While equity markets stuttered in July – the MSCI World Index, which represents 85% of the total market capitalisation of each developed market in the world, grew just 0.5% during the month – flows into exchange-traded products were strong.

European-listed exchange-traded funds (ETFs) and exchange-traded commodities (ETCs) attracted flows of €47.3 billion in July, up 28.5% from €36.8 billion the previous month, according to data from investment research firm Morningstar.

Fund flows can give a broad indication of how investors feel about the market at a given point of time, though there is of course no guarantee that this will continue in future.

Among European-listed ETFs, those focusing on equity investing attracted €34.2 billion in flows during July, up from €29.9 billion in June. ETFs tracking bonds attracted €8.8 billion in July, up from €7.7 billion in June.

“Despite a softer month for US equities, money continued to flow into both global and US-focused equity [ETFs], reflecting investor conviction in the long-term artificial intelligence and technology-led growth story,” said Jose Garcia-Zarate, senior principal at Morningstar. “Investors largely treated market weakness as a buying opportunity, continuing to allocate capital to growth-oriented exposures.”

While ETF flows remained strong in aggregate, there was some divergence between the allocations towards different styles of fund.

The Europe-listed ETF sectors that saw the biggest inflows and outflows

Blend equity ETFs (those holding a combination of value and growth stocks) saw some of the largest inflows among Europe-listed equity ETFs during July, according to Morningstar’s analysis.

Global large cap blend equity ETFs attracted €10.1 billion in flows during the month, followed by US large cap blend equity at €8.6 billion.

While ETFs that contained a blend of US large- and small-caps saw the largest flows, their counterparts that focused on either growth or value saw divergent flows. ETFs targeting US large cap growth stocks were among those that saw the largest outflows (€1.4 billion worth), but US large cap value ETFs saw outflows of €117 million.

^{Source: Morningstar Direct. Data as of 31 July 2026.}

“Interestingly, we saw little evidence of a meaningful rotation into defensive or value strategies during the pullback,” said Garcia-Zarate.

The ETF sectors that saw the largest outflows were global large cap value, which saw outflows of €539 million, and Europe ex-UK with €442 million in outflows.

Which Europe-listed ETFs saw the largest flows during July?

Vanguard’s FTSE All-World UCITS ETF (LON:VWRP) topped the list of ETFs seeing the largest inflows during July, with €3.3 billion flowing into the fund. iShares MSCI Japan ETF (LON:IJPN) came second, with €1.6 billion inflows.

State Street SPDR MSCI World ETF (LON:SWLD) saw the largest outflows, at €1.9 billion, followed by Xtrackers S&P 500 Swap ETF (LON:XSXG) which registered €981 million outflows.

^{Source: Morningstar Direct. Data as of 31 July 2026.}

What happened to global ETP flows in July?

The data on flows into European-listed ETFs and ETCs was consistent with the picture that global ETP flows painted.

Global flows into exchange-traded products (ETPs) – which includes ETFs and ETCs – hit a record $362.6 billion in July, according to data from asset manager BlackRock.

BlackRock’s analysis showed that flows into equity ETPs rose for the third consecutive month to $64.8 billion.

Tech-focused ETPs saw higher flows than any other sector. Flows into tech ETPs reached a record $60.5 billion in July, smashing through the previous record of $32.0 billion, set the previous month.

Retail investors were in a buoyant mood early in the summer as new figures show they poured £3.8 billion into investment funds during June, the highest monthly total since August 2021.

The data from The Investment Association (IA) – an industry body representing the UK’s investment managers – showed that retail investors allocated £12.3 billion into funds during the first six months of the year.

June’s positive fund flows marked the eighth consecutive month of net fund inflows.

While the annual totals suggest that investors were willing to invest, there is evidence that resilience and defensiveness were top of mind.

“Investors have shown resilience by staying invested in the markets, shifting their portfolios to lower-risk strategies, with bonds, diversified mixed assets and cash-like assets leading the way,” said Miranda Seath, director of market insight and fund sectors at the IA.

Fixed income strategies saw monthly inflows of £2.3 billion, the highest monthly figure since January 2021 and up 53% from £1.5 billion in May 2026. Within fixed income strategies, funds focused on government bonds saw the largest inflow, at £674 million during June.

Despite a Memorandum of Understanding between the US and Iran alleviating pressure on oil prices and calming inflation expectations for much of the month, investors allocated their money cautiously and equity funds saw net outflows of £1.1 billion. This was, however, an improvement on the £1.5 billion outflows that occurred in May.

Where were fund flows concentrated in the first half of 2026?

Across the first six months of 2026, equity funds saw total outflows of £7 billion – though, again, this marks a slowing of outflows compared to the £14.3 billion that fled the sector in the second half (H2) of 2025.

Fittingly given the volatile year that US stocks have had, net monthly flows to the North America sector fluctuated between inflows and outflows each month during H1, but it was the only IA equity sector to end the period in positive territory, with inflows of £1.7 billion.

Seath attributed this flip-flopping to investor unease and uncertainties relating to artificial intelligence (AI).

The North American Smaller Companies sector saw its first month of inflows this year during June, bringing in a net £181 million.

Half-yearly outflows from UK-focused funds fell to their lowest level since 2021 – with £3.1 billion leaving these funds in H1 2026 compared to £4.8 billion in H2 2025.

This moderation in UK equity outflows follows a strong 2025 for UK stocks, said Seath.

“Investors may be taking advantage of a more defensive market composition in the face of broader uncertainty,” she added. “The UK market has relatively high exposure to 'halo' sectors, those with heavy assets and low obsolescence, such as mining and energy, which are often viewed as more resilient during periods of uncertainty and offer a counter trade to investments in AI and tech stocks helping to diversify portfolios.”

Funds focused on Asian equities, though, saw outflows of £1.6 billion during H1. Certain Asian markets are highly exposed to the volatility of certain parts of the AI infrastructure industry.

“Emerging markets chip manufacturers have become key players in the global AI value chain, driving strong performance but also creating potential new concentration risks in markets including South Korea,” said Seath.

Did active or passive funds see the biggest fund flows in the first half of 2026?

Fund flows are a good way to see what investors are backing in the active versus passive debate. The data from H1 2026 shows passive strategies are overwhelmingly more popular.

Tracker funds saw inflows of £9.7 billion in the first half of the year – their strongest half-year since 2024.

Most of this demand came from equity tracker funds, which saw inflows of £6.8 billion.

Actively managed equity funds, by contrast, saw outflows of £13.9 billion during the first half of the year.

In bad news for sustainable investments, responsible investment funds also saw outflows of £2.7 billion across H1, with outflows from SDR-labelled funds shedding £1.9 billion.

Over the past five years, the Japanese yen has lost 30% of its value against the US dollar and nearly as much against the pound. The currency recently hit a 40-year low against the greenback. Now, powerful figures in global finance are drawing a line in the sand.

Over the weekend, Japan's Ministry of Finance and the US Treasury confirmed they had jointly intervened in currency markets to support the yen. Japan is thought to have sold $59 billion to buy yen, with Washington staging a smaller intervention – its first in Japan since 2011 – in support.

The move sent the Japanese yen up 3.5% against the US dollar, a significant rise in foreign-exchange terms that reversed months of depreciation. Japan's own interventions had become increasingly ineffective. America brings much more potential firepower to the table.

Why is the US buying Japanese yen?

US Treasury secretary Scott Bessent has shown markets there is “a new sheriff in town”, says Katie Martin in the Financial Times. The real mystery is why Washington is getting involved at all. One explanation is simply that Donald Trump likes Japan, telling reporters “Japan's been very good to us, with the exception, of course, of Pearl Harbor”.

Self-interest, too, may be motivating Bessent. Japan's “massive sales” of dollar assets (mainly US Treasuries) are raising US borrowing costs at a time when government yields are already under pressure. His solution? “Stand behind Japan like a scary big brother” to “scare off the yen sellers.” The Japanese yen stabilised at around 157 to the dollar this week, stronger than the 163 level prior to the intervention.

The operation is likely to halt, at least temporarily, a “disruptive further depreciation” of the yen, says Brad Setser of the Council on Foreign Relations. A weak yen tends to pressure other Asian currencies lower. By making the region's exports cheaper, weak Asian currencies cut against the White House's desire for US re-industrialisation. The administration of a short, sharp shock to speculators betting against the Japanese yen might cause them to re-evaluate the trade.

Recent market “negativity” towards Japan has been overdone. The country has several important strengths, including a big current account surplus and ownership of huge tranches of overseas assets.

The one missing piece is higher interest rates. At 1%, Japanese rates are far below those in America, which causes steady selling pressure as local investors seek better yields overseas. Therein lies the rub, says Robin Brooks on Substack. Japan cannot afford to raise interest rates because of its mammoth government debt, which is equivalent to 248% of GDP. But without the support of rate hikes, this currency intervention will ultimately “fail like all previous ones”. Despite its slide, the Japanese yen is probably still overvalued. Its rout is “a symptom of a debt crisis that's getting papered over”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Revolut will shift more than 13 million UK customers to its banking arm after securing a licence earlier this year.

The fintech firm acquired a full UK banking licence in March 2026 after a four-year battle with regulators.

Since then, it has been shifting its over 13 million UK customers to its banking arm.

Many existing customers and new Revolut customers already have current accounts with Revolut’s UK bank. 

While it has been popular with users who travel regularly due to perks such as zero FX fees when spending abroad, lounge access and travel insurance, this will be the first time Revolut will offer basic current accounts.

The move is expected to shake-up the banking sector, providing competition to the major high street names and challengers like Monzo.

Nik Storonsky, chief executive officer of Revolut, said in March that securing a banking licence was a “vital step in our mission to build the world’s first truly global bank”.

Existing customers’ accounts are still being transitioned to bank accounts in tranches. Revolut is contacting them one to two weeks ahead of being fully moved across.

In an email to customers, seen by MoneyWeek, Revolut said: "Becoming a licensed bank means we’ll be able to offer more banking products and features in the future.”

Kalpana Fitzpatrick, digital editor-in-chief on Moneyweek, said: “The good news for anyone using Revolut is that being part of a bank, your money is protected by the Financial Services Compensation Scheme and in future you could also benefit from competitive savings deals and mortgages.

"But the question is, do you want another current account? If you do not use your Revolut account much, then this will be another account you may have to manage.”

Here’s everything you need to know about what the changes mean for you.

What is changing?

Your account will switch from being an e-money account to a new current account.

Revolut customers can deposit money into the current accounts, with deposits protected under the Financial Services Compensation Scheme (FSCS) up to £120,000 per person.

If you have an account with travel insurance, available for premium accounts, the terms and conditions will stay the same.

However, travel insurance group policy numbers will change, which Revolut will send via email.

What is staying the same?

The account number you have with Revolut, as well as any sort codes, IBAN and BIC will stay the same when you move to a bank account.

You will be able to access transaction and statement history from before the start of the transition in March 2026.

Charges and fees for all Revolut plans will be unchanged while you can still trade in stocks and cryptocurrency via the app.

Can you close your account?

If you’re an existing Revolut customer and don’t want your account to be transitioned across to a current account, you can simply close your account via the app.

Having smashed through the record for the largest initial public offering (IPO) in history back in June, SpaceX (NASDAQ:SPCX) announced results for the first time as a public company on 4 August.

SpaceX’s IPO saw its shares skyrocket, gaining 19% on their first day and a further 25% over the following two sessions.

But by market close on 4 August, ahead of the earnings release, they had fallen to $125.33 – 7% below the IPO price of $135 and 44% below the $225.64 peak they reached on 16 June.

And the reaction following results exacerbated this crash-landing. The stock opened more than 10% lower on 5 August, the day after the results, despite some impressive headline figures. Increased spending seems to have spooked many investors.

“Part of a SpaceX rocket crashing into the moon this morning is probably a good metaphor for the share price performance so far,” said Chris Beauchamp, chief market analyst at investing and trading platform IG.

Revenue was encouraging, increasing 92% year-on-year to $7.8 billion. Analysts polled by LSEG had yielded a consensus forecast of $6.9 billion, so this represented a healthy beat – at least in theory.

“It’s so early in [SpaceX’s] life as a public company, that beating consensus carries little real weight,” said Matt Britzman, senior equity analyst at investment platform Hargreaves Lansdown. “Analysts are still trying to work out what the business should look like.”

Rather than these estimates, investors appear to have focused on the negatives, including rising costs across all segments – particularly artificial intelligence, where spending rose by $1.6 billion.

