage, you will have far lower monthly costs too, meaning you will have more money in your pocket each month.

“Going into retirement owning your own home means your day-to-day expenses will likely be lower,” said Morrissey. “You can also use your home to release money either through equity release, or downsizing, should you need it.”

Ultimately, whether you should rent in retirement is dependent on your lifestyle, whether you already own a house, and whether you can afford it with your pension.

Around a million workers are being urged to look out for letters landing on their doorstep in the next few weeks telling them they’re entitled to money from the government.

HMRC is kickstarting a campaign this month to offer top-ups to people who didn’t receive pension tax relief because of the way their workplace pension scheme was administered.

Workers whose occupational pension schemes issue tax relief through a net pay arrangement (NPA) could be entitled to the top-up.

A NPA is when pension contributions are taken out of your monthly pay before tax is calculated. It means you receive tax relief there and then.

Typically, people earning £10,000 or more a year are automatically enrolled into workplace pension schemes, but under an NPA method, those earning between this amount and £12,570, and therefore not paying income tax, aren’t eligible for pension tax relief.

If these same people were in a workplace pension scheme using the relief at source (RAF) method, the employer automatically would claim tax relief from the government to add to their pension and they would benefit from pension tax relief.

Employees have no choice in whether they are signed up to a workplace scheme that uses the NPA or RAF method.

The government is seeking to compensate these lower earners who have been in NPA occupational schemes from 2024/25 onwards and estimates that around one million people are affected, of which 75% are women who may have earned less due to working part time or taking a career break.

The top-ups are worth £70 on average and will be paid by bank transfer.

When will I receive the top-up?

From this month, HMRC will start contacting the one million eligible people via letters in the post or through their personal tax account.

HMRC said these letters or notes on personal tax accounts will explain what people need to do to accept payments, which are expected to start being claimed over the "coming months”.

The letters will be rolled out gradually and into early 2027, HMRC said.

“Real risk” low earners won’t claim free money

Steve Webb, former pensions minister and now partner at pension consultants LCP, warned that people unexpectedly receiving these letters offering them money may think they're a scam and not claim what they’re entitled to.

Webb said: “The process of getting these payments to the right people is going to be incredibly painful and there is a real risk of huge non take-up.

“Most people will not have a clue about this issue and may be suspicious of a letter out of the blue from HMRC offering them free money.”

Webb is urging people to check their post in the coming weeks to make sure they do not miss out.

An HMRC spokesperson said: "We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine.

“Customers can check a letter is genuine on gov.uk and should only respond via official HMRC channels. We’ll never ask for passwords, PINs or money to be transferred to claim a payment.”

Will I be entitled to a top-up in future years?

The process set up by HMRC is offering top-ups to people who may have missed out on pension tax relief in 2024/25.

Once registered, these low earners are expected to receive the top-ups through a more automated system for future years, if they’re still eligible, Webb said.

HMRC will assess eligibility each tax year and so you may qualify for a payment this year but not future payments.

Nationwide has boosted rates on some of its savings accounts, offering customers an interest rate of up to 4.55% on their cash.

The building society’s one and two-year fixed rate cash ISAs are now paying respective rates of 4.5% and 4.55% AER, up from 4.4% and 4.5% earlier this month.

Its one and two-year taxable fixed rate bonds now have interest rates of 4.5% and 4.55%, respectively, a rise from 4.25% and 4.3%.

It’s the second time this month Nationwide has bumped up rates on its fixed rate bonds and ISAs.

How do the savings accounts work?

Fixed rate cash ISAs

You can open one of the ISAs if you’re 18 or over, a UK resident and you haven’t maxed out your £20,000 annual ISA allowance this tax year.

People under 65 face a £12,000 per year limit on cash ISA contributions from April 2027. The overall £20,000 annual ISA allowance will remain.

If you are a new Nationwide customer, you have to apply for the ISA in a Nationwide branch. You can find your nearest branch using the building society’s search tool.

You have to fund the ISA during the application and can’t open it then top it up later. You can fund one of the accounts through an ISA transfer or via another Nationwide account.

You can withdraw money from one of the fixed-rate ISAs before the end of the term, but would have to pay an early access charge.

At the end of the term, the money from the account is moved to an instant access cash ISA with a lower interest rate.

Fixed rate bonds

Nationwide’s fixed rate bonds can be opened in branch or online if you’re 16 or over and a UK resident with an email address.

Once the fixed rate accounts are open, you can’t access your money until the end of the term. You can save up to £5 million in the accounts – although the Financial Services Compensation Scheme (FSCS) only protects up to £120,000 per person, per banking licence.

Money must be paid into the bond within 14 days of opening it. At the end of the term, your savings are moved to an instant access savings account paying a lower interest rate.

Are the boosted savings accounts worth it?

The headline interest rates on both the one and two-year fixed-rate cash ISAs can be beaten by other savings accounts on the market, based on the latest data from Moneyfactscompare as of 27 August.

AlRayan Bank’s one-year fixed-rate cash ISA pays 4.72% while Vida Savings has a two-year fixed-rate cash ISA paying 4.77%.

You’ll also find better headline rates on one and two-year fixed-rate bonds – AlRayan Bank’s one-year fixed-term bond is paying 4.87% interest while Investec Save’s two-year fixed-rate saver is paying 4.95%.

However, if you want to bank with an established name, Nationwide’s bumper rates on its one and two-year fixed-rate ISAs could be a good choice.

