Investors are facing major changes to ISA rules from April 2027 as the government tries to foster a culture of investing in the UK.

The reforms, as confirmed in the 2025 Autumn Budget by chancellor Rachel Reeves, will see a new annual cash ISA limit of £12,000, down from the current £20,000 ISA allowance, for under 65s.

The £20,000 annual ISA allowance – which also covers stocks and shares, innovative finance ISAs and lifetime ISAs – will remain.

A new 22% charge cash held within stocks and shares ISAs will also apply, while retail investors will be banned from having a stocks and shares ISA made up wholly of money market funds.

Under 65s will also not be allowed to transfer money from stocks and shares ISAs into cash ISAs.

However, how these new “anti-circumvention” rules apply to those aged 65 and over is more nuanced.

How will the new ISA rules apply to 65-year-olds and older?

Government guidance states that the 22% charge on interest earned on cash in a stocks and shares ISA will apply to those aged 65 and over.

Meanwhile, the prohibition on 100% cash-like investments (money market funds) will also remain in place for those aged 65 and over.

However, individuals aged 65 and over will be able to transfer money from stocks and shares ISAs into cash ISAs when the new rules come in from April 2027, unlike those aged under 65.

Jason Hollands, managing director at wealth management company Evelyn Partners, said the new rules were adding an unneeded layer of complexity for all investors and “undermine the tax-free promise”.

He added: “We've never had different rules applying to different people depending on age.”

Hollands welcomed that 65-year-olds and over will be able to transfer money from stocks and shares ISAs into cash ISAs when the new rules come into force, allowing them to free up more liquid cash and avoid paying tax on cash held within stocks and shares ISAs.

A HM Treasury spokesperson said: “Parking cash long term in a non-cash ISA to earn tax-free interest isn't investing. These changes will push more people towards investments that actually grow their money, and industry leaders including Nationwide and the Building Societies Association back us on this.

“Savers can still hold up to £12,000 in a cash ISA, and those 65 and over keep the full £20,000 allowance.”

How exactly do the new anti-circumnavigation rules apply?

The 22% charge on cash held within stocks and shares ISAs will apply to any interest paid on it.

A number of investment platforms such as Bestinvest, AJ Bell and interactive investor, pay interest on cash held within a stocks and shares ISA.

Individuals will not have to declare any interest paid to HMRC as it will be paid by investment brokers.

Cash-like assets, like money market funds, will be allowed within stocks and shares ISAs, so long as they don’t make up 100% of the portfolio.

Investments such as shares, funds, investment trusts, ETFs and bonds, including gilts, will not be treated as cash-like assets under the new rules.

Transfers from stocks and shares ISAs will not be allowed for investors aged under 65, although they will be able to transfer money from a cash ISA to a stocks and shares ISA. This rule doesn’t apply to investors aged 65 or over.

Assuming no Labour MP throws their hat into the ring to challenge him, Andy Burnham looks set to be the UK’s next prime minister – and he could assume the office as soon as 17 July.

You might be wondering what a Burnham administration could mean for your money, in particular your investments. After all, the UK’s stock market has had an eventful year so far: the FTSE 100 reached its all-time high of 10,935 on 27 February, just before the Iran war broke out. It fell off sharply over the following weeks, and while much of the lost ground was recovered by the end of March, it still has not regained its late February highs.

UK stocks have been undervalued compared to international counterparts for some time, and while that’s a positive for value-focused investors, the hope is that something will, at some point, catalyse a revaluation so their prospects rise.

Could the UK’s seventh prime minister in 10 years be that catalyst, or is it more unwelcome news as far as the UK’s stock market is concerned?

“If Andy Burnham does get the keys to Number 10, he'll face a supremely tricky balancing act,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club.

The apparent prime-minister-in-waiting outlined his vision for the country on 29 June in a speech that majored on strengthening regional autonomy, but was otherwise light on detail.

“Investors will be looking for a clearer roadmap showing how growth can be boosted sustainably without unsettling bond markets or putting further strain on already stretched public finances,” said Streeter.

How UK stocks have reacted to the prospect of prime minister Burnham

There is widespread skepticism about how effectively Burnham can meet these challenges. Equally, it is yet one more source of turbulence for a market that could probably do without it.

“I think what the markets would like to see is some stability,” Jo Rands, portfolio manager on UK equity income at asset manager ClearBridge Investments, told MoneyWeek.

It is notable, though, that UK stocks have not reacted strongly (in either direction) since Keir Starmer announced he would step down, and Burnham emerged as his almost nailed-on replacement.

While some sectors have experienced jitters – Rands highlighted potential nationalisation concerns impacting the utilities sector – on aggregate there has been little reaction. The FTSE 100 gained 0.7% on 22 June, the day Starmer announced his resignation, and rose a further 0.6% between then and 30 June.

“The markets have been thinking about this potential change for a while,” said Rands. “Last year we were talking about the risk for UK equities thinking about the local elections, and the implications that could have on the market. So it’s been rumbling away in the background.”

Uncertainty itself, in other words, was already priced in. What is still not certain – and will likely have the greatest impact both on the UK economy and UK stocks – is who Burnham chooses to replace Rachel Reeves as chancellor.

“A week ago, when you looked at the prediction markets, Wes Streeting was the favourite,” said Rands. “Markets quite liked that.” But Ed Miliband appears to have become the more likely candidate in the meantime, and the markets are less keen on the prospect of him in number 11, according to Rands.

Whoever takes the role will be the primary person responsible for executing the precarious economic balancing act that Burnham will face – an unenviable task.

Why UK stocks offer diversification

The good news is that the UK stock market is not the same thing as the UK economy. The large cap stocks of the FTSE 100 are predominantly global companies who derive their revenue from all over the world – so they can perform strongly even if UK growth slows.

“A lot of people conflate UK equities with the UK economy,” said Rands, adding that it’s often more the mid- and small-cap end of the UK market (accounting for around 12% of its total value) that are heavily exposed to the domestic economy.

UK stocks also offer rich sources of diversification. Compare the top ten holdings of the S&P 500 and the FTSE 100:

*Based on weightings in the Vanguard S&P 500 UCITS ETF (LON:VUAG) and the Vanguard FTSE 100 UCITS ETF (LON:VUKG), which track the respective indices, as of 31 May.

Five of the S&P 500’s top ten holdings are designated as Information technology companies – with two of the other five being represented by Alphabet’s two different share classes. But given that all of the exceptions are members of the ‘Magnificent 7’ group of AI-relevant stocks, it’s fair to say that all of them are tech companies in a fundamental sense, if not according to their official designations.

The FTSE 100, meanwhile, has six different sectors included in its top ten companies, none of which include more than two companies.

“Global indices are predominantly US, which are predominantly tech,” said Rands. “In the UK, it’s spread across a number of different sectors.”

Two Premium Bonds holders have woken up millionaires after NS&I revealed the winners of the July 2026 prize draw.

The latest £1 million jackpot winners come from Reading and Warwickshire and won with bond numbers 250TP871786 and 217AV429216, respectively.

The Reading winner bought their bond in July 2015 and has a total holding of £49,931, close to the maximum of £50,000.

The Warwickshire champ purchased their winning bond in January 2014 and holds a total of £14,000 in Premium Bonds.

How many prizes will be issued in July’s monthly draw?

More than 6.2 million tax-free prizes, worth over £433 million, will be paid to Premium Bonds winners in July.

This month, there were more than 136 billion £1 bonds eligible to be picked in the draw. The total value of the prizes dished out since the first draw in June 1957 is £42 billion.

The table below shows the breakdown of Premium Bonds prizes in July:

Credit: NS&I

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

NS&I’s Agent Million will inform the £1 million jackpot winners in person.

NS&I says bond holders can check if they have won prizes ranging from £25 to £100,000 the day after the first working day of each month.

You can check using the Premium Bonds prize checker app, by visiting the NS&I website or by asking Alexa. For July 2026, Premium Bonds holders can check from 2 July.

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.

Just make sure you’ve got your bond number or NS&I number to hand so you can access your account.

As Premium Bonds do not expire, it may be worth checking if you have any prizes waiting for you even if you bought them years ago.

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

We look at the alternatives to Premium Bonds in a separate piece.

Hundreds of thousands of young people have more than £2,000 sitting unclaimed in Child Trust Funds (CTFs), a type of tax-free savings account for children born between 2002 and 2011.

The government has now launched a taskforce aimed at reuniting people with their money, with ministers teaming up with financial institutions including Nationwide, HSBC and Sheffield Mutual to reconnect savers with their accounts.

Roughly 6.3 million CTFs were opened for children born between 1 September 2002 and 2 January 2011, mostly by parents and guardians but some by HMRC.

The tax-free funds could be opened as cash savings or stocks and shares accounts.

These accounts started maturing in 2020, but due to a number of reasons including difficulty tracing them, people forgetting they have them or deciding to leave the funds invested, more than 750,000 matured accounts still remain unclaimed.

Once a CTF matures, you can no longer add money into it and it is typically moved into a default account paying a weak interest rate.

Rachel Blake, economic secretary to the Treasury, said: “Too many young people are missing out simply because they are not aware of where their Child Trust Fund is or how to access it.

“We are acting to fix that by bringing government and industry together – improving coordination and making it easier for people to find and claim what’s rightfully theirs.”

HM Treasury said the taskforce will “improve tracing approaches, test more effective engagement with young people, and drive practical actions that lead to more accounts being claimed”.

Its launch comes after HMRC wrote letters to thousands of 21-year-olds reminding them to claim the money in their CTFs in April.

HMRC is reminding eligible young people they can claim the funds through online campaigns on social media platforms like X, formerly Twitter.

Antonia Medlicott, founder and managing director at personal finance website Investing Insiders, welcomed the government’s taskforce but said more should have been done sooner.

She added: “Far too many Child Trust Funds are going unclaimed. Some accounts will hold significantly more than the £2,200 average figure that has been circulated, and it’s a shame to see that they have been left until now.”

How to track down lost Child Trust Funds

In the first instance, you should contact the provider the CTF was set up with, who should be able to reunite you with the account.

Alternatively, you can use HMRC’s Child Trust Fund tool to request your CTF details if you’re over 16. Make sure you’ve got your National Insurance number to hand.

You can also use this tool if you’re a parent or guardian of a child under 18. You will need the child’s full name, address and date of birth, and also any previous names you or the child have used.

You may have a CTF under your name even if you or your parents didn’t set one up for you. If an account wasn’t set up for an eligible child after 12 months, HMRC opened one on the parents’ behalf.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “Of the 6.3 million accounts that were opened, 1.8 million were opened by HMRC, so there’s a decent chance the parents of these children never engaged with where the money ended up.

“For those who did choose where to put the money, so much time has passed that there’s a real risk they moved house and didn’t update their details, and if the paperwork has gone astray, they may have forgotten these accounts entirely.”

What should you do once you’ve tracked down the Child Trust Fund?

Unless you need all the money from the CTF for an emergency, it could be worth keeping some of it invested to grow.

However, it might be worth transferring the remaining funds from the CTF into a Junior ISA.

Coles explained: “Stocks and Shares CTFs tend to have higher charges and less choice than their equivalent Junior ISAs, while Cash CTFs often pay less interest. It means parents should waste no time in tracking the accounts down and deciding whether to move the money into a Junior ISA.”

The cost of applying for probate is set to rise by 75% next month, leaving grieving families forking out hundreds of pounds extra.

The Ministry of Justice (MOJ) has confirmed the Grant of Probate fee will increase on 13 July from £300 to £526, subject to parliamentary approval.

Martyn James, consumer expert, said the hike would leave people “absolutely justified in feeling upset and ripped off”.

He added: “Probate is one of the most antiquated, bureaucratic and complex processes we will encounter – precisely at the point where we need simple and clear help the most.”

The MOJ confirmed it is also set to increase a further 170 court and tribunal fees by 2.6% and 27 by an average of 34% on 13 July. Four fees will be reduced to account for a fall in underlying costs.

HM Courts and Tribunals Service said the time taken to resolve a probate case had more than halved since 2023 thanks to its investment in staff as well as system improvements.

A MOJ spokesperson added:  “We know that losing a loved one is already a difficult time. That’s why it’s vital the probate service remains as smooth, swift and simple as possible. 

“The new fee reflects the full cost of an ever-improving service which enables families to resolve disputes in as little as two weeks. Increasing fees is always a last resort, however the new cost accounts for rising inflation as well as investment in delivering an efficient and modern service.

“The worst off will face no fees whatsoever and anyone struggling can still apply to have the fee reduced or removed entirely through our Help with Fees scheme.”

What is probate?

Probate is the legal right granted to someone to deal with and distribute another person’s estate (property, possessions and money) when they die.

You can only apply for probate if you’re the executor of a will or the closest living relative of someone that has died who didn’t have a will in place.

Typically, the next of kin or executors of a will have to apply for probate before they can claim, transfer or distribute a deceased person’s assets.

You don’t always need to apply for probate. You may not need it if the person who died only had savings in their estate. You may also not need probate if they owned shares or money with others, in which case the shares and money go to the surviving owner.

You also don’t need to apply for probate if the deceased person owned land or property as a joint tenant. In this instance, the land or property is automatically passed to the other tenant.

Financial institutions, such as banks and mortgage lenders, have different rules on whether you can access a deceased person’s assets without having been granted probate, so it’s worth contacting them to find out what you need to do.

How do you apply for probate?

You can apply for probate by post or online via gov.uk, which is usually quicker.

If you’re applying by post, the form you need to fill in is different depending on whether the person left a will or not.

If they did, you need to fill in the application form PA1P. If they didn’t have a will, you need to fill in the PA1A form.

The government says the probate is typically granted within 12 weeks of submitting an application.

It’s crucial you do a few things before applying for probate though.

This includes working out an estimate of the value of the dead person’s estate for inheritance tax (IHT) purposes.

Even if no IHT is due, you’ll need the value as part of your probate application.

If IHT is due on the estate, you have to report its value to HMRC within one year via an IHT400 form. You can’t apply for probate until this is done and normally need to start paying any IHT due before you can get probate granted.

If IHT is owed on an estate, you also need to send “full details” of the estate to HMRC within 12 months of the person dying and before applying for probate.

Full details refers to the estate’s assets and debts, any gifts made, and any reliefs and exemptions.

Even if no IHT is owed, you may still need to send full details of an estate to HMRC.

For example, if the person who died gave away over £250,000 in the seven years before they died or if their estate is worth more than £3 million, you will need to contact HMRC.

There is a whole list of reasons on the gov.uk website of why you may still need to send full details of an estate to HMRC despite no IHT being owed.

You don’t have to give full details of an estate’s value to HMRC if all of the following applies:

• The estate counts as an “excepted estate”,
• There’s no IHT to pay, and
• There are no reasons, as per gov.uk, the full details of an estate still need to be sent to HMRC, despite IHT not being due.

An estate is typically classed as excepted if its value is below the nil-rate band (£325,000) or it’s worth £650,000 and any unused nil-rate band was transferred to a surviving spouse or civil partner.

An estate is also classed as excepted if the person who died left everything to a spouse living in the UK or a qualifying charity and the estate is worth less than £3 million.

The last way an estate can be excepted is when the deceased person was living permanently outside the UK when they died and the value of their UK assets is £150,000 or less.

Chancellor Rachel Reeves looks set to follow her boss Keir Starmer out of Downing Street following the prime minister’s resignation on 22 June.

At present, Andy Burnham appears the most likely candidate to replace Starmer – though a leadership contest could still take place if any Labour MP decides to challenge him.

One contender could be Al Carns, who stepped down as armed forces minister earlier in June over criticism of Starmer’s defence investment plan. Carns told journalists at the Foreign Press Association on 23 June that he hadn’t ruled out running for prime minister.

When the prime minister changes, the chancellor usually changes too. Jeremy Hunt was the last chancellor to survive a change of prime minister, from Liz Truss to Rishi Sunak – though Truss had only appointed Hunt after dismissing her original chancellor, Kwasi Kwarteng, following the infamous ‘mini budget’ in 2022.

Prior to that, Reginald Maudling was the last chancellor to stay in the post after the prime minister left, when Sir Alec Douglas-Home entered number 10 following the resignation of Harold Macmillan in 1963.

But with Reeves tied so closely to Starmer’s policies, it seems unlikely she’ll survive the transition at the top.

“Focus has already turned to Number 11, and the identity of the new chancellor of the exchequer,” said Matthew Ryan, head of market strategy at financial services firm Ebury.

Who could be the next UK chancellor?

If Rachel Reeves does lose her position as chancellor, there are several candidates that could replace her. So who are some of the high profile contenders?

Wes Streeting

Wes Streeting is one of the names at the top of this list. Prior to Starmer’s resignation he appeared to be a potential candidate for the top job, but immediately after Starmer resigned on 22 June, Streeting announced that he wouldn’t challenge Burnham for the position.

“Of the potential candidates, we view Streeting as the most bullish outcome for the pound, given his centre-left pragmatism and apparent aversion to aggressive tax-and-spend policies,” said Ryan.

Susannah Streeter, chief investment strategist, remarked that Streeting appears to be the front-runner for the position on the assumption that Reeves would be “ousted”.

“From any new chancellor, financial markets would initially be looking for stability and signs of action aimed at stimulating sustainable growth, and Streeting [would be] likely to initially try to project reassurance and a business as usual attitude aimed at reassuring investors and keeping a lid on high government borrowing costs,” said Streeter.

Streeting was previously secretary of state for health and social care, before resigning from the position in May.

Ed Miliband

Currently secretary of state for energy security and net zero, Ed Miliband is another possible contender for number 11 in a post-Starmer administration.

“Miliband’s position on the soft left might raise the possibility of more spending and borrowing,” said Sarah Coles, head of personal finance at investing platform AJ Bell. “However, his experience in senior roles, including as a special adviser to Gordon Brown, may lie behind reports it was Miliband who helped persuade Burnham of the importance of sticking with the fiscal rules in order to calm the markets.”

Coles suggests that Miliband might turn to progressive taxes, or reviewing tax cuts that mostly benefit higher earners, in order to balance the government’s books.

“He has previously supported a mansion tax. He might also consider more environmental taxes,” said Coles.

Coles added that Miliband’s association with net zero could reduce his chances of landing the role given opposition from some business leaders and trade unions.

Shabana Mahmood

Another option, though one whose agenda as chancellor is harder to predict, is current home secretary Shabana Mahmood.

“Mahmood has not spoken out on economic issues since her time in the shadow Treasury, so assessing a potential approach relies on extrapolating from her position as home secretary,” said Coles.

“She is considered to be measured, pragmatic and disciplined over budgets. If this is carried through into economic policy, it could mean steering clear of radical changes and opting for incremental improvements.

“The fiscal responsibility may go down well with markets, which had been worried about borrowing and spending under Burnham.

This could clash with a desire on Burnham’s part to draw a line in the sand between the Starmer government.

“More recent reports suggest Mahmood is less of a front-runner for the role than originally thought,” said Coles.

Yvette Cooper

Foreign secretary Yvette Cooper could also be a contender for chancellor, and might be well-received by markets, according to AJ Bell’s head of financial analysis Danni Hewson.

“Yvette Cooper is likely to be considered a safe pair of hands, having deftly jumped from domestic to global affairs of state as part of Starmer’s cabinet,” said Hewson. “She also spent time in the Treasury under Gordon Brown and is considered to be something of a centrist, which could reassure markets nervous about an Andy Burnham premiership that starts with pledges to turn on the spending taps."

Adding to the possible appeal of Cooper is the fact that, as a northern MP, she has a good working relationship with Burnham.

“Her breadth of experience means that she will understand the pressures on the public purse better than many and her seniority could help bring together different factions of the party under a new leader,” said Hewson.

Could Rachel Reeves play a role in the next government?

While it is unusual for senior ministers to accept demotions, the BBC has reported that sources close to Andy Burnham suggest she could do so, and take up a more junior ministerial role in a Burnham government.

Either way, Reeves is backing Burnham to be prime minister. She told the British Chambers of Commerce annual conference on 25 June that Burnham was committed to following the same fiscal rules that guided her term as chancellor.

“Andy has been really explicit - he backs those fiscal rules,” said Reeves.

“He is a great communicator, he's got a great track record of delivering in Greater Manchester, and I have no doubt he will bring that to the position of prime minister.”

Tech shares have sold off over the past week with SpaceX stock seeing steep declines days after the company’s spectacular initial public offering (IPO).

The Nasdaq 100 – a US index mostly containing technology stocks – fell 2.1% in the week to 23 June and the S&P 500 fell 1.9% over the same period.

SpaceX (NASDAQ:SPCX) also saw steep declines, shedding 26.2% to bring its share price to below the level it closed its first day of trading following its IPO less than two weeks before.

SpaceX is not yet included in either index, but given the immediate success of its IPO its slide reflects a pessimistic shift in the market mood towards tech stocks.

“Investors remain super-cautious, nervous that high valuations could be chipped away at again,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club. “Even a fresh easing of the energy crunch, with oil prices dipping further, isn’t lifting sentiment much.”

What’s driving the latest sell-off, both for the tech sector and for SpaceX in particular?

Why did tech shares sell off?

Several factors are converging to create a cautious air around technology stocks.

One is the fragility of the peace agreement reached between the US and Iran last week.

“Despite threats over the weekend from Iran that it could re-close the Strait of Hormuz following continued fighting between Israel and the Hizbollah militia it supports in Lebanon, talks continue in Switzerland with the US to turn a memorandum of understanding and a ceasefire extension into something more like a permanent solution to the war that began nearly four months ago,” said Tom Stevenson, investment director at Fidelity International.

Markets are also spooked at the prospect of central banks hiking interest rates in response to rising inflation. While the Federal Reserve and the Bank of England both held rates when they met last week, international counterparts in the EU and Japan both raised their respective rates by a quarter of a percentage point.

Underpinning much of the negativity around tech specifically is a rising concern over whether the artificial intelligence boom can pay for itself.

“With doubts about the returns that can be achieved on investments worth hundreds of billions of dollars, together with a rising challenge to equity investors from rising bond yields, more equity issuance and fewer share buybacks, the boom feels fragile,” said Stevenson.

SpaceX shares fall on debt issuance

Debt issuance is a crucial top for tech investors at present, as SpaceX shareholders found out the hard way this week.

On 22 June, the company announced that it was seeking to raise $20 billion in debt, with the figure rising to $25 billion the following day.

Shares in SpaceX fell 16.4% on 22 June before recovering slightly on 23 June.

“Issuing debt at such a heady valuation raises questions about cash flow for this hugely capital-intensive venture,” said Wealth Club’s Streeter. “SpaceX has come down to earth with a bump, burning off most of its post-launch steam.”

Despite these declines, SpaceX shares closed 23 June 15.6% above their IPO price of $135 and 4.1% above the $150 at which they opened trading on 12 June.

Should you buy tech shares?

There is always a potential buying opportunity when sectors or markets sell off.

Whether you want to take advantage of the recent pull back in tech stocks depends largely on your circumstances and goals. It is worth bearing in mind, though, that the sector is still highly valued, and as recent days have shown it is prone to volatility.

If you are looking to buy tech shares, you could consider the following investment trusts and exchange-traded funds (ETFs) which offer exposure to the sector:

• Allianz Technology Trust (LON:ATT). Top holdings Nvidia, Alphabet, Micron Technology and Apple account for 30% of the portfolio as of 31 May, but the trust trades at a 7.3% discount to net asset value (NAV) as of 23 June, according to data from investment trust industry body the Association of Investment Companies.
• Polar Capital Technology (LON:PCT). Similarly, large tech companies account for most of the portfolio (over 96% of holdings have a market cap above $10 billion as of 29 May), but trades at a 9.2% discount to NAV.
• WisdomTree Space Economy ETF (LON:WSPG). From 29 June, SpaceX will enter the ETF’s portfolio with an initial 5.5% weighting. As of 23 June top holdings include space launch provider Rocket Lab and Japanese industrial firm Mitsubishi Heavy Industries.

The Treasury has revealed plans for a revamped Lifetime ISA (LISA) product that will remove the upper age limit and withdrawal charges but the retirement savings component will also disappear.

Chancellor Rachel Reeves revealed in her 2025 Autumn Budget that the government would launch a consultation on a “new, simpler ISA product to support first-time buyers to buy a home” in “early” 2026.

A consultation released by the Treasury this week said there is evidence that the current product is “not working well for many".

The LISA was launched in 2017, aimed at first-time buyers and pension savers.

Under current rules, you can put up to £4,000 a year into a Lifetime ISA and the government adds 25%, up to a maximum of £1,000 per year. This allowance is included within the overall £20,000 annual ISA allowance.

The money can be used either to contribute towards a deposit on a property worth up to £450,000, or to save the money and withdraw it fee-free once you reach 60 years old.

Critics suggest the price cap and age limits as well as the 25% withdrawal charge for "unauthorised" withdrawals make the Lifetime ISA unattractive.

The Treasury consultation acknowledges this and highlights that the number of unauthorised withdrawal charges is increasing year on year, reaching 8% of all accounts opened in 2024/25.

The document also warns that the LISA "may be diverting people from saving into pension products that may be a more appropriate for them".

The Treasury said: “The government is committed to making the aspiration of home ownership a reality for as many households as possible. However, we recognise that the LISA is not working for everyone, and that when people’s circumstances change, they should be able to adjust their finances accordingly.

“We understand that the complexity of the LISA may have dissuaded many providers from offering it, and savers from taking it up, meaning that it is not as accessible as it could be. That is why we are consulting on the implementation of a new, simpler, ISA product to support first-time buyers.”

The government is now seeking views on a replacement product called the First Time Buyer ISA (FTB ISA).

How would the First Time Buyer ISA work?

The new First Time Buyer ISA (FTB ISA) will solely be for the purposes of buying a first home.

The self-employed who can't access auto-enrolment would need to stick with a LISA or focus on a private pension or self-invested personal pension to save for retirement.

Similar to the LISA, there would be cash and stocks and shares options, money saved into the account would go towards your annual ISA allowance and there would be a government bonus, although the level hasn't been announced.

Accounts can only be open from age 18 and there would be no upper age limit.

Subscription limits, property price caps and the level of the government bonus will be announced at a future fiscal event to take account of market conditions and wider public finance context, the Treasury said.

The document added: “Increases to any of these parameters in isolation would come with a cost. A lower subscription limit and/or property price cap could allow for a higher government bonus and would shift the benefits towards lower income savers outside London and the South East.”

There isn't a launch date yet for the product but the Treasury said it would like it to be available "as soon as practically possible".

What is the difference between the First Time Buyer ISA and the Lifetime ISA?

There are a few differences between the FTB ISA and the LISA, including it only being available to first-time buyers.

Unlike the LISA, which has to be opened by age 40 and the bonus can only be earned until age 50, there will be no upper age limit.

The government bonus will be paid as a percentage of subscriptions made, rather than the value of the account, at the point that an individual withdraws funds to purchase their first home.