Across the business, losses narrowed to $541 million from $1 billion, and Elon Musk moved the company’s target date to achieve $1 trillion in annual revenue forward by a year, from 2031 to 2030.

The initial success of SpaceX’s IPO made Musk a trillionaire, though the subsequent share price declines have brought his nominal wealth back below the threshold.

But could there be complications when Musk, and other long-standing investors, try to realise this wealth?

How might lock-up expiries impact SpaceX shares?

On 6 August, the first of a series of lock-up periods for longstanding SpaceX shareholders expired.

Investment research firm Morningstar predicted these lock-up expiries could lead to waves of selling.

Lock-up periods are a period of time following an IPO during which pre-existing shareholders cannot sell their shares (for the most part, these are company insiders and any investment trusts or other institutional investors that invested in the company when it was private).

In theory this protects new investors from a sharp sell-off once the company goes public – because these pre-existing shareholders are, in theory, heavily incentivised to realise some of the value or profits from their shareholdings when a company lists. Staggering the periods at which they can sell gives the share price a chance to stabilise on the public market.

SpaceX’s lock-up periods expire in multiple tranches between 6 August and the one-year anniversary of the IPO.

Each lock-up window expiry provides an opportunity for longstanding shareholders to bank profits, and the expectation is that many of them will.

This usually sees a dip in a company’s share price as there is a sudden influx of sellers.

The 911 million SpaceX shares that became available for trading on 6 August is more than the amount that were sold in the IPO.

Musk himself won’t be able to sell his shares until June 2027, though he has previously said that he won’t sell his shares even then.

Matthew Kennedy, senior strategist at investment bank Renaissance Capital, told Morningstar that “SpaceX has the longest series of lock-up releases we’ve ever seen”.

In the event, there was no sudden deluge of selling when the first expiry hit. SpaceX shares actually rose more than 6% on 6 August.

But with more unlocks approaching in August, September and October, SpaceX’s share price could continue to fluctuate over coming weeks.

“[In the near term] lock-up expiries, a growing public float and upcoming Starship launches are likely to keep the shares volatile,” said Britzman.

Santander has launched a new range of fixed-rate cash ISAs paying inflation-beating rates.

With potential base rate cuts next year and changes to the ISA rules, fixed-rate savings accounts could offer an opportunity to lock in rates now for those with short term savings goals.

From the tax year 2027/28, the annual cash ISA allowance will be reduced from £20,000 to £12,000 for under-65s.

Santander’s fixed cash ISA range includes one, two, three and five-year accounts offering interest rates of up to 4.7% annual equivalent rate (AER).

The one and two-year ISAs pay 4.5% AER and the three and five-year ISAs pay 4.65% and 4.7% AER, respectively.

Analysis by Paragon Bank shows fixed and instant-access cash ISA balances grew by £38 billion to £478 billion across 25.6 million accounts between January and May.

Who can open Santander’s new fixed ISAs?

You can open an account if you’re 18 or over with a minimum deposit of £500.

Interest is paid into the accounts annually and at the end of the term. Deposits for the 2026/27 year must be made by the end of 30 September 2026.

You can withdraw money from the ISAs, but you must take out the entire balance and you’ll be charged a fee equal to 120 days’ interest.

Can I transfer an old ISA into Santander's ISAs?

If you have an ISA elsewhere with a much lower rate, and are happy to lock money away for a few years, then it is possible you can transfer it into one of Santander's new fixed deals.

Just ask the provider for the correct form so that you do not lose the tax free status of the savings.

Santander said it will also pay a hotel voucher of up to £400 when transferring in.

Santander will email you a link and registration code within 28 days of your ISA transfer completing which you need to activate within 60 days to receive the voucher(s).

It is worth noting that some providers are also paying up to £1,500 cash bonuses when transferring into a stocks and shares ISA.

How do Santander’s cash ISAs compare to the rest of the market?

Based on a deposit of £500, none of Santander’s fixed-rate cash ISAs are top of the market, but only by a small amount.

All four are also paying the highest rates out of the major high street banks, if you prefer a bank with an established name.

If the very top rate is your priority, then the one-year fixed-rate cash ISA can be beaten by Cynergy Bank paying 4.7%.

The two-year fixed-rate cash ISA by Cynergy Bank pays 4.75%. Coventry Building Society has a two-year fixed-rate deal paying 4.63%.

Its three-year fixed-rate deal is beaten by Tandem Bank, paying 4.78%. Meanwhile its five-year fixed-rate cash ISA can be beaten only by Hinckley & Rugby Building Society (4.82%).

Though, if you have a large sum and do not think you need it for five years or more, investing it could make better sense.

If you’ve sold a house recently and it felt like it took an age, you aren't alone. It currently takes 216 days on average to find a buyer and complete the sale of a property across Great Britain.

The average time it takes to find a buyer across England, Wales and Scotland was 62 days and the time taken to complete a purchase was 154 days in June, Rightmove finds.

Sellers with flats who have found a buyer are facing the longest wait to complete – an average of 169 days. In contrast, owners of terraced and semi-detached houses are waiting 149 days on average to complete a purchase after finding a buyer.

Johan Svanstrom, Rightmove’s CEO said this was the longest summer wait on record.

"An average 154 day wait to complete the transaction process itself is simply far too long. Rightmove data shows that in some parts of the country the delays are even more significant. Housing mobility is closely linked to economic growth. We believe greater digitisation of moving journey processes, stronger information standards and transparency to all stakeholders is key," he said.

Delays in the house-selling process were caused by a number of factors including longer chains, legal hold-ups and complications involved with selling leasehold properties.

Rightmove also said a big driver of long competition times was conveyancing solicitors dealing with high caseloads. It comes with £205 billion worth of residential property currently on sale on the Rightmove website, according to the portal's own figures, which, if sold, it said could stimulate UK economic growth.

The regions where properties are selling the fastest and slowest

The analysis reveals homes are generally much quicker to sell in the north of England and Scotland than the south of England and Wales.

It’s currently quickest to sell a home in Scotland with the time to find a buyer combined with the time to complete a purchase sitting at 127 days on average – over four months.

The second quickest place to sell a home is in the North East of England, where the total time to move home is 194 days on average.

The third quickest is Yorkshire and the Humber, with the total time to move home taking on average 207 days.

Homes take the longest to sell across Great Britain in London. It takes 70 days on average to find a buyer and 174 days to complete a purchase, a total wait of 244 days (or over eight months), Rightmove found.

Source: Rightmove

The local authorities where it’s fastest and slowest to sell a home

The 10 local authorities where it’s quickest to sell a home after finding a buyer are all in Scotland, according to Rightmove.

It is quickest to complete the sale of a property in Clackmannanshire where the average wait time is 76 days, then Angus and Dumfries and Galloway where it takes 77 days on average.

The local authority where it takes the least amount of time to complete a house sale outside of Scotland is in North East Derbyshire (120 days), then North East Lincolnshire (122 days) and Chesterfield (124 days).

The time taken to complete a sale is longest in Slough (229 days), Brentwood (209 days) and Colchester (205 days).

Source: Rightmove

How to speed up the house-selling process

Getting paperwork ready and in order can shave weeks of the house-selling process, said Nick Mendes, mortgage technical manager at broker John Charcol.

“Title deeds, Energy Performance Certificate, leasehold info, planning or building regulation certificates, all of it should be sat with your conveyancer on day one, not chased up after an offer lands," he said.

It’s also worth getting a conveyancer involved before you’ve got a buyer, not after.

“Too many sellers wait until an offer's accepted to start looking for a solicitor, and that's time you never get back. Get the ID checks, source of funds and initial searches moving early so things can progress the second a sale is agreed.”

If you’re selling a leasehold property, you can speed up the process by extending a lease through your landlord and requesting management packs as soon as possible.

It can be harder to sell a leasehold property with less time left on a lease while lenders may be reluctant to issue a mortgage to a buyer, which can also delay the house-selling process.

Management packs contain details on what the buyer is purchasing, such as service charges and insurance costs, but can take weeks to arrive.

Mendes added that it’s crucial to set a realistic asking price on your home when putting it on the market. Recent research from Zoopla found many people are setting the initial price too high which means it takes longer for a property to sell, sometimes years.

“Go in too high and have to correct it later, and you've just added time on market and given any chain a chance to fall apart,” Mendes said.

Two Premium Bonds holders have bagged the jackpot in the August National Savings & Investment prize draw - one of which only purchased their winning bond seven months ago.

The latest £1 million jackpot winners come from Kent and Hampshire and the Isle of Wight and won with bond numbers 664BF890888 and 491KF169443, respectively.

The Kent winner bought their bond in February 2026 and has a total holding of £21,000.

The winner from Hampshire and the Isle of Wight purchased their bond in March 2022 and holds £49,850 overall in Premium Bonds, close to the maximum of £50,000.

How many prizes will be issued in August’s draw?

Roughly 6.2 million tax-free prizes worth a total of £433 million will be paid to Premium Bond prize draw winners in the August draw.

This month, there were 136 billion £1 bonds eligible for the draw.

The total value of the prizes dished out since the first draw in June 1957 is £42.3 billion.

The table below shows the breakdown of prizes in August:

Credit: NS&I

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

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

Premium Bond holders can check if they have won the smaller prizes of £25 to £100,000 the day after the first working day of each month. For August 2026, the date you can check from is 4 August.

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

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

You will need your bond number or NS&I number to access your account.

As Premium Bonds do not expire, it’s 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 2.8 million left unclaimed.

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

Brazil remains a good old-fashioned emerging market play, while volatile semiconductor manufacturers distort Asian stock indices. Financials make up 40% of the MSCI Brazil stock market index, with energy and materials combined accounting for nearly 30%. The Ibovespa index enjoyed a thrilling spring as global investors looked for a hedge against surging commodity prices.

While Brazil does import some refined oil products, it is a net exporter of crude oil, say Alex Nae and Tae Yoon Kim for FTSE Russell Insights. The FTSE Brazil stock market index returned 47.2% last year. It rallied at the start of 2026, but remains attractively valued on a 12-month forward price/earnings ratio of 9.5, compared with an average of 12.6 in the wider FTSE Emerging index.

Foreign investors dump Brazilian stocks

Since a peak in April at the height of the Iran war, the Ibovespa has fallen 11%, but remains up 10% this year. Foreign investors pulled 14.9 billion reais (£2.2 billion) from local shares in May alone, the fastest pace in six years, say Raphael Almeida and Leda Alvim on Bloomberg. Foreign capital plays an outsized role in São Paulo, accounting for 60% of trading in Brazilian equities, the highest level in any emerging market.

The slump reflects two factors. Firstly, the AI trade has distracted investors from commodity plays. Secondly, expectations of higher inflation and interest rates act like a wet blanket on emerging-market equities. Brazil's benchmark Selic interest rate stands at 14.25%. With east Asian semiconductor firms surging, Brazil's longstanding pattern of underperformance has re-emerged. The MSCI Brazil stock market index has returned an average of 7.5% annually over the past decade, compared with an emerging-markets average of 10%.

All eyes are on general elections scheduled for 4 October. Incumbent president Luiz Inácio Lula da Silva enjoys a narrow polling lead over Flávio Bolsonaro, the son of former president Jair Bolsonaro. Lula can point to “record low” unemployment and strong annual growth, which at around 3% has “outpaced expectations for three years”, says The Economist. The catch? Brazilian debt is “unsustainable on its current path”, with gross public debt forecast to hit 99% of GDP in 2030. The nominal deficit – “composed almost entirely of interest payments” – stands at a “whopping” 8.1%.

Lavish, constitutionally mandated spending on pensions is to blame. Until that is reformed, “the market will never trust Brazilian fiscal rectitude”. Stronger growth does ease the situation, says Gustavo Medeiros in the Financial Times. But it may take a market panic to persuade politicians that a credible fiscal plan is needed. Still, given Brazil’s “humbling valuations”, it wouldn’t take much good news to make the country a “compelling opportunity”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Semiconductors are the world's most valuable manufactured good. These tiny, intricately engineered pieces of silicon can perform more calculations in a second than a single person could complete in 30,000 years. This year has brought a semiconductor boom for the ages. The US PHLX chip index has nearly doubled over the past 12 months. Investors, noticing that big US tech firms are planning nearly $1 trillion in spending on AI data centres next year, followed the money to the chip stocks that provide AI hardware.