The two cash ISAs are paying higher rates for these types of accounts than the ‘Big Four’ banks – NatWest, Barclays, Lloyds and HSBC.

Nationwide’s one-year fixed-rate bond is much less competitive compared to other options on the market, but still offers the best rate out of the Big Four.

The two-year fixed-rate bond is also not as competitive and you can get a better rate with NatWest which is offering a two-year fixed term savings account paying 4.75%.

Rachel Springall, finance expert at Moneyfactscompare, said Nationwide customers can get in-person support at branches too, something a lot of digital banks don’t provide.

“Customers who find digital banking difficult, such as for accessibility reasons, will need to look beyond top rates to find a brand that can cater to their personal needs,” Springall said.

She added: “The fixed-rate cash ISAs from Nationwide are accessible for savers with either small or larger pots, with its minimum investment limit set at just £1, plus transfers in from both cash and stocks and shares ISAs are [currently] accepted. Those who do find they need their money sooner can even access the ISA funds early, subject to a set penalty.”

Families could be stung with a triple tax blow from next year when inheritance tax changes come into effect – but there are ways to lessen the hit.

Most unspent pensions will become subject to inheritance tax (IHT) in April 2027, which could leave some families facing IHT, an income tax bill and the loss of the residence nil-rate band allowance.

How families could be hit

Everyone has an allowance known as the nil-rate band which means estates worth less than £325,000 are not subject to IHT.

You can also benefit from a further £175,000 allowance known as the residence nil-rate band if you are passing your home to a direct descendant such as a child or grandchild.

Any unused amounts from these two allowances can be passed onto a spouse or civil partner, meaning some estates worth up to £1 million have no IHT liability.

However, the residence nil-rate band is cut by £1 for every £2 an estate is worth over £2 million.

If you are single, you lose your entire residence nil-rate band once your estate is worth £2.35 million or more and if you are in a couple you lose it all if the estate is worth £2.7 million or more.

The inclusion of most unused pensions within estates for IHT purposes from April 2027 could see more people losing their residence nil-rate bands.

Beneficiaries also have to pay income tax on any unused pension funds if the deceased was 75 or older when they died.

This means, from April 2027, some estates are facing a triple tax hit, when combining IHT and income tax on pensions, plus the loss of the residence nil-rate band.

According to calculations by insurance firm NFU Mutual, some estates may have an effective 91% tax charge on inherited unused pensions.

Adam Cole, retirement specialist at wealth management firm Quilter, said: “The prospect of some families facing an effective tax rate of over 90% on inherited pension wealth highlights just how significant the inheritance tax changes coming in from April 2027 will be.

“While these are quite extreme scenarios, many more families will find pensions that were previously outside the inheritance tax net are now contributing to much larger tax bills.”

Source: NFU Mutual

How to lower the impact from a potential triple tax blow

Gifting

Making gifts throughout your lifetime is one of the simplest ways you can lower the value of your estate, and a potential IHT bill.

There are various gifting allowances. For example, you can give away up to £3,000 tax-free each financial year to one or more people. This is known as the annual exemption.

You can also make regular gifts to people, as long as they’re made out of income and not capital and they don’t affect your standard of living.

This is known as ‘expenditure out of income’ and can include regularly paying rent for a child or adding money into an under 18’s savings account.

There are other inheritance tax allowances, plus if you give a gift at least seven years before your death, it won’t be subject to inheritance tax – unless the gift is part of a trust.

Sean McCann, chartered financial planner at NFU Mutual, said: “Making gifts during your lifetime is one of the most effective ways of reducing inheritance tax.

“While some gifts are immediately exempt, including gifts up to £3,000 each tax year and regular gifts from income that don’t compromise your normal standard of living, most others require you to survive seven years.

“In many circumstances it will be possible to take out a life insurance in trust to meet any potential inheritance tax liability on the gift.”

Take your 25% tax-free lump sum earlier

You can withdraw as much as 25% from your pension pots as a lump sum, up to a maximum of £268,275, from age 55 currently and from 57 from April 2028.

The advantage of doing this earlier is that it reduces your capital and the size of your estate.

However, there are drawbacks to taking the lump sum early, namely that the size of your pot will become smaller and there is less in there to continue growing.

Consider an annuity

Buying an annuity could be another option to lower the value of your estate.

An annuity is an insurance product which offers you a regular payment for a specific period of time in exchange for a lump sum of cash.

By buying one, you’re taking capital out of your estate and potentially lowering an eventual IHT bill for your loved ones.

Annuity rates have increased in recent years, making them a more attractive proposition. Sales of annuities have increased by 7.8% from 82,061 in 2023/24 to 88,430 in 2024/25, according to the Financial Conduct Authority.

Ed Wood, financial planning director at wealth manager Rathbones, said: “We would not advocate annuity purchases simply to avoid future inheritance tax, but the relative merits of annuity vs drawdown have slightly changed. For anyone who had previously ruled this out, it may be worth a second look.”

Many workers are snubbing pay rises amid fears of higher taxes, research suggests.

While most people would welcome higher wages, one in six (16%) have hesitated over or refused a pay rise, bonus or promotion because they were concerned they could lose out financially, according to research by Standard Life. This includes 5% who have turned an opportunity down altogether.

This is due to frozen income tax thresholds, which last increased in England, Wales and Northern Ireland five years ago and aren't set to rise until at least April 2031. The freeze is pushing people into higher tax brackets at a faster rate than if the thresholds had kept pace with inflation, which is known as fiscal drag.