This means that the bonus is calculated on what an individual has put into the account, minus any withdrawals made, not on any investment growth or savings interest accrued subsequently.

Under the current system, providers pay the government bonus in a LISA each month, when a contribution has been made in the previous month. For example, if you deposit £1,000 in one month, a 25% bonus (£250) would be added in the following month.

But the new FTB ISA bonus will be paid at the point an individual makes a withdrawal for purchasing their first home.

The Treasury said this removes the need for a withdrawal charge and means a saver can withdraw funds, should their circumstances change, without penalty.

Rachael Griffin, tax and financial planning expert at Quilter, said: “Thousands of savers have been charged for accessing their LISA for an unauthorised withdrawal, often because their financial circumstances changed unexpectedly and they needed to dip into their savings. Allowing people to access their money when needed, while still being incentivised to save towards a deposit for a first home, would be a much better design.

“Equally important is the decision to remove the upper age limit. The average age of a first-time buyer has been consistently on the rise, yet the Lifetime ISA effectively shut the door on those who did not get onto the property ladder prior to turning 40. A reformed product with no age limit would reflect a more modern housing market.”

Rachel Vahey, head of public policy at AJ Bell, said moving away from an upfront bonus should make the system simpler but she has warned that savers will lose out on the investment growth they could have earned on the bonus while building up their deposit.

She highlighted that someone paying in £4,000 each year for five years into a Lifetime ISA with a bonus added each year would have built up £28,165 assuming 4% growth net of charges. Under the FTB ISA, assuming the same terms including payments, and that a government bonus of 25% is added when buying the house, the ISA holder would only have built up £27,532.

Vahey added: “For some first-time buyers, that could mean having less money available when they come to purchase a home.”

Who can use the FTB ISA?

The FTB ISA will be available to UK residents over age 18 looking to purchase their first home.

It can only be used with a mortgage, which excludes cash buyers and you will need to have the account open for at least 12 months to become eligible for the bonus.

What will happen to the Lifetime ISA?  

There is no suggestion currently that the LISA will be phased out so accounts can still be opened and used.

Individuals with funds in a LISA will not be able to transfer their money to the new FTB product as they will have already received the government bonus.

But you will be able to use any funds in your existing LISA and those in the new FTB ISA for the same purchase.

Individuals will be able to hold both the new FTB ISA and an existing LISA, but will only be able to save into one in the same tax year.

Regardless of where the property price cap is set, the FTB ISA, LISA and Help to Buy ISA cap will be aligned so that no account holders will lose out, the Treasury said.

To ensure that holders of the Help to Buy ISA do not lose out, the Treasury is also proposing that holders will be able to transfer their holdings into the new FTB product up to the subscription limits.

Additionally, as part of wider ISA reforms, transfers from a stocks and shares ISA to the new cash FTB ISA will be banned.

Paula Higgins, chief executive of the HomeOwners Alliance, said this is “well-intentioned reform” but warned that unless the property price cap is reviewed, it risks fixing one unfairness while leaving another firmly in place.

She said: “The Treasury should update the cap now and future-proof the scheme by ensuring it rises in line with house prices, rather than allowing it to become outdated again.

“First-time buyers need a product designed for the housing market of the future, not one based on prices from nearly a decade ago.”

NS&I has increased the rates on nine of its savings accounts as it looks to draw in customers and meet its financing target.

The Treasury-backed bank increased rates on one, two, three and five-year fixed bonds and a green savings bond today (23 June).

The rise in the fixed bonds comes as NS&I looks to meet its net financing target for the 2026/27 financial year of £15 billion, up from £13 billion in 2025/26.

The financing target is set by the government, which can influence what rates NS&I offers on its accounts. If the target is higher, NS&I may raise interest rates.

It is the third time NS&I has hiked interest rates on the one, two, three and five-year fixed-rate bonds in 2026.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “The savings market is impressively competitive right now, and NS&I has entered the fray.

“Banks are pulling out all the stops to compete, keeping fixed rate deals higher and forcing NS&I to raise rates again to attract the cash it needs.”

Which NS&I accounts will pay more?

The interest rates have been raised on the following nine accounts:

Credit: NS&I

You can open one of the eight Guaranteed Growth or Income bonds with a minimum investment of £500 and save a maximum of £1 million.

You can open the Green Savings Bonds with a minimum £100 investment and hold a maximum of £100,000.

You cannot withdraw funds early as all nine accounts are fixed-term while you also cannot access the money until the end of the term.

After the accounts mature, you can withdraw any cash or reinvest it into a new NS&I account.

You can apply for the accounts on the NS&I website.

How do NS&I's savings accounts compare to others on the market?

While the boost in rates is good news for savers, there are slightly better options if you want to get the top rate.

The better deals are with smaller providers, but they are protected by the Financial Services Compensation Scheme (FSCS).

Customers can get a 4.81% interest rate with StreamBank on its one-year bond, as well as 4.8% with Afin Bank.

In terms of two-year fixed-rate deals, Market Harborough Building Society is offering a 4.86% interest rate on its two-year bond while Afin Bank is offering a two-year bond paying 4.85% interest.

Afin Bank is also offering the most competitive rate on three-year fixed-rate bonds (4.85%) while thisbank has a three-year fixed bond paying 4.82% in interest.

Meanwhile, Afin Bank’s five-year fixed-term bond pays 4.9% interest while Atom Bank has a five-year fixed bond paying 4.85%.

NS&I’s Green Savings Bond has shot up the rankings and is now the joint-second best green savings account on the market, according to Moneyfacts, beaten only by Castle Trust Bank’s three-year e-Saver account paying 4.54% interest.

Coles said the significant hike to the rate on the Green Savings Bond suggested “the previous policy of hoping green-conscious savers would be happier to overlook a much lower rate for the bonds just wasn’t working in attracting the cash” NS&I wanted.

Santander has launched a market-leading regular savings account which pays an interest rate of 8%.

The account is open to new and existing customers with a qualifying Santander current account, including: Santander Everyday, Edge, Edge Student, Edge Up and Explorer.

The Everyday and Edge Student current accounts are fee-free while the other three charge up to £17 a month.

You must be 16 or over and live in the UK to apply for the regular saver.

Customers can open Santander’s regular saver with just £1 and save up to a maximum of £200 every month.

The 8% interest rate includes a 5% bonus for the first 12 months. After 12 months, it falls to 3%. The interest rate is variable meaning it could go up or down at any point.

Money can be withdrawn from the account anytime penalty-free.

Jessica Sheldon, MoneyWeek's deputy digital editor, added: "While an 8% interest rate is certainly eye-catching, restrictions on monthly contributions mean savers might not end up with as much interest as they think they would with a regular savings account, so it’s worth considering whether it’s the best option for you.”

“It’s a good idea to regularly check the best rates for savings accounts, and set a reminder to review the account once a bonus rate period ends.”

How does Santander’s regular savings account compare to the rest of the market?

When it comes to headline interest rate, Santander’s regular savings account pays the most on the market as of 23 June.

The next best account in terms of rate is Zopa’s regular saver paying 7.1% interest, followed by The Co-operative Bank’s regular saver paying 7%.

However, you could earn more interest with The Co-operative Bank’s regular saver as it lets you add £250 into the account each month.

Assuming you added the maximum £200 into the Santander regular saver each month, didn’t withdraw any money and the interest rate stayed the same, you could earn £104 in interest over the course of a year.

But, if you paid the maximum £250 per month into The Co-operative Bank’s regular saver, you could earn £114 over the year, assuming no withdrawals or changes to the interest rate.

Is a regular savings account the best option for you?

Regular savings accounts may not be as attractive as they seem, as the headline interest rate only applies to money that is saved for a whole year – meaning the first month’s deposit.

The second month’s deposit is only in the account for 11 months of that year, so you only earn eleven twelfths of the interest rate.

Therefore, on average, you’re effectively getting half the headline rate advertised.

This means, if you already have a lump sum, you could get more interest by putting the money into an easy-access or fixed rate savings account instead.

For example, you would get £104 in interest by drip-feeding £2,400 into Santander’s regular savings account over 12 months, based on no withdrawals being made and the interest rate remaining at 8%.

However, if you added a lump sum of £2,400 into the top-paying easy-access savings account, currently Chase which pays 4.5%, at the end of the year you would have earned £110 in interest.

Speculation has ramped up about who will be the next UK prime minister after Sir Keir Starmer kicked off a Labour leadership election by resigning on Monday (23 June).

Nominations will open on 9 July and end by the summer recess on 16 July.

The next prime minister may have different priorities to the current government, which has been working on several tax shake-ups including the mansion tax, cash ISA reforms and changes to pensions and inheritance tax rules.

New Labour MP and former Greater Manchester mayor Andy Burnham is the only candidate to have put his name forward so far, as many expected following his by-election win last week.

Maike Currie, vice president of personal finance at PensionBee, said: “The Labour leadership contest will dominate the summer, with a new prime minister expected to take office when Parliament returns in September. Investors will be looking for a clear handover, a credible economic team and an early commitment to fiscal discipline.”

Who will replace Keir Starmer?

Burnham is the only name officially in the ring so far to become the next prime minister.

He has also been backed by former health secretary Wes Streeting, who was seen as a potential candidate.

No other Labour MPs have confirmed that they will run for the leadership role yet.

Burnham hasn’t confirmed what his policies will be, although he may have to stick to manifesto commitments to not raise income tax, VAT or national insurance.

He has previously backed reforming council tax and stamp duty.

Inheritance tax changes could also be a possibility. As health secretary in 2009, Burnham suggested a flat 10% charge applied to all estates, with the money being used to fund social care for all.

More recently, on BBC Question Time in June, he said he would look at raising the personal tax allowance and also said there was “definitely a case” for the return of a 50% top rate of tax for the wealthiest.

Matthew Ryan, head of market strategy at global financial services firm and FX specialists Ebury, said: "Burnham sits firmly to the left of the Labour Party, and his record as mayor points to a significant step-up in public spending, a higher tax burden and greater gilt issuance.

“This is an experiment that the UK can ill-afford. Debt is at its highest relative to GDP since the 1960s, growth is weak, debt-servicing costs are already vast and the limited fiscal headroom leaves almost no room to manoeuvre, risking a self-reinforcing borrowing and growth trap.”

Susannah Streeter, chief investment strategist for Wealth Club, added that Burnham has tried to reassure markets by signalling that he will largely stick to fiscal rules and take a more cautious approach to spending.

She said: “He appears willing to tackle the UK's large benefits bill, arguing that welfare reform should focus on helping more people into work. Investors will also be scrutinising how Burnham's interventionist instincts translate into national economic policy. He has argued that the government should play a more active role in shaping economic outcomes, particularly through greater investment in regions outside London and the South East.

“He is also expected to push for further devolution of economic powers and has indicated support for a stronger public role in key sectors and infrastructure. However, concerns are bubbling that greater state involvement could deter private investment if it creates additional costs or regulatory burdens.”

Local supporters suggest the regeneration he has brought to Greater Manchester could be replicated nationally.

Property developer Mike Ingall, chief executive of Allied London, who has worked with Burnham on developments in Manchester including the technology and media campus Campfield, said: “He understands investment and that is the only way to get growth rather than just tax and spend.”

There have been rumours in the past that former deputy prime minister Angela Rayner could stand.

Rayner also sits on the left of the party.

Who could be in the new cabinet?

The prime minister is just one role that is likely to be up for grabs in July.

Whoever becomes the next Labour leader and prime minister is likely to want to appoint their own ministers and there are rumours that chancellor Rachel Reeves could be replaced.

Rob Morgan, chief investment analyst at Charles Stanley Direct, said: “Until we know more about the composition of the cabinet and likely policy direction it is hard to draw any firm conclusions from the soundbites heard so far. However, bolder moves on taxation certainly appear to be a possibility, so it’s a time for anyone planning their finances to be on high alert for changes.

“Already the Budget in the autumn looms large as a potentially highly consequential event. Yet given we don't even know the identity of the chancellor at this stage we can make no conclusions.”

Currie said a chancellor with a reputation for fiscal discipline could reassure markets but warned: “A more interventionist appointment, or a candidate perceived to be less disciplined with spending could have the opposite effect.”

Morgan added that there is some comfort in the fact that marked changes to taxation or other policies affecting personal finances rarely happen overnight and usually come with a long lead in time.

He said: “So while vigilance is essential there is likely plenty of time to assess any consequences, good or bad, that fall out of a change of political leadership.”

• The Bank of England’s Monetary Policy Committee (MPC) voted to keep interest rates at 3.75% today.
• The decision was in line with expectations from most experts.
• The MPC seems to be adopting a ‘wait and see’ approach to setting rates, holding off on a hike or cut until we see concrete evidence of how the war is affecting the UK.
• The Bank estimates that inflation will be lower than their previous expectations in 2026.
• The latest inflation data showed prices rose by 2.8% in the year to May 2026, unchanged from April.
• Unemployment fell slightly to 4.9% in the three months to April.

When will interest rates fall further? | Is the UK heading for stagflation? | MPC meeting dates | UK inflation forecast |

Good afternoon and welcome to MoneyWeek’s live coverage of tomorrow’s (18 June) interest rates decision.

The Bank of England’s Monetary Policy Committee (MPC) will meet today to decide where to take interest rates, and the decision will be announced on Thursday.

Follow along for the latest commentary and analysis on the upcoming decision and the breaking news tomorrow afternoon.

What is the Monetary Policy Committee (MPC)?

The Monetary Policy Committee (MPC) is a group of nine experts who are responsible for setting interest rates.

The group is made up of five senior members of staff at the Bank of England, and four external experts who are there to make sure the MPC benefits from expertise outside the BoE. The committee is chaired by Andrew Bailey, the governor of the Bank.

They meet every six weeks and vote on whether to cut, hold, or raise interest rates. If there is a tie, then the Bank of England governor Andrew Bailey holds the deciding vote.

Interest rate decisions are usually announced on a Thursday, though the meeting itself typically takes place on the day before the announcement.

At their last meeting, the MPC voted to hold rates at 3.75%, with the motion passing by eight votes to one.

ONS: Inflation held steady at 2.8% in May

Inflation held at 2.8% in the 12 months to May, as the lowest food inflation in 17 months helped offset high transport prices, the latest figures from the Office for National Statistics (ONS) show.

The figure undershot expectations from many economists who expected inflation to rise.

Although inflation is lower than many had forecasted, it is still significantly above the Bank of England’s 2% target and many economists expect it to rise this year thanks to the economic disruption from the Iran war.

The largest upwards contributor to inflation in May was the transport sector, where inflation was 6.8% in the year to May. Price growth for airfares, vehicle taxes, and motor fuel costs pushed May’s overall inflation up by 0.29 percentage points.

Much of this was offset by surprisingly low food inflation, which was the lowest in May since December 2024. Food prices rose by 2.2% in the 12 months to May, pulling overall inflation down by 0.07 percentage points.

Other notable downwards contributions to the inflation rate came from the housing and household services, furniture, clothing, restaurant, and recreation sectors.

For more detail and analysis on today’s inflation figures, you can read our inflation live report from earlier today.

What’s the link between interest rates and inflation?

Inflation is one of the most important, though not the only, economic indicators used by the MPC to help them set interest rates.

This is because the Bank of England has a mandate to keep inflation at 2%, a level of price growth that economic consensus deems healthy for an economy.

Most Western central banks, like the European Central Bank (ECB) and the US’s Federal Reserve (Fed), have an inflation target of 2%.

The Bank of England can use monetary policy to help keep inflation at the target level. The most important of these levers is the moving of interest rates.

Broadly speaking, when inflation is too high, the MPC will raise interest rates, and when it is too low, it will lower them.

These are not the only two reasons why interest rates are moved. For example, rates might be lowered if economic growth is too slow in a bid to speed up the economy.

Where have interest rates gone in the last decade?

Interest rates are currently at 3.75%, the lowest they have been since February 2023.

Before 2022, rates had languished under 1% for the most part as low interest rates were used as a tool to help stimulate the economy following the 2008 financial crisis and during the covid-19 pandemic.

But high rates have been the norm since 2022, when energy prices exploded in the wake of the Russian invasion of Ukraine. This led to high inflation and the start of the cost of living crisis, which we are still feeling the effects of today.

In order to tame inflation, the Bank of England quickly and aggressively hiked rates, going from 0.5% in February 2022 to 5.25% in August 2023.

Rates have since been gradually lowered, with the bank rate going from 5.25% in July 2024 to 3.75% in December 2025, where they have stayed.

Before the Iran war, most economists expected the Bank to cut rates at least twice in 2026, but few now expect this to happen.

They now either expect rates to stay at 3.75% for the rest of the year, or potentially rise depending on how deep the inflationary shock from the war will be.

What should we expect from tomorrow’s interest rates announcement?

Most economists agree that an interest rate cut is incredibly unlikely tomorrow as global economic conditions make this a risky move. If rates are cut at a time when many expect inflation to rise, it could exacerbate the issue.

Instead, many experts are forecasting that the MPC will choose to hold interest rates at 3.75% for the fourth consecutive meeting.

Today’s inflation data bolsters the case for a hold, as it undershot the Bank’s projection by 0.4 percentage points, helping paint a rosier picture of price growth.

With inflation holding steady compared to the April 2026 figure, the possibility of a rate hike in tomorrow’s announcement also becomes more unlikely, though future hikes are not off the table yet.

Experts at Oxford Economics forecast a hold at tomorrow’s meeting, expecting the MPC to vote 7-2 in favour of a hold.

Edward Allenby, senior economist at Oxford Economics, said: “Although energy prices remain elevated, most MPC members don’t appear close to voting for tighter policy.

“Early warning signs of indirect and second-round effects remain benign, and most members have argued that the weakness in the economy means the risks around the medium-term inflation outlook are two-sided. But these members are still likely to signal that they remain open to rate rises if necessary.”

The economic backdrop to tomorrow's announcement

The economic backdrop to tomorrow’s MPC meeting is a mixed picture. While May’s inflation figures were much lower than most economists expected, the rest of the economic news is not quite so rosy.

The UK economy shrunk in April as the country started to feel the economic disruption from the Iran war, figures from the ONS showed last week.

The economy contracted by 0.1% in the month to April, the first time negative growth figures were seen since August 2025.

The contraction is a far cry from the more positive growth figures in the first quarter of 2026, which showed the economy grew by 0.6%, indicating that the Iran war disrupted the start of an economic recovery for the UK.

Negative growth is a big worry for policymakers as it means the country is getting poorer as a whole.

When periods of economic contraction are prolonged, the effect is worse as firms see revenues dwindle and start to lay off staff – if the economy shrinks for two consecutive quarters, it officially enters a recession.

We are not quite at that point yet, but depending on how the economy responds to the economic shocks coming, we could get closer.

The Bank of England also closely monitors the labour market to help inform their interest rates decision.

The latest figures show unemployment climbed to 5% in the three months to March, bringing joblessness to its highest level in almost six years.

Meanwhile, wage growth is slowing. In the three months to March, wages grew by just 3.4%, also the slowest rate in six years.

Although high unemployment and slow wage growth are bad for individuals, according to the orthodox view of economics, a soft labour market does act as a disinflationary pressure in the economy – if you are laid off, your income falls and so does your spending.

That means that a poor jobs market can help lower inflation, which can in turn help persuade the MPC to cut rates.

Why does conflict in the Middle East mean inflation in the UK?

The war in Iran has caused a significant global economic shock with trade being disrupted since 28 February as hostilities have made transporting goods through the region very risky.

The disruption has been particularly acute because the Strait of Hormuz, a narrow waterway between Iran and Oman through which around 20% of the world’s oil and gas is transported, has remained shut.

With such a large proportion of the world’s oil supply effectively stuck in the strait, oil prices have soared.

The average price of a barrel of Brent crude oil was around $70 before the start of the war, but once hostilities began prices became high and volatile. They peaked at around $114 a barrel in May, but hovered between $90 and $100 for the most part since February.

Following news that a peace deal had been reached between the US and Iran, prices plummeted as traders expect the Strait of Hormuz will reopen and allow the ships stuck there to continue on to their original destination.

But even if this peace deal is signed and comes into full effect, the economic consequences of the war will be felt for some time.

Though the oil supply is set to return to normal, the damage has already been done.

The price of oil impacts how much many everyday items cost. This includes more obvious things like petrol and diesel, but also goods you may not expect like crayons, plastic bags, and iPhones.

With prices being so high for four months, we can expect the hangover effects to last for the rest of the year and potentially spill into 2027. The hard work of restarting the whole process of oil production and distribution takes time.

An additional pain point for the UK from the war is energy prices. The closing of the Strait of Hormuz sent wholesale energy prices flying, and this will be reflected when the next price cap comes in on 1 July.

Millions of households in the UK will be shelling out around 13% more for their energy this summer, and prices are expected to remain broadly at this elevated level until at least 2027, according to most forecasts.

When will the interest rate decision be announced?

The Monetary Policy Committee’s (MPC) interest rates decision will be announced tomorrow (17 June) at 12pm.

Alongside the decision, the Bank will publish the minutes from the MPC meeting, where the committee’s thinking can be seen.

This document also has statements from each MPC member on why they voted the way they did.

Every other meeting, the Bank of England also publishes a Monetary Policy Report that sets out the economic analysis and inflation projections used by the MPC.

There will be no report published alongside the June meeting as one was published in April.

Thank you for following our live coverage of interest rates this afternoon. We will pause the blog for now, but will be back in the morning.

Make sure to come back to this page tomorrow to get the latest breaking news, analysis, and commentary on interest rates when the MPC announces their decision.

Good morning. Welcome back to our live coverage of today’s interest rates decision.

The Bank of England will announce whether rates are falling, rising, or staying where they are at 12pm.

While most economists think the bank rate will remain at 3.75%, there is still a small chance that rates will rise today.

Follow this page to get the news as soon as it's announced, as well as analysis and commentary.

ONS: Unemployment fell slightly to 4.9% in three months to April

Unemployment fell to 4.9% in the three months to April, down from a reading of 5% in the previous month, according to the latest figures from the Office for National Statistics (ONS).

Meanwhile, payrolls rose to 30.3 million in May, up slightly by around 2,000 compared to April.

The figures slightly undershot most expectations from economists, who largely anticipated joblessness to remain at 5%.

Liz McKeown, director of economic statistics at the ONS, said: “The labour market remained broadly stable in the latest quarter, with further softening evident in some numbers.”

The data indicates the jobs market may be strengthening. If this is the case, it would be good news for workers, but potentially mean the Bank of England will be more inclined to keep interest rates high to avoid the inflationary pressures that arise when the jobs market is strong.

The ONS also published provisional data for May, showing the number of vacancies in the UK was down by around 2.6% (19,000 jobs) in the period between March and May, the lowest level since April 2021.

McKeown said the fall in vacancies suggests “firms are becoming more cautious about taking on new staff”.

The provisional figures also showed payrolls rose to 30.3 million in May, up slightly by around 2,000 compared to April.

ONS: Wage growth remains at a near six year low

Public sector wages are growing far faster than those in the private sector, new data from the ONS shows, as overall earnings growth remains at its slowest level in almost six years.

Wages for the average worker in the UK grew by 3.4% in the year to April when excluding bonuses, remaining at the same level as the previous month. When including bonuses, this figure grows to 4.4%.

Liz McKeown, director of economic statistics at the ONS, said: “Regular wage growth in the private sector slowed to its lowest rate in five and a half years, though total earnings are growing faster because bonus payments in March and April are higher than a year ago, particularly in the financial sector.

“Public sector pay growth increased but is once again affected by the timing of pay awards varying this year.”

Public sector workers received the biggest pay bump in the period, with their average wages growing by a rapid 5.1%.

Private sector wages lagged far behind this figure, growing by just 2.9% overall in the same period. When excluding bonuses, earnings grew at their slowest rate since October 2020, during the height of the covid-19 pandemic.

Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales, said the latest labour market figures “point to a jobs market struggling under the strain of soaring energy bills and employment costs, with more firms limiting hiring and holding down pay, especially for younger workers”.

He said: “Weak wage growth offers a silver lining for rate-setters by raising hopes that any inflationary spillover from the Iran war will be limited, especially as rising unemployment will help keep pay settlements heading downwards.”

He added that the figures “seal the deal” on an interest rate hold today as rate-setters will be reassured that a soft labour market can help mitigate the inflationary shock from the Iran war.

Recap: What you should expect at 12pm

The MPC’s interest rates decision will be announced at 12pm today. We will be covering the result of the decision in this live report.

Most economists think the MPC will keep rates where they are at 3.75% for the fourth consecutive meeting.

They are likely to do this because of the economic shock that is coming from the Iran war. Analysts expect the war to push up inflation in the UK this year, although we are yet to see data that shows how deep the shock is.

While fuel prices are already high because of the war, and energy prices are set to rise from July onwards, overall inflation has been lower than expected in March and April, holding steady at 2.8%.

However, when the new energy price cap comes in in July, we can expect inflation to rise more significantly.

As the Bank of England has a mandate to keep inflation at 2%, they are highly unlikely to cut interest rates at a time like this, as doing so might exacerbate the problem.

While a hold is the most likely result, the MPC may decide to raise interest rates to help stave off inflation. However, a rate hike is not expected today as the MPC will likely wait and see before taking more drastic action.

Before the war, most experts thought the MPC would cut interest rates twice more in 2026, but most now think they will remain where they are for at least the rest of this year.

BREAKING: Interest rates held at 3.75%

Interest rates are unchanged at 3.75%, the Bank of England has announced.

The hold was widely anticipated by economists, as the Bank’s Monetary Policy Committee (MPC) wait to see how the shock from the Iran war will be reflected in economic data.

Interest rate hold passed by 7 votes to 2

The Monetary Policy Committee voted to hold rates at 3.75%, with seven members supporting the motion, and two members opposing it.

The two members who opposed the hold instead wanted rates to rise by 0.25 percentage points to 4%.

The members voting to raise interest rates were Huw Pill and Megan Greene.

Energy prices were a major concern for the MPC

The minutes of the MPC’s meeting show that the elevated level of global energy prices were a key concern for the committee when deciding where to take interest rates.

They acknowledged that wholesale energy prices have fallen since their previous meeting in April but noted that they still remain higher and more volatile than they were before the Iran war.

They added that the impact of the energy shock on the economy is still uncertain, with concrete data only set to become available in the coming months.

The minutes said: “Monetary policy cannot influence energy prices but is being set to ensure that the economic adjustment to them occurs in a way that achieves the 2% inflation target sustainably.”

Future interest rate decisions set to depend on scale of Iran shock

Where interest rates go next is uncertain and highly dependent on how the economy reacts to the shock from the Iran war, the minutes to the MPC’s meeting showed.

The Bank’s mandate to keep inflation at 2% will require different amounts of intervention from the MPC depending on the rate of inflation later this year.

The minutes show that a potential future rate hike is still on the cards despite more positive developments in the Middle East as the inflationary impact of the war is still set to get worse.