The global semiconductor supply chain is very concentrated. A handful of manufacturers and designers – Taiwan's TSMC, South Korea's Samsung and SK Hynix, America's Nvidia – capture the lion's share of profits. Yet expectations have run ahead of reality. This week, SK Hynix reported a 557% surge in operating profit, with margins of more than 80%. That Midas-like profitability still wasn't good enough for investors in Korea, who sent the shares tumbling 19%. The Korean Kospi slumped 11% on Tuesday and a further 6% on Wednesday. America's Nasdaq 100 technology index has fallen 9.7% from its peak, says Eva Roytburg for Fortune.

The immediate trigger was talk of new competition from China, where chipmaker CXMT listed on Monday. Those fears are probably overdone – China still doesn't have access to the cutting-edge extreme ultraviolet lithography machines required to make the world's best chips. But the chip stock selloff isn't irrational; for months, the “going trade” has been to sell the hyperscalers – firms such as Microsoft and Meta that appear to be overspending on data centres – and “buy the semis”, companies such as Samsung that are profiting from Silicon Valley's profligacy. Now investors have realised the obvious contradiction: if Big Tech's AI investments really are as wasteful as they think, then at some point that spending will be cut, which would be a disaster for chip stocks, too.

The semiconductor boom is based on very real profits, says Moses Sternstein for a16Z. Rising earnings have come alongside falling valuations – an unusual symptom for an alleged bubble. Micron, whose earnings are poised to rise 60% year on year, trades on a mere six times forward earnings. The wider US semiconductor complex trades on about 21 times forward earnings, a slight discount to the five-year average of 23.8.

The semiconductor industry is infamously cyclical

So are semiconductors cheap? In one sense, yes, but the industry is infamously cyclical. An acute shortage during the pandemic turned into a big bust in 2023 as demand returned to normal levels. “Investors are wondering whether semis can keep it up” this time. As laptop buyers will be well aware, dynamic random-access memory (DRAM), which is used for computer memory, is in acute shortage this year.

Samsung and SK Hynix have joint plans to invest as much as $1.5 trillion to double Korea's DRAM output within five years, say Song Jung-a and Michael Acton in the Financial Times. Yet there are risks of the chip cycle turning again. Should AI demand disappoint or Chinese supply surge, there could be a glut as soon as 2028.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

NS&I has hiked interest rates on its fixed-rate savings products for the third consecutive time this year, making them some of the best on the market.

The government-backed bank has increased the interest rates on new issues of its one, two, three, and five-year savings accounts, called British Savings Bonds.

It brings NS&I’s top interest rate to 4.75% for the new five-year guaranteed growth bond, or 4.72% for the new one-year guaranteed growth bond.

Andrew Westhead, retail director at NS&I, said: “Today’s increases mean savers can now choose from improved fixed-term rates across our one, two, three and five-year British Savings Bonds, with the certainty of knowing exactly what return they will receive over their chosen term.”

What are the new rates?

NS&I has increased rates on eight of its fixed-rate accounts, but the size of the hike differs depending on the term and type of each account.

There are two types of British Savings Bonds – guaranteed income and guaranteed growth bonds.

Guaranteed growth bonds are lump sum investments that earn a fixed rate of interest over a set period of time and are designed to be held for the full term.

Meanwhile, guaranteed income bonds pay out monthly income at a fixed rate of interest over a set period of time based on the size of your lump sum investment.

The table below shows the new and old rates for each savings account.

Source: NS&I, 31 July

Are NS&I British Savings Bonds any good?

With increased rates, new issues of NS&I’s British Savings Bonds are a lot more attractive for savers looking for high rates.

However, the accounts do not provide the absolutely highest interest rates available on the market.

NS&I’s one year fixed rate growth bond pays 4.72% interest. This is well above the market average of 4.27%, according to Moneyfacts, but still lower than the top one-year fixed rate saver from GB Bank that pays 4.92%.

Even with the new increased interest rates, you can currently find alternative accounts with stronger interest rates across all term lengths.

The table below compares the interest rate on the top fixed-term account on the market to the interest rate offered for the same term by NS&I.

Source: Moneyfacts, NS&I, 31 July

Caitlyn Eastell, personal finance analyst at Moneyfacts, said: “NS&I’s decision to increase rates on its British Savings Bonds is a welcome boost for savers and makes them a far more competitive option in the current fixed-rate savings market.”

She added: “While the market-leading fixed bonds are now paying 5%, some savers may be willing to sacrifice the extra interest for the peace of mind NS&I offers, especially those with large deposits.

“Unlike traditional savings accounts, every pound held with NS&I is backed by HM Treasury, giving savers an unlimited government guarantee rather than the £120,000 FSCS protection available with banks and building societies.”

Income investors have enjoyed a strong quarter with UK companies paying out their all-time highest levels of dividend payments, according to industry research.

The latest Computershare UK Dividend Monitor – a quarterly report produced by the financial administration company, which tracks share registers of limited companies, including how they return money to shareholders – said regular dividends were the driving force behind the regular payments.

In total, companies paid out £35.3 billion in the second quarter of 2026, with £34.8 billion in regular dividends – an increase of 7.4%.

Banks and mining companies were the strongest sectors. Over the three months from April to June, banking stocks paid a record £11.1 billion in dividends, up 20.6% on last year’s equivalent and contributing four fifths of the aggregate dividend growth over the period.

Strong balance sheets, persistently high interest rates and low loan book losses – leading to near-record profitability – are supporting the sector’s performance.

While a year ago, it seemed likely that interest rates would continue to fall, reducing net interest margins for banks and the interest income paid on all reserves held at the Bank of England, the picture has changed.

The report pointed to persistent inflation, which has limited the Bank of England’s ability to cut rates, in turn sustaining higher bank earnings.

“The sector’s balance sheets are very strong and this, combined with high profitability has enabled significant dividend growth,” it said.

HSBC was the biggest driver, raising its end-of-year dividend by 25%, funded partly by a suspension of its share buyback programme.

Elsewhere NatWest and Standard Chartered raised payouts by 53% and 75% respectively, while Lloyds increased its own payouts by 14%.

The top sectors that fared well on dividends

The mining sector showed a strong recovery, with dividends from miners 27.5% higher than last year’s cyclical low.

Booming copper, silver and gold prices boosted dividend increases from Antofagasta, Fresnillo and Endeavour respectively, according to the paper.

The report also said that despite slightly lower profits as a result of falling iron ore prices, strong cash flow and a robust balance sheet enabled giant Rio Tinto to increase its final payout for the year by 13%.

Overall mining sector payouts rose 27.5% on a headline basis, up £917 million year-on-year.

Healthcare payouts rose by 6.1%, led by GSK, with the same level of increase (6.1%) shown across broader financials, with London Stock Exchange Group the highest payer in that space.

Which sectors struggled with dividend payouts in Q2?

At the weaker end was the food, drink and tobacco sector, which reported a 15.9% fall, largely due to Diageo, whose earnings have faced a couple of headwinds.

The report said weaker demand for spirits as consumers rein in discretionary spending and distributors work through their excess inventories. The company halved its dividend in response.

In industrials, the report flagged “pockets of weakness”, naming packaging and paper manufacturer Mondi and recruiter Robert Walters as contributing to the 7.9% dip in the sector overall.

Broadly, 11 sectors posted an increase while nine posted a decline in their dividend levels.

What is the outlook for income investors?

As expected, the larger companies saw significantly higher dividend growth than their mid-cap counterparts, with growth levels 7.7% for the top 100 and 4.6% for the mid 250.

Special dividends remain highly unpredictable, reporting a 76% decline over the quarter to £465 million, weighing on the overall headline growth rate.

But these figures are from a high base. For context, Q2 special dividends have averaged £2.2bn over the last five years – even bigger before the pandemic. There has also been an increase in share buybacks in recent months, which might be a factor. The paper notes that this is a mere notable correlation not a proven cause.

While dividend growth is expected to slow in the second half of the year, the strength of the payments in Q2 have led the business to increase its forecast from 3.1% to 3.4%.

UK equities look set for a yield of 3.2% over the next 12 months, while volatile bond markets amid geopolitical uncertainty are underpinning ‘best-buy’ cash savings rates of 4.2% for an average easy access account.

The number of millionaires living in Britain has hit the lowest level since the financial crisis, new research suggests.

Analysis by think tank the Adam Smith Institute (ASI) shows high taxes and slowing house price growth are among a range of factors that have hit people’s wealth.

The latest records from its Millionaire Tracker show that there were 442,000 sterling millionaires in Britain last year, down by 7% since 2024.

This has been blamed on falling real asset prices, a low household savings rate and the emigration of high net-worth individuals (HNWIs) amid the abolition of non-dom status and fears of a wealth tax.

To reverse this trend, the ASI is calling on the government to make the tax environment more welcoming to wealth creators. In particular, they've suggested the abolition of inheritance tax, cuts to capital gains tax and an international competitiveness assessment on the UK’s tax and regulatory treatment of non-doms and HNWIs.

Mitchell Palmer, economist at the Adam Smith Institute, said: “The decline in millionaires may be greeted as a success by some on the left, but it should instead be viewed as a warning signal. Every millionaire that leaves means less capital for British businesses, fewer international connections, and weaker entrepreneurial spirit in the economy.”

Why is the number of UK millionaires falling?

The ASI uses Office for National Statistics data to estimate the number of constant-price sterling millionaires.

Its definition of a constant-price sterling millionaire is an adult British resident who has at least £1 million in individual net worth, across all real and financial asset classes, including pensions and property, measured in constant 2025 prices.

The figure of 442,000 is the lowest level since the 2008 financial crisis .

A range of factors have pushed this figure down.

The ASI said: “Higher interest rates, as well as a lack of confidence in the British economy, have mechanically reduced the inflation-adjusted values of pension pots and high-end London property.

“Moreover, Britain’s low savings rate has reduced the pace at which households make themselves millionaires. Finally, and perhaps most concerningly, there has been a well-documented trend of high net-worth individuals either leaving Britain or no longer choosing to move here.”

Millionaires are leaving the country for a number of reasons, the ASI said, including the abolition of non-dom tax status, high levels of general taxation, and a hostile culture for wealth creators.

The think tank also warns that calls for a wealth tax are misguided.

It said: “France, Austria, and the Netherlands all abandoned theirs after seeing vast outflows of millionaires or other avoidance behaviour. Given Britain is already haemorrhaging wealth, we could only expect similar results here.

“Every millionaire that leaves is a loss to the country. Both foreign- and British-origin millionaires bring jobs, capital, connections, and ideas to this country, which can create substantial wealth for other Brits.”

The think tank argues that millionaires already pay a disproportionate share of tax, with the top 1% of earners paying 29.1% of income tax.

Palmer added: “Recently mooted anti-wealth proposals, such as a wealth tax or equalising the capital gains tax rate with income tax, will only make this problem worse.

“Instead, the government should focus on making Britain an attractive place for ambitious people to build and keep their wealth. This includes cutting or abolishing inheritance tax and capital gains tax.”

How can you protect your wealth?

Many wealthy people may be concerned about calls for a wealth tax or higher taxes.

Nouran Moustafa, practice principal at Roxton Wealth, said she is seeing more high-net-worth clients ask how they can protect or diversify wealth outside Britain, with some considering leaving.

She said: “Those worried about preserving wealth should avoid panic. They should review diversification, tax wrappers, pensions, liquidity and estate planning, while keeping their strategy flexible enough to withstand future policy changes.”

Paul Denley, chief executive at Oakham Wealth Management, added: “For those staying, the answer isn’t panic but planning: diversify globally, use every available tax allowance, review estate and succession planning, and avoid irreversible decisions based on short-term headlines. Wealth is usually lost gradually through poor decisions, not overnight.”

New prime minister Andy Burnham has distanced himself from rumours that he was actively looking at proposals to replace council tax and stamp duty with alternatives that reflect a property’s current value.

It comes after The i Paper reported he was looking at ways to replace the current property taxation system with either a proportional property tax or a land value tax.

However, Number 10 has denied Burnham is considering scrapping council tax and stamp duty.

A spokesperson told MoneyWeek that rumours the prime minister is considering replacing stamp duty and council tax with either a proportional property tax or a land value tax are “not true”.

They added: "As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events.”

Burnham has previously said it is unfair that households in affluent parts of London (like Wandsworth or Westminster) are paying far less in council tax than households in poorer areas where house prices are much lower.

In an interview with the BBC on 26 July, Burnham said: “There are people here in Manchester who pay a much higher council tax than people living in much larger homes in London.

“[Former Labour chancellor] Rachel Reeves was right to start to reform council tax to create some fairness there in relation to people in homes that are of much greater value who haven’t seen their council tax go up over the years because of the failure to revalue the banding.”