The tax-free personal allowance would be £16,072 in 2026/27 had it kept pace with inflation – £3,502 higher than its current £12,570 level, Standard Life said.

The higher-rate threshold would be £64,274, rather than £50,270.

Based on this, the frozen personal allowance adds £700.36 to the annual income tax bill of a basic rate taxpayer who uses the allowance in full, Standard Life said.

It is not just higher taxes that are worrying people – they may also lose valuable tax allowances as their pay rises.

The analysis found that a fifth say paying a higher rate of income tax could make them consider turning down a pay rise, while 7% cite the risk of losing other financial support or allowances and 5% point to losing childcare support.

Neil Jones, tax and estate planning specialist at Standard Life , said: “A pay rise, promotion or bonus should be something to celebrate, so it’s concerning that some people are thinking twice because they’re worried they could end up worse off.

"It’s understandable that people want to protect valuable allowances and manage how much tax they pay, but turning down additional income without fully understanding your options could mean missing out unnecessarily.”

The risks of a pay rise

A pay rise is a good sign that your career is progressing but as you earn more, you could end up having to give up valuable tax benefits.

For example, parents could be taxed on Child Benefit payments or lose them altogether once one person in the household earns more than £60,000 under the High Income Child Benefit Charge. Under this tax, HMRC takes 1% of the total Child Benefit received for every £200 of income between £60,000 and £80,000. The money is fully clawed back at £80,000.

Basic rate taxpayers get a £1,000 per year personal savings allowance but this is reduced to £500 per year for higher earners. Additional rate taxpayers don't get a personal savings allowance.

There are more allowances lost once you earn above £100,000.

For instance, you lose eligibility for tax-free childcare once you earn above £100,000.

Plus, for every £2 you earn over £100,000, you lose £1 of your standard £12,570 personal allowance, dropping to zero once your income reaches £125,140.

This creates an effective 60% tax rate on taxable income between £100,000 and £125,140.

How to cut your income tax bill

There are several tax-saving strategies to consider before rejecting a pay rise.

The first recommendation is to increase pension contributions.

If your employer offers salary sacrifice, increasing pension contributions can reduce your taxable income while putting more into your pension.

Jones said: "This can be particularly useful if a pay rise takes you into a higher tax band or across another important income threshold. You may also pay less National Insurance (NI) than if you took the additional salary as cash."

The rules around pension salary sacrifice are due to change from April 2029 with a £2,000 cap being introduced on NI relief.

Pension contributions also benefit from tax relief. Basic rate taxpayers effectively receive 20% tax relief, while higher and additional rate taxpayers can qualify for relief at 40% and 45%. Depending on how contributions are made, the additional relief may need to be claimed from HMRC, so it’s worth checking you’re receiving what you’re entitled to.

Beyond pensions, you could also reduce your taxable income by making use of company benefits such as gym membership or a car scheme that may be available to fund through salary sacrifice.

Charitable donations can also reduce your taxable income and it may be worth changing the timing of how or when you receive a bonus.

Eamonn Prendergast, chartered financial adviser at Palantir Financial Planning, said: “The answer is planning, not earning less.

“When workers genuinely consider refusing career progression because of tax, policymakers should be asking whether the tax system itself has become part of the problem.”

Nvidia reported record adjusted quarterly earnings per share (EPS) of $2.22 for the second quarter (Q2) of its 2027 financial year following market close on 26 August – 5.7% above analysts forecasts of $2.1, and 120% higher compared to the same period last year.

Quarterly revenue was $96.2 billion, 4.4% above the $92.2 billion analysts polled by London Stock Exchange Group (LSEG) had forecast and representing a 106% year-on-year increase.

“Nvidia’s (NASDAQ:NVDA) results show that the artificial intelligence (AI) boom is not running out of demand,” said Lale Akoner, global market strategist at investment platform eToro. “The constraint is increasingly the industry’s ability to supply and finance the infrastructure required.”

The results sent Nvidia’s share price surging in after-hours trading. As of 9.45am BST on 27 August the shares had risen around 7.5% from the previous day’s close.

“AI has reached its inflection point,” said Jensen Huang, founder and CEO of Nvidia. “It’s doing useful work. Its tokens are productive and profitable.”

Nvidia’s results in detail

There were more positives for investors throughout Nvidia’s results.

Revenue for the Data Center division – the largest and most closely-watched of Nvidia’s business arms as it contains all of the AI hardware elements – beat expectations at $89 billion, up 117% year-on-year.

Nvidia’s gross margin increased from 72.5% a year ago to 75.0% in the latest quarter.

“Nvidia remains the main toll collector on big tech’s enormous AI budgets, capturing a large share of each new round of infrastructure spending,” said eToro’s Akoner.

Nvidia also issued Q3 revenue guidance of $108 billion (plus or minus 2%) – higher than the $105.1 billion that LSEG’s poll had projected.

“Blackwell Ultra drove the quarter, while Vera Rubin is already entering production,” said Akoner. “This smooth handover suggests the AI hardware upgrade cycle is accelerating without the pause some investors feared.”

How did other stocks respond to Nvidia’s results?

While growing demand for Nvidia’s products is a positive for the AI boom in general, it could be seen as a headwind for the companies that are reliant on buying them.

Alphabet fell 0.4% overnight, while Meta Platforms and Amazon both fell around 0.2%.

These are not large shifts, and could be due to other factors besides Nvidia’s results. But many are starting to question whether the so-called hyperscalers will ever recoup the hundreds of billions of dollars they are pouring into AI infrastructure.