They said: “The policy stance required to achieve this [the 2% target] will depend on the scale and duration of the shock, and how it propagates through the economy.”

Economists at the Bank still expect inflation to accelerate later this year when the effects of higher energy prices pass through to consumers in July through the increased price cap. They are also closely monitoring second-round inflationary effects, which are typically worse the longer higher energy prices persist.

One economic indicator that helps the Bank justify avoiding a rate hike is the softening labour market, which could help “contain inflationary pressures.”

The minutes read: “The Committee will continue to monitor closely the situation in the Middle East and how its impact propagates through the economy. The Committee stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term.”

Bank of England lowers its inflation expectations for 2026

Inflation is expected to remain just below 3% for most of the year, but briefly rise to “a little over” 3.25% in the fourth quarter of 2026, new estimates from the Bank show.

The new estimates are well below the Bank’s April forecasts which expected inflation to peak at 3.6% in their best-case scenario and over 4% in their worst-case scenario.

The downgrade in the Bank’s inflation expectations came after energy prices have fallen since the previous estimates were made, with significant drops coming after it looked like the Iran war was coming to a close.

Lower non-energy prices also helped the Bank revise their inflation forecast down.

BoE: Strong economic growth in Q1 is unlikely to be repeated in 2026

The UK’s strong economic performance in the first quarter of 2026 is unlikely to continue in the rest of the year, the Bank of England has said.

The minutes of the MPC’s meeting showed that this figure overstated overlying economic momentum, which has remained subdued, according to business surveys analysed by the Bank.

April’s GDP figures, which showed the economy shrank by 0.1%, are consistent with this.

Bank staff estimate that underlying GDP growth in Q1 was around 0.2%, and that the economy would continue growing at this rate in Q2.

Base rate held for four consecutive meetings

Today’s announcement that interest rates would stay at 3.75% is the fourth consecutive time the MPC has voted to keep rates where they are.

Compared to interest rates in the last 20 years, 3.75% is relatively high, especially considering rates had been near 0% for years following the 2008 financial crisis.

However, as inflation has remained persistently high since the 2022 energy crisis and the accompanying cost of living crisis, the bank rate has been high for some time. That means that 3.75% is actually the lowest since February 2022.

Bailey: We must tolerate above-target inflation to get back to target

In the minutes of the MPC’s meeting, Andrew Bailey, governor of the Bank of England, justified his vote to hold interest rates.

He argued that the marked fall in energy prices in recent days was a positive sign, especially considering the progress on US-Iran peace talks, but warned “the situation remains unpredictable, and there is clearly a risk that energy prices remain elevated for an extended duration”.

Bailey noted the labour market is showing signs of further softening and said there are further signs of demand weakness in the economy.

He added: “Our remit recognises that attempting to bring inflation back to the target too quickly may cause undesirable volatility in output.

“Given the context at present of softness in the real economy and uncertainty around the scale and duration of the shock to energy prices, tolerating temporarily above-target inflation as part of a return to target is an appropriate way to approach the trade-off, providing inflation expectations remain contained.”

He said that inflation and interest rates risks are on the upside, meaning it is more likely for the bank rate to rise than fall in the foreseeable future.

“I would respond promptly to any signals that an extended period of elevated energy prices could be leading to stronger possible second-round effects,” he added.

Why two MPC members voted to raise interest rates to 4%

While the majority of MPC members voted to keep interest rates held at 3.75%, there were two dissenting voices that wanted to hike rates.

These were Huw Pill, the Bank of England’s chief economist, and Megan Greene, an academic economist and external member of the MPC.

Greene voted to hike rates as she saw the risk of second-round inflationary effects as higher and more uncertain than other members of the committee. To deal with this, she called for the MPC to “pursue a risk management strategy!.

She said the risk of holding rates where they are and second-round effects being more extreme than expected is worse than hiking rates and these effects being as forecast.

She said: “These risks are asymmetric, so we should insure against the possibility of larger second-round effects until we have evidence to determine they are not materialising. A proactive hike now in bank rate should help anchor inflation expectations.”

Pill’s justification was similar, arguing that, with the inflationary outlook so uncertain, raising interest rates to 4% “continues to be the most robust monetary policy response to the intensification of these risks”.

“Global energy prices remain volatile, and elevated compared with their pre-hostilities level, despite the announcement of a new ceasefire. Even with a looser labour market, the risk that second-round effects will create greater intrinsic persistence in UK inflation remains.”

He added that moving the bank rate to 4% now would put monetary policy in a good position to address the uncertainties in the economy.

Deutsche Bank: Interest rates expected to be on “long hold”

Deutsche Bank has said that interest rates are set to stay at 3.75% for a long time, with a lower chance of a rate hike as the economic and geopolitical backdrop has become more favourable and given rise to a wider consensus within the MPC.

Sanjay Raja, the bank’s chief UK economist, said: “For the MPC, recent data outturns combined with an Iran/US deal has meant that the risks around second-round effects have receded. Indeed, while the MPC still sees upside risks to inflation, lower wage and price inflation has given the MPC more confidence that price pressures remain more contained for now.

“Put simply, despite an inevitable inflation wave, the MPC may be willing to tolerate and look through a temporary bump in price momentum.”

Raja added that today’s decision has also helped the MPC keep their options open in the summer, when we will start to see more concrete data about how the Iran war has affected the UK.

“Despite better data and a dramatic fall in energy prices, the MPC avoided sounding too dovish. Instead, it maintained its hawkish bias – keeping flexibility should there be any meaningful signs of indirect and/or second-round effects.

“While financial conditions have tightened since the war began, the MPC's decision today reflects the importance of maintaining some policy restriction in market pricing – allowing it to stick to its 'active hold' strategy.”

As for where interest rates will go next, Raja says the need to act swiftly has reduced as more favourable economic data than expected bought the MPC some extra time to assess the situation.

With that extra breathing space, Raja expects interest rates to stay at 3.75% for the rest of 2026 and adds that Deutsche Bank’s models still see the case for rate cuts in spring 2027.

What does today’s interest rates decision mean for your finances?

Decisions made at the Bank of England to cut, hike, or hold interest rates will affect your personal finances.

This is because the bank rate is the core interest rate in the UK, and is the rate of interest the BoE pays to commercial banks, building societies, and financial institutions that hold money with the central bank.

The bank rate is also the interest rate that the BoE charges on loans made to other financial institutions.

That means that when interest rates change at the BoE, the lending and savings rates offered by retail banks also tend to change.

This is why you may find that your mortgage rate is higher after the bank rate rises, or why you may find your savings are generating less interest when the bank rate falls.

According to data from Moneyfacts, its Average Savings Rate has risen to 3.57%, the highest point since May 2025. “Much of this change to fixed rates is down to speculation that interest rates will remain higher for longer,” said Rachel Springall, finance expert at Moneyfacts.

For more on how interest rates affect your finances, read our article.

MPC remains in ‘wait and see’ mode

Today’s decision to hold interest rates at 3.75% indicates that the MPC is continuing the ‘wait and see’ approach that they have used since the beginning of the Iran war, according to analysis from advisory firm Oxford Economics.

Multiple economic indicators have turned less inflationary in the last few days.

Oil and energy prices in particular are in a better place than any of the BoE’s potential scenarios outlined in their April Monetary Policy Report, with oil and gas futures trending down as the Iran war winds down.

Meanwhile, the labour market has continued to soften, which acts as a further disinflationary force in the economy.

Andrew Goodwin, chief UK economist at Oxford Economics, said that the majority of the MPC who voted to hold rates “appear to take the view that the most likely scenario is that a weak labour market and fragile demand will keep a lid on second-round effects via pay growth and margins. And leading indicators on the strength of those second-round effects will remain key to the MPC’s decision making”.

Like Deutsche Bank, Oxford Economics agree that we are probably going to see interest rates settle at 3.75% until at least next year before a potential cut in late 2027.

Goodwin said: “On balance, we can’t see any reason to change our call that Bank Rate will remain at 3.75% for the rest of this year. The majority of the committee appear content to sit back and see how events play out, and we don’t expect to see leading indicators showing evidence of growing second-round effects that might trigger a change of heart.”

Thank you for following our live coverage of today’s interest rates decision.

We will close our live report now, but make sure to subscribe to MoneyWeek’s newsletters to get a wealth of news, features, and analysis straight to your inbox.

Around £221.5 million was stolen in investment fraud during 2025, as scammers target those trying to get investing.

Across all types of scams, Brits unknowingly handed over a whopping £1.3 billion to fraudsters in 2025, up 4% from 2024, trade body UK Finance found.

Investment fraud was the leading type of authorised push payment (APP) fraud, where criminals exploit online platforms to manipulate victims into authorising payments themselves, making up just under half of all losses of this type.

The vast majority (66%) of all APP fraud, including investment fraud, begins online as scammers are more easily able to cast a wide net to attract victims with get rich quick schemes, UK Finance found.

Other types of APP fraud on the rise include purchase scams, where a victim pays in advance for goods that are never received, which accounted for 71% of all APP fraud. Losses in this category were up 20% to £118.1 million in 2025.

The amount stolen through romance fraud, where victims are persuaded to make a payment to a person they have never met but believe they are in a relationship with, was up 22% in 2025, totalling £39.2 million.

Ruth Ray, managing director of economic crime at UK Finance, said: “Fraud operates on an industrial scale, harming people, businesses and the UK economy, typically funding serious and organised crime in the UK and globally.

“The financial sector invests huge amounts in protecting customers, but we cannot be the only line of defence. Almost £1.3 billion was stolen again last year and it is clear we are not tackling the underlying problem effectively enough.

Ray called for online tech platforms to have “stronger, enforceable responsibilities” to urgently stop criminals profiting from fraud.

AI is making investment scams easier than ever

The rise of AI-generated images and videos has made fraud easier than ever for scammers, as many imitate famous figures in finance to feign credibility. Last year, MoneyWeek found fraudsters using the likeness of investor Steven Bartlett to lure unsuspecting victims.

Since then, similar scams that use the likeness of Bank of England governor Andrew Bailey, and Blackrock CEO Larry Fink, and others have been found.

A survey of fraud-management and financial crime prevention experts showed that AI is making fraud more difficult to deal with.

Around 84% of respondents to the survey by BioCatch, said AI has increased the sophistication of fraud and scam schemes as deepfakes are becoming increasingly difficult to spot.

Jonathan Frost, director of global advisory for EMEA at BioCatch said: “Agentic AI is making fraud faster, more scalable, and harder to detect. Criminals will inevitably use AI, potentially leading to exponential growth in fraud.”

How to protect yourself from fraud

With fraud on the rise, there are steps you can take to protect yourself. These include:

• Never give out your personal information to any organisation before you check they are legitimate. This includes your name, address, bank details, email, or phone number.
• Make sure your personal devices have up-to-date antivirus software so that any malware targeting you can be stopped before it does significant damage.
• Be conscious of phishing attempts where scammers send emails, texts, or phone calls pretending to be an organisation or individual that they are not. They often try to get you to give out your personal details or passwords. Common signs of a phishing message include grammatical errors, urgent language and suspicious-sounding email addresses or numbers.

If you think you have been a victim of fraud, contact your bank as soon as possible. You should also report the crime to Action Fraud.

To prevent yourself from becoming a victim, you should also remember the number 159 – a number you can dial if you get a suspecting call. It will direct you to your bank who can confirm if the caller is legitimate.

• The Office for National Statistics (ONS) has released UK inflation data for May 2026.
• Consumer Prices Index (CPI) inflation stayed at 2.8% in the 12 months to May, the same as in the previous month’s release.
• Economists had previously predicted a rise in inflation compared to the month prior.
• Lower food prices were one of the main counters to higher transport costs in May.
• The Bank of England’s (BoE) Monetary Policy Committee (MPC) meets this week to decide on UK interest rates and will watch today’s inflation data closely when making its decision.

| UK inflation forecast | What is inflation? | When will interest rates fall further? | CPI release dates | MPC meeting dates |

Good afternoon and welcome to live coverage of the upcoming UK inflation data release.

Tomorrow, we’ll find out how prices changed in the UK during May. Last month’s release showed a slowing of UK Consumer Prices Index (CPI) inflation in the 12 months to April, despite higher oil prices resulting from the conflict in Iran.

While oil prices have fallen this week following the announcement of a peace deal between Iran and the US, the expectation is still that the impact of the conflict will have pushed CPI inflation higher in the period the data covers. How great will the impact be – and what could it mean for your money?

When is UK inflation data released?

The Office for National Statistics (ONS) will release May’s UK inflation data at 7am tomorrow (17 June).

We’ll bring you live reporting and reaction following the release, as well as rolling coverage and expert views on what changes in inflation might mean for you.

What do experts predict for May’s UK CPI?

The headline CPI figure took a surprise dip in April, but few experts anticipate a repeat in the May UK inflation data.

Economists at advisory firm Pantheon Macroeconomics expect CPI inflation to have risen to 3.0% in May, due to the impact of recovering air fares and vehicle duty base effects.

“Most of the action comes in services,” said Pantheon Macroeconomics’ chief UK economist Robert Wood and senior UK economist Elliott Jordan-Doak in a report seen by MoneyWeek. “Non-core components should add 1 basis point to inflation in May compared to April, and core goods will shave off 6 basis points.”

Similarly, Sanjay Raja, chief UK economist at Deutsche Bank, expects CPI to rise to 3%, with most of the uplift driven by services inflation.

Both Deutsche Bank and Pantheon Macroeconomics forecast services inflation to rise from 3.2% to 3.7%.

Notably, both organisations forecast a lower rate of UK inflation for May than the MPC itself. In its latest report (published in April), the MPC forecasted CPI to rise by 3.3% in the year to May, driven largely by a 3.9% rise in services inflation.

UK inflation data to be followed by interest rates decision

UK inflation data is released once per month, and the Bank of England’s (BoE) Monetary Policy Committee (MPC) meets every six weeks to set UK interest rates.

This means every other MPC meeting and every third inflation data release coincide. Inflation data is released on Wednesdays and the MPC’s decision is posted on Thursdays, so when this happens the MPC announces its decision the day after inflation data is released.

That’s the case this week; the MPC’s interest rate decision will be announced on Thursday 18 June. The committee will factor tomorrow’s inflation data closely into its decision.

“Absent some huge surprises in this week’s inflation and labour-market figures, we think the MPC will say at Thursday’s policy meeting that they remain prepared to act but feel they can keep rates on hold for now,” said Robert Wood and Elliott Jordan Doak, chief UK economist and senior UK economist respectively at advisory firm Pantheon Macroeconomics, in a note seen by MoneyWeek.

Why small changes in inflation make big differences to your finances

Inflation measures the rate at which prices rise or, from another perspective, the rate at which money falls in value. One pound today buys less than it did ten years ago.

The MPC targets a 2% rate of inflation. This is generally viewed by economists as a healthy rate of inflation (too little inflation or, worse, deflation are signs of a weakening economy).

The difference between 2% inflation and 3% might sound trivial, but over the long term it has a surprisingly large effect on your money.

“People often assume there isn't much difference between low rates of inflation, but the rule of 72 shows how it can mount up,” says MoneyWeek’s editor Andrew VanSickle. “At 4%, your money takes only 18 years to halve in value. At 3%, 24 years. At 2% – the Bank of England's target – 36 years.”

UK inflation data history

The peak for UK inflation in recent history came in October 2022, when the headline CPI inflation measure hit 11.1%.

CPI inflation fell below the Bank of England’s 2% target in September 2024, before rising steadily over the next year.

Until the war in Iran broke out, inflation had been trending downwards. The war’s outbreak, though, pushed UK inflation to 3.3% in March this year – ahead of the dip in April.

Could the Iran ceasefire ease UK inflation in time to avert rate hikes?

The MPC will look closely at tomorrow’s UK inflation data when it meets this week. But this data is backward-looking – reflecting what happened to UK prices in May. The committee will also pay close attention to what is likely to happen to inflation going forward.

With that in mind, the ceasefire between the US and Iran, and the resulting re-opening of the Strait of Hormuz, could have come at the perfect time for rate-setters who had appeared set to decide between hiking rates, which risks stifling an already weakening economy, and cutting or holding them which could risk letting inflation get out of control.

“Falling oil prices have arrived at a convenient moment, giving both the [Federal Reserve] and the Bank of England something to work with ahead of their meetings this week,” said Chris Beauchamp, chief market analyst at investing and trading platform IG. “Cheaper energy takes pressure off inflation, and that should allow both central banks to strike a more measured tone than some of the more excitable commentary and market pricing seen since the US and Iran went to war.”

Your personal inflation rate

CPI inflation is just one way of measuring inflation. It is the headline rate measured by economists and policymakers largely because, of all the metrics, it is one of the easiest to compare internationally. For more information on different inflation measures, see our explainer on CPI vs RPI inflation.

All inflation measures have one thing in common: they distil an immensely complex combination of goods and prices across the whole economy into a single number. While that number in theory represents the economy as a whole, different people with different spending patterns will experience inflation differently from one another.

Everyone has their own personal inflation rate. You can calculate yours by answering a series of questions at the ONS’s personal inflation rate calculator.

“My personal inflation benchmark is the peppermint Aero,” says MoneyWeek’s editor Andrew VanSickle. “I paid 22p in 1988. Now it's 63p or so.”

Thank you for following today's live reporting ahead of tomorrow's UK inflation data release. We're pausing coverage here for this evening, but we'll be back live tomorrow morning to bring you the May inflation data as soon as it breaks at 7am.

Good morning, and welcome back to our live coverage of the upcoming UK inflation data release.

As a reminder, the Bank of England most recently forecasted a rise in Consumer Prices Index (CPI) inflation to 3.3%, though some economists believe that inflation will have been cooler at 3.0%.

We'll bring you the headline figure as it happens, as well as rolling reaction and analysis following the release.

UK inflation data release imminent

The May UK inflation data release is just minutes away. Will inflation have risen, and by how much if so?

BREAKING: UK inflation stays at 2.8% in May

UK inflation as measured by the Consumer Prices Index (CPI) stayed constant at 2.8% in the 12 months to May 2026.

Lower food prices lead to surprisingly flat UK inflation

UK CPI inflation, which was expected to have risen in the 12 months to May compared to the previous month, has instead stayed flat with lower food prices counteracting increased transport costs.

“After last month’s slowdown, inflation held steady in May as various price movements offset each other,” said Grant Fitzner, chief economist at the Office for National Statistics (ONS).

“The main upward movement came from transport with airfares, vehicle taxes and petrol prices all pushing up inflation,” Fitzner continued. “These were offset by lower food prices, with decreases in inflation seen across a range of meat, dairy and vegetable items compared to last month, as well as the cost of domestic heating oil, which fell back after climbing in recent month[s].”

UK inflation in detail

Let’s have a look at some of the other UK inflation figures beyond that headline 2.8% rate of annualised CPI inflation.

While annualised CPI inflation held steady in May, on a monthly basis the metric increased by 0.2% from April, the same rate as in May 2025.

The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.0% in the 12 months to May 2026, unchanged from the 12 months to April.

CPIH also rose by 0.2% in May 2026 – the same monthly rate as in May 2025.

Core CPI (CPI excluding volatile goods like energy, food, alcohol and tobacco) rose by 2.6% in the 12 months to May 2026, up from 2.5% in the 12 months to April.

As had been predicted, CPI services inflation rose from an annual rate of 3.2% to 3.7% between April and May.

Could the Iran inflationary shock be short-lived?

When looked at in historical context, there is very little sign of a bump in inflation linked to the Iran war.

“UK inflation was flat during May, coming in below expectations despite higher energy prices continuing to weigh on UK households and businesses,” said Scott Gardner, investment strategist at J.P. Morgan Personal Investing. “This reading will provide some hope that any rebound in UK inflation could be short-lived after the announcement of a framework deal earlier in the week between the White House and Iran to stop fighting.”

Other experts are striking a more cautious tone, though.

“Despite energy prices having fallen recently, there is more inflationary pressure to come for the UK, when the Ofgem price cap moves higher next month,” said Luke Bartholomew, deputy chief economist at asset manager Aberdeen.

Rachel Reeves: Economic plan is controlling inflation

The chancellor of the exchequer Rachel Reeves has responded to today’s inflation figures.

“While the war in the Middle East pushes prices up globally, we have got the right economic plan and inflation has held steady,” said Reeves.

“We’re protecting families and businesses from rising costs, with cuts in energy bills and freezes in fuel duty and rail fares.”

Reeves’s statement drew attention to measures that the government has brought in including targeted support on heating oil, reduced tariffs and an extension of the fuel duty cut to December 2026.

Which categories had the biggest impact on UK inflation?

Different categories of goods and services had contrasting effects on UK inflation during May.

Transport had the largest upward impact on an annualised basis, rising 6.8% in the 12 months to May and contributing 0.29 percentage points to 12-month CPI inflation. On a monthly basis transport costs increased by 0.4% in May, having fallen 1.8% in April.

Conversely, the price of food and non-alcoholic beverages fell 0.1% during the month, which led to this category lowering annualised CPI inflation by 0.09 percentage points. While furniture and household goods prices increased 0.8% between April and May, they fell by 0.1% over the preceding 12 months, meaning this category reduced annualised CPI inflation by 0.04 percentage points.

Unchanged UK inflation suggests price pressures are ‘finely balanced’

The easing of food price pressures indicates that, beneath the headline impacts of higher energy prices, there is a longer-term disinflationary trend at play, according to Richard Flax, chief investment officer at wealth manager Moneyfarm.

“It was a modest positive surprise to see UK headline inflation hold at 2.8% in May, as consensus expectations had pointed to a move closer to 3%,” said Flax. “This suggests underlying price pressures remain more finely balanced than anticipated.”

Middle East disruption could still lead to higher UK inflation

Experts are warning UK consumers not to get carried away with the idea that the UK has escaped the inflationary risks resulting from the war in the Middle East, even following the peace deal negotiated between Iran and the US.

“Despite a peace deal being reached, disruption to global energy markets and related supply chains is yet to work its way through the system,” said Rob Morgan, chief investment analyst at wealth manager Charles Stanley. “Households still need to brace themselves for pricier shopping baskets and energy bills in the coming months.”

Despite this the reopening of the Strait of Hormuz “is undoubtedly good news for consumers, business owners and central banks alike”, Morgan added. “It means that the price jolt won’t be as ferocious as it might have been, and it could give way to a calmer inflationary setting next year… it’s far from a ‘worst case’ inflationary scenario for UK households and businesses.”

UK inflation outlook looks softer, says Deutsche Bank chief economist

Investment bank Deutsche Bank’s chief UK economist, Sanjay Raja, has highlighted the benign outlook for UK inflation implied by today’s release.

“Outside of services CPI, headline, core, and food prices [inflation] all undershot our expectations,” said Raja.

“Driving some of the downside in price momentum was a combination of weaker core goods prices and food prices. Indeed, despite rising energy costs, retailers remain hesitant to price in any cost pass-through.”

The easing of pricing pressures on these goods coincides with the apparent resolution to the conflict in the Middle East, which has already seen oil prices fall to around 10% below last month’s market assumptions.

“This will slowly flow through the inflation data over the summer and winter,” said Raja. “And, in even better news, the fall in oil prices has coincided with a fall in gas prices. It’s looking increasingly likely that the Ofgem Price Cap could be lower as opposed to higher come October 2026, bringing some much-needed relief for UK households and businesses.

“Altogether, the sting from the Iran conflict looks less than markets initially assumed,” Raja added. “The peak in CPI could end up well below what we saw last year.”

UK inflation recap

Here’s a recap of the main talking points from this morning’s UK inflation data release:

• CPI inflation was 2.8% in the 12 months to May, unchanged from the previous month.
• While transport costs rose, food prices fell month-to-month which contributed to the lower-than-expected figure.
• CPI services inflation rose to 3.7%, maintaining upward pressure on UK inflation more broadly.
• CPI rose by 0.2% on a monthly basis.

What does inflation mean for your money?

You’ll have already felt the impact of the May inflation figures the ONS has announced today when you bought travel tickets, food and drink or petrol last month. Inflation figures are backward-looking and reflect what people across the economy spend on everyday goods and services.

But beyond straining your monthly budget there are indirect consequences for your money when inflation runs above the 2% level that the Bank of England (BoE) targets.

First and foremost among these is the impact on interest rates. The BoE’s Monetary Policy Committee is meeting this week to decide on interest rates. Higher inflation incentivises central bankers to raise interest rates, which would increase the interest you pay on any debt (including your mortgage) but would also increase the amount of interest you could accrue on savings and cash.

Higher inflation also puts up any utility bills you have that are inflation-linked. Many contracts have a clause allowing them to increase by the rate of annual inflation (often this is based on the Retail Prices Index (RPI) rather than CPI).

State pensioners also potentially stand to benefit, as the triple lock means that state pension payments increase by whichever is highest out of CPI inflation, average wage growth or 2.5%.

Inflation reality checks

UK inflation undercut expectations in May and that’s a cause for optimism in many respects. Before we get carried away though, various experts have cautioned that the trouble may not be over yet.

“On the face of it, a flat 2.8% reading on headline UK inflation, against a 3% expectation, and almost all of which attributed to transport costs, is good news,” said George Lagarias, chief economist at financial consultancy Forvis Mazars. But despite this and the anticipated impact of a peace deal between the US and Iran, Lagarias warned that “businesses should not casually overlook the jump in services inflation from 3.2% a month ago to 3.7%.”

Sarah Coles, head of personal finance at investment platform AJ Bell, also highlighted that some categories such as motor fuel and pet ownership have seen significant inflation, while cumulative impacts of inflation can mount up over time.

While the US-Iran peace deal could mitigate inflation in future, “there are no guarantees that the deal will hold, and even if peace endures, price rises are already baked in through higher input costs”, said Coles.

Those on lower incomes are also disproportionately impacted by things like higher energy costs, as a greater proportion of their household income goes on energy-sensitive spending.

“The ONS Family Spending figures out last week showed that the 20% of households with the lowest disposable income spent 15.2% of their budget on food and drink – compared to 7.9% among the highest 20%. They also spent 7.8% on gas and electricity, compared to 3.9% among the richest fifth, and 2.5% on petrol, diesel and motor oils, compared to 2.1%,” said Coles.

What does the latest UK inflation data mean for interest rates?

The biggest question from here is what impact today’s inflation data might have on UK interest rates.

The Bank of England’s Monetary Policy Committee (MPC) is meeting this week, and tomorrow it will announce its latest interest rates decision.

We’re ending live inflation coverage here – but don’t worry, we’ve got a separate live report covering the MPC’s decision. Keep a close eye on that today and tomorrow as we bring you rolling news, insight and analysis of the announcement.

Pensioners who were in certain pension schemes of failed companies are in line for a share of almost £2 billion in top-up payments.

The Pension Protection Fund (PPF) – the industry-funded rescue fund for defined benefit pension schemes – will begin writing to in excess of 300,000 former staff of collapsed firms from July. Payments will be made from January 2027.