A proportional property tax would mean higher taxes for people in expensive homes

It had been rumoured that Burnham was considering removing council tax and stamp duty and replacing it with a flat 0.48% annual charge on a home’s current value, although Number 10 has since said this is “not true”.

This proportional property tax method would greatly reduce the amount of council tax people in areas with lower house prices pay while increasing the amount people in more expensive areas pay.

For example, a property in the North East (the area in England where house prices are lowest) cost an average of £181,133 in June, according to Lloyds.

Assuming the tax is levied at a flat 0.48%, the typical household would have to pay £869 a year. This is far lower than the Band D council tax rate in Newcastle of £2,540.

On the other hand, the average house in London, which costs £534,831 according to Lloyds, would pay £2,567 a year. This is far more than a Band D property would pay in all London boroughs.

The most expensive London borough for council tax is Kingston upon Thames where Band D costs £2,050 a year – a household here would pay around £500 more annually under the proportional property tax proposal.

Meanwhile, the borough with the lowest council tax rate is Westminster, where a Band D property pays just £935 a year in council tax – over £1,500 less than the proposed proportional property tax for the average London house.

However, properties in Westminster are far more expensive than in the rest of London – they cost £836,000 on average, according to the ONS.

As the proportional property tax proposal is a flat annual levy on a home’s current value, the more expensive your home is, the more you will have to pay. For example, a home worth £1.3 million would have to pay £6,240 a year.

Could a land value tax be introduced?

Reports from The i Paper also suggested Burnham’s team was looking at a land value tax (LVT) as an alternative to stamp duty and council tax.

A land value tax is paid on the value of the land that a property sits on, rather than the value of the property itself.

This means that, theoretically, a large five-bedroom house in a remote and unappealing area of the country would pay far less in tax than a similar house in the middle of London.

Research by Tax Policy Associates suggests that if land value tax was introduced, households in almost all parts of the country would pay much less tax, whereas those who live close to large cities would generally pay much more.

Could the ‘mansion tax’ threshold be lowered?

In the 2025 Autumn Budget, then-chancellor Rachel Reeves announced a new tax on expensive homes. The High Value Council Tax Surcharge will take effect in April 2027, based on 2026 property values.

Dubbed the ‘mansion tax’, it means households who live in properties worth more than £2 million will have to pay an additional council tax surcharge of between £2,500 and £7,500 a year depending on the value of their home.

The resident is usually liable to pay council tax, but the mansion tax applies to homeowners, rather than occupiers, meaning tenants wouldn’t be responsible for paying the surcharge.

Before Burnham became prime minister, the Mail of Sunday reported he was looking at lowering the mansion tax threshold to £1.5 million, potentially pulling 150,000 additional households into paying the tax.

Would you pay more tax under the proposals?

The biggest winners of a proportional property tax or a land tax would be people who live in inexpensive homes in parts of the country where property is cheap. With low house prices, a 0.48% annual charge would likely be far less than current council tax rates.

They would also pay less under a land value tax, assuming their property is not in a major city or the south east of England.

On the other hand, the biggest losers would be people who live in expensive houses in expensive parts of the country – especially people living in parts of London where council tax is currently low.

Homebuyers could save up to 47% on the price of their prospective home by looking for properties in neighbouring postcodes, according to new analysis from Lloyds.

Those looking to buy a home in some of the UK’s most attractive postcodes are stuck paying a premium for location – but by looking at properties just beyond the boundaries, you could potentially spend hundreds of thousands of pounds less.

On average, properties in postcodes next to the most sought-after locations are 28% cheaper than their counterparts, and in many places this discount is higher, the research shows.

For example, buyers in the North East can find the biggest savings. House prices in the seaside town of Whitley Bay are £304,022 on average, but ones in the neighbouring port town of Blyth are just £162,075 on average – a saving of 47%, or £141,947.

Amanda Bryden, head of mortgages at Lloyds, said: “It’s easy to focus on the ‘must -have’ locations when you’re searching for a home, but this research highlights just how much value can sit right next door.”

While these homes are in less sought-after areas, they have the benefit of being significantly cheaper, making them much more affordable while still being close to prestige areas. This can be helpful, especially for those trying to get onto the property ladder.

Byden added: “Of course, neighbouring areas aren't always directly comparable and each will have its own distinctive character, housing stock and local appeal. But in many parts of the country, looking just beyond the most sought-after postcodes can reveal more affordable options while still keeping buyers close to jobs, transport links, amenities and the communities that matter to them.”

Where in your region has the biggest postcode discount?

Discounts can be found by looking in neighbouring postcodes all across the country.

While the biggest example by percentage is the gap between Whitley Bay and Blyth, you can still find sizable discounts elsewhere in the UK.

For example, people who buy in South Luton and surrounding areas in Eastern England rather than the pricier Harpenden could, on average, save the most amount of money, by changing postcodes.

The average home in Harpenden costs £587,884, while it’s £351,742 in the South Luton LU1 postcode area. This means there’s a postcode price gap of £236,142, or 40%.

Likewise in Greater London, buyers could save £232,419 (30%) by moving to Cricklewood in the capital’s NW2 postcode, rather than NW3, which covers Hampstead, Belsize Park and surrounding areas.

On the other hand, the smallest savings are seen in Northern Ireland. The largest postcode gap is between the BT4 postcode that encompasses East Belfast and the BT16 postcode that covers Dundonald and the surrounding areas.

The average house price in the BT4 postcode is £278,143, compared to £247,068 in the BT16 postcode – a potential saving of £31,075 or 11%.

The table below shows the neighbouring postcodes where buyers can find the biggest savings in each region of the UK.

Source: Lloyds, 27 July

Investors in Japanese stocks – like investors everywhere – need to be alert to concentrated exposure to the AI story. Over the past few months, it has gone from important to indispensable.

Wherever you look, the stocks that are doing best are linked to AI demand, while those that are AI-agnostic or an “AI loser” are mostly lagging. The emerging markets index is now trading like an AI play, due to TSMC, Samsung Electronics and SK Hynix, but this is by no means the only example.

Among Japanese stocks, the top performers are firms such as Kioxia, a chipmaker that soared from ¥1,455 when it floated in December 2024 to a high of ¥112,700 in June. Other big hitters include tech conglomerate Softbank and firms involved in chipmaking and testing such as Advantest, Murata Manufacturing and Tokyo Electron.

Implausible-sounding companies such as food-seasonings firm Ajinomoto and toilet manufacturer Toto have also been carried along: their core businesses make them leaders in materials that play a role in the chip-supply chain.

Japanese stocks have made a strong start to the year

“The result has been an unusually narrow, yet powerful market,” note Alex Bowles and Brett Moshal of the Japan equity team at asset manager Orbis. As of the end of June, the Topix index has made a strong start to the year (up 19%), yet only a third of Japanese stocks have beaten the benchmark. A basket of 67 AI companies accounts for 14 percentage points of that return.

This has been a headwind for any investors underexposed to AI, although Bowles and Moshal argue that it is also creating contrarian opportunities. They point to Nintendo, which has halved amid fears of a memory crunch hurting hardware sales in the short term, but also the threat that AI poses to its competitive advantage in game development. This is overdone given the strength of Nintendo's intellectual property, they argue.

Foreign investors held back by a weak yen

Diversification between regions may not be much protection if the AI boom ends badly. That said, for now, the market is still doing well, and the drag for foreigners is the currency.

The yen keeps weakening and now stands at ¥163 to the US dollar and ¥218 to the pound. There has been little sign of this bottoming out, notwithstanding talk of “appropriate and bold action” by the finance minister this week. The result is that Japan has become one of the cheapest developed-market countries to live in, note Jim Reid and his team at Deutsche Bank. In purchasing power parity terms, with price levels measured on the basis that the US is 100, Japan now comes in at 60; in 2012 it was at 125.

In theory, the yen is deeply undervalued. Yet this has been near-consensus and it keeps sliding. Our exchange-traded fund (ETF) portfolio is invested in Japan through Vanguard FTSE Japan (LSE: VJPN) and this has done fine, but clearly a currency-hedged ETF would have done better. We are sticking with the unhedged position since we expect the yen to rally eventually – but iShares MSCI Japan GBP Hedged (LSE: IJPH) or UBS Core MSCI Japan hGBP (LSE: UB0D) are other options to cut the risk it falls further.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Could Andy Burnham’s leadership mark a shift in tone and pace for the UK’s beleaguered economy?

Business leaders hope so. Gregor Paterson, fund manager in the UK team at fund management group Amati Global Investors, highlights that the new prime minister ought to have the expertise on hand to do so.

“Burnham himself has a lot of experience, and has a pretty heavyweight team of advisers around him,” says Paterson. “He must be aware – as we all are – of how much Keir Starmer’s team struggled to get the economy moving, and you’d hope that he has a plan.”

The sense of urgency is critical. One key frustration with the previous government was the lack of clarity around policy direction, especially around the Budget.

“Businesses weren’t able to hire, expand or build because they didn’t know what was coming,” Paterson says, pointing out successive delays around fiscal events, whereas Burnham already looks to be moving at pace.

“It looks like he’s putting his team in place and keen to get things moving much more quickly than might have been the case if there had been a messy leadership battle.”

To the business community, speed and clarity are essential for planning – not merely political virtues. There is a deeply felt need for a credible and ambitious growth strategy.

Anna Leach, chief economist at business leaders’ professional body the Institute of Directors (IoD), says some elements of the previous government’s approach were well-intended but overshadowed by uncertainty.

“We need a better industrial strategy and it all needs to be done a bit more quickly and at a grander scale,” she says.

Infrastructure is a key area of focus

Leach would welcome a clearer long-term framework that gives companies the confidence to commit capital, hire staff and expand their operations.

Planning reform and infrastructure investment should form two central pillars of a growth strategy and she supports Burnham’s ambitions for a more balanced economy.

“A regional growth agenda and devolution are really good ideas. There’s strong economic evidence that – if well-designed – these can deliver strong growth and help draw in private sector investment,” she adds.

But execution will be key.

“It does come down to design because while Manchester looks like it has been successful, I don’t think one could look at Wales and Scotland and say that devolution has unleashed any animal spirits in those two regions.”

Job market dynamics are another area of concern. Cost pressures have intensified, the jobs market has cooled, hiring is declining and vacancies are falling. This all raises questions over how to meet conflicting priorities.

“We want to see how we shape the labour market in a way that balances everybody’s needs… because at the moment things are looking a little bit risky, particularly when you layer in artificial intelligence,” says Leach.

All eyes on Burnham’s tax policies

Given the £3 trillion debt burden, the key question is one of tax. For many in the business community, their immediate wish is not further reform but stability, with uncertainty particularly acute around the non-domicile regime.

“The constant speculation about what tax increases should fall on wealth creators, following big tax increases on businesses themselves, is all detrimental to private sector investment,” adds Leach.

She also highlights the cumulative effect as the business tax burden has been creeping up in successive budgets.

“In the near term… more certainty and a lack of vilification of business would be pretty pleasant to start with.”

Darius McDermott, managing director of investment platform Chelsea Financial Services agrees; he’s a clear believer that if you overtax the wealthy, they will leave the country, shrinking future potential tax revenues.

“If additional rate taxpayers face a 1% increase, I don’t expect you’d see a huge outcry. But if it goes up to 60% over a certain number, then I think you’d see a lot of unhappy wealthy people,” he says.

Markets rely on confidence as well as policy

From a market perspective, the challenge is not just policy design but sentiment.

According to Anna Macdonald, investment strategy director at Hargreaves Lansdown, the UK needs a “credible, investment-friendly plan for economic growth, alongside clarity and stability on tax”, otherwise investors will remain hesitant.

“Constant speculation, including around capital gains tax, risks making people more cautious about moving their money from cash into long-term investments, at precisely the moment when the UK needs more people to invest for their future.”

Critics of Starmer say that Labour was voted in on the promise of growth and change, but it soon emerged he didn’t have a clear plan to achieve it.

“What markets want to see is how we're going to start to grow the economy and grow productivity. We thought the answer to that previously was going to be in housebuilding but that didn’t really materialise,” adds Paterson.

“When you have such high levels of debt, you have to grow your economy. And I think neither people nor businesses feel confident enough to invest – hire people, build factories and expand.”

It’s early days, but if Burnham can shift the mindset, his impact could be significant.

“If he can inject some confidence back into the system, then people and businesses will hopefully start to react,” adds Paterson.

One move that would encourage investors towards UK companies is if the new administration were to lower the rate of stamp duty reserve tax on most UK-listed stocks and shares.