“Once the initial excitement settles, questions are likely to resurface about the durability of this boom in revenues,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club. “It’s becoming less about whether Nvidia can keep climbing the AI mountain, and more about how long it can sustain this extraordinary pace of ascent and whether the vast sums being poured into AI infrastructure will ultimately deliver the returns needed to justify the colossal investment.’’

Higher costs for memory chips could also become a headwind for Nvidia in due course, according to Akoner.

“Rising memory costs are expected to push gross margins down from 75% to 71%-72%,” she said. “Nvidia’s ability to raise prices should help margins recover, showing considerable pricing power, but it cannot escape supply pressures entirely.”

It’s a difficult time for value investors.

The theory goes that value stocks – those trading at a lower price relative to their fundamentals than others – ought to outperform the rest of the market over the long term.

That’s not how it’s playing out. In the 10 years to 31 July 2026, the MSCI World Value Index generated an annualised return of 11.0%, compared to 13.3% for the MSCI World Index. The former index is based on the latter, with a tilt towards value stocks.

Momentum has been a more dominant investing factor during that time. The MSCI World Momentum Index has outperformed the main index over the last 10 years, with an annualised return of 15.2% during that time.

The rise of momentum investing was acknowledged in July 2026 by veteran value investor Terry Smith, CEO and chief investment officer of investment management company Fundsmith, when he told Fundsmith Equity Fund shareholders he would start paying more attention to the momentum factor when selecting investments.

“Periods of market exuberance can be particularly testing for valuation-driven investors,” said Cedric Jacque, investment manager at wealth manager Lloyd Capital. “Today, the combination of the artificial intelligence (AI) investment boom, strong momentum and elevated valuations has clear echoes of previous late-cycle markets.”

Why is value investing struggling?

There are two main reasons why value investing has trailed the returns of alternative strategies in recent years, though the two are interrelated.

The first is the rise of passive investing. According to data from investment research company Morningstar, passive funds’ share of the total investment fund market has risen from 12.4% in January 2008 to 46.4% in July 2026.

Most passive funds are market-cap weighted, meaning that the largest companies form the largest part of the fund. When investors buy index funds, they are therefore putting most of their investment into the largest companies in the index. In other words, the more popular passive investing becomes, the more money pours into the world’s biggest companies, pushing their share prices higher regardless of any change in their fundamentals. Indeed, many of their buyers are likely not looking at their fundamentals, but simply buying an index fund.

The rise of passive funds has coincided with an era during which technology stocks have ballooned in value. Developments like cloud computing, the proliferation of smartphones and, more recently, the AI boom have concentrated much of the market’s growth into tech stocks.

Tech is a tricky sector for value investors, because it tends to look far more at the future than the past or present. As of 21 August, software company Palantir Technologies traded at over 150 times its trailing earnings and 112 times its forecast earnings; the equivalent figures for Tesla are around 336 and 185 respectively. Tech investors price in expectations of rapid future growth that make the sector effectively off-limits for value-focused investors.

Terry Smith highlighted the convergence between these two phenomena in his shareholder letter, ascribing much of his fund’s underperformance to “a market which is dominated by so-called passive or index funds… and the boom surrounding AI which have combined to produce a market dominated by momentum rather than any fundamental factors like profitability, returns on capital and growth”.

Does value investing still work?

Smith hasn’t abandoned value investing outright, but he identified a need to “take more account of momentum… in our investment decisions”.

That shift has drawn criticism, though, with some arguing the current environment is precisely where it is most important to adhere to value investing’s principles.

“We agree with [Smith] that a market driven by passive flows and momentum can become increasingly distorted, that momentum sits at levels last seen in 1999, and that this will end badly,” said Lloyd Capital’s Jacque. “Where we part ways is on the remedy.

“We believe that becoming more of a crowd follower, and setting aside time-tested investment principles, is not a solution we can get behind,” Jacque continued. “We continue to believe that disciplined, bottom-up value investing, with a focus on earning power, is the right way to compound capital over the long term.”

Jacque argued that the passive investment boom isn’t a threat to patient value-driven investors, but rather creates an opportunity.

“Passive investing and index flows should increasingly expand the pool and the magnitude of the mispricing and therefore lead investment opportunities for the patient long-term shareholders,” he said. “We are thrilled about that.”

US Treasury secretary Scott Bessent has found himself caught in a standoff with currency traders more than a fortnight after the US and Japan jointly intervened to buy yen for the first time since 1998.

The move strengthened the yen at the start of August, but it has since given back roughly half of its post-intervention gain. Currency analysts warn the fundamental drivers of a weak yen, especially a yield gap between Japan (where rates are 1%) and the US (where rates are over 3.5%), have not gone away.

Scott Bessent knows a thing or two about currency trading, says The Guardian. He was part of the George Soros team in 1992 that made a billion dollars by forcing the pound off the European Exchange-Rate Mechanism. His intervention to stabilise the yen wasn't an act of charity. Japan is a “cash spigot”, with the cheap yen funding a global “carry trade” that helps prop up US technology shares.

If the yen's slide continues, then Japan might be forced to respond with “aggressive” interest-rate rises. That could quickly unwind the carry trade and trigger a Wall Street rout, as happened two years ago when a surprise Japanese rate rise sent global markets tumbling.