These pensioners missed out on inflation protection which they should have been entitled to as part of their payments from their company pension schemes – meaning their pension should have risen in line with prices but didn’t.

Defined benefit pensions pay a regular guaranteed income based on a worker’s salary and length of service. Many are closed to new members but are particularly valuable because of the inflation protection which boosted the retirement income.

However some pensioners were denied this valuable benefit before 1997 by their former employers, in firms that later went bust.

A recent rule change now means they will get the money they are owed. In April, the Pension Schemes Act became law, allowing the PPF and the Financial Assistance Scheme (FAS) to make the additional inflation-linked payments.

The PPF protects millions of UK defined benefit scheme members if their employer becomes insolvent. The Financial Assistance Scheme (FAS) is a separate but similar government-funded scheme designed to help those whose employers became insolvent between 1997 and 2005. Both are administered by the PPF.

A PPF spokesperson said: “Supporting our members is central to the PPF's role. The government's decision to enable us to pay inflation increases on pre-97 compensation will strengthen outcomes for many PPF and FAS members.

“Implementing this change requires significant work and we’re making good progress to be able to start paying these increases to eligible members from January 2027. We will continue to keep members fully informed throughout."

Who will get payouts?

The change in the law applies to PPF and FAS members whose former pension schemes promised to pay its members pre-1997 inflation-linked increases in their retirement payments.

Prior to 1997 – long before the PPF and FAS were set up – the law did not compel employers who provided defined benefit scheme pensions to also provide inflation protection for their members’ retirement income.

In practice the majority of defined benefit pension schemes did, in their scheme rules, provide inflation protection, but not all.

When the PPF and FAS were set up, the founding legislation (Pensions Act 2004) did not allow these lifeboat funds to pay pre-97 inflation-linked increases to all their members.

Now, however, the change in the Pension Schemes Act applies to PPF and FAS members whose former schemes promised pre-97 indexation as a right.

The PPF has, in the past months, reviewed the scheme rules of all 2,000 schemes which have transferred to the PPF and FAS.

Having completed this exercise, the PPF has determined that in excess of 300,000 members will be eligible for pre-1997 inflation-linked pension increases in the future.

Affected pension scheme members don’t have to do anything. The PPF will write to those eligible from next month.

The average asking price for a property fell in June, dipping by 0.6% (equivalent to £2,113), as historically high stock and low buyer demand have kept them on ice.

It marks the largest fall recorded in June for 14 years, and may be a result of the May heatwave distracting buyers from house-hunting, according to the latest house price index from Rightmove.

The dip means the average asking price for a property in the UK is now £376,191, around 0.5% lower than this time last year.

While summer tends to be a slower season for the housing market, this June has been particularly difficult for prices, which typically rise modestly in the month.

The recent slowdown may be a result of the high level of competition and low demand in the market, according to Rightmove.

Housing stock is still at a historic high, and sellers are responding to this by cutting asking prices more fiercely in an attempt to make their homes more attractive to buyers.

Buyer demand was down 10% year-on-year in May. One reason for this larger-than-normal dip in demand could be higher mortgage rates.

Rates have been high since the beginning of the Iran war on 28 February, the effects of which are expected to weigh heavily on the UK economy.

Inflation in particular is expected to rise, it’s unlikely the Bank of England will cut interest rates in 2026. That, in turn, means mortgage rates are set to stay high for the foreseeable future.

Rightmove adds that slumping demand may be worse this year as heatwaves and the World Cup are set to distract buyers for the next few months.

Colleen Babcock, property expert at Rightmove, said: “It’s unusual to see a price fall of this size in June, as we would normally expect to see modest price growth at this point in the year.

“What’s different this time is a combination of factors, including wider economic uncertainty, the timing of the May bank holiday and unusual heatwave, and the high number of homes on the market, which together appear to be bringing forward the traditionally slower summer market.”

While asking prices have dipped, sales activity has remained relatively steady. Though Rightmove’s data shows sales are down 6% year-on-year, 2026’s numbers are broadly in line with those from recent years (about the same as 2024 and 5% more than 2023).

Babcock added: “While the summer market has come a bit early this year, overall activity is still within a typical historic range. What has changed is some buyer behaviour; with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions.

“Sales activity remains stable, but it’s a very price-sensitive market with buyers looking out for the right property at the right price.”

Asking prices grew in Scotland and London

While almost all regions in the UK saw average asking prices fall, Scotland and London actually saw them rise in June.

The average asking price for a house in Scotland is up 0.8% in June, bringing it to £207,011. Sales in the country are also the fastest in the UK, with the average seller only having to wait 31 days to find a buyer. Overall, asking prices are up by 3.3% on the year.

Asking prices in London have been falling recently, but June’s data has bucked the trend. The average home in the capital is now 0.3% more expensive, with average asking prices coming in at £687,080.

Despite the June bump, asking prices for homes in the capital are still lower today than they were a year ago, slumping by 1.2%.

The poorest-performing region in the UK for asking price growth in June was Wales. The average asking price for a house in the country is now £271,459, down 1.6% this month and 0.3% on the year.

The emerging market (EM) universe is very diverse in terms of what drives individual economies. What does China have in common with India (other than being populous and in Asia) or either of them with Brazil? Yet they are treated as a block, and recent trends are stretching these contradictions further than ever.

A top-down investing strategy often involves assigning things to groups, then buying the most compelling groups or choosing the most attractive within a group. These groups can seem arbitrary – the difference between members can be as big as the similarities. Yet in the investment business, classifications that seem easy to understand can stick around well past the point where they make sense.

Standard rules of thumb for emerging markets would tell you that the last few months have been difficult. Many emerging markets are energy importers, so will suffer from higher oil prices. Markets also tend to be affected by inflows and outflows from foreign investors. If global investors get more nervous, they would be expected to cut emerging-market exposure first and take their money home. Yet the MSCI Emerging Markets index is up by 20% in sterling so far this year. How?

AI stocks are over-represented in emerging markets indices

The explanation hinges on two points. The first is that two of the biggest markets in the index are emerging markets only in one very specific sense. South Korea and Taiwan retain certain restrictions, mostly around their currencies, that MSCI deems incompatible with being in the developed markets group. Yet in many respects, they are both wealthier and more advanced than many developed economies.

The second is that a few huge companies – Taiwan Semiconductor (TSMC), Samsung Electronics, SK Hynix – are huge beneficiaries of the AI boom and are driving their markets even more than the Magnificent Seven drives the US market. Those three stocks account for almost 30% of the MSCI Emerging Markets index. Taiwan and Korea together make up 50% of the index. In turn, TSMC is 55% of the MSCI Taiwan, while Samsung Electronics and SK Hynix account for 60% of the MSCI Korea.

These are eyebrow-raising numbers. They have worked out very well for any broad emerging-market investor. Still, we must remember that if the AI boom ends and the US market slumps, the emerging market index will do the same – it's been a play on the same theme.

If you want diversification, you will only find it in funds whose mandate does not bring in these stocks – BlackRock Frontiers (LSE: BRFI) or Barings Emerging EMEA Opportunities (LSE: BEMO), for example. Of course, these funds have lagged in recent months, held back by the lack of tech exposure or battered by the Middle East crisis. I would not say it is yet time to rotate out of broader emerging market funds. But it is something to keep in mind if the crisis passes and the AI boom falters.

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Sarah Wynn-Williams, a former senior director at Meta, offers in her 2025 memoir Careless People what The New York Times described as “a darkly funny and genuinely shocking” account of one of the world's most powerful companies.

But, thanks to a gagging order imposed by Meta, owner of Facebook, Instagram and WhatsApp (which has frequently invoked the importance of freedom of expression to justify some of the more extreme content on its own sites), Sarah Wynn-Williams was forced at this year's Hay Festival to sit mutely on stage during a panel discussion of her whistleblowing book – on pain of financial ruin. Meta, which calls the book's claims “false and defamatory”, last year won an emergency ruling in the US to stop Wynn-Williams promoting the memoir on the grounds that she had “potentially violated her severance contract”.

This prevents her from saying anything negative about Meta, “potentially for ever”, says The Times. The company asserted that her appearance alongside investigative journalist Carol Cadwalladr and former White House technology adviser Tim Wu – two critics of Meta – also breached a legal ruling. “This amounts to targeting people for the ‘crime' of free association and the public discussion of ideas” at a literary festival “taking place in Hay-on-Wye, not Beijing”. What kind of legally sanctioned madness is this? As Wu observed, it smacks of “medieval” despotism.

It's easy to see why Meta is so “rattled” by the book, which, as well as containing unflattering portraits of senior executives Mark Zuckerberg, Sheryl Sandberg (who quit the board in 2024) and global affairs director Joel Kaplan, provides a detailed account of some of its worst alleged practices. An extraordinary array of allegations ranges from “sexual harassment” and the “deliberate manipulation of vulnerable teenagers” to embedding staff in Donald Trump's 2016 presidential campaign, working “hand in glove” with China's autocratic regime and complicity, in the writer's view, in the 2017 Rohingya genocide in Myanmar. The book is “petty, malicious and tremendous fun”, says The Spectator. It also paints an often horrifying picture of “a supranational colossus untroubled by local laws or ethical codes”, says the Financial Times. The book takes its title from F. Scott Fitzgerald's description of Tom and Daisy Buchanan in The Great Gatsby – a couple who “smashed up things and creatures and then retreated back into their money or their vast carelessness”.

How Sarah Wynn-Williams got involved with Facebook

New Zealand born Sarah Wynn-Williams, now in her mid-40s, had “a front row seat in Meta's growing-up stage”, working in Sandberg's public policy department from 2011-2017, says the FT. After growing up in Christchurch she graduated in law from the University of Canterbury and briefly practised law before joining New Zealand's diplomatic service, which posted her to Washington. She joined Facebook, excited about the potential of the platform. “After years of looking for things that would change the world, I thought I'd found the biggest one going,” she recounts. It didn't take long for disillusionment to set in. In 2017, Wynn-Williams was fired for what Meta/Facebook called “poor performance and toxic behaviour”. She maintains it was after she'd filed a claim of sexual harassment.

“Everyone who cares about free speech” or “the deeds of the powerful and unaccountable” should buy this book, observed The Times after Wynn-Williams' appearance at Hay-on-Wye. It seems readers have taken the message to heart, notes The Bookseller. Sales soared by 305% week-on-week after her very public silencing.

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Global flows into exchange-traded products (ETP) fell slightly during May compared to the previous month, according to analysis from asset manager BlackRock.

Purchases of ETPs – which mostly comprise exchange-traded funds (ETFs) as well as some similar products – fell to $199.4 billion in May, from $212.4 billion the previous month.

The dip was driven mostly by a sharp fall in equity fund inflows, which dropped to $106.4 billion – the lowest month for global equity ETP inflows since January.

Similarly, analysis from investment research firm Morningstar found that European ETF and ETC flows fell from €40.2 billion in April to €38.0 billion in May.

“Investor demand for ETFs remained resilient in May, even as flows moderated slightly from April’s peak,” said Jose Garcia-Zarate, senior principal at Morningstar. “Equities continued to dominate allocations, supported by strong market performance and sustained interest in US exposure.”

Which ETP sectors saw the largest flows during May?

Recent analysis of the most popular funds and stocks with DIY investors on Interactive Investor revealed a split between cautious strategies and risk-seekers, a trend also borne out by BlackRock’s analysis.

While fixed-income ETPs recorded their largest month of inflows on record ($87.7 billion), suggesting a cautious market, within equity ETPs technology was the most popular sector, attracting $14.4 billion of inflows.

Besides tech, the only sectors to record meaningful inflows were industrials ($2.7 billion) and energy ($1.5 billion), according to BlackRock.

Morningstar’s data also pointed towards high demand for tech ETFs. Garcia-Zarate attributed much of this demand to the forthcoming SpaceX IPO.

“VanEck Space Innovators ETF (LON:JEDG) [was] among the top 10 flow-gathering ETFs in May,” he said.

Unsurprisingly given the demand for tech-focused ETFs, funds targeting the US saw the largest inflows. Of regionally focused ETPs, BlackRock’s analysis found only those targeting the US received positive flows – and even these dipped to $103.3 billion, from $121.9 billion in April.

Emerging market equity ETPs saw monthly outflows of $40.4 billion, the largest negative flows of any region’s ETPs.

OpenAI, the company behind ChatGPT, has joined the race between the three tech giants set to list in 2026, each tipped for a landmark initial public offering (IPO).

One week after Anthropic filed its own paperwork to the US regulator, the Securities and Exchange Commission (SEC), and in the same week as SpaceX is expected to float, OpenAI kicked off its own IPO process.

In a brief post on its website on Monday 8 June, OpenAI said: “We recently submitted a confidential S-1. We expect it to leak so we’re just announcing it. We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”

Filing a ‘confidential’ S-1 form means the SEC can review a company’s financials before having to make them publicly available, which can mitigate the level of market speculation ahead of an IPO.

How much is OpenAI worth?

At the end of March, OpenAI closed its latest funding round, with $122 billion of committed capital co-led by SoftBank, which – post-money – values the AI company at around $852 billion. Dwarfed by the $1.75 trillion SpaceX is said to be valued at, OpenAI ranks behind Anthropic’s latest valuation of $965 billion.

It said it was generating $2 billion in monthly revenue, a growth rate it claims is four times faster than “the companies who defined the internet and mobile eras, including Alphabet and Meta”.

At the time, the company also extended its availability to bank channels in a bid to attract investment from individual investors, which include via several exchange-traded funds (ETFs) from ARK Invest, which own the stock.

OpenAI’s democratic third phase

Alongside confirmation of its S-1 filing, OpenAI said it was entering its third phase.

Having spearheaded the consumer-facing AI boom when it launched ChatGPT in 2022, as of February it had around 900 million weekly active users and more than 50 million paying subscribers.

OpenAI has set out its three main goals: to build an automated AI researcher; accelerate the economy; and give everyone on earth an artificial general intelligence (AGI).

A blog by CEO Sam Altman and chief scientist Jakub Pachocki dated 8 June said its first phase had been about doing research toward AGI, its second began "when our research became relevant to the real world and we became a product company."

"Now we are entering the third phase. The economy is beginning to reshape around AI. The central question now is how to make advanced AI abundant, affordable, safe, useful and easy enough for every person and organisation to benefit from it."

In the article, they said rather than concentrating AI’s power in too few hands, which history shows creates fragility, the future needs a broad distribution of that power, which makes societies more "resilient, adaptable and free".

"That is why access matters. It is also why safety, privacy, affordability, open ecosystems, and public oversight matter," they said.

Younger people should be given the choice to take a year of their state pension early in exchange for working longer, a think tank has said, in a report that takes aim at intergenerational wealth unfairness.

The so-called ‘Citizens Advance’ would give people a choice – receive a lump sum now in exchange for postponing the point at which they start receiving their state pension.

Only those who had built up 10 years’ worth of National Insurance contributions would be eligible.

At the current full new state pension rate for a year, those using such a scheme could be given up to £12,547 decades before state pension age.

The proposal, put forward by think tank the Social Market Foundation and Andrew Lewin, the Labour MP for Welwyn Hatfield, highlights how family wealth levels can “alter the course of people’s lives”.

While only a third of adults expect to benefit from an inheritance, those who do will share in some estimated £5.5 trillion expected to be passed down by Baby Boomers in the “Great Wealth Transfer”.

“As the Great Wealth Transfer takes place, the sense of injustice around wealth inequality may only therefore increase without government action. Something has to give,” said the report’s authors.

Rachel Vahey, head of public policy at AJ Bell, said: “The obvious potential benefit to this particular proposal is it could deliver a much-needed cash boost at a time many people really need it, particularly if they’re trying to repay debt or save for a deposit on a first home.

“The downside is that in doing so they would have one year less of state pension income to rely on in later life.”

We look at how much you need for a comfortable retirement in a separate article.

Early state pension lump sum

Support for the policy suggestion was, perhaps unsurprisingly, strong among 25 to 40-year-olds, who might expect to be the key beneficiaries, according to the report, which surveyed 2,000 adults, did AI-led qualitative interviews with 300 respondents and carried out three focus groups.

Most in the 25 to 40 year old age group were in favour of a Citizens Advance, irrespective of whether they would take it, with 54% positive versus just 6% negative. The rest were ‘neutral’ on the idea.

A majority of this age group said they would take such an advance if it was offered, ranging from 50% to 70% depending on the value of the lump sum, length of state pension given up and restrictions on how it can be spent.

The SMF report suggested an early cash advance lump sum could help revive home ownership dreams among the young – with more than two-thirds of 18 to 40-year-old non-homeowners currently of the view property ownership is a dead idea for their generation.

But the report also finds over-indebtedness is increasingly widespread, and a lack of wealth is holding people back from starting a business or family – debt repayment was the most popular intended use of a Citizens Advance, chosen by 18% of respondents to an SMF survey.

People asked in the SMF survey also described the value of the policy in emotional terms, not just financial, calling it “empowering” and allowing them to take matters into their own hands.

What would an early state pension lump sum cost?

A policy to give a year of state pension early could be delivered for £1.3 billion in year one, depending on how eligibility is set, according to the SMF report.

The size of the lump sum, whether it is taxed, who is eligible and how it is rolled out could all affect how much the policy might cost.

An untaxed £12,500 Citizens Advance would cost an estimated £1.3 billion in its first year if it was only made available to those reaching 10 years of National Insurance credits and born from 1998 onwards – i.e. those turning 28 this year.

If it were implemented, only those who went straight into work would be able to claim the lump sum in year one of the policy, with others in the 1998 cohort becoming eligible in the following years depending on their post-18 educational pathways.

Modelling by the SMF suggests costs would grow towards £7 billion as all groups and younger cohorts become eligible and take the Citizen’s Advance over subsequent years, after which costs would increase in line with the state pension.

Costs would be higher, at least in the first few years, if the policy was made available to multiple age cohorts at once. It would take an estimated £27 billion in year one to offer the lump sum to 28 to 35-year-olds, for example, or over £45 billion for those up to 40.

Tax on proposed state pension lump sum

Annual costs are estimated to fall towards £8 billion a year over time as take-up becomes driven by those becoming newly eligible, according to the report.

Making the lump sum taxable would cut costs by a third, as would restricting it to people

earning under the higher income rate (£50,271). Limiting its uses, such as to housing only, is another way of bringing the upfront costs down.

Vahey from AJ Bell said: “A proposal along these lines would present cashflow challenges for the Exchequer, as it would need to pay the money out on demand to anyone who qualifies, whereas at the moment state pension entitlement only kicks in at state pension age.

“Even if early access was offered on the most conservative basis, this would amount to a rise in today’s government spending which would only be offset in decades, potentially creating pressure on the public finances at a time when they are already stretched to breaking point.”

Santander has launched a new rewards credit card, offering a competitive 3% cashback offer on a range of everyday spending.

Customers can get the cashback by using the card on everyday travel, eating out, and takeaway spending for the first 12 months.

There’s no annual fee and no cap on the amount of cashback you can earn, making it a more attractive deal than some others on the market.

As well as the 3% cashback rate on the above purchases, users can earn 0.25% cashback on all other spending indefinitely.

In your second year after getting the card, the cashback rate on travel, eating out and takeaway spending falls to 0.25%.

The Santander Rewards credit card has a representative 24.9% APR (variable).

Jessica Sheldon, MoneyWeek's deputy digital editor, said: "Cashback can be a helpful reward if you were going to spend the money anyway, but with any credit card, always make sure you can pay off the statement balance in full by the due date."

How does Santander’s Rewards credit card compare to other cards?

Santander’s deal is directly competing with other popular cashback credit cards, like those from Chase, which offers 2% cashback up to £20 a month on certain expenditure,

While Santander’s cashback offer is competitive, it may not make sense for everyone.

The 3% rate is very generous, but remember that you only get this rate on two categories of spending in the first year and get the lower 0.25% on everything else.

That means you may earn more money by using cards paying lower rates of cashback.

The Lloyds Ultra card pays 1% cashback on all spending via the card for the first year.

For example, if you spend a total of £1,300 a month (assuming £100 on takeaways, £200 on travel, and £1,000 on everything else), you can expect £13 cashback with Lloyds. With Santander’s Rewards credit card, you’d get £11.50 back.

However, if you adjust the amount spent on these categories, the cashback available via the Santander card may rise.

For instance, if you spent £300 on travel, £200 on takeaways, and just £800 on everything else, the Lloyds Ultra card would pay £13 of cashback, but you’d get £17 with the Santander Rewards credit card.

Before you apply for a credit card with Santander, it is a good idea to look at which categories you spend the most on and work out if your travel and eating expenses are high enough to justify getting the card, or whether you may be better off with a different card.

Santander Rewards credit card: What can you get cashback on?

The Santander Rewards credit card pays 0.25% cashback on all spending for the first 24 months, but you can get a higher 3% rate on certain everyday travel and spending on eating out and takeaways for the first year.

The travel category includes things like buying petrol, diesel, or charging your electric vehicle. It also extends to public transport fares on trains, buses, and the London transport system, as well as taxi spending.

Meanwhile, the eating out and takeaway category includes spending at restaurants, coffee shops, and food delivered to you. Cashback earned is paid monthly.

On top of the cashback, the Rewards credit card can be used abroad without incurring any additional foreign exchange fees.

Unlike some other credit cards that offer cashback, there is no fee for the Santander card.

Who can open a Santander Rewards credit card?

To be eligible for the credit card, you must be a permanent resident of the UK and be over the age of 18.

You must also have a guaranteed annual income of £10,500 or more and have a good credit record. Acceptance for the account is subject to a credit check by Santander, which will determine whether you can be accepted and the maximum credit limit they can offer you.

You can only have one Santander Rewards credit card.

Is the Santander Rewards credit card worth it?

While the 3% cashback rate looks generous, few people will be able to get a truly significant cashback just from spending on travel, eating out and takeaways.

For example, if you commute to work every day and it costs around £10 per day, you will spend around £200 a month on travel. With the Santander card, you will receive 3% of this as cashback, which is just £6.

If you spend an extra £100 on eating out and/or takeaways a month, this will add an extra £3.

If you spend around £1,000 a month on everything else, you will receive 0.25% of this as cashback, or around £2.50.

Together, that means you will receive £11.50 a month in cashback. Assuming that your spending stays the same for a year, you can expect to receive around £138 for the period.

Whether or not this amount is enough to justify setting up a new credit card or shifting where you spend your money depends on your personal circumstances and the current perks you get from your accounts right now.

We compare the best cards for flight points and airline rewards in a separate article.

Planned changes to the mortgage market could make it easier for older homeowners to access tens of thousands of pounds of wealth built up in their property.

The Financial Conduct Authority (FCA) wants to update affordability guidance for retirement interest-only mortgages, as part of a consultation into the wider home borrowing market launched today (9 June).

Rising house prices mean older borrowers collectively have billions of pounds of housing wealth locked up in their homes. But many are reluctant to move. Retirement interest-only mortgages can offer a solution.

To help older borrowers access some of this housing wealth, the regulator is proposing to make changes that would mean affordability for joint retirement interest-only mortgage applications are assessed in the same way as for standard joint mortgages.

In practice this would mean lenders would not be obliged to always consider a sole borrower’s ability to afford the mortgage if the joint borrower passes away.

By removing this rule, lenders would be able to more flexibly determine – based on

their risk appetite and in line with mortgages conduct and consumer protection rules – how to assess whether the surviving spouse or civil partner could still afford the required payments or what their exit strategy may be.

David Geale, executive director for payments and digital finance at the FCA, said: “We’re living longer and how many people work has changed. Our mortgage rules need to keep pace so those who can afford to repay can borrow.

“Stronger protections mean we can now safely widen access to mortgage borrowing for those that may be underserved.”

What are retirement interest-only mortgages?

Retirement interest-only mortgages (RIOs) are designed for borrowers over 50 or 55. You only pay the interest each month, and the loan is only repaid when you pass away, move into long-term care, or sell your property.

RIO mortgages can help older homeowners because it can get harder to get a new mortgage as you get closer to retirement. A RIO lets you mortgage your home in later life or provides an alternative to equity release.

We compare equity release versus downsizing in a separate article.

How does a retirement interest-only mortgage work?

A retirement interest-only mortgage is similar to a lifetime mortgage where the loan is usually only paid off when you sell the house, die or move into long-term care.

But retirement interest-only mortgages have different risks compared to lifetime mortgages. In particular, they do not feature the roll-up of interest, meaning homeowners don’t run the risk of the equity in their home being eroded – allowing them to leave more to their loved ones in the form of an inheritance.

Retirement interest-only mortgages require a borrower to manage the ongoing monthly payments, whereas a lifetime mortgage does not require monthly payments.

Demand for retirement interest-only mortgages

FCA data showed there is demand for mortgage products among older homeowners. Yet sales of retirement interest-only mortgages remain low compared with lifetime

mortgages – 3,002 RIOs versus 26,974 lifetime mortgages in 2025, according to FCA figures.

Firms have told the regulator, including in responses to its discussion paper, that the availability of retirement interest-only mortgages are constrained due to its current guidance being too restrictive.

Richard Pinch, head of banking and credit advisory at financial services consultancy Broadstone, said: “The FCA’s proposals represent a sensible evolution of the mortgage market, recognising that traditional affordability assessments do not always reflect the realities of modern working patterns, income streams and borrowing needs.

“The regulator is seeking to give lenders greater flexibility through affordability assessments that better reflect real borrower behaviour and lifetime earnings patterns. The proposals could be particularly beneficial for groups that have historically found it more difficult to access mortgage finance, including the self-employed, those with variable income and older borrowers.”

Mortgage help for self-employed

The FCA is also seeking to do more to help self-employed people get mortgages. The self-employed have typically struggled to get home loans due to often having inconsistent income, making lenders more reluctant to lend to them, seeing them as more risky.

FCA product sales data from 2025 shows around 6% of mortgage sales included at least one borrower whose employment status was recorded as “self-employed” at application. This compares to around 13% of the workforce who are self-employed, including around 1-2% who are independent contractors or locums.

Proposals include reducing barriers for lenders to offer flexible repayments for people with variable income, like the self-employed, and lend to those paid in foreign currency.

The FCA is also encouraging lenders to assess affordability based on a person’s “full and current situation”, rather than automatically excluding people because of minor or past credit history issues.

Sarah Coles, head of personal finance at AJ Bell, said: “Developing products to better suit people’s lives makes perfect sense. Self-employed people with lumpy incomes have been forced to contort their finances into paying the same sums each month under existing rules.

“A change could allow them to access products that are flexible enough to fit around their lives and their needs instead.”

HMRC is increasingly hitting bereaved families with penalties for filing inheritance tax returns late as they struggle with long, complicated forms, according to data from a Freedom of Information request.

The number of penalties issued by HMRC for filing inheritance tax (IHT) returns late increased 35% from 3,850 to 5,200 over the last five years, data up to the tax year 2024/25 obtained by TWM Solicitors showed.

Fines for late filing rapidly increase over time, from an initial £100 to up to £3,000 after 12 months.