Currently investors directly purchasing more than £1,000 of UK-listed shares, unless they were newly listed or traded on the Alternative Investment Market (AIM) – even inside an ISA – would need to pay 0.5% stamp duty.

“If you were to buy Tesco shares to put in your ISA, you’ll pay half a percent tax when you buy those shares, but if you buy Walmart shares, you won't pay any tax,” Paterson says.

Scaled up, those amounts soon mount up. He says as well as eroding returns, the UK could be putting itself at a disadvantage compared to other markets.

“It’s something most markets don’t have. The French do, but it's only 0.3% and it’s only on the very largest companies. So we're a bit of an outlier in charging people to participate in our stock market.”

Which investments could benefit under Burnham’s government?

John Healey being named chancellor was the big announcement many of us were waiting for.

He stood down as defence secretary on 11 June in protest over insufficient funding of the country’s defence strategy; he’d been calling for a defence budget of 3% of GDP by 2030.

Healey’s appointment saw a bounce in some defence names. Babcock International Group (LON:BAB) jumped roughly 7% following the news and BAE Systems (LON:BA.) was also up around 3% the following day. Both share prices climbed further over the next few days.

While it remains to be seen which defence companies are the specific longer-term beneficiaries, the sector as a whole will be a clear structural winner, according to McDermott.

He says: “The increase in spend isn’t over one year; it’s a multi-year increase. We may see the investment into companies from other countries, the US or elsewhere, but I think European defence, of which we’re obviously a subsector, is likely to see a decent amount of growth over the next decade.”

As always, individual investors should try to avoid overreacting to political headlines or any market noise as the new government sets out its plans.

“Changing a long-term investment strategy in response to a change of chancellor can easily do more harm than good. Staying invested and focused on long-term goals remains the most sensible approach,” says Macdonald.

Germany's fragile coalition government has announced a major package of economic reforms aimed at kick-starting the country's chronic low growth. The long-awaited measures, announced earlier this month by chancellor Friedrich Merz, include tax cuts, greater labour-market flexibility and a broad easing of bureaucratic red tape – and follow separate but related pension reforms, announced a week earlier.

Assuming the measures clear the Bundestag (very likely, but not certain), no one expects them dramatically to boost Germany's immediate fortunes. But they are definitely a positive first step that should “lift business sentiment”, says Simon Nixon on Substack. Moreover, they “could hardly have come at a more crucial moment, given the mounting evidence that the German economy is being eaten alive by Chinese competition”.

Why is China a threat to Germany's economy?

The news that Volkswagen is weighing plans to cut 100,000 jobs – more than double the number agreed with the unions – and close four factories in Germany is the latest blow to hit the country's vehicle sector, which has been ravaged by cheap Chinese competition and innovation in electric vehicles, as well as Donald Trump's tariffs.

Similarly grim dynamics are playing out in other export-oriented industries, such as chemicals and aircraft manufacturing. Meanwhile, “panic” is spreading through the Mittelstand, the vast network of midsized, family-owned companies that form the backbone of the German economy, says Tom Fairless in The Wall Street Journal. German industry is currently shedding more than 10,000 jobs a month and industrial output fell by roughly 10% between February 2022 and early 2026, with energy-intensive sectors plunging by more than 15%.

Is Germany's economy growing?

Barely, and at a far slower rate than that of peers. Adjusted for inflation, GDP is only fractionally higher (0.8%) than it was in 2019 – an unprecedented period of stagnation for the Federal Republic. In manufacturing, Germany's traditional engine, the situation is even worse: industrial production peaked in late 2017 and remains 9% lower than a decade ago.

This year, growth is expected to be between 0.5% and 0.8%. Europe as a whole has been stuck with low growth for years, but Germany – the continent's biggest economy – is far behind its neighbours. Germany's cumulative growth since late 2019 is a mere 0.8%; the rate in France is 6.3% and Italy 7.4%. In the eurozone overall, cumulative growth is 6.6%, and it's 6% for the UK.

Why is Germany struggling?

The rise of China is a factor: exports to China fell by a fifth between 2021 and 2025, while car exports halved. But it's broader than that, with causes including high energy costs, inflexible labour markets and lack of technological innovation. According to Ifo, a leading economic think tank, the economy is undergoing a “profound structural change that is shaped by decarbonisation, digitalisation, demographic changes and geopolitical disruptions”. Compared with other countries, Germany is adapting slowly.

What is in Germany's reform package?

There are 33 measures altogether, with three main areas sticking out. First, there's €10 billion-worth of income-tax cuts for lower-and middle-income earners paid for by tax rises for the wealthy. The current top rate of income tax, 45%, will kick in at €250,000 (£212,000, far higher than the UK's £125,000), but a new 47% rate will take effect at €280,000. Germany's overall corporate tax burden is set to drop to roughly 25% from 2028 (depending on the state), matching the UK's.

Second, there are labour-market reforms, including more flexible employment contracts, tighter rules around sick-leave certification, and measures designed to discourage early retirement.

And third, there's action to cut the bureaucratic burden on businesses, including reducing reporting requirements, simplifying permits, digitising compliance requirements and streamlining data-protection rules where they exceed EU standards. There are also ambitious changes to the pension system, including a new link between the retirement age (eventually set to reach 70) and life expectancy.

Is Germany fiscally stable?

Relative to its European peers, yes. Germany's famous “debt brake” places strict limits on how much the federal and state governments can borrow – it restricts the federal structural deficit to 0.35% of GDP while strictly prohibiting net debt for federal states. In all, the Merz government plans to borrow about €200 billion next year, 12.5% more than this year, and overall borrowing between 2027 and 2030 is projected at €838 billion.

Germany's debt-to-GDP ratio will rise to 69.5% next year, still lower than the eurozone average, with the public deficit widening to 4.3% of GDP. As the country's low borrowing costs testify (ten-year bond yields are a little over 3%, compared with just under 5% for the UK), none of this worries the markets.

Will Germany's reform package work?

Analysts overwhelmingly agree the package is necessary, but not sufficient. Holger Schmieding, chief economist at Berenberg, described it as “a lot of small steps” that, combined with planned reforms of the country's welfare system, could “add up to major progress”. On their own, the new reforms are “unlikely to zap life into a rapidly deindustrialising economy that has barely grown since 2019”, agrees The Economist.

But the fact that Merz's coalition has “shown itself capable of comprehensive action” is cause for celebration. This is a package that could create the framework for future growth, says Carsten Brzeski of ING. What's still missing is a “clear longer-term strategy for affordable energy for both households and companies, as well as some tax relief for companies”. Still, the package is an encouragingly clear sign that “Germany is at last moving” away from “moaning and analysing” – and “towards tangible action”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Over one million Brits are set to be additional rate taxpayers in the 2026/27 tax year, with record numbers paying above the basic rate of income tax according to the latest HMRC projections.

The number of people in the highest tax bracket is set to reach 1.3 million this year, double the number in 2021/22, as a record 3.2% of the population have an income of at least £125,140.

The number of additional rate taxpayers has ballooned by 33.8% since the 2023/24 tax year as tax thresholds have not increased in line with inflation.

Meanwhile, the number of higher rate (40%) taxpayers is also rising rapidly. An estimated 7.7 million Brits are set to pay tax at this rate in the 2026/27 tax year as they earn between £50,270 and £125,140 – up by 34% compared to figures from the 2023/24 tax year.

The overall number of people paying tax in the UK is up too. There are projected to be a total 40.8 million taxpayers across all bands in the 2026/27 tax year, up from 36.7 million in 2023/24.

Frozen thresholds are dragging more Brits into higher tax bands

The higher and additional rate tax bands are seeing fast increases as more people’s incomes rise above the thresholds.

But many of them are paying tax at higher rates than they would have in 2021/22 when adjusted for inflation.

This is a result of a process called ‘fiscal drag’, where tax thresholds are frozen by the government and not uprated with inflation. That means that when workers’ earnings rise (even just to keep up with inflation), they are ‘dragged’ into higher tax brackets.

Fiscal drag is often called a stealth tax because, while tax rates have technically not increased, more people start to pay income tax at higher rates despite their purchasing power not increasing significantly.

For example, the tax-free personal allowance has remained at £12,570 since 2021 and has not increased with inflation. If it had, then, using the Bank of England’s inflation calculator, it should have risen to around £16,013 by May 2026.

Thanks to frozen thresholds, workers are paying tax on their earnings between £12,570 and £16,013 when they wouldn’t be if thresholds had increased in line with inflation.

Laura Suter, director of personal finance at AJ Bell, said: “Frozen tax thresholds are affecting almost everyone who pays income tax, from pensioners to anyone earning more than the £12,570 personal allowance. But the biggest impact is felt by those pushed into a higher tax band.

“Once your income exceeds £50,270, every additional pound you earn is taxed at 40%, rather than the 20% basic rate. That means a much larger slice of any pay rise goes to the taxman, leaving you with far less extra money in your monthly payslip.

How to lower your tax bill

Fiscal drag can be damaging to your personal finances as it means you are keeping less of your earnings than you otherwise would have if thresholds had increased with inflation.

It can be particularly difficult for people whose earnings sit on the edge between tax bands. For example, someone who earns £50,000 will today pay the basic 20% rate of income tax. However, if their earnings increase by just 2% (£1,000), £730 of this will be dragged into the higher 40% tax band.

In this situation, the only way you can lower your tax bill is to reduce your taxable income. That does not mean saying no to a pay rise – it means using the extra cash in a more tax-efficient way.

The simplest way of doing this is to put more money into your pension through salary sacrifice as this is deducted from your pre-tax income.

If you earned £51,000, you would need to pay 40% income tax on the £730 of your income that sits in the higher rate tax bracket. However, if you put this into your pension through salary sacrifice instead you would be taxed 0% on that £730.

There are other salary sacrifice schemes in the workplace too where you can pay for certain things out of your pre-tax income. The most common of these is the ‘cycle to work’ scheme where you can pay for a bike with tax relief, but schemes exist to pay for electric cars and other goods and services.

Hundreds of thousands more pensioners look set to pay income tax than the government previously estimated, according to new HMRC figures.

Since freezing the thresholds in 2021, more people – especially pensioners – have been caught by the income tax net.

The tax allowance was set at £12,570 in 2021/22. Since then, three million more people over 65 are due to pay tax and for the first time, more than 10 million people in this age group will be liable.

Why are more pensioners paying tax?

Steve Webb, partner at pension consultants LCP and the former pensions minister, said a combination of the freeze in personal tax-free allowances, combined with the significant year-on-year rises in the state pension (and other sources of taxable income), alongside a rise in the size of the pensioner population, means the number of tax-paying over-65s has risen dramatically.

Department for Work and Pensions (DWP) figures suggest around 12.2 million people in the UK are receiving a state pension, meaning more than seven in 10 pensioners are now taxpayers, with an extra million expected by 2030-31.

The new state pension is currently £12,547 – just below the basic income rate threshold of £12,570. From April 2027, it is expected to rise to £12,578 – just above it, meaning state pensioners will have to pay income tax on these small amounts.

Every year the government releases income tax liabilities statistics, which show the total number of people paying tax. The data is split by factors such as age, region and marginal tax rate.

The Spring Statement suggested previously published figures might have underestimated the number of taxpaying pensioners but it was buried in the accompanying paperwork, whereas it has now been officially confirmed.

What are the government plans to help pensioners?

In the Autumn Budget, chancellor Rachel Reeves proposed a special scheme that would prevent such people paying tax, citing the administrative burden but as yet, no details have emerged.

Speaking to MoneyWeek, Webb said: “They need to get cracking because it needs to be clear by next April and it will probably need legislation. It’s all very well saying it doesn’t matter until the next of the financial year but that’s not really good enough – people want to know where they stand. So I think they’re up against it because any of the possible solutions so far look to be a bit of a mess.”

While no details have emerged, Webb said rumours are circulating.

“There’s talk they'll do something quite radical, like tax everybody’s state pension at source – taxing everybody at 20% and then people who are non-taxpayers will have to claim a refund.

“That doesn’t actually solve the problem but it means that they’re not collecting lots of silly small amounts of tax through a ‘process’. That’s the rumour, which I think would be absolutely awful as you’d then have several million non-taxpaying pensioners who would all be overtaxed and all have to jump through hoops to get back money that they don’t currently have to pay.”

A HM Treasury spokesperson said: “Anyone whose only income is the full new or basic state pension without any increments will not pay income tax and we are committed to that over this Parliament.