Don't worry, the risk of a “disorderly” unwind “seems low”, Masayuki Nakajima of Mizuho Bank tells Katie Martin in the Financial Times. The danger of higher Japanese rates is now “extremely well understood” by traders, who have made appropriate preparations. Rather than a snap yen rally, “all the ingredients are in place” for the carry trade to continue and yen selling pressure to persist. “It is increasingly clear that the market is in the mood for a fight” with the US Treasury.

What does Scott Bessent’s intervention mean for the global economy?

The “US currency intervention was not only ineffective, but counterproductive”, says George Saravelos of Deutsche Bank. Washington has been encouraging Tokyo to tap an emergency Federal Reserve dollar facility, inadvertently sending a signal that “it is not comfortable” with the “direct US Treasury sales” that Tokyo usually uses to prop up the yen.

If Scott Bessent's yen “ruse” was designed to keep US borrowing costs under control, then it has failed, agrees Simon Nixon on Substack. Washington's use of “unorthodox” tools, including selling euros rather than dollars to fund the yen intervention, has only “deepened the anxiety it was meant to soothe”. Bond traders sniff out hesitation like sharks detect blood in the water.

The spike in government debt isn't only affecting America. Japan's own ten-year yield hit a 30-year high on Monday, while France's has topped 4% for the first time since 2008, potentially pushing the country closer to the brink of a “debt crisis”.

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Investors were feeling deeply bearish about European stocks earlier this year, with warnings that the closure of the Strait of Hormuz would unleash the continent's second energy crisis in a decade. That danger has not passed, but markets got carried away. Unusually strong second-quarter earnings have allayed fears of stagflation. The Stoxx Europe 600, a pan-European stock index that includes UK-listed shares, is up 13% since its low in March.

German earnings on the DAX index rose 11% year on year, the best showing “in at least ten quarters”, according to Deutsche Bank analysts. The country's carmakers remain in poor health, but that was more than offset by a superb showing from industrial and chemical firms. The wider Stoxx 600 did even better, recording year-on-year earnings growth of 23%.

European stocks have turned in their “best earnings season in nearly four years”, say Sagarika Jaisinghani and Alice Atkins on Bloomberg. Miners and industrials are booming. The continent's small technology sector is outperforming the US giants, led by Dutch chip specialist ASML, whose shares have risen 57% this year. Foreign investors are piling in, with European stocks attracting the second-strongest inflows in a decade so far this year. Given the challenging backdrop, the “resilience” of the continent's corporations is deeply reassuring.

European stock markets have long been overshadowed by Wall Street and some of the racier Asian markets, says Joseph Wilkins on CNBC. Goldman Sachs analysts argue that many of the things investors think they know about Europe are “myths”. Chinese competition, for example, isn't an existential challenge, because carmakers represent just 1% of the continent's market capitalisation. “Since 2022, European banks have considerably outperformed the Magnificent Seven.” And with anxiety growing about AI exposure, the old continent offers an obvious “hedge”.

Eurosclerosis continues for European stocks

US equity valuations are “on the nuttier side of bonkers”, but that doesn't necessarily make European stocks good value, says Stuart Kirk in the Financial Times. The Euro Stoxx 50 index of eurozone blue-chips has managed a fairly boring annualised return of 11.1% over the past decade. True, ASML is a “world-class firm”, but the performance of the continent's other industrials and banks is underwhelming when compared with US peers. “Europe's 25% price/earnings discount to US shares is not deep enough.”

European growth remains sclerotic, says James Carter for National Review. The EU's GDP per capita is just half that of the US, down from 76.5% in 2008. Contrary to popular belief, Europeans work just as much as Americans; indeed, employed Europeans average longer working weeks than their US counterparts. The real issue is sluggish productivity growth.

The danger of an energy shock has not gone away either. European natural gas prices have been trading above €60/MWh, levels not seen since the tail end of the 2022-2023 energy crisis. The continent's gas storage is the lowest it has been for this time of year since at least 2009.

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Investors have been warned against putting money into mini bonds issued by unregulated companies just five years after the Financial Conduct Authority (FCA) banned promotions of the risky products.

The high-profile collapse of London Capital & Finance in 2019 – where 11,600 bondholders lost an estimated £237 million – prompted the FCA to ban the marketing of mini-bonds to retail investors in 2021.

They can now only be sold to high-net worth and sophisticated investors who can handle more risk in their investment portfolio.

But the regulator remains concerned after the July failure of Woodville Consultants, a litigation funder that raised capital from retail investors through unregulated loan notes.

The FCA is now warning consumers about the risks of investing in loan notes and mini-bonds issued by unregulated companies, after it said it continues to see people lose money in these high-risk investments.

What is a mini bond?

A mini bond usually involves lending money to a company for a set period in return for interest.

Mini bonds were popular pre-pandemic when savings and interest rates were at record lows.

The rate of return is often high - even at double digits - to tempt investors and reflect the risk. But they are not regulated so you can’t get any recourse from the Financial Services Compensation Scheme or Financial Ombudsman Service if something goes wrong.

Ultimately, if the company fails, consumers could lose every penny.

Nouran Moustafa, practice principal for Roxton Wealth, said her starting point for an ordinary retail client with mini bonds is a very simple 'no'.

She said: “The word ‘bond’ sounds reassuring, but some of these investments are anything but. You can be lending to one unregulated company, with little liquidity, limited diversification and the possibility of losing every penny if that business fails.”

Moustafa feels they could “potentially” have a place, but if so “only for a very small minority of sophisticated investors who fully understand the structure" and who aren't relying on that money for the future.