Many families with modest estates have been drawn into paying IHT in recent years, largely because the IHT threshold has remained frozen since 2009. Even an average house can now trigger an IHT bill on its own.

But Duncan Mitchell-Innes, partner and deputy head of private client at TWM, said the increase in late penalties is also being driven by more families attempting to complete IHT returns themselves, without realising the complexity involved.

“People often underestimate the complexity of the UK’s IHT rules. What seems like a straightforward task can quickly become time-consuming and technically challenging, particularly when HMRC requires extensive supporting evidence. This can lead to penalties if deadlines are missed,” he said.

Complex IHT forms

The basic IHT400 form alone has 122 questions, often requiring detailed financial and historical information.

This is the main form families will need to fill in for inheritance tax purposes. But in many cases, it must be supplemented by additional schedules – requests for information – of which there are more than 30, depending on the nature of the estate.

One of the most time-consuming parts of an IHT return, according to lawyers, relates to the valuation of assets. Many assets, such as residential property, need to be valued professionally – market estimates are not enough.

In addition, some assets, such as shares, have specific ways of being valued for IHT purposes. Getting these valuations completed on the correct technical bases can be time consuming without prior technical knowledge.

Delays can also arise where executors struggle to identify all the relevant details needed for the IHT400. This can include tracing all bank accounts, investments and historical gifts, which sometimes go back many years – for instance due to the seven year rule. Many banks only provide this information by post.

Missing out on inheritance tax reliefs

Mitchell-Innes said it can be hard for people handling their loved one’s IHT return on their own to identify all the relevant technical reliefs and exemptions that may apply, together with gathering the evidence to support them.

For example, gifts made out of surplus income or more than seven years before death may be exempt, but finding evidence to support that exemption can take time.

Some families handling their own return even lose out on reliefs and exemptions available to them simply because they do not know they exist.

“Reliefs aren’t applied automatically. People must actively claim reliefs and exemptions and find the evidence to support them where needed, which can be time-consuming. Without proper advice, families risk penalties and leaving valuable reliefs unclaimed,” said Mitchell-Innes.

The number of penalties for late filing of inheritance tax returns is likely to increase further after unused pension pots are brought into the IHT net from April 2027, leading to more families having to submit a return.

The development is expected to increase the demands on personal representatives – those in charge of administering the estate left behind after a death – to get the pension IHT paperwork right, or face potential fines themselves.

Barclays has ditched its monthly fee for retail investors in a major move which could save customers hundreds of pounds a year.

Customers using Barclays Direct Investing, formerly Smart Investor, previously paid 0.25% on balances up to £200,000 and 0.05% on anything more monthly, but will now pay nothing with immediate effect.

The removal of the monthly fee by Barclays means someone with a £300,000 holding will save £550 a year. Stacked up over a number of years and the savings could reach into the thousands of pounds.

The cut applies to the trading platform fee and investors still need to pay FX charges, and fees for telephone trading and buying and selling stocks. Buying and selling funds remains free.

Sasha Wiggins, chief executive of Barclays Private Bank and Wealth Management, said: “By removing our Direct Investing customer fee, we are helping to make it more straightforward for people to take the next step and invest with confidence.”

Barclays’s decision follows several other providers responding to competition in the market by cutting fees.

Some providers have also come under pressure to reduce their fees as consumers wise up to the real impact on returns.

Earlier this year, Hargreaves Lansdown shook up its fee structure, including lowering its annual platform fee from 0.45% to 0.35%, which works out better for some customers.

In February, interactive investor (ii) introduced a new pricing plan which saw flat fees reduced on most accounts depending on their size (though some fees increased).

Holly Mackay, chief executive officer and founder of consumer advice website Boring Money, said the move from Barclays has seen it leapfrog Hargreaves Lansdown, ii, AJ Bell and Fidelity to join Freetrade as the cheapest platform in the UK for those holding funds.

Mackay said that because Barclays already charges no fee to trade funds, removing the account fee means “anyone buying funds who banks at Barclays already and has the app will struggle to make a case to buy funds anywhere else”.

“This is a very big move which will shake up the direct investing market. Barclays is drawing a bold line in the sand which will take the fight to challenger fintechs,” Mackay added.

“I think we’re entering a new phase of very strong competition and I would be very surprised if other big brand platforms didn’t respond.”

How does Barclays compare to other platforms after the change?

How Barclays compares to other platforms following the change depends on your holding and what type of investments you trade in.

According to analysis by Boring Money, for a customer contributing the maximum annual £20,000 into a stocks and shares ISA and buying two funds per year, the lowest cost providers are now Barclays and Freetrade (both £0).

Banks HSBC and Santander would cost £50 and £70, respectively, while Hargreaves Lansdown, ii and AJ Bell would cost £73.90, £79.86 and £53, respectively.

Boring Money also looked at annual costs based on trading ETFs. Based on eight trades per year, Barclays would cost £48 in total. This is based on each trade costing £6 and no monthly account fee.

AJ Bell would cost £82 per year and Halifax £112 per year.

Below is a breakdown of how much your annual platform fee would cost based on eight fund trades per year.

Credit: Boring Money (platform fee cost based on eight fund trades per year)

Do note, it’s worth factoring in other investment costs when deciding which platform is best for you, plus the choice of investments you’ll have on each platform.

While Barclays has ditched its monthly fee, customers have less funds to choose from compared to AJ Bell. Barclays customers can choose from around 2,500 funds but AJ Bell offers over 4,000 to pick from.

Stock markets sold off late last week as strong economic data combined with underwhelming results from one semiconductor giant pushed investors towards the exits.

The S&P 500 fell 2.6% on Friday 5 June, with Broadcom (NASDAQ:AVGO) – the index’s seventh-largest constituent – shedding 7.9%. It marked three consecutive sessions of losses for the company, which is viewed as one of Nvidia’s key competitors in the lucrative artificial intelligence (AI) semiconductor market, during which Broadcom’s shares fell 19.9%.

As can be the way with crowded trades, Broadcom’s woes soon spread to other stocks and funds.

The Nasdaq Composite – which contains all shares on the tech-dominated index – fell 4.3% in the two sessions to 5 June. The iShares Semiconductor ETF, which tracks the NYSE Semiconductor Index, fell 12.3% over the same period.

Which factors have contributed to the stock market selloff?

While the selloff was sparked by Broadcom, more macro factors came into play later in the week.

US labour data was released on Friday 5 June. It showed an unexpectedly strong job market, with 70,000 new jobs added in May (compared to a monthly average of 14,000).

This labour market strength reduces the likelihood of a cut to US interest rates, and in fact increases the chances that the Federal Reserve (Fed) could raise rates amid fears of higher inflation as a result of the war in Iran.

High interest rates are negative for equities, particularly tech stocks, because they tend to restrict the amount of future growth in an economy.

“Friday's US jobs report sparked a firestorm of selling, with big tech bearing the brunt of the wobble in confidence,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club. “Indices in Asia have been hit by the contagion of pessimism, with semiconductor stocks falling sharply.”

On 8 June, the US tech selloff combined with fears that the fragile ceasefire in Iran might be shattering led to the Korean stock market pausing trading for 20 minutes following a decline of more than 8% – having already had to trigger a circuit breaker in March following the start of the conflict.

Korea’s stock market is dominated by semiconductor stocks SK Hynix and Samsung, both of which fell late last week.

Why did Broadcom’s shares sell off?

On 3 June, Broadcom announced its results for the second quarter (Q2) of the 2026 fiscal year.

Revenue increased 48% year-on-year to $22.19 billion. This was a slight miss on analysts’ expectations; those polled by the London Stock Exchange Group yielded a consensus revenue estimate of $22.27 billion.

This miss was compounded by the fact that Broadcom reiterated its guidance of $100 billion in AI chip sales for 2027.

These might not sound like significant problems, but the market has got used to AI companies exceeding analyst targets and frequently raising their outlooks.

“Although the huge earnings it's raking in are highly impressive, a very high bar has been set,” said Streeter.

Because Broadcom is a supplier to the broader AI industry, the appearance that its growth trajectory might be decelerating led to fears that demand for other AI-related stocks might slow.

Is there an AI bubble, and is it bursting?

Since the explosive growth of AI stocks from 2023, many investors have been wary of the prospect of an AI bubble.

Valuations of big tech stocks, particularly the Magnificent 7 and close competitors like Broadcom, rose rapidly on expectations that the future growth of AI would drive rapid increases in revenue and profits for many years to come.

These heightened expectations leave these stocks susceptible to any slight counter to the narrative of continued, rapid growth. Expectations are very high, and moments like Broadcom’s underwhelming guidance undermine the exuberance that the market has become accustomed to.

“Given how heady tech valuations have become, it's not surprising that investors are reassessing allocations and opting for companies with more reliable income streams and dividends,” said Streeter. “There had already been undercurrents of worry about the surge in tech stock prices and fears that today's insatiable demand for the apparatus needed to support AI products and services would eventually wane.”

Should you join the stock market selloff?

Whether or not you sell stocks following the recent market pessimism is going to be a factor of your current portfolio and risk preferences.

As a general rule, though, it is often best to avoid knee-jerk reactions to short-term market moves.

Making regular investments can help to take the emotion and decision-making out of investing, and can mean you buy stocks at lower prices during short-term downturns.

You could also see the current pessimism around tech stocks as an opportunity to look to other sectors.

“Tech is starting to fall out of fashion, while companies operating in the 'real economy' may be more sought after – those selling consumer staples, providing healthcare, or keeping the lights on through utility services,” said Streeter.

In Asia, it is the best of times, it is the worst of times. The crisis in the Strait of Hormuz is hammering energy importers hard, even as parts of the region emerge as the principal winners of the mania surrounding AI. That pushed the MSCI Emerging Markets Asia index up 15% in the first five months of the year.

Yet on currency markets things are grim. Talk is turning to the 1997 Asian financial crisis, when large trade deficits caused investor confidence to “evaporate within months”, triggering “deep recessions” and political tumult, say Swati Pandey and Claire Jiao on Bloomberg. Indonesia, the Philippines and India look especially vulnerable to capital outflows. Respectively, their currencies have shed 8.5%, 9.5% and 10.5% against the US dollar over the past 12 months.

The once-promising Philippines has been hit especially hard, says Daniel Moss, also on Bloomberg. The country was a Southeast Asian growth star in the 2010s. Now inflation is running at 7% and heading for double digits, a huge surge from 2% in January. The local PSEi share index is down 5.6% over the past three months. The Philippines' difficulties could be a taste of things to come elsewhere.

But nowhere are Asia's contradictions as stark as in South Korea. The won is trading at its lowest level against the dollar since the 2008 financial crisis, say William Sandlund and Daniel Tudor in the Financial Times. Yet puzzlingly, Korea is enjoying a record trade surplus because of insatiable demand for its computer chips. An export boom should be strengthening the won, not weakening it.

Paradoxically, one explanation may be the blistering pace of an Asian stock market boom. The Kospi index has doubled since the start of the year, driven by large runs at chip specialists Samsung and SK Hynix. That has forced fund managers to sell to avoid overexposure, with foreign investors offloading a record net $79 billion of local equities this year.

Taiwan's Taiex index has gained 58% this year, seeing it surpass India to become the world's fifth-largest stock market. Almost all of the world's high-end chips are made by Taiwan's TSMC. The island, which is only slightly larger than Belgium, now accounts for almost a quarter of the entire MSCI Emerging Markets index.

Investors in Asia should ‘buy the shovels’

When there's a gold rush, it's good if 30% of your economy is “based on shovel manufacturing”, says Joseph on Substack. Taiwanese GDP rose at an annualised pace of 23.6% in the final quarter of 2025. GDP has risen by almost a quarter since ChatGPT was launched in late 2022. Not everyone is benefiting from the boom – exporters are doing well while everybody else struggles. But there is no arguing with this modern growth “miracle”.

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New Fed chair Kevin Warsh takes the reins of the world's most powerful central bank at a difficult time, says Roger Ferguson for the Council on Foreign Relations think tank. Donald Trump wants easier money, saying, on swearing Warsh in, that “we want to stop inflation, but we don't want to stop greatness”. Trump openly criticised Jerome Powell, Kevin Warsh's predecessor, for failing to cut interest rates. But US inflation is running at 3.8% and has been above the Fed's 2% target for five years in a row. Cumulatively, the price level is nearly 25% higher now than it was in 2020.

Pricier petrol, the fallout of Trump's adventure in Iran, threatens to trigger a new inflation wave. Kevin Warsh may be “compelled to raise interest rates”, which is “precisely the opposite of what Trump had in mind”. Fireworks could lie ahead.

Kevin Warsh will have more elbow room when it comes to cutting the size of the Fed's balance sheet, says Colby Smith in The New York Times. He sees the institution's holdings of $6 trillion in government bonds and other securities as “emblematic of everything that has gone wrong” in central banking since the 2008 crisis. But drawing down the portfolio must be handled with great care. In 2019, a similar attempt to reduce the balance sheet too quickly gave markets a “near heart attack”.

Kevin Warsh must deal with ‘hot’ US inflation

Investors began the year expecting “at least one or two rate cuts”, says The Economist. Now, rate hikes are in the picture. US inflation is “hot”, and the cause is not just oil. Even the core measure, which excludes energy and food, rose at an annualised 3.2% during the three months to April. Central bankers are taught to “look through” energy shocks, which usually prove temporary, but broad-based signs of inflation are harder to ignore. Service prices are rising “uncomfortably fast”. And durable goods – for decades a source of disinflation – rose at an annualised 7.7% in the first quarter of the year. That reflects the effect of both tariffs and soaring prices for computer kit amid the AI boom.

The oil crisis has led to inevitable comparisons with the 1970s, says James Smith for ING Think. In some respects, the similarities are “striking”. Now as then, we face an energy shock emanating from Iran. Now as then, US government spending is unsustainably high. But in other ways we live in a quite different world. Per-capita oil consumption in the UK is 55% lower today than it was 50 years ago. In real terms, energy prices are well below the levels of the late 1970s, when they hit nearly $200 in today's money. Unionisation rates have collapsed since the 1970s and strike action is far rarer than it used to be, reducing the risks of a sustained inflationary surge.

Not that everything is rosy. In some respects, advanced economies face new sources of inflationary pressure that didn't exist in the 1970s. Populations are ageing and net migration is beginning to fall sharply because of stricter border policies. That threatens “shortages” of workers on a scale “with little precedent in the West”.

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Anthropic submitted a draft registration statement to the US regulator on 1 June for its imminent initial public offering (IPO), the second US technology company to do so in recent weeks.

Slipstreaming SpaceX (whose own IPO is expected later this month), the San Francisco-based artificial intelligence (AI) company behind the Claude series of large language models (LLMs) said the amount it was targeting – determined by the number of shares to be issued and their price – had not yet been set.

An unattributed statement on its website said: “Today, Anthropic, PBC confidentially submitted a draft registration statement on Form S-1 to the U.S. Securities and Exchange Commission for a proposed initial public offering of our common stock. This gives us the option to go public after the SEC completes its review. The proposed initial public offering will depend on market conditions and other factors.”

The company has appointed Morgan Stanley and Goldman Sachs to lead its listing process, according to Bloomberg, which said J.P. Morgan was also involved.

The flotation is expected to take place as soon as October, although many details are still speculative.

Which fund managers have invested in Anthropic?

Just days before it confirmed submitting its paperwork to the SEC, Anthropic announced it raised $65 billion in a series H round, led by Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital, bringing the company’s estimated valuation to $965 billion.

Brad Gerstner, founder and chief executive of Altimeter Capital said: “Claude’s latest advancements have driven large-scale adoption among the world’s most demanding organisations. This momentum positions Anthropic to lead the next phase of AI innovation and capture the enormous opportunity ahead.”

Co-leading the round were Capital Group, Coatue, D1 Capital Partners, GIC, ICONIQ and XN. Other “significant investors” named included Baillie Gifford, Blackstone and T. Rowe Price.

The raise also includes $15 billion of previously committed investments from hyperscalers, including $5 billion from Amazon.

What is the easiest way for UK retail investors to hold Anthropic?

Several investment trusts hold Anthropic, allowing investors exposure to the stock without them having to get involved in the often onerous and volatile IPO process.

Annabel Brodie-Smith, communications director of the Association of Investment Companies (AIC), said as it’s easier for investment trusts to hold privately held companies, these are a sensible option for DIY investors.

Five investment trusts have exposure to Anthropic, which she said “provide retail investors with a way of getting exposure before the crowds pile in when the company is listed on the stock market”.

Source: AIC / Morningstar and investment trust managers (as at 02/06/2026 based on latest available published portfolio weights).

What are Anthropic’s growth plans?

The fundraising announcement also detailed recent expansion of its compute capacity, including signed agreements with Amazon, Google, Broadcom and SpaceX. It said Claude was the first frontier model available on the three largest cloud platforms, Amazon Web Services (AWS), Google Cloud and Microsoft Azure, with AWS its main cloud provider and training partner.

Alfred Lin, partner at Sequoia Capital said: “Startups and Global 5000 companies alike are deploying Claude to handle complex workflows, and in doing so, Claude is learning how businesses actually operate: the context, the processes, the judgement. Anthropic is building the bridge between where enterprise AI stands today and where it’s headed.”

Since its series G round in February, the company said adoption has grown across global enterprise customers and its run-rate revenue (a company’s estimated annual revenue based on a multiplier of a short-term, indicative period) crossed $47 billion.

As a public benefit corporation (PBC) Anthropic is a for-profit company that prioritises its purpose of “the responsible development and maintenance of advanced AI for the long-term benefit of humanity”.

While not yet confirmed, as a high-profile tech company, the stock is expected to list on the Nasdaq exchange. These recent announcements suggest it has now overtaken its rival OpenAI in the race to go public, allowing it to exploit surging investor demand for all things AI.

Anthropic, OpenAI and SpaceX are being touted as the three landmark listings set to take place in 2026 that are changing the playbook for IPOs, including how index providers are facilitating their inclusion in benchmark indices.

Confidence in stock markets appears to be coming back as investors move out of defensive assets like money market funds in favour of equities, particularly those listed in the US, according to latest industry data.

Figures from trade body the Investment Association (IA) showed higher monthly inflows in April, rising to £1.5 billion, an increase on March’s figure of £1.3 billion.

Equity outflows reduced significantly over the month as global stocks rebounded, reflecting higher risk appetite and the ability to look past ongoing geopolitical uncertainty.

The MSCI World Index returned 9.6% in April (in US dollar terms), its strongest monthly gain since 2020.

Equity funds reported outflows of £1.3 billion in March while April’s outflows were roughly half that, at £689 million.

Investors favoured equity index trackers over their actively managed equity fund peers, with £1.7 billion inflows compared with outflows from £2.4 billion, respectively.

Should I invest in US equities?

At sector level, North American equities led the charge, attracting £860 million – their highest monthly amount since April 2025.

Miranda Seath, director, market insight and fund sectors at the IA, said the big question was whether this momentum broadens out, or if geopolitical uncertainty keeps risk appetite fairly contained.

The trade body suggested strong earnings from several big tech names in recent weeks – Alphabet (NASDAQ: GOOGL), Meta (NASDAQ: META), Amazon (NASDAQ: AMZN) and Nvidia (NASDAQ: NVDA) all exceeded expectations, supported by continued investment in artificial intelligence (AI) likely contributed to higher demand.

This trend was underlined by £96 million of inflows into the IA Technology and Technology Innovation sector – its first in seven months.

It’s not just tech: 84% of the 485 S&P 500 companies that reported Q1 earnings beat analyst estimates, according to Bloomberg.

In contrast, regional equity fund sectors from UK, global emerging markets, Asia and Europe all reported net outflows, losing £673 million, £477 million, £399 million and £244 million, respectively.

Investing through volatile times

Money market funds – often used as a temporary shelter for investors when markets look uncertain – posted their first outflow since August 2025, with £755 million moving away from these more conservative strategies.There were record inflows to money market funds in the previous month.

Short-term Money Market was the worst-selling sector in April.

Seath said this was particularly striking. “For much of the past year, investors have been holding capital in short-term cash-like assets, understandably so, given the level of uncertainty in markets.

“The fact that we are now seeing that money begin to move is an encouraging sign that investors are starting to feel more confident in the investment outlook, particularly for the US following a strong month of North American equity inflows.

Similarly, the IA Targeted Absolute Return sector also witnessed outflows of £114 million, reversing three consecutive months of inflows.

Bond funds also returned to inflows of £466 million, with Mixed Bond the best-selling fixed income sector at £373 million, followed by Sterling Corporate Bond’s £85 million and Sterling High Yield, which had slightly lower inflows of £79 million. UK Gilts took in £67 million while Government Bonds had further outflows, with £147 million redeemed in April.

The government is considering plans to hit non-UK resident property owners with an extra "mansion tax" charge in a bid to raise more cash.

A consultation launched by HM Treasury explores the possibility of applying a “non-resident premium” on top of the High Value Council Tax Surcharge (HVCTS), also known as the “mansion tax”.

The consultation says: “In high‑pressure housing markets, particularly in areas such as London, there is interest in understanding whether demand from non‑UK resident owners may be contributing to pressures on housing availability and prices.”

The extra non-resident surcharge is just being considered and will not necessarily come into effect. The government’s consultation closes on 14 July.

An HM Treasury spokesperson said: “The government is inviting views on whether there could be a case for a non-resident premium, as part of a wider consultation which seeks to address a longstanding council tax unfairness in this country.

“We welcome views from all interested parties, including on whether demand from non-resident owners may be contributing to housing pressures.”

What is the mansion tax and how would a non-resident premium be applied?

The HVCTS will take effect from April 2028 and apply to homes in England worth £2 million or more. The charge will be owed once per tax year.

The chancellor has claimed the surcharge will make the council tax system fairer.

The Valuation Office (VO), which is part of HMRC, is set to carry out a valuing exercise to assess which homes the surcharge will apply to.

Homes valued at £2 million or more but less than £2.5 million will be charged £2,500.

Properties worth £2.5 million or more, but less than £3.5 million will need to pay £3,500. Homes worth between £3.5 million and £5 million will need to pay £5,000. Properties worth £5 million or more face a £7,500 surcharge.

These charges are set to be increased each year in line with the Consumer Price Index (CPI) measure of inflation. Revaluations will be conducted by the VO every five years.

When it comes to the non-resident premium, there is no further detail in the government’s consultation on how the extra levy would be applied if it did come into force.

What could the effect of the premium be?

Marc Acheson, global wealth specialist at pensions and life insurance firm Utmost, said: “This latest proposal is likely to raise far less revenue than envisaged as more people will consider selling London properties, putting further downward pressure on valuations at the top end of the housing market.

“More broadly, it risks further damaging the UK’s reputation as a destination for wealth and accelerating the ongoing exodus of wealthy international individuals that began in earnest following the abolition of the non-dom regime at the Autumn 2024 Budget.

“The economy cannot afford to lose these individuals, who are the largest contributors to the tax base, and once this cohort leaves it is very hard to replace them.”

Sian Armitage, tax director at tax advisor Mark Davies and Associates, said the premium could push non-resident property owners weighing up a sale into putting their property on the market.

“For those that are undecided, they may treat this as yet another reason to sell, or consider this as an indication of things to come,” Armitage said.

However, Armitage added that because the levy would be applied to non-residents “it does imply that those individuals are not spending significant time in the UK in any case, so I don’t envisage this policy alone as having a negative impact”.

Meanwhile, Peter Ferrigno, director of tax services at consultancy Henley and Partners, said making the HVCTS slightly higher for non-UK residents would be an “inconvenience”, but it was unlikely the introduction of such a premium on its own would be enough to make wealthy individuals sell up.

But, he said the bigger issue is they could leave when also considering “many other changes, and an indication that there will still be more demands for a bit here, a bit there, a bit more after that, and then...who knows what's next”.

What is a non-UK resident?

Non-UK residents pay tax on their UK income, but not on their foreign income. In contrast, a UK resident would typically pay UK tax on income from both sources.

You are generally classed as a non-UK resident if you spend fewer than 16 days in the UK each tax year or work abroad full-time and spend fewer than 91 days in the UK each tax year and no more than 30 of those days are spent working.

The statutory residence test (SRT) determines whether you are resident in the UK under UK domestic tax law for tax years 2013/14 onwards. You can find out more on gov.uk.

Almost three million people could cut back on pension saving as a result of the impending salary sacrifice clampdown, the government’s own data suggests.

Chancellor Rachel Reeves used her 2025 Autumn Budget to announce a £2,000 cap on the amount workers and their bosses can add into pensions via salary sacrifice before being hit with National Insurance (NI) charges.

The changes will come in from April 2029 and are expected to raise £4.8 billion for the Treasury in 2029/2030 and £2.5 billion in 2030/2031.

But while this may be good for the nation’s finances, it could be a blow for people’s own pension savings.

Research by former pensions minister Steve Webb, now a partner at consultancy LCP, found the government’s own estimates suggest more than 2.8 million workers are expected to cut back on pension saving as a result of the changes.

It comes despite the government-backed Pensions Commission recently warning that people aren’t saving enough for their retirement.

The impact of pension salary sacrifice changes

Salary sacrifice has long-been a popular way for employees to make pension contributions.

Money is added into an employee’s pension pot from their gross pay, adjusting their net income. This also reduces the payroll taxes paid by an employee and employer.

But government guidance shows the cost of the relief has increased markedly, from £2.8 billion in forgone National Insurance contributions in tax year 2016/2017, rising to £5.8 billion in 2023/2024.

Without any change, it is expected that this would almost triple to £8 billion by 2030/2031.

Capping the relief will save the government money.

HMRC has previously disclosed that an estimated 7.7 million employees currently use salary sacrifice to make pension contributions.

Of these, 3.3 million sacrifice more than £2,000 of salary or bonuses.

The Office for Budget Responsibility has already warned that a consequence of the policy could be a reduction in contributions.

A Freedom of Information (FOI) request to HMRC by Webb has revealed the extent of this.

The FOI asked for the government’s assessment of the number of employees that are assumed to cut their contributions in 2029/30.

HMRC said it expects more than 2.8 million workers to reduce their contributions.

This is broken down as 2.2 million earning above the £50,270 upper earnings limit, while 666,000 will generally be basic rate taxpayers.

Webb said: “The government has presented the changes to salary sacrifice for pensions as being a relatively painless way of cracking down on a tax break mostly enjoyed by the well off.

“But these figures show that the effects of the policy will be far more damaging than had previously been admitted.”

He suggests it is hardly ‘joined-up government’ to be stressing the need for more pension saving one day through the Pensions Commission and then implementing a policy that will reduce the pension savings of millions the next.

Webb added: “At a time when the government is running a major Commission to tackle the issue of pension under-saving, it is shocking that a separate government policy will result in more than 2.8 million workers cutting back on pension saving.”

A Treasury spokesperson said: “High earners piled in huge bonuses through salary sacrifice without paying a penny in tax – a taxpayer funded perk largely benefitting the better off.