“By keeping the triple lock, 12 million pensioners will see their income rise by up to £470 this year, and they continue to benefit from the highest personal allowance in the G7.”

Andy Burnham will have a lot of important jobs when he steps into Number 10. One of them will be to try to fix the UK’s apparently broken stock market.

The persistent undervaluation of UK stocks may provide buying opportunities for investors, but it seems to be overseas institutions that are taking advantage, rather than the country’s own DIY investors.

EasyJet (LON:EZJ) is the latest British company to be the subject of an opportunistic takeover bid from a foreign private equity firm. It is unlikely to be the last.

Analysis from stockbroker Peel Hunt showed there have been £165 billion worth of takeover bids for British companies since the start of 2023. In that time, there have been 11 initial public offerings (IPOs) with a combined value of £6 billion. That amounts to a massive shrinking in value of the UK market.

“To say that the UK has a problem in retaining its companies and listing new ones would be a massive understatement in our view,” Charles Hall, head of research at Peel Hunt, stated in a report.

“The situation on the London market is now so serious that it requires bolder interventions to save our stock market,” said Richard Stone, chief executive of the Association of Investment Companies (AIC), an industry body that represents the UK’s investment trusts.

Why aren’t British investors buying their own stock market, and is there anything Burnham can do to change that?

Why aren’t Brits investing?

Part of the problem is the is a lack of investing culture in the UK. The Starmer government attempted to solve this by launching a retail investment campaign, fronted by the mascot Savvy the Squirrel.

It doesn’t seem to have worked, and the disruption in Downing Street appears to be making Brits even more cautious. Research from investment platform IG shows that nearly one in four British investors (23%) have changed their investment allocation as a result of political uncertainty.

“Rather than simply expressing concern about the outlook, many retail investors are actively reassessing where they want their money invested,” said Chris Beauchamp, IG’s chief market analyst.

UK investors have multiple sources of uncertainty to contend with. As well as domestic political upheaval, there is also the persistent geopolitical tension in the Middle East as well as the spectre of persistent inflation.

“That doesn't necessarily mean investors are abandoning risk altogether,” said Beauchamp. “Many continue to look for long-term growth opportunities, but confidence in UK markets will depend on greater political and economic certainty over the months ahead.”

What could Burnham do in order to save the UK’s stock market?

Industry leaders have called on Burnham to reform the tax system around UK stocks in order to encourage domestic investors to buy the country’s shares.

“Abolishing stamp duty altogether would give the biggest financial return to the UK economy by encouraging more investors to buy UK equities and drive economic growth,” said the AIC’s Stone, who also called for reforms to the rules that impact investment trusts and venture capital trusts (VCTs).

He highlighted that investment trusts are currently subject to “onerous double taxation” as they pay stamp duty when they buy UK-listed shares, and investors are then charged stamp duty when they buy the shares of the trusts themselves.

“It’s vital to support businesses at an earlier stage of their growth journey by reversing the decision to reduce tax relief on VCTs,” said Stone. “The cut in tax relief from 30% to 20% is expected to lead to a sharp decline in funding for VCTs, which provide the capital to growing businesses as they scale up and prepare to list on the stock market.

“If we don’t support our home-grown companies, we reduce the chance of seeing successful IPOs on our domestic market,” Stone continued. “We will also continue to see home-grown businesses head overseas, leading to the UK missing out on job creation and wealth.”

Millions of older workers could face a longer wait until they retire amid reports that changes to the state pension age could be brought forward.

Currently, the state pension age is due to rise to 68 from 2044 but a report from the Office for Budget Responsibility (OBR) suggests this could take place sooner.

It comes amid debate about the cost of the triple lock and a government backed review of the state pension age which is due to make recommendations on changes in the comings months.

The OBR’s latest Fiscal Risks and Sustainability Report said state pension spending is projected to increase from 5% to 9% of GDP over the next 50 years.

It added that a policy assumption underpinning the state pension projection is around future changes to the state pension age.

In its baseline scenario, the OBR assumed that the state pension rises to 68 between 2037 and 2039 and then to 69 in the 2070s.

This is different to the current trajectory that suggests the state pension age will rise to 68 in 2044/45.

Keeping to the timetable would cost an average additional £6 billion in today’s terms in each of the years the state pension age rise is delayed.

The OBR said: “The Treasury has confirmed to us that this is the government’s current policy position, rather than the legislated increase set in the Pensions Act 2007.

“This is also consistent with the recommendation of the first state pension age review in 2017 that the legislated-for rise to 68 between 2044 and 2046 should be brought forward to the late 2030s, and the principle that 32% of adult life should be spent in retirement, both of which the government at the time committed to. However, the rise to 68 remains legislated to happen between 2044 and 2046, with no subsequent rises legislated for.”

If these changes are made, it is estimated that five million people aged between 49 and 55 would have to work for an additional year before being eligible for their state pension.

The Treasury has been asked for comment.

How to prepare for state pension age changes?

The funding and timing of the state pension seems to regularly be under review.

Much of the criticism around the state pension is the use of the triple lock calculation, which can lead to above-inflation rises and is costly for the Treasury.

Beyond scrapping the triple lock, an alternative is to make people wait longer by changing the state pension age.

The state pension age was always going to increase in the coming decades but may now be sooner than many expected to help boost the nation’s finances.

Nothing has been confirmed yet but a revised timetable does potentially mean working longer.

Catherine Foot, director of the Standard Life Centre for the Future of Retirement said: “The state pension remains a critical element of retirement incomes in the UK for millions of people, and the reports that state pension age increases could be accelerated are a reflection of the difficult balancing act government faces in keeping the system affordable while people live longer, and ensuring it remains fair and adequate for those who rely on it.”

But Adam Cole, retirement specialist at Quilter, suggest that rather than relying on the government, there are steps that people can take.

“Someone aged 49 could build a fund capable of replacing a year's projected state pension with contributions costing just over £50 a month after basic-rate tax relief. Even someone aged 55 could potentially achieve the same outcome for around £75 a month net,” he said.

"While no one welcomes changes to the goalposts, these examples highlight the power of starting early. Small, regular pension contributions, combined with tax relief and investment growth over time, can provide valuable flexibility and help reduce dependence on an increasingly stretched state pension system."

Workers could boost their retirement pots by thousands of pounds under major government reforms.

The Department for Work and Pensions (DWP) has laid out its workplace pensions roadmap for the next three years, aimed at bettering outcomes for savers.

The government estimates that, on current trends, those retiring in 2050 will have lower private pension incomes than those retiring in 2026, with millions facing retirement poverty.

Rachel Vahey, head of public policy at investment platform AJ Bell, said: “The government has set out an ambitious programme of reforms that has the potential to transform workplace pensions, making it easier for people to compare pensions and switch to get a better deal.”

The measures will run alongside the new free online pensions dashboard, which is expected to launch in the 2027/28 tax year.

Vahey added: “Combined with pensions dashboards, these reforms have the potential to create a new generation of more engaged savers.

“For the first time, people will be able to see what pension savings they have built up across different providers, alongside clearer information about how well those pensions are delivering for them.”

League table for workplace pensions

The "centrepiece" of this three-year plan is a Value for Money framework.

Pension savers will be able to see how their workplace pension scheme is performing and the returns it is generating against other pension schemes via a league table.

Schemes will be ranked from red (poor value) to green (outperforming on value) on a range of metrics including investment performance, charges and quality of service.

Schemes not performing well for savers will have to improve or be forced to wind down.

The league table will be rolled out to all workplace pension schemes from 2029.

Torsten Bell, minister for pensions, said: “The stakes are high, when the gap between the best and worst performers could cost a saver with a £10,000 pot over £5,000 across just five years.”

However, Helen Shackelford, partner at consulting firm LCP, said introducing a league table could “constrain innovation”.

She added: “Short-termism in a long-term system may ultimately compress the range of member outcomes and penalise funds that have made strategic decisions with a 20–30 year horizon.”

Creation of pension ‘megafunds’

The government reforms also include plans to consolidate smaller defined contribution (DC) workplace pension schemes which are used for automatic enrolment into ‘megafunds’.

From April 2030, these multi-employer schemes must reach at least £25 billion of assets under management or have at least £10 billion with a growth plan to reach £25 billion by 2035.

The government says these larger funds will improve returns for savers through lower fees, higher returns and a more diversified pool of investments.

‘Guided Retirement’ to provide better outcomes for savers

Under a Guided Retirement framework, pension savers accessing their pots at retirement will be offered default options from 2029.

The idea behind the change is that pension savers who don’t want to take an active role in deciding how to access their pots will still receive a decent stream of income in retirement.

But savers won’t have to accept the default option and they’ll also be able to choose an option more suited to their needs, if they prefer.

Bank bonuses have reached their highest levels since the 2008 financial crisis, prompting calls for a hike in the windfall tax to help struggling households with their energy bills.

Analysis of bank bonus data by the Trades Union Congress (TUC) shows £25 billion was paid out in bonuses in the financial year ending in March 2026 - up 16% annually.

The TUC said bank bonuses have never been higher in cash terms and saw their highest real-terms quarter since 2008.

Ahead of the chancellor’s Mansion House speech this evening, the TUC claims these figures suggest there is room for a higher bank surcharge tax that could help fund a social tariff that would permanently cut energy bills for the majority of households.

The trade union says that “while sky-high bills are looming for ordinary working people, bank bonuses are booming”, adding that this is further evidence that banks could easily afford to pay more tax.

What is the bank surcharge tax?

The bank surcharge tax or windfall tax is an additional 3% corporation tax on the profits of banks above £100 million.

It was introduced 2016 as part of efforts to redistribute wealth back into the UK economy and was reduced from an initial 8% in April 2023 by the Conservative government.

Reforming the bank surcharge tax

Critics claim that the surcharge doesn’t go far enough, especially as banks have also benefited from charging higher interest rates on loans and mortgages in recent years.

Sara Hall, co-executive director at research group Positive Money, said: “Record bonuses to celebrate record profits - the cost of living crisis must be something of a fantasy to City bankers.

“Banks aren’t redirecting the windfall profits they’ve made from higher interest rates towards the households or businesses struggling to pay them, so it falls to the Government to do so in their stead.”

TUC analysis reveals an increase in the bank surcharge could raise between £9 billion and £60 billion over the next four years.

Even just reversing the Tory cuts and setting it at 8% would raise £9 billion over four years, the TUC said.

A 16% surcharge, doubling the surcharge's previous value before the Conservatives cut it, would deliver £24 billion over four years.

Meanwhile, a 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would deliver £60 billion over four years.

It comes after the big four banks made profits of £45.7 billion in 2025.

TUC analysis of the wider banking sector shows profits are 40% higher than in the lead up to the 2008 financial crisis.

The trade union suggests an increase in the bank surcharge tax could deliver a permanent social tariff - and further support when there is a spike in costs - to cut energy bills to all those on low and middle incomes by up to £559 a year.

Paul Nowak, general secretary of the TUC, said: “While sky-high bills are looming for working people, bank bonuses are booming.

“Every time there is talk of taxing banks, some of the richest people in the country start whining and try to claim they can’t afford to pay any more.

“But the big banks are making a killing off the back of higher interest rates and mortgage misery across the country. They can well afford to pay more tax.

“The case for an increase in the bank surcharge tax has never been greater. It’s a long overdue common-sense solution – and the government should use to money raised to cut people’s energy bills.”

Positive Money's Hall suggests prime ministerial frontrunner Andy Burnham is being handed a rare opportunity to rebalance the scales in the public’s favour.

She said: “He should seize the chance to implement this popular policy that won’t cost the Government a penny, but might just earn it some desperately-needed trust.”

Should banks help fund a social tariff?

A higher bank surcharge could ultimately mean reduced bonuses.

That may please the unions but not everyone is in agreement.

Samuel Mather-Holgate, managing director of Mather and Murray Financial, highlights that bank bonuses are not just City excess but are a performance tool.

He said: “If banks want to attract people who can grow lending, manage risk and deliver returns, pay has to reward results.

"Since the bonus cap era, UK bank profitability and competitiveness have hardly looked world-beating, so doubling down on restrictions would be a strange answer. There is a fair debate about whether banks should contribute more to public finances, but cutting bonuses to fund energy bills risks treating pay policy as a piggy bank.

“A social tariff may be worth considering, but it needs a stable funding model, not a raid on incentives that help banks perform.”

Anita Wright, financial planner at Ribble Wealth Management, added: “Energy bills didn't go up because bankers got paid too much. They went up because years of cheap money and a falling pound made everyone's cash worth less.