“My rule is simple: if losing 100% of that investment would materially change your life, you should not be anywhere near it," said Moustafa. “No yield is worth destroying your financial plan.”

What is the latest mini bond warning about?

Despite promotions of mini bonds to mainstream investors being banned since January 2021, the FCA said consumers may still come across adverts for loan notes and mini bonds in everyday places including social media, online adverts or websites promoting high fixed returns.

The adverts can look simple and safe but may be scams, said the FCA.

Lucy Castledine, director of consumer investments at the FCA, said: “Big, fixed returns are a warning sign, not a guarantee. Loan notes, mini-bonds and other speculative illiquid securities are high-risk investments and are not suitable for most people.

“Ordinary retail investors should only invest through regulated firms because if they invest through an unauthorised firm, they may have little or no protection if things go wrong. We are working hard to prevent harm, but consumers should still stop and check before investing.”

Anita Wright, chartered financial planner for Ribble Wealth Management said mini bonds can be seductive but investors should ask why the offer reached them.

She said: “Credit this good doesn't need retail money, banks price it for a living, and private credit funds fight over the scraps. When the capital is raised instead from savers through a commissioned introducer, every desk with a credit team has already looked and walked away.

“You are not early. You are last,” Wright said, adding that the only people who know the business they are lending to and can afford to write off the investment completely should consider buying one.

“Even then the deal is lopsided,” she continued. “If the business fails you lose like a shareholder, if it thrives you still only get your interest.”

Households will have a new energy-saving option that they can pickup in the supermarket from next week – plug-in solar panels.

The Iran conflict and cost of living crisis have pushed up energy bills in recent months with Ofgem's price cap remaining high.

Rooftop solar panels are often highlighted as one way of going green and potentially reducing your electricity bills.

But not everyone can afford the upfront cost and many don’t have the roof space or permission to install them.

There will be another option from 27 August though when government changes to energy power regulations go live and shops such as supermarkets and hardware stores including B&Q and Lidl will be allowed to sell plug-in solar panels.

These can be installed on balconies or in gardens to capture energy from the sun.

What is a plug-in solar panel?

A plug-in solar panel is a smaller and less powerful version than a rooftop one.

They are popular in Europe but couldn't be used in the UK until a change in regulations.

Rather than attaching to your roof, you can find a common sunny spot at your home such as a balcony or garden and connect it to your mains via a cable that plugs straight into a typical socket.

The idea is that people in flats or who can’t install panels on their roof such as renters or leaseholders can still try to reduce their energy bills and go solar.

Similar to a rooftop panel, electricity is generated from sunlight.

But there are differences as the plug-in panels can't store power (with the rooftop versions, you can store the power in a special home battery), meaning you need to be home to actually use it as it is being generated.

How much could you save with a plug-in solar panel?

The government estimates that the panels could save households between £70 and £110 on energy per year.

There are other costs though. You will need to purchase the kit, which is estimated to cost between £400 and £600. You will also need a professional tradesperson to install it.

It may therefore take a few years to breakeven.

The savings will ultimately depend on your own energy usage but anything plugged in will use energy from the panel first before drawing it from the National Grid and your main bill.

Is a plug-in solar panel worth it?

The cost of installing a rooftop solar panel starts from £6,000, according to the Energy Saving Trust so a plug-in panel is cheaper to start with.

But there is less capacity for energy savings.

The maximum power of the plug-in panels has been capped at 800 watts.

The website Money Saving Expert suggests that’s the equivalent of two kilowatt hours of electricity per day, while the average UK household uses 7.4kWh.

Another issue is that the panels don’t store energy, so it is best to make sure they are being used while you are at home so you can benefit from the power being generated.

Renters and leaseholders may also need to get permission to install a plug-in panel depending what their rental or leasehold agreements say.

Martyn Fowler, founder of green energy supplier Elite Renewables, said: “The value is highest when you use the electricity as it is being generated. If the system produces a unit of electricity and you consume that unit in the house, you have avoided buying one from your supplier.

“Homes with a steady daytime load will benefit most. Someone working from home is likely to use more of the generation than a property that sits empty all day.”

Orientation matters as well.

Fowler added: “A panel mounted vertically on a balcony will generate less over the year than the same panel at a good angle facing south.

“Plug-in solar is a useful entry point into solar. It will not transform your energy bill, but it can be a low-cost way to reduce grid use and start generating some of your own power.”

NS&I is raising its Premium Bonds prize fund rate from September, taking the total monthly prize pot close to £500 million.

The government-backed savings bank will increase the prize fund rate from 3.80% to 4.35% from the September draw.

NS&I says there will be more than 308,000 extra prizes up for grabs, including 12 additional £100,000 prizes, 27 more £50,000 prizes and an extra 51 £25,000 prizes.

There will also be over 2.3 million £100 prizes in total and the overall monthly pot will rise by £63 million to more than £497 million.

NS&I is also increasing the odds of winning from September, from 22,000 to one to 21,000 to one. The odds were also raised in July.

Caitlyn Eastell, personal finance analyst at data firm Moneyfactscompare, said: “[Premium Bonds] may be particularly appealing to savers who have already used their ISA allowance or are likely to breach their personal savings allowance.

“However, despite the improved odds, they are a game of chance and the 4.35% shouldn’t be mistaken for a headline rate.”

Eastell added: “The best easy access ISAs pay over 4.5% and returns could be even higher if [savers are] willing to lock away their cash.”