“Our fair reforms protect 95% of workers earning under £30,000 using salary sacrifice, and as IFS analysis shows, over three quarters of under 30s will be unaffected.”

After a long run trading on double-digit discounts, fortunes look to have turned for the UK investment trust sector.

Latest data from the closed-ended fund sector trade body, the Association of Investment Companies (AIC), reveals the average discount to net asset value (NAV) across all UK investment trusts reached single digits for the first time in nearly four years, narrowing to 9.6% on 31 May.

Comparing month-end figures, this is the first time the average discount has been less than 10% since August 2022, when it was 9.4%.

Those wider discounts were due to higher interest rates, regulatory issues around cost disclosures and the dominance of US big tech companies – especially the Magnificent 7.

After a challenging period for investment trusts, there is now “light at the end of the tunnel”, according to Richard Stone, chief executive of the AIC.

“The sector has reshaped itself over the past four years with unprecedented levels of M&A and share buybacks, as well as mandate changes and fee cuts to give shareholders a better deal,” he said.

Stone added that while the challenges were not over, to see the average discount return to single digits was encouraging.

He said: “This reflects the continuing appeal of the investment trust structure, which can offer exposure to virtually any asset from mainstream stocks and shares to exciting private companies such as SpaceX.”

What is an investment trust discount?

Because investment trusts are closed-ended investment vehicles – listed companies whose shares trade on a stock exchange – they have certain features that set them apart from traditional open-ended collective funds. One of these features is their share price being able to trade at a premium (higher) or a discount (lower) than their total net asset value (NAV) per share.

An investment trust’s NAV is the value of the trust’s assets minus any liabilities. This is then divided by the number of shares to get the ‘per share’ number, which is then compared to the actual share price to determine if the trust (or company) is at a premium or discount.

These typically indicate whether demand for the shares is high or low at any given time.

Doug Brodie, chief executive of Chancery Lane Retirement Income Planning, gives the example of an investment trust with a market capitalisation (market cap – the combined value of all its shares) of £50 million, but the assets it holds are worth £55.5 million.

“The market cap – the share price – is at a 10% discount to the value of the assets it owns – the NAV… A discount is simply a price off the normal price: instead of paying 100p in the pound for shares, you only have to pay 90p for them.”

Why do discounts widen or narrow?

The discount on an investment trust can narrow for several reasons. These include improved performance, increased popularity of the sector it sits in, a change in manager or other corporate activity, such as a merger with another trust, or being acquired or liquidated.

In the latter case, the assets have to be sold or absorbed into another vehicle, meaning their actual value – minus costs – is likely to be realised. A rise in corporate activity has contributed to discounts narrowing.

Further, Max King, former fund manager and MoneyWeek columnist explained that discounts are wider for trusts with unquoted assets than for those with quoted assets.

Shares in private companies don’t trade daily on stock exchanges, so their value is only determined at intermittent events when they are bought or sold. When an investment trust holds these shares, it usually values them based on the most recent valuation event – which might be out of date compared to the market’s assessment of their current worth. That can contribute towards discounts or premia to NAV.

Because private equity valuations are backward-looking, they tend to hold up when markets are falling and pick up when they’re rising.

“Hence discounts widen as investors realise they are unrealistic and fall when investors realise that valuations have become conservative,” said King.

What do narrower discounts mean for investors?

According to King, discounts appear for three reasons: poor performance; distrust of the net asset value – especially for unquoted assets; or rapid sell-off of UK-listed equities, as witnessed in the past few years.

As investment trusts are UK-listed companies with their own shares often listed on the major indices, if there’s an exodus from the UK market, it will inevitably hit UK-listed trusts as well – even if their underlying companies are global.

He warned against being seduced by wide discounts, adding that investors should instead focus on underlying performance, and be sure to understand why a discount exists and why it might come down before deciding to invest.

“Investors in the UK have been bizarrely risk-averse in recent years,” King added. “That is diminishing so, in time, discounts will disappear, existing trusts will issue more equity, new trusts will be launched and investors will be euphoric – that will be the time to turn cautious.”

Why discounts matter for income investors

Narrowing discounts also suggest that investors are seeing the value of long-term holdings, for which Chancery Lane’s Brodie said investment trusts were “the perfect vehicle”.

He added that for income-seekers, discounts become even more valuable, giving the example of M&G Investments.

“If M&G shares are yielding 6.48%, you can buy a trust that holds them and if that trust is on a 10% discount, your investment yield on those shares is actually 7.2%.

“If a trust is at a discount, even without any underlying stock market growth, its share price should, over time, grow back to match the actual value of the assets.”

UK house prices have fallen and the negative trend could worsen before the end of the year, experts warn.

The latest house price index (HPI) data from Nationwide reveals property values fell by 0.6% in May to £278,024, compared with the month before.

Meanwhile, the building society said annual house price growth slowed to 1.7%, down from 3% in April.

Robert Gardner, chief economist at Nationwide, blamed the fall on the conflict in the Middle East, which has seen mortgage rates rise and consumer confidence hit.

Data firm Moneyfacts says the average interest rate on a two-year fixed mortgage deal is 5.68% as of 1 June, up from 4.83% on 27 February, a day before the US and Israel launched strikes on Iran.

Gardner said: “Given the uncertainty caused by developments in the Middle East and the subsequent rise in energy prices and market interest rates, some loss of momentum was to be expected.”

Nationwide is not the only major lender to show a month-on-month fall in house prices since the outbreak of tensions in the Middle East. The Halifax house price index reported a 0.5% fall in the month to March 2026 and a further 0.1% drop in the month to April.

Meanwhile, the latest data from the Office for National Statistics shows the average UK house price fell from £269,204 to £268,132 between February and March 2026.

Could house prices fall further in 2026?

Lenders, experts and economists were relatively optimistic about the prospects for future UK house price growth at the start of 2026, but tensions in the Middle East have tempered any positivity.

The latest RICS UK Residential Market Survey suggests higher mortgage rates have weighed down on buyer demand.

There’s also a glut of homes on the market. According to Rightmove, the number of homes for sale is at its highest level for this time of year since 2015.

This is being reflected in asking prices. Rightmove’s latest HPI shows average asking prices were 0.3% lower in May 2026 compared to the same month a year ago.

Estate agents Savills is now predicting house prices to fall by 2% in 2026, revised down from a forecast made in December 2025 of 2% growth.

In London, house prices could fall by as much as 4% and 3.5% in the South East and East of England, Savills suggested.

Meanwhile, Deutsche Bank is expecting property values to drop by between 3% and 5% this year.

Sanjay Raja, UK chief economist at the bank, said the Iran conflict had “likely put an end to any hopes of an imminent housing market recovery” in 2026.

Even economists and estate agents that are more upbeat in their predictions have revised down earlier forecasts.

Estate agent Knight Frank is now expecting property values to increase by 1.5% in 2026, down from a previous estimate of 3% made in September 2025.

Tom Bill, head of UK residential research at Knight Frank, said he expected “continued downward pressure” on housing transaction activity as lower interest mortgages drop off the market.

Economic research firm Pantheon Macroeconomics has also forecast prices to increase by just 1% in 2026, down from a previous estimate of 3%.

We reveal whether it’s a good time to sell a house in another article.

Two savers have woken up millionaires after NS&I confirmed the winners of June’s Premium Bonds prize draw.

The first person to get £1 million is from Leeds and won with the bond number 662EK268242. They bought the winning bond in February 2026 and have £42,425 in Premium Bonds.

The second person to win the top prize is from Cheshire and West Chester, purchasing their winning bond of 573GA618329 in March 2024. They have a total holding of £33,800.

It is the fifth time someone from Leeds has won the top £1 million prize and the second time someone from Cheshire and West Chester has bagged the jackpot.

Both this month’s £1 million prize winners will have received a knock on the door by Agent Million, an anonymous NS&I employee that travels the country to inform jackpot winners of their newfound wealth.

While June’s jackpot winners have already been announced, Premium Bonds holders can find out they’ve won smaller prizes from 2 June.

How many prizes will be issued in June’s monthly draw?

Just under six million tax-free prizes will be paid to Premium Bonds prize draw winners worth a total of £376,627,975 in June.

This month, there were 136,955,621,672 £1 Bonds eligible for the draw.

While just two people won £1 million in June, 71 £100,000 prizes will be paid out, as well as 143 payments of £50,000. Over 2.8 million prizes worth £25 will be awarded.

The table below shows the breakdown of Premium Bonds prizes in June:

Credit: NS&I

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

NS&I’s Agent Million will inform the Premium Bonds prize draw jackpot winners of their win in person.

NS&I says bond holders can check if they have won prizes ranging from £25 to £100,000 the day after the first working day of each month. You can check using the Premium Bonds prize checker app, by visiting the NS&I website or by asking Alexa. For June 2026, Premium Bonds holders can check from 2 June.

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. Just make sure you’ve got your bond or NS&I number to hand so you can access your account.

As Premium Bonds do not expire, it may be worth checking if you have any prizes waiting for you even if you bought them years ago.

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

For example, there is a £25,000 prize from June 2023 yet to be claimed in Cheshire & West Chester.

We look at the alternatives to Premium Bonds in a separate piece.

Asking prices on homes in some seaside towns are bucking the British trend and showing up to double digit growth, according to new research.

Rightmove has revealed the British coastal towns where property asking prices rose the most in the 12 months to May 2026.

Asking prices went up the most in Bootle, Merseyside, rising by 11% to £141,680, the property portal’s data shows.

In family-friendly Crosby, which is less than 20 minutes away by car, prices increased by 9% to £330,900.

On the other side of the River Mersey, asking prices in Wallasey, home to popular seaside destination Marine Point, rose by 7% to £200,753.

The list also featured five Welsh coastal towns, including Penarth, South Glamorgan, where asking prices jumped by 8% to £433,081 in the year to May 2026.

In Llantwit Major, South Glamorgan, asking prices rose by 8% to £340,033.

Asking prices rose by 7% in Llanelli, in Carmarthenshire (to £201,570), and Bangor, in Gwynedd (£220,622). They increased by 6% in Porthcawl, South Glamorgan, to £359,412.

Barrow-in-Furness, Cumbria, saw asking prices rise by 6% in the year to May 2026 to £185,169.

One Scottish town made the top 10 list – Helensburgh in Dunbartonshire recorded average asking price growth of 6% to £247,953.

Mary-Lou Press, president of trade body NAEA Propertymark (National Association of Estate Agents), said: “Many of the fastest-growing seaside markets remain relatively affordable, especially in parts of the North West and Wales. For many buyers, these areas can offer a balance of lifestyle, space and value.

“We’re continuing to see demand driven by flexible working and buyers reassessing where they want to live, but consumers should look beyond headline price growth and also consider factors such as transport links, local jobs, flood risk and ongoing housing costs.”

Source: Rightmove, analysis of more than 100 coastal towns, comparing year-on-year change in May 2026

The cheapest seaside towns to buy a home

Rightmove also analysed the 10 overall cheapest seaside towns to buy a home, with asking prices starting from just £120,000, well below the UK average.

All of the hotspots are based in the north of England or Scotland, including Peterlee in County Durham where the average asking price is £120,657.

Asking prices in the port town of Grimsby, Lincolnshire, are just £133,706 on average.

Head a couple of hundred miles north and you’ll find Ashington, where the average property asking price is £133,775.

Bootle, despite being a town where house prices have risen the most in the last year, is still one of the cheapest places to buy a home on the coast (£141,680).

Blackpool and Fleetwood, both in Lancashire, also featured in the top 10 cheapest seaside hotspots. The average asking prices are well below the UK average house price, at £142,277 and £147,910, respectively.

Seaham, County Durham (£157,994) and Ayr, Ayrshire, Scotland (£157,754) also made the top 10 list.

Source: Rightmove, analysis of more than 100 coastal towns, comparing year-on-year change in May 2026

The most expensive seaside towns to buy a home

The 10 most expensive coastal towns to buy a home are all found in the south of England.

Topping the list is Sandbanks, in Poole. The average property asking price there is £1,119,945, according to Rightmove.

Canford Cliffs, less than two miles up the coast, is the second most expensive place to buy a home near the sea (£1,045,533).

Lymington, Hampshire, also made it on to the list of most expensive coastal spots. Buyers here are looking at an average asking price of £545,926, well above the UK average.

Barton on Sea, in Hampshire (average asking price of £496,143), Lyme Regis, in Dorset (£474,417), and St. Ives, in Cornwall (£461,959), are also on the pricier end of the spectrum.

Source: Rightmove, analysis of more than 100 coastal towns, comparing year-on-year change in May 2026

Having an offer accepted on a property should clear the path to moving into a new home – but most sales collapse after buyers and sellers have already paid out thousands in costs, according to new research.

More than half of house moves (58%) fall through after an offer has been accepted, costing buyers and sellers an estimated £2,830 in direct costs such as legal fees, surveys and mortgage costs.

One in six transactions collapse after four months and one in 10 falls through after five months or more. Sometimes it is because vital information about the true condition of the property is not disclosed upfront. Other times affordability issues arise late into the process putting the house price out of reach.

With around 1.2 million residential transactions taking place each year, the total cost could be as high as £2 billion a year in wasted time and fees as people try to buy a house or sell their home.

The findings from the Open Property Data Association (OPDA), based on a survey of 5,000 recent home movers, highlight deep-rooted problems with the home‑buying process.

The data comes at a time when the economy and housing market are already under strain. Higher interest rates, tighter affordability, and longer transaction times have increased the risk of deals collapsing before completion, leaving families financially stretched and emotionally drained.

When asked how they were affected by a collapsed sale or purchase 43% cited emotional stress as the biggest impact. More than four in 10 people (41%) said their plans were significantly delayed.

The impact was felt most acutely by older home movers. Among those aged 55 and over, almost six in ten (59%) reported high levels of emotional stress.

Maria Harris, chair of the OPDA, said: “These figures lay bare a housing market that is failing consumers at every stage. Far too many transactions collapse because crucial information only comes to light weeks or even months after an offer is made. By then, buyers and sellers have already invested significant time, money and emotional energy.”

How to avoid a property chain collapsing

Harris is calling for upfront, standardised property data through digital property packs to be available to all buyers to avoid any hidden surprises that could jeopardise a home buying chain.

Phil Spencer, property expert and founder of property advice website Move iQ, added: “For buyers and sellers, these fall‑throughs often mean months of uncertainty, money lost on fees that can’t be recovered, and plans put on hold. Much of that pain could be avoided if people were given clear, reliable property information upfront.

“When buyers know what they’re committing to from the start, they can proceed with confidence, avoid nasty surprises later on, and reduce the risk of deals collapsing after so much has already been invested.”

While buyers are waiting for upfront digital property documents to become mainstream, these are the issues Ian Futcher, financial planner at Quilter warns to be aware of in the current market that could jeopardise a sale – and how to prepare for them.

1. Get an agreement in principle early

The two most common causes of chains collapsing are affordability issues – where buyers either fail to secure a mortgage or see offers revised as rates change – and survey results uncovering problems that lead to renegotiation or withdrawal.

In the current environment, Futcher said mortgage dynamics are playing a bigger role. “As rates have shifted more quickly in the UK than in some other markets, buyers can find themselves reassessing what they can afford midway through a transaction, which increases the risk of deals falling apart,” he pointed out.

“Securing a mortgage agreement in principle early in the process can provide greater certainty on borrowing capacity,” Futcher said.

2. Use a good mortgage broker

Working closely with a broker or adviser helps ensure buyers are matched with suitable products from the outset and give flexibility should cheaper deals become available in the run up to completion. Seek recommendations from friends and family who’ve had positive experiences, or use a free matchmaking service like VoucherFor or Unbiased to find a vetted mortgage broker.

3. Keep transactions moving

Futcher said: “Delays often create the conditions for second thoughts or changing circumstances, so maintaining regular communication with lenders, solicitors and agents can help keep momentum and avoid surprises emerging late in the process.”

4. Factor in changes in mortgage rates

Buyers who have factored in potential rate movements and ensured they have sufficient financial headroom are better placed to proceed, even if market conditions shift slightly before completion, said Futcher.

“In a market where uncertainty remains elevated, taking advice and stress-testing affordability upfront can make the difference between a successful completion and a collapsed chain,” he said.

After weeks of anticipation, SpaceX’s initial public offering (IPO) took off on 12 June, with shares in Elon Musk’s space and artificial intelligence (AI) company gaining 20% to close at $160.95 on their first day of trading.

SpaceX (NASDAQ:SPCX) has pioneered the modern space economy. Its Starlink network consists of over 9,000 satellites that provide internet connectivity all over Earth, while its rockets facilitated more than 80% of the US’s licensed space launches in 2025.

“SpaceX shares blasted higher on their stock market debut, shooting past the $135 IPO price as investors rushed to buy into Elon Musk’s vision for space, satellite and AI domination,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club. “The IPO had reportedly been at least four times oversubscribed, leaving many investors without an allocation and forcing them into the secondary market once trading began.”

This was the first IPO that allowed UK-based investors to buy shares ahead of the event.

Having raised $75 billion for SpaceX, the IPO became the largest in history. It raised more than twice as much as the previous leader, Saudi Arabian state oil company Saudi Aramco, raised in its 2019 IPO.

It means SpaceX’s founder and CEO, Elon Musk, became the world’s first trillionaire – though it will be some time before he can sell SpaceX shares and realise the increase in his nominal wealth.

How much was SpaceX worth at its IPO?

While the $1.77 trillion valuation at which SpaceX shares initially sold had raised some eyebrows, the gains over the course of its first session saw the company close with a market capitalisation of $2.11 trillion.

That puts SpaceX at number seven in the list of the world’s most valuable companies – in between semiconductor giants Taiwan Semiconductor and Broadcom.

Shares opened at $150 – already 11% above the $135 IPO price – and never fell below $149.3 on the day. SpaceX stock reached a high of $176.5 during their first session trading on public markets.

SpaceX’s IPO filing envisages a $28.5 trillion total addressable market (TAM), the vast majority of which ($26.5 trillion) is ascribed to AI. Within AI, even eye-catching segments like AI infrastructure are a relatively small portion of the total (expected to be worth $2.4 trillion); enterprise applications – in other words, AI products sold to businesses – are expected to account for $22.7 trillion, around 80% of SpaceX’s entire TAM.

Space-enabled solutions, by contrast, are expected to account for just $370 billion, or 1.3% of SpaceX’s TAM, while connectivity (Starlink Broadband and Starlink Mobile) are expected to make up another $1.6 trillion, or 5.6% of the TAM.

What could SpaceX’s IPO mean for the markets?

Many experts believe that the success of SpaceX’s IPO could pave the way for yet more mega-cap tech IPOs.

AI developers OpenAI and Anthropic have both filed for IPOs since the start of June, and other private tech giants like Databricks, Stripe and Anduril could follow. This could potentially create “a wave of new market capitalisation large enough to reprice growth equities more broadly” according to Stephen Dover, chief market strategist at investment manager Franklin Templeton.

However, there are risks posed by the prospect of so many huge private companies entering public markets at the same time.

“If several mega-cap IPOs come in the same window of time, they will compete for capital not only with each other, but also with existing publicly traded growth stocks,” said Dover. “That could create rotation pressure across software, semiconductors, fintech, defence tech and AI beneficiaries.”

Dover also cautioned that the increased scrutiny of public markets could test the valuations of these private companies, most of which have raised large amounts of money at very high valuations over the latest business cycle.

Others, however, viewed the success of SpaceX’s IPO as a positive.

“The positive SpaceX debut and investor reception is a good sign for OpenAI and Anthropic as both companies likely head down the IPO path before year-end,” said Dan Ives, head of global technology research at investment bank Wedbush Securities. “As tech stalwarts like SpaceX, OpenAI, and Anthropic get more capital and go public this will… further drive more investments and [capital expenditure] into the AI revolution flywheel.”

How can you invest in SpaceX?

Before investing in SpaceX, it is important to consider the risks involved. The company listed at a very high valuation – around 100 times sales, rising to around 109 times sales by the close of its first day trading – and lost nearly $5 billion last year. Nvidia, by comparison, trades at around 20 times sales.

Now that SpaceX has listed publicly, most brokers that enable trading in US-listed shares should enable you to buy its stock, like that of any other listed company.

If you haven’t bought US-listed stocks through your broker or investment platform already, you may need to complete a W-8BEN form – a simple form that entitles you to a reduced tax rate in the US on your investments. Your broker will prompt you for this if and when it is needed.

There are various ways to gain exposure to SpaceX besides buying its shares directly. You could, for example, buy an investment trust that holds the stock, such as Scottish Mortgage (LON:SMT). Shares in Scottish Mortgage gained 1.7% on 12 June, the day of SpaceX’s IPO.

Investors on both sides of the Atlantic are likely to have come across the term ‘Magnificent 7’ – a moniker used to describe a group of ‘big tech’ companies that have dominated industry headlines and stock market returns in recent years.

These seven technology giants – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla – enjoyed a collective surge in share prices that began in 2023. Their impressive returns were powered by a massive appetite for all things artificial intelligence (AI), a concentrated US stock market and each demonstrating strong financial performance.

The Mag 7 represents around a third of the S&P 500 by market capitalisation. According to investment manager Mellon, in 2023 the group returned 76% against the wider S&P 500’s 24%. As of May 2026, their year-to-date performance is 8.8% compared with the overall S&P’s return of 8.1%.

This suggests their relative success may be slowing, with several market commentators wondering if the collective party may be splintering.

Is the ‘Mag 7’ story over?

Neuberger Berman co-chief investment officer, multi-asset strategies Jeff Blazek said while Alphabet, Amazon and Meta all delivered Q1 results that surpassed analyst expectations, the cohesive performance of the wider group may have run its course.

“The ‘Magnificent 7’ moniker has had a good run. But the basket is beginning to break at the same time more granular AI-related equity stories are gathering momentum,” he said.

While several continue to impress, “the story of seven stocks moving in unison to dominate large cap indices may be reaching its end,” Blazek added.

All seven remain heavily exposed to AI, appetite for which shows no signs of easing. Quite the opposite, in fact.

Helen Jewell, international chief investment officer of fundamental equities at BlackRock, said AI looks set to continue to attract huge levels of investment.

“AI capital expenditure is now $725 billion for 2026 and we expect that to reach $6 trillion by 2030 – an extraordinary amount of money is being spent on AI.”

But she also points out that the expected divergence between the seven companies will be determined by their breadth of offering.

She said: “A company like Alphabet has more elements across that whole AI stack – computing, cloud, models, applications. Others are more exposed to the parts of the stack seen to be less strong. Software, for example, is seen as a weaker part of the AI story because there’s a feeling that AI will be able to replicate a lot of what software does.”

While the term was useful in describing their shared characteristics, Jewell said it will become outdated as the divergence that’s already started to emerge continues.

Where are the Mag 7 differences showing up?

While these acronyms can help investors looking for an interesting, memorable narrative, it’s important to look beneath the marketing story.

Neuberger Berman’s Blazek explained: “The Mag 7 story no longer reflects how these companies are actually behaving and it no longer serves investors trying to make sense of where markets are headed.”

He said their average pairwise correlations – the rate at which two stocks move together – have fallen significantly since their heyday.

In 2023, this was 75%, whereas it’s now 25% – the lowest level since 2019.

As at mid-May, Neuberger Berman said year-to-date returns ranged from Alphabet’s 23% to Tesla’s loss of 15% – a “striking” divergence in such a short timeframe.

“Consider Alphabet and Microsoft specifically: a year ago, the former was written off as lagging badly on AI, while the latter was deemed a consensus winner. That read has inverted – starkly,” Blazek said.

Beyond the Mag 7, where should investors look next?

Trying to second-guess markets or time share price movements is challenging – even for professional investors.

James Norton, head of retirement and investments at Vanguard Europe points out that people described Mag 7 valuations as being stretched for years. If anyone was spooked by that narrative they might have sold out and missed out on a lot of returns.

Clearly this year’s performance to date has been more mixed. As it’s hard to predict future share price trajectories, taking a diversified, long-term approach is more sensible than trying to time a specific theme.

Norton added: “For investors with a diversified portfolio, these companies are just one part of the picture. It is true that historically quite a small number of companies have driven a large share of overall market returns. But in a diversified portfolio, the Mag 7 are just a part of the returns of the US market, which are in turn part of the returns from the global market, which are again balanced by the returns you are also getting from bonds.”

Are the Mag 7 stocks overvalued?

Jewell doesn’t like calling stocks ‘expensive’.

“Ultimately the multiple reflects what people think the future earnings growth is going to be. The reason Alphabet is demanding a higher price is because there’s a feeling that its earnings growth is going to be strong because they've got so many different parts of the AI story,” she said.

The other point to note is that the divergence of performance starting to emerge is not a static story for these types of companies.

Their ambition, attitude and high levels of cash flow means their ability to continually reinvest themselves is part of their power.

Jewell added: “As the oldest of the Mag 7, Microsoft is a phenomenal company that has gone through many iterations. It reinvents itself continually – as does Apple – because they’ve got the cash to rethink and recreate what they do, which is what allows them to sustain for the long term.”

Households will be able to enjoy children's meals in restaurants and certain days out for less today as temporary tax cuts across England, Wales, Scotland and Northern Ireland go live today (25 June).

VAT will be cut temporarily at theme parks and major leisure attractions to help reduce the cost of days out over the summer, with Alton Towers, The London Eye and LEGOLAND among the businesses taking part in the scheme.

Summer VAT cut

From 25 June to 1 September, a reduced 5% VAT rate (down from its regular 20%) will apply to certain services in England, Wales, Scotland and Northern Ireland including children’s meals served in restaurants, as well as children’s and family tickets for the cinema, the theatre, exhibitions, shows and concerts.

The cut will also be applied to admission tickets for both children and adults to a range of attractions, such as amusement parks, fairs, circuses, museums, zoos, adventure parks, soft play and observation attractions.

The Treasury confirmed to MoneyWeek that adults without children can still access the savings on attractions.

The idea is that people can get out and spend money in the economy at a cheaper rate, as long as businesses pass on the VAT savings.

If a business chooses to pass on the full VAT savings, a family of two adults and two children could get £9 off tickets to the circus, £17 off tickets to a wildlife park and £20 off tickets to a theme park, according to the Treasury.

At a roundtable last week at Chessington World of Adventure, Chancellor Rachel Reeves met with business leaders from Merlin Entertainments, Crealy Theme Park in Devon, Camel Creek Family Adventure Park in Cornwall, Gulliver’s Theme Park Resorts, Haven and Paultons Park, which all backed the VAT scheme.

Others taking part include Cineworld, Barleylands Farm Park in Essex and Nando’s.

Reeves said: “This comes on top of support we’ve already put in place including freezing fuel duty, taking off £117 off energy bills, and freezing prescriptions and rail fares – all to help families with the cost of living.”