“The same forces that fattened those bank profits are the ones now squeezing families.”

If you really want to help people with their bills, said Wright, people should ask why the pound in their pocket buys less every year.

She added: "Blaming bankers is easier. It also fixes nothing. Someone always has to pay. Changing who picks up the tab isn't the same as shrinking it.”

The number of investigations into capital gains tax (CGT) rose by 26% last year, netting HMRC £266 million from Brits who had underpaid.

The taxman closed 9,800 investigations in 2024/25, up from 7,800 the previous financial year, according to new Freedom of Information (FOI) figures – the highest number of investigations in a tax year since the Covid pandemic.

Of those whose claims were probed, the average amount of underpaid tax rose from £23,333 to £27,142.

The total tax taken by HMRC following investigations increased by 46% year-on-year, from £182 million in 2023/24, the FOI figures obtained by tax and accountancy firm Lubbock Fine revealed.

Rachael Griffin, tax and financial planning expert at wealth manager Quilter, said the figures suggested “investors, landlords and business owners should not assume capital gains tax reporting slips under the radar”.

Griffin added: “At the same time, HMRC has significantly improved its ability to identify discrepancies through increased data sharing and digital reporting.

“Investment platforms, estate agents, conveyancers and other financial institutions provide information that can be cross-checked against tax returns, making it increasingly difficult for gains to go unreported.”

An HMRC spokesperson said: “We’re committed to helping people pay the right amount of tax, and the vast majority do. We take a variety of approaches to ensure all taxpayers are aware of their obligations and pay what they owe at the right time.”

Why people are being investigated over their capital gains

The uptick in CGT investigations comes after the annual exempt amount was reduced from £6,000 to £3,000 in April 2024. It was reduced from £12,300 to £6,000 in April 2023.

Griffin said: “Far more people now have a potential reporting obligation, including those who may never previously have had to think about CGT. As a result, some individuals may be finding themselves caught out simply because they are unaware of the rules.”

Lubbock Fine said HMRC was also cracking down on cryptocurrency investors, some of whom might not be aware crypto assets are taxable.

Graham Caddock, director at Lubbock Fine, said: “Cryptocurrencies were renowned for being the ‘wild west’ of investing. For many crypto investors this categorisation has stuck and many underestimate how seriously HMRC treats undeclared gains.

“Even worse, some crypto investors think that gains made through digital assets somehow sit outside the normal tax rules, which is exactly why HMRC is targeting the sector so aggressively.”

Lubbock said a lot of retail investors and young day traders were unaware selling shares could trigger a CGT bill as well.

How to avoid being investigated over your capital gains

First, it’s worth making sure you report any gains correctly.

Caddock, from Lubbock Fine, said: “Many CGT enquiries start because of basic errors such as failing to get an independent valuation (perhaps more than one) for such things as gifts of family company shares or even property.”

If you have had to input estimates in the value of assets when you report your capital gains, it’s worth explaining why too.

“This may avoid an enquiry altogether, and the disclosure will help limit HMRC’s ability to enquire into earlier tax periods,” Caddock explained.

Charlene Young, senior pensions and savings expert at investment platform AJ Bell, said lots of people come unstuck when it comes to reporting gains on property.

Young said: “While gains made on your main residence are usually exempt from CGT, profits on second homes must be declared and the estimated tax paid within 60 days of completion to avoid penalties and further investigation.

“HMRC can use data from the Land Registry, banks and estate agents to cross-reference what it has been told by taxpayers, or what it suspects hasn’t been declared.”

It’s also worth making full use of your annual £20,000 ISA allowance where possible. Gains made from investments held in a stocks and shares ISA are shielded from CGT.

The second quarter (Q2) of 2026 saw increased enthusiasm from British investors, and they appear to be positioning their assets strategically in order to capitalise on looming challenges for the artificial intelligence (AI) boom.

Data from investment platform eToro shows that their its investors predominantly bought semiconductor stocks, particularly the makers of memory chips, during Q2.

Memory is a key bottleneck for the AI and technology trade. Ownership of memory hardware producer Sandisk (NASDAQ:SNDK) on the platform rose 185% in Q2 compared to Q1, according to the analysis, while ownership of Marvell Technology (NASDAQ:MRVL) rose by 90%.

^{Source: eToro}

“We are entering a more mature phase of the AI trade,” said Lale Akoner, global market strategist at eToro. “Retail investors are no longer just buying the most obvious winners; they are starting to look for where supply bottlenecks, pricing power and capital spending are likely to create the next layer of beneficiaries.”

Despite the rise in ownership of these winners, none were significant enough to knock the AI infrastructure giant Nvidia (NASDAQ:NVDA) off pole position as the most-owned stock for eToro’s UK retail investors.

^{Source: eToro}

Investors became more confident during Q2

According to research from retirement firm Scottish Widows investors were more willing to put funds into their portfolios during Q2 than in the previous quarter.

Average portfolio contributions rose by 47%, reaching £3,554 between April and June, up from £2,413 from January to March, according to the firm’s latest investment pulse survey of 2,000 UK-based retail investors.

“Investors have shown real resilience this quarter, increasing their contributions even as global conflict has escalated and the UK political landscape has shifted expectations,” said Manuel Pardavila-Gonzalez, Scottish Widows’s managing director of investments. “Even as the cost of living continues to bite, most aren’t reacting to short-term noise or alarmist headlines – they’re staying the course rather than making knee-jerk decisions.”

He added that Q2 often sees a seasonal spike in investing as investors top up their portfolios and make use of their ISA allowance around the end of the tax year on 5 April.

The survey also identified a shift in allocations overseas. While UK-held investments remained the largest single allocation at 57% (down from 62% in Q1), allocations to North America increased from 16% to 21% – consistent with eToro’s findings that US tech stocks held high appeal for British investors last quarter.

Similarly, AI was the post popular investment theme – 35% of respondents highlighted this as their favourite theme – followed by renewable and clean energy infrastructure with 25% of respondents.

Where else did retail investors look last quarter?

Memory isn’t the only AI bottleneck that retail investors exploited last quarter.

Energy is another important part of the AI puzzle. With the power demands of AI data centres rising all the time, demands for energy are set to grow, and this was reflected in a dash for clean power and energy infrastructure stocks like GE Vernova (NYSE:GEV), Bloom Energy (NYSE:BE) and NuScale Power (NYSE:SMR).

“Energy remains on retail investors' radar, but the perspective is evolving,” said Akoner. “While traditional oil and gas names feature heavily among the fallers, investors appear to be turning their attention to clean power, nuclear-linked energy and low-carbon infrastructure.”

Akoner added that as well as AI’s increasing power demands, the energy transition away from fossil fuels in order to improve individual countries’ energy security is a further tailwind for clean energy stocks.

Unsurprisingly, given SpaceX’s blockbuster IPO taking place in the quarter, the space economy was another focal point for investors in Q2.

Space infrastructure manufacturer Intuitive Machines (NASDAQ:LUNR) was the fourth-biggest riser among UK users, with holders increasing 62%, while Rocket Lab (NASDAQ:RKLB), AST SpaceMobile (NASDAQ:ASTS) and Ondas (NASDAQ:ONDS) were also among the 20 stocks that saw their ownership on eToro increase most during the quarter.

It remains to be seen whether investors will sustain their current tech optimism going forward, but Scottish Widows’ Pardavila-Gonzalez believes investors should stay the course.

“While we’re expecting more of the same uncertainty in the next quarter, the principles of investing remain the same and it’s important not to let short-term volatility derail long-term plans,” he said.

What is Manchesterism?

Manchesterism is the new political buzzword that Andy Burnham uses to describe his political philosophy – essentially meaning social democracy with an emphasis on close relations with business, regional devolution, strong municipal government and public control (though not ownership) of essential services. It is the word the soon-to-be PM himself prefers to sum up his outlook and record as metro-mayor of Greater Manchester since 2017.

In Burnham's words, the concept means “a modern and functional response to the high-inequality, low-growth trap that came from the 1980s drive to privatise economic power and overcentralise political power in the Treasury”.

To Burnham's critics, Manchesterism is nebulous flannel with no coherent set of policies attached; vibe-shift politics at its most virtue-signalling and vacuous. Meanwhile, to economic historians – free-market liberals in particular – his adoption of the concept is ironic and mildly annoying.

What's wrong with Manchesterism?

In the 19th century, “Manchesterism” was coined to describe the culture of laissez-faire capitalism that grew up in Manchester and its cotton-rich Lancashire hinterland. Burnham sees his new Manchesterism as the nemesis of “neoliberalism”.

By contrast, original Manchesterism meant the free-trade liberalism of Richard Cobden and John Bright, leaders of the Anti-Corn Law League, which campaigned successfully to scrap the protectionist tariffs that kept bread prices artificially high. The idea – as relevant today as ever – was that free markets and free trade will lead to a more equitable society by making goods available to all at reasonable prices.

What about modern Manchester?

Its recent history is also of expansion and getting richer: the city-region's economy has grown at more than 3% since 2015, double the overall UK rate, and the skyline is dotted with gleaming new towers. However, as Burnham acknowledges, the roots of that transformation long predate his tenure as city-region mayor.

In the late 1980s, the Labour mayor of Manchester City Council, Graham Stringer, began opening up the city to private-sector property investment. In the early 1990s, only a few hundred people lived in Manchester's city centre. Following the massive redevelopment and regeneration that followed the IRA bombing in 1996, that figure is now approaching 100,000.

In the 2010s, Labour council leader Richard Leese, together with the council's chief executive, the late Howard Bernstein, opened up the city to foreign investment in property and expanded the tram system. They also negotiated Greater Manchester's far-reaching devolution deal – creating the city-region and mayor position – with then-chancellor George Osborne in 2014.

What has Andy Burnham achieved as Greater Manchester mayor?

His signature achievement has been to bring Greater Manchester's buses, which were deregulated in the 1980s, back into one publicly controlled system known as the Bee Network. The municipal authority doesn't own the companies, rather it operates a franchise system under one (distinctive yellow) branding, with control over services, routes and fares (capped at £2 for a single trip).

It's been a success, with passenger numbers and customer satisfaction up. He's also attracted some £2 billion of public and private investment into the Greater Manchester Good Growth Fund, which aims to fund the building of 10,000 council and social homes by 2028, as well as a series of public-private industrial schemes.

Is Manchesterism socialism?

Burnham reckons Manchesterism is “business-friendly socialism”, says Tej Parikh in the Financial Times. But the long-term rise of Manchester was actually built on stable, pragmatic local government and its openness to private enterprise. “The emphasis on attracting investment, clustering and connectivity has supported creative destruction” – in particular the regeneration of old industrial zones into business spaces, drawing in higher value-added sectors including professional services, technology and media.

That's the real story of Manchesterism, not public control of colourful buses. Regional devolution has helped, but the city's rise is more “about the ‘neoliberal' forces the politically astute Burnham has recently criticised, and less the socialist principles he suggests”.

If the UK as a whole is to grow faster under its new PM, it will need to draw on the real “Manchesterism, not the version Burnham supporters think he represents”.

Can Manchesterism work at the national level?

“What Manchester does today, the rest of the world does tomorrow,” remarked prime minister Benjamin Disraeli on a visit to Britain's industrial powerhouse in the 1870s. Burnham, despite his eye-catching plans for a “Number 10 North”, will obviously not find it that simple.

If the UK does indeed follow Manchester's example, a new paper by two Burnham allies, Mathew Lawrence and Alex Williams (“The Productive State: A Framework for Manchesterism”), ought to be a promising guide to what we might expect. It calls for “public control of essentials” such as water and sewerage, energy networks and rail infrastructure, alongside social housing and social care.

But Greater Manchester doesn't actually have public control of these sectors. And in any event, the idea that what worked so well for Manchester will work for the UK is “the very definition of a fallacy of composition: the generalisation from a single example to the whole, from a city to a country”, says Wolfgang Munchau on UnHerd.

The crucial difference between a country and a large city is not size, it is macroeconomics and fiscal policy. Cities don't have currencies, don't have significant tax-raising powers and “they certainly don't have bond markets. Becoming acquainted with the latter will be a new experience” for the self-styled King of the North.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Is the shine coming off the Nasdaq 100?

The index – effectively a benchmark for US big tech, since it includes the largest 100 stocks listed on its namesake exchange but excludes finance companies – reached an all-time high of 30,730 on 3 June.

Over the next month, the index fell by 4.6%.

Increased fears over a potential artificial intelligence (AI) bubble bursting have played their part in this demise.