Source: NS&I

NS&I boosts rates on savings accounts

In addition to increasing the Premium Bonds prize fund rate and odds of winning, NS&I is also increasing interest rates on 10 savings accounts from today (18 August).

NS&I is boosting rates on its easy-access Direct Saver and Income Bonds savings accounts.

The Direct Saver’s rate is increasing from 3.45% gross/AER to 3.75% gross/AER while the Income Bonds savings account’s rate is rising from 3.4% gross/3.45% AER to 3.69% gross/3.75% AER.

Interest is paid yearly on the Direct Saver. You can hold a minimum of £1 and maximum of £2 million in the account.

Interest is paid monthly on the Income Bonds account. You need a larger £500 to open it and can hold a maximum of £1 million.

NS&I is also hiking rates on its one, two, three and five-year fixed-rate Guaranteed Growth and Guaranteed Income British Savings Bonds.

Rates are increasing by between 0.09 and 0.15 percentage points.

Source: NS&I

Are the savings accounts worth it?

If you like the idea of your money being 100% backed by the Treasury, the Direct Saver and Income Bonds could be more appealing now their rates have increased.

Money in most savings accounts is protected under the Financial Services Compensation Scheme (FSCS) in case your provider collapses, but only up to £120,000.

However, even with your money being backed by the Treasury through the Direct Saver and Income Bonds, you can get more competitive rates via other easy-access accounts on the market currently.

Santander’s Edge Saver account is paying 6% interest, if you open a Santander Edge or Santander Edge Explorer current account. The accounts come with respective monthly fees of £3 and £17.

If you don’t want to pay a monthly current account fee, you could also put your money in a cahoot Sunny Day Saver and get 5% on balances up to £3,000, or the Chase Saver has an interest rate of 4.5% on balances up to £3 million.

NS&I’s changes to their fixed-rate British Savings Bonds have made them best buys, correct at the time of writing.

Based on MoneyWeek analysis of Moneyfacts data, the one, two, three and five-year bonds are all in the top 10 for their respective terms, however, the top rates on the market are currently paying up to 5%.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “Given that this is the most popular term to fix your savings over, [NS&I is] clearly hoping to persuade rate-chasers to make a small compromise in order to secure a rate that’s 100% backed by the Treasury.

“There are better deals on offer elsewhere – especially if you are fixing for longer – so if the rate is the most important thing to you, you can find a more rewarding home for your money.

“However, getting so close to the most competitive deals could be enough to tempt some savers into the NS&I fold.”

Nationwide has increased interest rates on its fixed term savings accounts and ISAs, with customers now able to get up to 4.7% on their cash savings.

The higher rates are available if you lock your money away to grow for a fixed amount of time, with no withdrawals allowed.

For the ISA products, any interest earned during the term will be tax-free.

Richard Stocker, Nationwide’s head of savings, said: “We’re pleased to launch new higher rates on our fixed rate cash ISAs and bonds, while continuing to ensure customers can access the same rates whether they open their account online or in branch.

“With the UK’s largest branch network, backed by our Branch Promise, we’re committed to ensuring customers who prefer face-to-face service aren’t disadvantaged. Many of our branch-accessible products are among the highest-paying available from a major high street provider, reflecting our commitment to combining choice, value and support for savers.”

The improved interest rates make the accounts some of the most attractive among major high street savings providers, but they are not the highest available on the market.

What are the new rates?

Interest rates for Nationwide’s new fixed-term ISAs range from 4.4% to 4.7% depending on the amount of time you choose to lock your savings away for.

As the account is locked for a fixed-term you cannot access it whenever you like without paying a penalty.

If you make any withdrawals from the account, you will need to pay an early access charge equivalent to between 60 and 300 days’ interest depending on the term of your ISA. Your ISA will also be closed.

There is a 14-day grace period after opening the account where you can withdraw your cash without paying a penalty.

You must be a UK resident aged 18 or over to open one of these accounts. Any interest you earn from cash held in an ISA is entirely tax-free.

The table below shows the new fixed-rate ISAs and their interest rates:

Source: Nationwide, 14 August

The new interest rates for non-ISA accounts are slightly lower than the new rates for the ISA products.

These accounts can be opened by UK residents aged 16 and over and no withdrawals are allowed at all 14 days after opening the account.

A table showing a full list of the new rates can be found below:

Source: Nationwide, 14 August

Customers can access the exact same rates whether they open the accounts in-branch or online.

Are Nationwide’s new savings accounts any good?

Nationwide’s new, higher rates on fixed-term accounts are decent, but are still not the best on the market.

The top 4.7% rate on the five year fixed-rate ISA is just shy of the market-leading rate of 4.85% from Leek Building Society and Vida Savings.

This is the case for all of the new ISA accounts, which each offer a good interest rate, but none are the absolute best in the market.

As for the non-ISA savings accounts, there is a much bigger gap between Nationwide's rates and the market leaders.

The table below shows Nationwide’s new rates compared to the market leaders.

Source: Moneyfactscompare.co.uk, 14 August. Calculations based on £25,000 lump sum investment.

Nationwide customers may be happy to miss out on a slightly lower interest rate considering other perks offered by the building society – for example, the ability to visit bank branches.

Nationwide has promised not to close any more branches until at least the start of 2030, in contrast to the prevailing trend of branch closures.

Nationwide has also offered a £100 Fairer Share bonus to millions of eligible customers each year since 2023.