Offering further savings for families, Adventure Attractions in Bournemouth has removed its historic toll to access the pier indefinitely to boost footfall, while Merlin Entertainments will be applying the VAT cut alongside an offer to visit two theme parks for the price of one. Merlin’s attractions include Alton Towers, Chessington, Thorpe Park, The London Eye and Peppa Pig theme parks among others.

Julie Dalton, managing director of Gulliver’s Theme Park Resorts, said on 17 June: “At Gulliver’s, we’ve already applied these savings to ticket prices across our four UK resorts – Gulliver’s Kingdom in Matlock Bath, Gulliver’s World in Warrington, Gulliver’s Land in Milton Keynes and Gulliver’s Valley in Rotherham – so combined with our latest summer ticket offer, the next few weeks are the perfect time for families to come and enjoy great value days out with us.”

The moves come as inflation remains high and is predicted to increase further due to the conflict in the Middle East.

Oil and wholesale energy prices have been rising since the Iran war began on 28 February, leading to a 17% hike in the average energy bill from July, and soaring petrol and diesel prices.

Free bus travel

Throughout August, all children aged five to 15 in England will be able to travel for free on any local bus service.

The Treasury said this will help more families access summer activities while reducing pressure on household budgets.

This is good news for people living outside London. Those in the capital can already get free travel on the London Underground using a five to 15-year-old zip card.

Price cuts for supermarket essentials

The prices of certain supermarket staples are set to fall this summer after the government announced it will cut some tariffs (taxes paid when importing goods) on more than 100 goods.

The tax cuts are expected to save consumers more than £150 million a year, according to figures from the Treasury as part of the Summer Savings initiative.

The package includes cuts to fruit, oils, avocados, bread, pizzas and olives.

Prices on some sweet treats will also be reduced, including chocolate, gingerbread, biscuits, marzipan and waffles.

A full list of the goods can be found below:

Will the cost of living measures help you?

Cheaper days out will be attractive to anyone.

But there is no requirement for businesses to pass on the full VAT savings so the actual benefit may depend on the attraction.

Similarly, it will be up to supermarkets to pass on the savings to customers of suspended food tariffs, which Reeves said she expects to be done in full.

Charlotte Kennedy, chartered financial planner at Rathbones, highlights that these measures are rightly aimed at limiting price rises in areas of inflation that are often unavoidable for many households, such as food and travel.

But she warned: “While any targeted support will be welcomed by many households, the impact of rising prices is unlikely to be felt evenly. Lower-income families and those already spending a larger share of their income on essentials may continue to face significant pressure on household budgets.

“It is also worth remembering that everyone experiences inflation differently, depending on their individual spending habits.

"As such, it remains important to keep a close eye on your finances to maintain financial resilience. This may include reviewing regular outgoings, prioritising high-interest debt repayments where possible, and building up a rainy-day fund – with three to six months’ worth of living expenses often considered a good rule of thumb.”

Some other cost of living relief measures are already in motion, with the Treasury extending the fuel duty freeze until the end of 2026. It was due to be phased out from September.

Meanwhile, Reeves has said she is looking at targeted support for households that will struggle to pay their energy bills.

Investment platforms are starting to stop paying interest on uninvested cash.

It comes ahead of the changes to ISA rules from April 2027.

Chancellor Rachel Reeves used her 2025 Autumn Budget to reveal new restrictions on cash ISAs in an attempt to encourage more people to invest rather than keeping their money in cash.

From April 2027, under-65s will only be able to put up to £12,000 into a cash ISA each tax year, down from the current £20,000 that can be used across the tax wrapper. They will still have the overall £20,000 annual ISA allowance, so if they put £12,000 into a cash ISA, the remaining £8,000 could go into a stocks and shares ISA.

Transfers from stocks and shares ISAs to cash ISAs will also be banned as part of the changes.

Plus, HMRC has said it will introduce a charge for those earning interest on cash within a stocks and shares ISA.

The aim is to disincentivise investors from keeping cash holdings in a stocks and shares ISA for a long time and instead encourage them to put the money back into the market.

For now, many of the major investment platforms are still paying interest on uninvested cash.

But J.P Morgan Personal Investing appears to be getting its investors ready for the changes now.

Cash pot changes

It may be tempting to keep money in cash while you decide where to invest, especially if you are earning some interest.

But the Treasury wants to get more people investing, ideally in UK stocks, so the new charge aims to provide a disincentive as it could outweigh any interest earned.

HMRC is due to consult on the changes.

While not explicitly linked to the reforms, J.P Morgan Personal Investing has unveiled plans to remove the interest paid on cash-only pots.

Currently, the robo-wealth manager pays the Bank of England base rate minus 2.5% on its cash-only pots.

This is money that investors can use to drip-feed funds into their portfolio or to protect your balance from market movements ahead of a withdrawal.

It is separate to cash held in the investment pot that goes towards management fees. Interest on this cash is currently paid at the base rate minus 0.75%.

But from 22 June, J.P Morgan said cash-only pots will no longer accrue interest.

Instead, cash‑only pots will remain available for holding cash and drip feeding money.

Any interest accrued up to but not including 22 June 2026 will be paid into your pot at the end of the current quarter.

Interest will still be paid on cash held in your investment pot.

Can you still earn interest on uninvested cash in a stocks and shares ISA?

Most other investment platforms are still paying interest on cash for now.

BestInvest pays a relatively decent 2.98% interest on cash holdings within any of your investment accounts.

Its managing director Jason Hollands said there are no plans yet to change the way cash is treated in its stocks and shares ISA, while HMRC has yet to firm up its plans.

In contrast, AJ Bell’s stocks and shares ISAs, lifetime ISAs, and junior ISAs pay 1.75% interest on all cash balances.

The interest paid can also depend on the amount being held.

For ISAs and junior ISAs, interactive investor now pays 1.11% on the first £20,000, 1.26% on the value between £20,000 and £50,000, 1.36% between £50,000 and £100,000, and 2.21% on the value above £100,000.

Hargreaves Lansdown users can earn 1.51% on cash balances between £0 and £19,999, 1.18% between £20,000 and £99,999, 2.02% between £100,000 and £999,999, and 2.38% on balances worth £1 million and higher.

MoneyWeek has asked the major platforms what there plans are once a charge is introduced.

Chase is set to increase the cashback offered on its credit and debit cards but the criteria may make it harder to qualify for the perks.

The JP Morgan-owned bank has grown market share in recent years with a popular cashback card offer, although its criteria and rates have been scaled back in the past.

Last year, Chase announced that customers will only be able to earn 1% cashback on debit card spending across three categories: groceries, everyday transport and fuel.

The cashback was also restricted to purchases made in the UK and paid for in pounds sterling rather than worldwide.

But now the bank appears keen to attract more users with a higher cashback rate of 2%, but you will need to work harder to get it.

What is the new Chase cashback offer?

From 1 July, new and current Chase customers will be able to earn 2% cashback on spending.

Plus, a new restaurant and cafes category has been added, meaning you will earn money when paying for meals out as well as on groceries, fuel and everyday transport.

There are no monthly fees and the cashback can be earned using a Chase debit or credit card.

Is the Chase cashback offer any good?

The cashback terms are technically better than what customers currently get, especially with the extra restaurant category.

Cashback has been increased from 1% to 2% and the monthly amount you can earn will be capped at £20 rather than £15.

This means you could earn up to £240 per year from cashback with Chase instead of £180.

But, there is a catch. Currently, you only need to pay in a minimum of £1,500 into either your Chase current or savings account to qualify for the cashback.

But from July, customers will need to make 15 or more card transactions or direct debits each month and maintain a balance of £1,000 across their Chase saver accounts.

This means you can no longer just put £1,500 from your income into the account each month and will need a Chase savings account.

That requires a bit more work but Chase does currently offer a decent easy access savings account paying 4.5%.

You need to hold £1,000 in a Chase saver account for the whole month to qualify for 2% cashback the next month.

Customers can’t deposit £1,000 and then move it out but you can hold a combined total of £1,000 across any Chase saver accounts.

How does it compare to other cashback cards?

The annual amount of cashback you can earn with Chase is hard to beat.

But there are other cashback current accounts on the market that are more flexible.

The new Zopa Biscuit current account pays 4% cashback up to £80 per year on any direct debits paid from the account. Plus, customers can access a 7% regular saver account with £300 per month.

Alternatively, Santander Edge pays 1% cashback on bills paid through its account such as council tax, energy and broadband. This is capped at £10 per month and there is a £3 monthly fee. Santander is also offering a £180 switching bonus at the moment.

Another option is the American Express Cashback Everyday Credit Card.

It pays 5% cashback on spending for the first five months, up to a maximum of £125.

You can then earn 0.5% cashback on first £10,000 spend.

The government has laid out its design of the so-called mansion tax, which would see owners of homes in England worth £2 million or more slapped with an extra charge from April 2028.

Chancellor Rachel Reeves announced plans for the High Value Council Tax Surcharge (HVCTS) in her 2025 Autumn Budget, claiming it would make the council tax system fairer.

The Treasury proposals are now being consulted on.

Housing Secretary Steve Reed highlighted that under the current council tax system, residents of a band D property in Darlington or Blackpool worth around £400,000 today pay £2,400 to £2,600 annually.

In comparison, those living in a mansion in Mayfair valued at £10 million in Band H are charged around £2,100 per year.

He said: “Previous governments have known how unjust this is, but failed to act. Through the HVCTS, those who own the most valuable properties in the country will pay their fair share.”

The Treasury estimates that fewer than 1% of residential properties in England will attract the HVCTS, which will be paid alongside council tax bills.

Revenue raised through the HVCTS will be used to support funding for local government services.

How high value homes will be valued for the mansion tax

The Valuation Office (VO) will be conducting a targeted valuation exercise to identify properties in scope by using professional valuers and using industry standard automated valuation models that assess sales data and property attributes.

It will identify homes worth more than £2 million as of April 2026 and adjust for differences between properties include the sale price, property type, size, age, number of rooms and parking.

High value homes will then be placed in four bands.

These start at £2,500 for a property valued in the lowest £2 million to £2.5 million band and go up to £7,500 for a property valued in the highest band of £5 million or more, all uprated by CPI inflation each year.

Revaluations will be conducted by the VO every five years.

Properties built after implementation of the HVCTS but before the next scheduled revaluation will be valued and banded either on completion or from the day they are occupied.

Homes that have been significantly improved or changed after the implementation date, for example by adding a large extension, will be revalued and banded at the sooner of either the next revaluation or sale of the property, the consultation said.

Who will pay the mansion tax?

It will be the owners of a property rather than the occupiers who pay the HVCTS. This means a landlord rather than a tenant would pay the charge if a home worth more than £2 million was being rented out.

This also means leaseholders will be liable for the mansion tax in a high-value home.

Where a property is held in trust for a child, trustees will be liable.

Mansion tax exemptions

There will be some exemptions to the mansion tax such as for individuals who bought or inherited their home but who now have lower income, or those who experience a temporary change in circumstances such as job loss or ill health.

The government said it will make a deferral scheme available which permits payment of HVCTS to be delayed until a property is sold, where individuals meet specific eligibility criteria.

This will be targeted at those on lower incomes – with an income threshold of £35,000 – and not for second homes or to companies that own property.

Deferral will also be available in certain circumstances where the property is the main home of someone who is disabled or severely mentally impaired.

Mansion tax discounts

The government has proposed offering a discount or exemption to charities and also to properties such as halls of residences, property owned by the Ministry of Defence and by organisations predominantly for the accommodation of those seeking refuge from domestic violence.

There may also be discounts for people who own a property tied to their employment.

The consultation said: “In some sectors, particularly agriculture, business owners may need to live on the site where their business operates for practical reasons. For example, a farmer may need to own and live in a home located on their farm.

“Outside agriculture, it is less common for ownership and occupation to coincide. For example, accommodation used to house members of a religious institution is typically owned by the institution rather than those occupying it.”

When would you need to pay the mansion tax?

The HVCTS will be collected by councils at the same time as council tax.

Once the valuations are ready, local authorities will identify owners and send the first bills in March 2028.

You will be able to contact your local authority for information on deferral and discounts in advance of the first bill or at any time if circumstances change.

Can you challenge the mansion tax?

Homeowners will be able to challenge valuations, similar to how you can appeal council tax charges.

If you think you have been incorrectly billed or banded, you will be able to complain to the VO or the local authority.

Homeowners will be given longer than usual to challenge the new  High Value Council Tax Surcharge (HVCTS).

The government is providing an initial eight month period to challenge banding rather than the typical six month period for mainstream council tax.

As with council tax, where an individual submits a challenge or appeal they will be required to continue paying HVCTS.

Any overpayments will be refunded or liabilities adjusted if necessary.

Sarah Coles, head of personal finance at AJ Bell, said: “There will be plenty of people breaking out the world’s smallest violins for those in expensive homes. However, it could cause problems for people who are asset rich but cash poor. They may decide to bring forward any downsizing plans, and then struggle to sell before the charge kicks in.”

NS&I has laid out a timeline of when tens of thousands of bereaved families will be reunited with lost savings.

The government-backed savings bank acknowledged in March that an “operational failure” had led it to lose track of hundreds of millions of pounds’ worth of deceased customers’ money.

Now, it has shared further details of how affected families will be contacted about money being returned.

It was originally estimated around 37,500 bereavement claims totalling £476 million in value had been affected by the operational error.

However, NS&I has confirmed that, as of 19 May, it is in fact 34,000 estates who are missing out on £367 million. The savings bank said this number could reduce further.

Sir Jim Harra, interim chief executive of the NS&I, said: “This issue should not have happened and I want to repeat the apology NS&I made in March to everyone who has been affected by it. Beginning the process of repaying these funds is a key step in putting things right.

“Dealing with the death of a loved one is a difficult and upsetting time. We know we need to do all we can to make the process of accessing a deceased saver’s NS&I holdings as straightforward as possible for personal representatives and executors of estates.”

How will affected estates be contacted and when will payments be made?

NS&I said it will start sending out letters to executors and personal representatives of impacted estates with holdings of £10 or more from next week, with any payments following “soon after”.

Letters will be sent out in weekly batches, with payments to all affected estates expected to be made by midway through 2027.

The letters will say how much estates will be repaid, as well as how any legal costs or administrative fees incurred through the payments can be reclaimed.

A dedicated NS&I phone number will also be provided in the letter.

NS&I said where an estate can’t be contacted, it will continue to hold any funds which will continue to accrue interest until the estate gets in touch.

Will payments be taxed?

Torsten Bell, minister for pensions, confirmed to the House of Commons on 19 May no inheritance tax will be owed on any reimbursed holdings.

Executors of estates will also not be liable for income tax on any interest accrued before the death of a loved one.

NS&I introduces new search process following operational error

The error which led to the 34,000 estates’ money going missing occurred due to the search process used when handling a bereavement claim failing to identify all NS&I products.

NS&I said the issue had been resolved and a new process was introduced in January 2026, however, this new system has resulted in delays for current and new bereavement claims.

The typical wait time for NS&I to respond to bereavement claims is two weeks, but the current response time is eight weeks.

NS&I said it has brought in an extra 100 staff to improve the service which it expects to be back to normal by autumn 2026, with Sir Jim apologising for the delays.

Sarah Coles, head of personal finance at investment platform AJ Bell, commented: “Anyone who has had to deal with an estate is no stranger to delays.

“Executors have to stick to strict deadlines, and for estates where inheritance tax is due, money has to be handed over within six months of the end of the month in which the person died.

“It means any delays in the process can be expensive as well as frustrating. The extra six weeks’ wait from NS&I will come as yet another headache for anyone slogging through the process.”

• The consumer prices index (CPI) rose by 2.8% in the 12 months to April 2026
• The latest Office for National Statistics (ONS) data shows that inflation dipped in the year to April, down from 3.3% in March
• Despite this, the Iran war is still expected to push up prices for Brits as global supply lines continue to operate under strain
• The Bank of England is unlikely to be moved to cut rates despite a lower inflation rate today

| What is inflation? | CPI vs RPI inflation | When will interest rates fall further? | CPI release dates | MPC meeting dates |

ONS set to publish April’s inflation reading at 7am tomorrow (20 May)

Good afternoon, and welcome to MoneyWeek’s live coverage of April’s inflation figures.

The data is expected to show that inflation dipped in the year to April, but only because of negative base effects as April 2025’s reading was unusually high.

As we approach the release, we will cover the latest forecasts, analysis, and break the news when the figures drop tomorrow morning.

What was inflation in the year to March?

The ONS publishes inflation data monthly, with the March Consumer Price Index (CPI) data released on 22 April.

The data showed inflation rose by 3.3% in the 12 months to March, up from 3% in the year to February. The rising price of motor fuel was the main driver of the increase in the CPI rate, the ONS said.

In February, the Bank of England’s Monetary Policy Committee said inflation would slow to 2.1% by April, but these expectations have been quashed due to the conflict in the Middle East, which has pushed inflation up.

How high could inflation go in 2026 and 2027?

In its latest Monetary Policy Summary, the Monetary Policy Committee said inflation could hit a peak of 6.2% by early 2027, under a worst case scenario.

The report described three situations that could occur due to rising prices caused by the conflict in the Middle East.

In Scenario A, inflation would rise to 3.6% at the end of 2026, while under Scenario B, it would hit 3.7% by the end of this year.

However, under Scenario C, inflation could reach as high as 6.2% by the first quarter of 2027, based on energy prices remaining elevated for a prolonged period.

Could inflation fall in April?

The conflict in the Middle East is expected to put a damper on the UK economy, hitting GDP growth, interest rates and inflation.

March’s inflation data, which saw a 0.3 percentage point rise on the month, pointed to this.

However, economists at Deutsche Bank say they don’t anticipate inflation to rise again in April’s data – rather, they expect a fall.

This prediction is not because they think the UK economy will be more resilient. It is because of negative base effects on the data.

These are expected to arise as April 2025’s inflation data was unusually high because of a tranche of bill increases.

As CPI inflation is measured as the change in prices over a 12 month period, that means April 2026’s data will be compared with April 2025’s data.

This is expected to result in a brief fall in inflation in April, which is then expected to be reversed in May.

Sanjay Raja, chief UK economist at Deutsche Bank, said he thinks April’s data will show inflation “drop from March as negative base effects drag on the annual price calculation.”

He added: “Put simply, annual price resets won't be as large this year as they were last year – especially in the services basket.

“The bad news? Prices will remain well above the Bank of England's 2% target. Indeed, only three months ago, forecasters, including us, were expecting CPI to drop to around 2% y-o-y in April.”

Deutsche Bank expects inflation to slow to 2.98% in April and then bounce back up in the following months.

Raja added: “Looking ahead, we expect price momentum to pick back up as the Iran shock catches up with the inflation data. Indeed, dual fuel bills won't rise until the summer. Rising food and core goods inflation, we expect, will also push momentum a tad higher.”

Thank you for following our preview coverage of tomorrow's UK inflation figures this afternoon.

We are pausing our live report for now, but join us at 7am tomorrow when we will report the latest inflation news, analyse the figures, and bring you expert commentary.

In the meantime, we want to hear your thoughts on where you think inflation will go in April. Voice your opinion in the poll below.

Good morning and welcome back to MoneyWeek's live report for the April inflation reading. The Office for National Statistics (ONS) will release the figures shortly, at 7am.

Where is inflation expected to go?

Inflation, as measured by the Consumer Prices Index (CPI), came in at 3.3% in March 2026, up from 3% in February.

UK inflation is expected to accelerate in 2026 as the economy is impacted by the conflict in the Middle East.

That said, economists expect April’s figure, which will be published shortly, to ease slightly, as inflation in April 2025 was unusually high.

This would not mean prices are falling, but rather, prices are rising year-on-year at a slower rate than they were the month before.

UK inflation slows to 2.8%

The consumer prices index (CPI) rose by 2.8% in the 12 months to April 2026, down from 3.3% in the 12 months to March, the ONS said.

On a monthly basis, CPI rose by 0.7% in April 2026, compared to a rise of 1.2% in April 2025.

The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3% in the 12 months to April 2026, down from 3.4% in March.

CPIH rose by 0.8% in April 2026, on a monthly basis, compared to an increase of 1.2% in April the year before.

Chancellor Rachel Reeves to set out plans to support UK households

Chancellor Rachel Reeves has insisted the government has "the right economic plan" and will announce further ways to support UK households tomorrow.

She said: “The war in Iran is not our war but one we will need to respond to, and the decisions I took in the Budget last year have kept inflation down as we deal with global instability. We have the right economic plan, and to change course now would risk our economic stability and leave working people worse off.

“We have already taken £117 off energy bills, frozen rail fares, and lifted the two-child limit, and over today and tomorrow I’ll set out the next phase of how we will support UK households.”

Prior to the conflict in the Middle East, which began at the end of February, inflation was forecast to fall to around the 2% target this month.

Shadow chancellor Mel Stride: "Prices still rising too fast"

Shadow chancellor Mel Stride has welcomed the fall in inflation to 2.8%, but said prices are still rising too quickly.

Writing on X, he said: "Any fall in inflation is welcome, but prices are still rising far too fast and Labour have left our economy weak and exposed to the impacts of the Iran war.

"The recent spike in borrowing costs shows markets are increasingly worried about Labour’s leadership chaos and economic mismanagement, leaving families to pick up the bill for a £300 Burnham Penalty.

"Only the Conservatives have a leader with the backbone and strong team needed to restore confidence and bring debt down through our Golden Economic Rule."

What drove the UK inflation rate in April 2026?

Housing and household services largely drove the easing of inflation, for both CPI and CPIH inflation.

The big rise in motor fuel prices increased the rate of inflation, but this was offset by a fall in prices from other categories in the transport division.

Energy prices drive easing of inflation in April

The 12-month rate for housing and household services was 3% in April 2026, down from 4.3% in the month before. The easing reflected electricity prices falling – dropping by 8.4% in April 2026 compared with a rise of 2.9% a year ago.

Ofgem’s energy price cap fell by 7% on 1 April. The average price cap household paying by direct debit for dual fuel will pay £1,641 per year this quarter, £117 per year less than the quarter before.

The price cap fell partly because global wholesale energy prices dropped in the 12-week assessment period Ofgem used to calculate the April price cap – this was before the outbreak of the conflict in the Middle East.

It also dropped as the UK government removed a number of green levies from household bills, instead funding them through general taxation.

Clothing and footwear inflation rate rebounds

Clothing and footwear prices increased by 0.7% in the annual figure, compared to a fall of 0.8% in the 12 months to March.

Motor fuels inflation rate highest since September 2022

Prices in the transport division rose overall by 4.5% in the April ONS data, down from 4.7% in March. The increase was predominantly driven by motor fuels but partially offset by falling air fares and a downward effect from vehicle excise duty (VED).

The average price of a litre of petrol increased by 16.6 pence between March and April 2026, reaching 156.8p – the highest price since November 2022.

The price of a litre of petrol fell by 3.0 pence in the same period the year before.

Diesel prices increased by 31.3 pence per litre in April 2026, to 190.0 pence per litre – the highest price since July 2022. Diesel prices fell by 3.1p per litre in April 2025.

These changes meant overall motor fuel prices rose by 23% in the 12 months to April 2026, compared to a rise of 4.9% in March. The motor fuels inflation rate was its highest annual increase since September 2022.

What does inflation mean for you?

While April’s data shows inflation has fallen to 2.8%, this easing is only forecast to be temporary, given the backdrop of the war in the Middle East.

Furthermore, slowing inflation doesn’t mean prices are falling. Rather, prices are still rising year-on-year, but just at a slower pace in April.

“Many households facing sustained financial pressure are unlikely to feel much relief, “Harriet Guevara, Chief Savings Officer at Nottingham Building Society, said.

"Beneath the headline figure, rising fuel and food prices alongside continued volatility in global energy markets mean that the path back to the Bank of England’s 2% target is unlikely to be straightforward.”

Impact of inflation on your savings

Inflation may have eased from previous highs, but it’s still pushing up costs, and money held in low-interest rate accounts could lose spending power over time.

Households should review whether they’re getting a competitive interest rate on their savings, make the most of tax-free allowances and consider creating an emergency fund, which covers three to six months’ of essential spending.

“With continued uncertainty around inflation and interest rates, building financial resilience should remain a priority,” Guevara said.

“Whether it’s creating an emergency fund, saving towards a home or planning for the future, taking proactive steps now can help households feel more secure in the months ahead.”

The average savings rate is currently 3.55%, according to money comparison website Moneyfacts.

There are currently 1,806 savings accounts that beat inflation – made up of 202 easy access, 178 notice accounts, 180 variable rate ISAs, 410 fixed rate ISAs and 836 fixed rate bonds.

In May last year, there were just 1,326 savings accounts which beat inflation, which was then at 3.5% (April 2025 CPI).

To avoid inflation-battered returns, “savers need to take a more proactive approach by reviewing deals frequently, making use of their tax-free cash ISA wrappers and avoiding apathy with long standing accounts that pay below average returns,” Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said.

We list the best savings accounts for top interest rates in a separate piece.

How some key household staples increased in April

While inflation fell in April, many households will have noticed increased pressure on their budgets lately. Petrol prices, for instance, shot up by 16.6% on average between March and April.

"While energy prices have dragged down the overall headline figure, lurking in the data are a myriad of painful price rises," Sarah Coles, head of personal finance at AJ Bell, said.

We look at some of the other household essentials which jumped in April.

Water

Water bills helped to bring down the overall inflation figure, although they still increased by 9% in a year, while sewerage costs increased by 5.8%. However, the price rises were a lot lower than the water bill hikes in April 2025 – when water bills rose by 26.4% and sewerage was up 25.9%.

Heating oil

While energy bills fell for millions of households on the energy price cap in April, those relying on heating oil saw prices soar. The war in Iran meant prices rose 8.5% in April, compared to a fall of 7.7% a year ago.

Food and non-alcoholic drinks

Food and non-alcoholic beverage price inflation eased in April – prices rose by 3% in the 12 months to April 2026, down from 3.7% in the 12 months to March.

The slowing of food and drinks inflation was due to five of the 11 food and non-alcoholic beverage classes:

• Meat – down 0.03 percentage points
• Sugar, jam, honey, syrups, chocolate and confectionery – down 0.03 percentage points
• Oils and fats – down 0.01 percentage points
• Coffee, tea and cocoa – down 0.01 percentage points
• Mineral waters, soft drinks and juices – down 0.01 percentage points

However, this was partially offset by an increase in the following classes:

• Vegetables – up 0.01 percentage points
• Milk, cheese and eggs – up 0.01 percentage points.

McKinsey: Years of high food inflation have changed consumer behaviour

One of the clearest ways consumers feel the impact of high inflation is in their food shop. In the year to April, food inflation rose by 3%, while it rose by 3.7% in the year to March.

Food inflation has been so high for so long that the average price of your food shop has risen by a staggering 30% in just the last six years, research by management consultants at McKinsey has found.

For example, if you spent £100 on your weekly food shop in 2020, you would be paying around £130 for the exact same items on average today.