Rachel Springall, finance expert at Moneyfacts, said: “While they might not be market-leading rates overall, savers who would prefer to place their cash in a fixed account over the longer term, with a provider that offers an in-branch service, will find them competitively priced against other high street brands.

“Customers who flock to Nationwide can benefit from in-branch face-to-face support, which is ideal for those who may have accessibility issues, plus, its current account range is well worth considering due to the variety of cost-saving add-ons. When it comes to finding the best savings accounts, it’s always important to shop around and keep any nest egg as tax-efficient as possible, such as by using an ISA.”

Millions of households face further water bill rises to fund £3.4 billion worth of investment in the network.

The regulator Ofwat has provisionally approved a package of funding to increase capacity, provide cleaner drinking water and upgrade treatment sites.

However, it means bills are set to rise by up to £43 a year between 2027 and 2030 for many customers in England and Wales.

The hikes are not yet confirmed and are going through a consultation phase, before any final approval is made in December.

The rises come in addition to previously approved increases to upgrade the network between 2025 and 2030.

Helen Campbell, executive director for delivery at Ofwat, said: “We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”

Which water firms are increasing bills?

Customers of the following five water firms are set to see their bills rise over the three-year period:

Source: Ofwat

Water firms say they need to increase customers’ bills to replace pipes and reduce leaks across the network, provide water to more people and businesses and because of heavier rainfall which can lead to more flooding and loss of water from storm overflows.

However, recent rises have been met with criticism from households and campaigners following water supply issues and pollution in rivers and seas.

Kierra Box, water campaigner at environmental group Friends of the Earth, said: “Our rivers and seas are chock full of filthy sewage and chemicals, which have seen next to no improvement despite recent bill hikes.

“Now ordinary people are being asked to foot the bill once again to pay for decades of water company inaction on upgrading our crumbling water infrastructure. It’s daylight robbery.”

Customers with Anglian Water, Dŵr Cymru Welsh Water, Hafren Dyfrdwy, Northumbrian Water, South West Water, United Utilities, Yorkshire Water and SES Water will face no further bill rises between 2027 and 2030.

How you can cut your water bill

It’s worth regularly checking your water bill and comparing it to earlier bills to see if there has been a spike.

If there has been, you might have a water leak in your home that means you’re using a lot more than you usually do and will need to get fixed.

You could also switch to a water meter which charges you based on your actual usage rather than the rateable value of your home. Most homes can have a water meter installed for free.

However, a water meter can see your bill rise as well as fall. The Consumer Council for Water (CCW), which represents water and sewerage customers, has a calculator you can use to find out if you might save money with a meter.

Typically, single-person households or homes with a high rateable value tend to benefit the most.

You might also be eligible for the WaterSure scheme which caps your water bill.

You’ll need to have a water meter, be on certain benefits such as Universal Credit or Pension Credit and have a medical condition that means you have to use extra water or have a large number of people living in your household.

Plenty of water firms offer customers free or cheap water-saving gadgets such as leak-detecting strips and water-efficient shower heads too.

Advice website Save Water Save Money has a tool on its website where you can enter your postcode and find out what gadgets you’re eligible for.

There are smaller practical steps you can take to save water around your home, such as making sure your dishwasher is full when using it and taking shorter showers.

The UK’s investment trusts are declining in popularity with the country’s investor base, new research suggests.

Financial consumer site Boring Money’s latest investment trust report shows that investment trust ownership among UK investors has fallen to its lowest level since the company started tracking adoption in 2021 – falling from 12% to 9% in the last year.

The report, based on four surveys (the largest of which included 6,000 nationally representative UK adults) reveals a stark fall in the percentage of 35-54 year-olds owning investment trusts, where adoption fell from 12% to 7% over the last six years.

“[US activist hedge fund] Saba created upheaval in the industry and highlighted the importance of the retail investor vote,” said Holly Mackay, CEO of Boring Money. “This coupled with declining levels of adoption is a real call to action for boards [of investment trusts] to engage with the customers of tomorrow, and demonstrate the role that trusts have to play in an investor’s portfolio.”

A lower percentage of UK investors holding investment trusts doesn’t necessarily mean they’ve become less popular in absolute terms though, given there are now more UK investors than ever before.

But Boring Money also noted a decline in the proportion of assets held in investment trusts on individual investment platforms, indicating ownership is declining in absolute terms too.

Why is investment trust ownership declining?

Investors appear to be favouring simpler and often cheaper vehicles over investment trusts.

Exchange-traded funds (ETFs) have surged in popularity recently: over the last six years, ETF ownership has nearly quadrupled from 5% to almost 20%.

“ETFs feel easier for people to compute,” said Mackay. “They have become synonymous with cheap and easy. Investment trusts are still thought to be difficult and old-fashioned.

“Trusts are trying to compete with 60 page PDFs and complex explainers and this misses a key point about getting through to retail investors,” she continued. “Beyond the hobbyists, most people want to spend as little time on this as possible. It’s about delivering key messages succinctly and with limited space.”

Boring Money’s research suggests that 45% of today’s investment trust holders have held their investment trusts for 10 years or more, compared to 18% of ETF holders, and that eight times as many investors bought ETFs for the first time in the last year compared to investment trusts.

“To try to capture some of the growth going to ETF providers, investment trusts have more to do to communicate their benefits to a broader investor base which has higher expectations for simple, compelling messaging and competitive price points,” Mackay said.

How is the investment trust industry responding?

The investment trust industry is moving to address this communication deficit.