These soaring prices are affecting how we approach our food shop.

Pieter Reynders, partner at McKinsey & Company, said: “These years of elevated food costs are leaving a lasting imprint on consumer behaviour. Even as some inflationary pressures begin to ease, households still feel they need to continually weigh up what represents good value in everyday spending. That means reassessing brands, formats, and price points with a sharper level of scrutiny.”

Where will inflation go next?

With inflation coming in significantly lower than the previous month, and even lower than many economists’ forecasts, it is tempting to hope that price growth will continue to slow. However, that would be misguided.

This slump in inflation is likely to "prove fleeting”, according to Sanjay Raja, chief UK economist at Deutsche Bank, as external price pressures will continue to push up price growth.

He said: “Given the prolonged closure of the Strait of Hormuz, energy prices remain elevated. Oil prices will likely rise a little further in the coming months. And gas/electricity prices will catch up to market pricing as soon as July, when the next Ofgem price cap kicks in.”

These are upwards pressures on inflation, and each of them come as a result of the war in Iran, which the UK has little control over.

As virtually all sectors are exposed to changes to oil and energy prices, we can expect more price increases to trickle down as increased production costs are passed on to consumers.

Raja added: “What’s more is that we are seeing continued signs of rising indirect price pressures. Higher commodity prices will likely see food prices rise further. And core goods prices will also – at some stage – be less insulated from ongoing price rises.

“To be sure, despite today’s encouraging CPI print, there’s still a lot of upward pressure yet to come across to headline inflation – as evidenced by today’s bumper producer price prints.”

BREAKING: Fuel duty freeze extended as petrol and diesel prices soar, PM says

The freeze on the rate of fuel duty has been extended again, prime minister Keir Starmer has announced, as prices at forecourts have risen across the country.

Chancellor Rachel Reeves will extend the 5p cut in the rate of fuel duty until the end of the year, helping keep costs at the pump down as price pressures due to the Iran war are pushing up the price of petrol and diesel.

The freeze had been due to start unwinding from September.

The government says that with the freeze extended until the end of the year, it is expected to have saved the average UK driver around £120 since 2025.

Starmer said: “I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances. Because when global events drive up prices, it’s working people who feel it first.

"That’s why this government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.”

The 5p cut to fuel duty was intended as a temporary measure following Russia’s invasion of Ukraine in 2022, but it has remained as fuel prices remained higher for longer.

In her 2025 Autumn Budget, the chancellor said the government would gradually get rid of this 5p cut, tapering it away by 1p in September, 2p in December. It would be scrapped entirely by March 2027.

However, as the Iran war has caused petrol and diesel prices to hit a three-year high, the government has extended the 5p cut.

Fuel duty freeze extension comes as fuel prices are at highest level since December 2022

The fuel duty freeze extension comes at a time when fuel prices are under extreme pressure as global oil supply lines are heavily disrupted.

As oil is used in the production of both petrol and diesel, any increase in the price of oil is reflected in the price you pay at the pump.

Since 28 February, when the Iran war began, the average price of a litre of petrol has gone up to 158.73p as of 20 May. That is 25.9p more than it was before the conflict and is expected to keep rising.

It has brought the price of petrol in the UK to its highest level since December 2022, in the wake of Russia’s invasion of Ukraine.

The problem is even worse for those who drive diesel vehicles. The average price of the fuel has grown to 185.73p a litre, a rise of 43.4p in the same time period, though is trending downwards.

At its worst, the price of a litre of diesel was 49.2p a litre higher than before the conflict on 15 April.

Freeze will ‘provide respite’ to motorists but further action may be needed

The government’s decision to extend the freeze on fuel duty has been welcomed by many in the motoring industry as the subsidy will help ease the burden on drivers.

John Cassidy, managing director at Close Brothers Motor Finance, welcomed the policy, saying the decision “will provide some respite to motorists.”

However, he added that despite this, events in the Middle East means that drivers will continue to feel the pinch.

He said: “With 42% of motorists stating that they have been worried about further petrol price rises, the announcement should go some way to alleviating financial stress. However, many will see this as papering over the cracks of much wider concerns, and will expect the Government to implement further measures to ensure drivers can afford the cost of driving - something that is essential to the daily lives of millions.”

Thank you for following our coverage of today’s UK inflation data release and the surprise extension to the fuel duty freeze.

We’re ending today’s live coverage here, but keep an eye on the MoneyWeek website and subscribe for email updates as we bring you more inflation and fuel duty news and reaction.

Around 15 million people are under saving for retirement, even with auto-enrolment, a new report from the Pensions Commission has warned.

The Pensions Commission was revived by the government last year to identify the challenges to retirement saving and make recommendations on how to boost contributions.

Back in 2006, the first Pensions Commission led to the roll-out of auto-enrolment into pension saving.

But 20 years later, there are warnings that too many people are sticking to the minimum level of contributions, which may not be enough for a comfortable retirement.

The latest Pensions Commission report looked at the necessary income replacement rates for those who have retired, suggesting around two-thirds of pre-retirement earnings is required.

Using these metrics, around four in 10 (43%) of the working-age population (15 million people) are under-saving, according to the report.

This figure could even reach as high as 19 million without action, the report warns.

Those born between 1965 to 1980 - are projected to have the worst outcomes, with 46% falling below these targets.

Low and middle earners, the self‑employed and women are most at risk, the report warns, as the pensions system fails to evolve to meet modern working lives.

Pensions minister Torsten Bell said: “Britain has got back into the pension saving habit, but the job is only half done with tomorrow’s pensioners still on track to be poorer than today’s.

“The Pensions Commission sets out clearly the scale of the challenge: not enough people are saving for retirement, and many of those that are aren’t saving enough.

"The Commission warns that without action millions more people could be at risk of becoming reliant on state support in retirement.”

Here are the main problems with pension savings that the report identified.

People not saving enough into a pension - even with auto-enrolment

Automatic enrolment has been a major policy success, the report claims, particularity as it means most people in work will be saving for their retirement.

But the Pensions Commission highlights that a third of eligible private sector employees have contributions that only follow the minimum automatic enrolment contributions.

This means that currently 8% of earnings - 5% from the employee and 3% from the employer - between a lower threshold of £6,240 and a ceiling of £50,270 – and this rises to half of the lowest-paid eligible employees.

The median earner is contributing 1.7% of pay above automatic enrolment minimums, according to the report, and where there is additional saving, the evidence suggests that this is led by employer behaviour rather than individual initiative and is more likely to benefit higher earners.

The Commission said it will consider how the eligibility criteria, income thresholds, and minimum contribution rates for automatic enrolment will need to be adjusted in the future.

It isn’t just contribution rates that are an issue though.

The report highlights that the variance in investment returns is wider in the UK than in comparable countries and can greatly affect outcomes. It suggests that the Pension Schemes Act could help address this by boosting how money is invested.

People not saving into a pension

Almost half of working‑age people are not saving into a pension in a typical month, and almost half of those not saving are in paid work.

The report highlights that while opt-out rates for auto-enrolment are low, there are some groups who are excluded.

It highlights that 14% of employees – 4 million people – are not eligible due to automatic enrolment’s age limits and £10,000 earnings trigger.

Additionally, approximately 4 million self-employed workers in the UK don’t have access to auto-enrolment.

Only 17% of the self-employed currently save into a pension, which falls to just 4% for those who earn only from self-employment, the report warns.

The problem with pension freedoms

Savers can start making pension withdrawals from age 55 - rising to 57 from 2028.

The Pensions Commission warns this creates risks, particularly with pension freedom rules providing extra flexibility on how the money is taken.

On current trends around three in 10 private pension pots are accessed at the earliest possible opportunity with half of all pots taken out in full. Nearly half of these are spent on large expenses like a car, holiday or renovations.

The Pensions Commission said: “Managing pension pot access so it lasts over thirty years from age 57 to 87, for example, is no easy feat. Since these changes, we have seen high levels of full cash withdrawals, widespread early access of ‘tax-free lump sums’, and high withdrawal rates that risk running down savers’ pension wealth too quickly.”

What retirement reforms is the Pensions Commission recommending? 

The Pensions Commissions is due to make recommendations next year.

But its latest report does provide some indication of its thinking.

It suggests that for pensioners in 2050 and beyond to have adequate incomes in retirement, they will require higher rates of private pension saving and higher coverage too.

That could mean changes to automatic enrolment eligibility, earnings thresholds and the statutory minimum contributions.

The report said: “Low and middle earners are not saving sufficiently and the system does not work for the self‑employed.”

The report also suggestions there should be more protections for people accessing their pension pot.

Jon Greer, head of retirement policy at Quilter said closing the pension gap cannot rely on a single lever.

He suggests financial education has a role to play but structural change is needed, particularly for the self-employed.

He said: “More flexible savings solutions, alongside mechanisms that replicate the success of automatic enrolment in this group, will be essential if participation and adequacy are to improve together.”

But all of this is playing out against an increasingly uncertain policy backdrop, with changes to inheritance tax on pensions, salary sacrifice and the possibility of state pension reform.

Greer added: “When the rules of the system appear to be in flux, it becomes harder to make the long-term decisions that pension saving requires. Stability and clarity are critical if people are to commit more of their income over decades.”

Pensioners are completely cashing in more than 100,000 more pensions today than they were seven years ago when records began, according to new analysis.

Data published annually by the Financial Conduct Authority (FCA) shows since the tax year 2018/19, the number of people cashing their pensions in full each year has increased 29% – or by 105,038.

Withdrawing a pension in full – rather than just taking the 25% tax-free lump sum and then sticking to the 4% rule or even the 6% rule – can seem attractive, but it can be costly.

For one thing it can trigger unexpectedly large income tax bills – the withdrawal is treated as income, so it can push savers into a higher tax bracket in a single year (and potentially fall foul of the 60% tax trap). This means a significant portion of their retirement pot may end up going straight to the taxman.

Georgie Edwards from TPT Retirement Solutions, a workplace pension provider that carried out the analysis, said the data “highlights the need for better guidance so retirees don’t erode their savings – or pay more tax than they need to”.

We look at ways to reduce your tax bill in retirement in a separate article.

Small pension problem

If more people are cashing their pensions in full, it suggests that increasingly the amount people have saved at the point of retirement simply isn’t big enough to offer meaningful income via pension drawdown.

By pot size, more than 300,000 pension pots withdrawn in full in 2024/25 were worth less than £10,000. A further 112,526 were worth between £10,000 and £29,000, the analysis found.

Looking across age brackets, there has been a 75% increase in 65 to 74-year-olds withdrawing their pensions in full between 2018 and 2025. For those aged 55 to 64, the rate of pensions being withdrawn in full rose by a lesser 15% over the same over this period.

Source: FCA

Edwards said: “The rise in people cashing in their pensions in full is a worrying signal about retirement adequacy in the UK. For many, it’s not a strategic choice but a sign their savings aren’t sufficient – and some may also be reluctant to consolidate pots, missing the chance to build a more sustainable income.”

Ad hoc withdrawals have also increased. The number of pension plans from which an ad hoc partial withdrawal was made in 2018/19 was 163,335. In 2024/25, this had reached 328,419 – marking a 101% increase. These types of withdrawals can also incur large tax bills.

“In some cases, savers are stuck in legacy products that don’t offer flexible options like phased drawdown or regular uncrystallised funds pension lump sum (UFPLS), effectively forcing higher withdrawals than they’d prefer and increasing their tax exposure,” Edwards added.

Source: FCA

Things to consider before withdrawing all of a pension

Withdrawing all of a pension in one go is a big decision. The money typically can’t be put back and there are often several tax implications. Ian Futcher, financial planner at Quilter, explains what you should consider before cashing in your retirement pot.

1. Higher income tax

As already mentioned, taking a whole pension pot may provide immediate access to cash, but many people underestimate the potential tax consequences. “Although 25% can usually be taken tax free, the remaining balance is taxed as income in the year it is withdrawn, which can unexpectedly push someone into a higher or additional rate tax band,” Futcher said.

2. Danger of running out of money

Pensions are designed to provide an income over what could be a retirement lasting 20 or 30 years. Fully withdrawing savings too early can leave people more financially exposed later in life, particularly as inflation and care costs remain ongoing concerns, Futcher pointed out.

3. Wealth taxes

“Money left within a pension continues to benefit from a tax-advantaged environment. Of course, some of those benefits can be retained if funds are moved into other wrappers such as ISAs. But, said Futcher, “large one-off withdrawals will often leave at least part of the money outside those protections and potentially exposed to income tax, dividend tax or capital gains tax over time”.

4. Managing inheritance tax

Pensions will fall within estates for inheritance tax purposes from 2027. However, that does not automatically mean emptying pension pots early is the right response, said Futcher: “Keeping funds within a pension can still offer valuable tax efficiency and long-term planning flexibility.” For example, those focused on passing on wealth can consider other options, such as gifting from surplus income.

The “vast majority” of pensioners will miss out on the government’s plans for an income tax exemption from next year, new research suggests.

In the 2025 Budget, chancellor Rachel Reeves announced pensioners whose sole income is the basic or new state pension would not need to pay the “small amounts” of tax via simple assessment if the state pension exceeds the tax-free personal allowance from 2027/28.

It was positioned as easing the “administrative burden” but the government has since clarified pensioners in this situation won’t have to pay income tax at all from 2027/28, if their pension exceeds the personal allowance from that point

It came as the chancellor announced the allowance would be frozen at £12,570 until at least April 2031. The threshold last increased in April 2021.

This proposed waiver is intended to stop pensioners solely reliant on the state pension (with no other taxable income or pension ‘increments’) having to pay tax on the payment.

Only around 5.5 million pensioners – or just one in 18 – will be eligible for the concessions, former pensions minister Sir Steve Webb, a partner at pensions consultancy LCP, said.

The full new state pension of £12,548 sits just £22 below the tax threshold and the government expects the rate from next April to rise above the threshold for the first time, given high inflation, wage growth and the triple lock.

The old state pension, by comparison, is much lower than the threshold and even with expected rises looks set to remain so, meaning people solely on the old state pension would not have to pay income tax anyway.

How will the government proposals affect different groups of pensioners?

Webb has called the disparity of treatment between groups of pensioners under the proposed scheme “bizarre”, as LCP’s research flags how few people will actually benefit from the move.

The firm’s new report, ‘The tax treatment of state pensioners’ highlights that anyone who reached pension age before 2016 – when the flat-rate, single tier system replaced the two-tier system of basic plus additional state pension (SERPS or S2P) – will not benefit.

LCP said based on current data for 2025/26, none of the 8.1 million pensioners in the old state pension system will qualify for the exemption. This is either because they are only receiving the old state pension, which at £9,614 a year currently falls below the income tax threshold anyway or – in the case of 6.5 million of them – because they also receive additional state pension (either under SERPS or state second pension) and therefore are receiving a pension “increment” on top of the basic payment.

Similarly, most of the five million people on the new state pension (anyone hitting retirement age after 2016) may also miss out.

The firm calculated that 290,000 are not based in the UK; one million receive pension ‘increments’ or protected payments; 1.1 million have a new state pension rate that will remain below the income tax threshold in the next three years; and 1.8 million have other taxable income, such as private pensions or investment income so they are not solely dependent on the state.

Using the Office for Budget Responsibility (OBR) outlook, LCP calculated the estimated tax levels due over the remaining tax years (under this Parliament), assuming the state pension will rise by 3.7% in April 2027 and then by at least 2.5% in April 2028 and 2029.

Webb said the outlook presents some potential “cliff edges”, pushing people with even £1 of other income into a very different tax position than those without.

He said: “Someone who qualifies for this tax break in 2027/28 does not have to pay tax but someone who just misses out because of £1 of other income… will have to pay income tax not just on the £1 but also on the income tax on their state pension – a further £88. Over time this cliff edge will increase, to £153 in 2028/29 to £220 in 2029/30.”

The table below shows how much income tax would be payable without the proposed concession, for someone solely dependent on the new state pension.

Source: LCP, calculations based on the OBR’s March 2026 Economic and Fiscal Outlook for April 2027/28, then assumes a minimum increase of 2.5%.

Webb gives the example of someone with a small pension pot under auto-enrolment who cashes it out at retirement, therefore taking some taxable income and no longer being classed as solely dependent on the state.

Speaking to MoneyWeek, he said the government’s reference to the old basic state pension might be perceived as an even-handed benefit, whereas it was more of a red herring.

He said: “Freezing tax thresholds for a year or two is manageable. Freezing them for nearly a decade creates more unintended consequences by making a structural shift to the tax system in a ‘back-door’ fashion that isn’t fully thought through.

“Instead, we need a fundamental ‘root-and-branch’ review of the system – why we have tax thresholds in the first place, whether we should have the same rates for pensioners as for working people and so on.”

What are some alternative ideas to the new tax concession for pensioners soley getting the state pension?

He said he appreciates this is being presented as a short-term fix to the end of the current Parliament and is suggesting two potentially ‘cleaner’ solutions.

One option, albeit more expensive than the current proposal, is a broad-brush increase in the tax allowance for all pensioners.

Webb added: “But this would come at a considerable cost because it would also benefit the eight-million-plus pensioners already paying tax. This would not be a targeted solution to the problem.”

He also suggested writing off all small tax bills for pensioners, which would be a cheaper, more targeted option focused on the group of most concern. It would also not discriminate between those on the old and new tax systems.

“But it would still be only a temporary fix and would still leave any future government with a headache as to how to tackle the growing cost of such a measure.”

Webb added that the government already has a line at which it writes off small tax bills but it’s just less well-documented.

“I'm pretty sure HMRC doesn’t send out self assessment demand letters for amounts of £4. It’s taxpayers’ money and why shouldn’t that be paid? We know they clearly have a line already, all I'm saying is just make it bigger.”

LCP also warns the policy presents potential problems for the next government as any write-offs get more expensive over time.

Webb said: “By 2029/30 it looks as though the pensioners who do benefit will have over £200 per year in income tax written off. If the policy continues into the next Parliament it will get more and more expensive with every passing year, but will be hard to switch off – a bit like the triple lock.”

A HM Treasury spokesperson said: “Pensioners whose only income is the basic or new state pension, without any increments, will not have to pay income tax over this Parliament. “

England’s friendliest neighbourhoods have been revealed, and the winner might surprise you.

Estate agents John D Wood and Co. ranked areas across the country based on factors such as access to green spaces, rates of anti-social behaviour and prevalence of community events.

Sutton, in south-west London, came out on top, with the borough scoring highly for its moderate levels of anti-social behaviour with just 15.6 reports per 1,000 residents.

The borough also has high levels of home ownership – around 65% of properties are owned outright or have mortgages on them. The average house price is £457,497, according to the latest Land Registry data.

It also has a bundle of social amenities such as restaurants and pubs for residents to choose from, with 10.36 for every 10,000 residents, and plenty of public gardens to explore.

The borough has also notched up seven council award wins for community initiatives.

Where else are the friendliest neighbourhoods in England?

Behind Sutton in south-west London, Chester, Cheshire, came second in the John D Wood and Co. rankings. It scored strongly for safety – the historic city in North West England records just 7.7 reports of anti-social behaviour per 1,000 residents.

Chester also benefits from high homeownership levels, with 69.4% of properties owned outright or with a mortgage on them.

There’s also an abundance of cafes, pubs and community spaces, while residents have access to an average of 4.84 public parks, gardens or paying fields within a 1,000 metre radius.

The average house price in Chester West and Cheshire is £267,668, according to the Land Registry.

Liverpool, Merseyside, came third in the rankings. The city records 13.5 anti-social behaviour reports per 1,000 residents.

John D Wood and Co. also said Google searches for community events among residents have increased by 33% in the last year, suggesting a growing interest in local activities and community spirit.

The average property price in Liverpool is just £177,378, based on Land Registry data, well below the UK average.

Source: John D Wood and Co. Average house price data is based on the latest Land Registry data, sourced by MoneyWeek.

What is the friendliest London borough?

Sutton was also named as the friendliest neighbourhood in London, as well as England.

Bromley, in south-east London, ranked second.

The borough, once home to rock legend David Bowie, records a homeownership rate of 69.04% while residents have a plethora of green spaces and high streets packed with shops to choose from. The average home there will cost you £515,200, according to the Land Registry.

Merton, in the south-west of the capital, came third in John D Wood and Co.’s London rankings. Home to areas like Wimbledon, the borough provides residents with plenty of parks, gardens and public fields to choose from, combined with decent homeownership rates and moderate levels of anti-social behaviour.

The average house price in Merton costs £604,042, says the Land Registry.

Perhaps unsurprisingly, Kensington and Chelsea also featured highly in the rankings, recording 11.42 cafes, pubs and community spaces per 10,000 residents.

Featuring iconic areas such as Notting Hill and Chelsea and no dearth of restaurants and boutique shops, the average house price is a steep £1,225,499, based on Land Registry data.

Hammersmith and Fulham also featured high in the London rankings, offering residents a mix of classy high streets and plenty of green spaces. The average house price is £727,665 says the Land Registry.

Several stock market index providers are re-evaluating their requirements to potentially fast-track newly listed megacap companies for inclusion on their major benchmarks.

Funds that track an index are obliged to buy all its holdings, although many providers have had a long ‘seasoning’ period in place – a time lag between a company’s Initial Public Offering (IPO) and it being included in a benchmark index that have typically ranged between three and 12 months.

Historically such rules have allowed companies to ‘settle in’, give the market time to digest and assess what they are worth. They also allow company management to adapt to the closer scrutiny that comes with being publicly traded as opposed to privately owned.

These are the kind of measures on which active fund managers will assess companies soon after listing; is the management team coping, have they seen sufficient evidence of growth or do they need to wait longer?

While such criteria might come into active managers’ decision-making, passive funds don’t have the same discretion. If a company joins the S&P 500, any tracker funds replicating the index automatically have to buy its shares.

One rule under review is about this listing time. If proposed changes go ahead, companies set for IPO will be included in tracker funds much sooner, raising questions over whether passive investors are being exposed to more risk, inadvertently.

What changes are being proposed to index inclusion rules?

This month, Nasdaq introduced fast-entry rules allowing megacap stocks to be included in the Nasdaq-100 index of non-financial US-listed stocks after just 15 trading days, as opposed to a year under the previous rules. Updates have also included higher minimum value thresholds, higher liquidity requirements and stronger investor protection.

FTSE Russell, the provider of the Russell 3000, has also consulted on its listing rules for its Russell US Equity Indexes but is yet to publish its outcome.

It is focused on three main areas: fast entry for sizeable IPOs – as short a period as five days rather than waiting for the next annual update; a 5% minimum free-float rule (referring to the percentage of shares available for public investors to buy and sell); and a 5% minimum voting rights rule (meaning public shareholders must collectively have at least 5% of the company’s voting power).

S&P Dow Jones Indices (S&P DJI) – the provider of the US flagship index, the S&P 500 – is currently holding an industry consultation to gather feedback on eligibility rules for megacap companies. It’s also mooting a shorter seasoning period, reducing it from 12 to six months.

It currently defines megacaps as those with market valuations falling in the top 100 constituent companies, although this is also up for review.

In its consultation paper, S&P DJI said: “The proposed criteria exceptions and changes to the S&P 500, S&P MidCap 400 and S&P SmallCap 600 apply only to eligibility determination.

“Therefore, if any of the proposed changes are adopted, such changes would not result in a megacap company’s automatic inclusion within those indices. New constituent selection for those indices remains at the discretion of the Index Committee, subject to the relevant index methodology.”

Requirements on profitability and liquidity for large companies are also under review.

S&P DJI’s consultation is set to close on 28 May. Any changes will take effect before the market opens on Monday 8 June, unless otherwise stated.

Could SpaceX join the S&P 500 when it IPOs?

Record IPOs – like those anticipated by SpaceX, Anthropic and OpenAI – pose unique challenges for index methodologies as they currently stand.

Current estimates are suggesting SpaceX could float with a market capitalisation of between $1 and $2 trillion. FTSE Russell suggested OpenAI could list with a market cap of around $1 trillion and Anthropic around $350 billion. It’s worth remembering that float dates have not yet been set and suggested values and IPO levels are purely speculative.

The providers agree their previous benchmark rules were set up in a very different IPO environment, with more conventional listing profiles. All proposed changes look intent on improving liquidity, fairness and governance standards for index investors.

Market research firm Morningstar, which acquired the Center for Research in Security Prices (CRSP) in February, now benchmarks the entire US equity market, spanning market caps, investment styles and sectors.

It said it was important to adjust eligibility rules so its benchmarks remained relevant to new market realities.

Alex Bryan, director of global equity indexes at Morningstar, said: “The picture here is not radically changing. Even without any changes, a company like SpaceX would probably work its way into all the major indexes eventually. And when companies are added to indexes, I think that only helps deepen the liquidity and improves price discovery. It’s just that instead of being included in months or a couple of years, they could be compressed to a couple weeks or a few days.”

When companies are held private for longer, much of their growth happens before mainstream investors can gain ready access. Bryan said these proposed changes should give passive investors comparable access to active managers.

Most index providers have methodologies designed for much smaller IPOs. Historically, providers required companies to have a certain proportion of their shares available to be freely traded (free float) – before they would be added to an index. Morningstar’s free-float threshold is set at 10% of total market capitalisation, for example.

But a company like SpaceX could have a relatively small IPO in percentage terms and still be one of the largest and most significant companies in the world.

Bryan said: “One of the requirements that Morningstar and others have had is that a new company coming in has to have a certain percentage of their total market cap in free flow to qualify. And 10% of close-to $2 trillion valuation is higher than the IPO that SpaceX is planning to come to market at.

“There’s a recognition across the industry that the historical legacy approach didn’t really anticipate these megacap IPOs at these enormous valuations; they were meant to sidestep thinly-traded small cap stocks.”

The team also made the point around liquidity and transaction costs. Share prices can become volatile around an IPO, leading to price uncertainty and potentially higher trading costs for investors.

But Alex Poukchanski, director of index analytics for Morningstar Indexes, pointed to recent evidence suggesting such volatility typically settles within a few days, especially for very large IPOs, reducing the likelihood of higher transaction costs.

What could a change in index inclusion rules mean for investors?

With private companies remaining private for longer, it’s understandable that stock exchange providers have been keen to reignite flow towards public markets; one way of doing so is to relax some of the headline rules.

“It does make [an IPO] more attractive – particularly for more entrepreneurial companies,” said Dan Coatsworth, head of markets at investment platform AJ Bell.

Coatsworth added that if the likes of SpaceX are listed quicker, it opens up a whole wave of buying from tracker funds as soon as they land on the stock market.

“The last thing any company wants is to join the stock market, not see any interest in its shares and the share price just drifts away,” he said.

While SpaceX, Anthropic and OpenAI have been the names in recent focus, their experience might well pave the way for smaller companies.

One potential trade-off is the chance of sharp share price movements in the early stage after being added to an index.

“You’ll get loads more buying but that could also prompt some investors who got in quickly, looking to trade on a short-term basis, which might trigger massive volatility.”