The AI boom over the last few year has been driven largely by a consensus that the enormous sums spent on AI infrastructure would inevitably pay for themselves.

“Now that is changing, and some [tech companies] are issuing debt to fund their AI operations,” said Annabel Brodie-Smith, communications director of the Association of Investment Companies (AIC) – an industry body that represents the UK’s investment trusts. “It’s understandable that some investors are looking to diversify their portfolios away from the AI boom and many investment trusts offer a great opportunity to do this.”

Any passive investments you hold will likely be heavily exposed to the big tech stocks that form the bulk of the Nasdaq 100 and the S&P 500.

“Correlation is the real risk in current markets,” said Saftar Sarwar, chief investment officer at model portfolio service manager Binary Capital. “A ‘diversified’ global portfolio is often not that diversified. Five companies account for around 30% of the S&P 500 – a very high level of concentration.”

But could these investment trusts offer some diversification and protect you in case the bubble bursts?

How to diversify away from AI

One of Sarwar’s first tips for diversifying away from AI is to avoid the “obvious emerging markets” of Korea and Taiwan.

These, he says, “are now significant technology-exposed equity markets”.

Instead, he recommends “so-called emerging frontier markets” like Poland, Egypt and Turkey, and picks out BlackRock Frontiers Investment Trust (LON:BRFI) as a route to gaining exposure given its 52% weighting towards financials.

Tomiko Evans, chief investment officer at portfolio manager Crossing Point Investment Management, recommends European stocks as another market that could offer diversification.

“Europe gives investors access to a broader mix of companies across sectors such as industrials, financials, healthcare, consumer goods and infrastructure-linked areas,” she said.

“Within this space, JPMorgan European Growth & Income (LON:JEGI) is one option we find interesting. The trust provides exposure to growth, but through a diversified European equity portfolio,” Evans continued. “Its approach combines quality, value and earnings momentum, allowing the managers to seek companies with attractive growth prospects while remaining disciplined on valuation.”

Buy British to avoid AI?

Both Evans and Sarwar believe undervalued UK stocks provide fertile ground for anyone looking to reduce their exposure to AI.

“UK equities have spent a decade unloved, and undervalued, for exactly the reason that now could look like an important advantage: minimal AI and technology exposure,” said Sarwar. “Trusts such as Merchants Trust (LON:MRCH), City of London (LON:CTY) and Law Debenture (LON:LWDB) own UK value or UK traditional equities with dividend yields of around 3% to 4%... These are good investment trusts if you want to move away from the whole AI theme and believe that the UK offers more compelling equity valuations relative to other markets.”

Sarwar also highlighted Temple Bar Investment Trust (LON:TMPL) for its value discipline and its heavy weighting towards the UK in comparison to the US.

Evans, meanwhile, picked out Murray Income Trust (LON:MUT). “Rather than simply owning the traditional large cap UK income names, the managers can look across a broader range of companies that can generate cash, pay sustainable dividends and offer scope for capital growth,” she said, adding that the trust offers “UK equity exposure, income discipline and relatively limited direct technology exposure” for investors that want to reduce their tech exposure without moving fully into defensive assets.

Rumours are already swirling about what changes Andy Burnham could make if he were to win the Labour leadership contest – including a shake-up of the capital gains tax regime.

The MP for Makerfield looks more-than-likely to gain the keys to Number 10 later this month and is said to be considering Wes Streeting as his chancellor.

Should Streeting take on the role, he could look at reforming capital gains tax (CGT) in attempts to drum up much-needed cash for the Treasury.

In an interview with the BBC’s Nick Robinson in May, the former health secretary suggested raising the three CGT rates to mirror income tax rates – 20%, 40% and 45%.

Currently, you pay a rate of 18% if you’re a basic-rate taxpayer and 24% if you are a higher or additional-rate taxpayer.

A number of experts have called for the equalisation of CGT rates with income tax rates, including the Centre for the Analysis of Taxation and Dan Neidle, founder of tax think tank Tax Policy Associates, arguing it would reduce tax avoidance and boost UK economic growth.

Neidle posted on X that Streeting’s proposal was “good”, suggesting the extra money it brought in could be used to cut the basic rate of income tax.

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

However, Jeremy Hunt, former chancellor for the Conservative Party, said a CGT rate rise would be “terrible” for the economy.

He said: “It doesn't matter if you're left or right, don't do it. If you increase your CGT above 24%, you will get less revenue, not more, because investors will change their behaviour.”

MoneyWeek asked Andy Burnham’s office for comment.

How would a rise in capital gains tax rates affect you?

Calculations by wealth manager Rathbones suggest aligning CGT rates with income tax rates could increase the tax bill on a £50,000 gain by almost £10,000 for an additional-rate taxpayer.

A higher-rate taxpayer’s bill would rise by over £7,500, according to Rathbones. The tax bill on a £10,000 gain would be more than £1,000 higher.

Basic-rate taxpayers would be stung less – Rathbone’s calculations suggest the tax bill on a £10,000 gain would be over £100 more compared to the current rates.

These figures were calculated based on gains being made outside tax wrappers such as ISAs and pensions and including the £3,000 CGT annual exempt amount.

How to protect against capital gains tax

Everyone gets a CGT annual allowance of £3,000. Any gains made within each tax year less than this amount aren’t taxed, and there are other methods you can use to lower your CGT bill too.

Maximise the use of ISAs

Gains made inside tax wrappers like ISAs are free from CGT so it’s worth utilising your full ISA allowance each year. The current annual ISA allowance is £20,000 per tax year.

Assets like shares or funds held outside an ISA can be transferred into a tax-wrapped ISA through a ‘Bed and ISA’.

Jason Hollands, managing director at wealth manager Evelyn Partners, said: “This involves selling investments, ideally not exceeding the annual £3,000 CGT exemption, and then repurchasing them within an ISA so that future gains – and income – are sheltered from tax.”

Use interspousal transfers

Assets can typically be transferred between married couples and civil partners without triggering a tax bill.

Transfers can be a useful way of moving your assets around and using up each person’s CGT and ISA allowances to full effect.

It can also be worth transferring assets to a partner who pays a lower rate of CGT, thereby reducing your combined tax bill.

Use your annual allowance rather than letting gains build

By selling assets each year within your annual £3,000 allowance, you can pull out profits tax-free and save yourself a larger bill on a big chunk of gains down the line.

Holland said: “The annual CGT exemption has become much smaller at £3,000 than it used to be, but it is still valuable. Many investors overlook it, allowing unrealised gains to build up over many years.”

It's become a cliché to describe a collectable that's hard to find as a “holy grail”. You don't often read about something being an “unholy grail”. But if there was ever such a collectable up for sale – at least in the eyes of England fans – it's the captain's armband Diego Maradona was wearing when he punched the ball into the England net during the World Cup on 22 June 1986. That infamous “Hand of God” goal put Argentina 1-0 up early in the second half, and England went home at the end of the match – while Argentina went on to win the tournament. “A little with the head of Maradona, and a little with the hand of God,” was how Maradona cheekily put it after the whistle. The armband appears as part of “The Beautiful Game” sale, held by Sotheby's in New York, which runs until 16 July. The highest bid as of late last week was $100,000, with days to go.

A less controversial lot in the sale is the remarkably small number-ten shirt that a 17-year-old Pelé wore while scoring two goals against Sweden in the World Cup final in 1958, which Brazil won 5-2. Almost 70 years after that match, Pelé remains the youngest-ever player to appear in a World Cup final, and Sotheby's expects that shirt to sell for at least $6 million, according to The Guardian. That would make it the most expensive single item of football memorabilia sold at auction.

The current record holder? The Argentina shirt that Maradona was wearing while scoring with “divine assistance”. It sold for an eye-watering $9.3 million in 2022. And recently, Dallas-based Heritage Auctions revealed it will be selling the actual ball in August. That one defies valuation. As Heritage says, the sports collectables market has been booming.

Japan's World Cup jersey sales soar

Football fever is apparent in other sales rooms, too. Sotheby's archrival Christie's is taking a decidedly left-field approach to celebrating the World Cup by selling five giant metallic football art installations, on 17 July, in New York. The works are currently on display across New York and New Jersey and a portion of the proceeds will go towards good causes.

Northamptonshire-based Budds (formerly Graham Budd Auctions) sold dozens of match-worn shirts from past tournaments this week, while more vintage tops can be found online with Dutch online auctioneer MatchWornShirt.

It might be worth keeping an eye out for one from Japan, as Eru Ishikawa notes on Bloomberg. Sales of this year's Japan away shirt have risen 29-fold compared with sales from the 2022 Qatar World Cup – and they have doubled for the home shirt – according to the manufacturer, Adidas. But good luck finding one. The adult replica shirts on the Adidas website in Japan, priced at ¥13,200 (£60) each, have sold out. Japan may already have been knocked out of this year's World Cup, but at least its fans will be left holding on to something longer lasting.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Crypto investors are being urged to ensure they have reported any capital gains to HMRC or face fines worth hundreds of pounds amid new transparency rules being introduced next year.

Financial Conduct Authority (FCA) data suggests around 8% of UK adults, roughly 4.5 million people, now hold cryptocurrency such as Bitcoin.

But commentators warn that those who have got into it as a side-hustle or to make quick profits amid Bitcoin price rises may not realise that they need to pay capital gains tax (CGT).

HMRC has previously clamped down on those failing to pay owed CGT.

As many as 101,024 CGT warning or ‘nudge’ letters were sent to investors in crypto assets between 2020 and 2025, according to Freedom of Information (FOI) data obtained from HMRC by comparison platform BrokerChooser.

Crypto investors will have no excuses from 2027 when platforms have to start reporting user data to HMRC.

Here is what you need to know.

Crypto tax changes explained

Owning crypto has never been tax-free and any profits from sales of the asset could result in a CGT bill if above the £3,000 threshold.

Currently investors have to report this to HMRC themselves but under the UK’s incoming Cryptoasset Reporting Framework, UK cryptoasset service providers began collecting user data in January 2026, with their first reports to HMRC due between January and May 2027.

Providers must record each user's name, address, date of birth, tax residence and, for UK residents, their National Insurance number or Unique Taxpayer Reference.

If you give inaccurate information or do not provide details, you could get a penalty of up to £300

HMRC expects the measure to raise an extra £315 million over four years.

If you have not paid owed tax and HMRC finds out, you may get a penalty of up to 100% of the tax due plus interest.

Harvey Dhillon, chief executive of at accountancy firm Zmartly said the person caught out is not the sophisticated trader but the everyday holder or side-hustler who bought a little, sold or swapped some, and never thought to put it on a tax return.

He added: "Crypto was never untaxed. It was just unseen, and that is the only thing changing. Selling a coin, swapping one for another or being paid in crypto can trigger Capital Gains Tax or Income Tax, and always could.

"Reported to HMRC is not the same as declared by you, and the gap between the two is where the penalties live. The person caught is not the full-time trader but the everyday holder who bought a little, sold some, and assumed a small pot could never be taxable.”

How to prepare for crypto tax

Crypto prices have soared in recent years, especially if you have bought and sold Bitcoin or Ehtereum in your investment portfolio.

With the capital gains allowance frozen at £3,000, even modest disposals can be chargeable.

Dhillon added: "If you have ever sold or swapped crypto, check your history now, work out the gains for each year, and correct anything missing before the reports land. The anonymity was the only thing protecting an unpaid bill. In 2027 it goes."

Graham Nicoll, financial planner at NCL Wealth Partners, urged people to review their transaction history.

He added: "This isn't a new tax, but it is a significant shift in transparency. I’ve seen investors who made substantial gains during previous crypto rallies wrongly assume those profits didn't need to be declared. As HMRC receives more data directly from crypto providers, those historic gains are likely to come under greater scrutiny.

"At the same time, investors shouldn't overlook losses. Properly reporting capital losses now can allow them to be offset against future gains, potentially reducing tax when markets recover or from gains on other assets.

“Anyone who has bought or sold crypto should review their transaction history, calculate any gains or losses and, if necessary, correct previous tax returns before HMRC comes knocking. Good records are now just as valuable as good investment returns."

Tens of thousands more households could be dragged into paying the ‘mansion tax’ under rumoured plans, if Burnham becomes the new Labour leader.

The prime minister-in-waiting could potentially lower the threshold at which people start to pay the High Value Council Tax Surcharge from £2 million to £1.5 million, according to reports in The Mail on Sunday.

An estimated 150,000 additional households could be pulled into paying the surcharge if the levy was brought down to the reduced amount, based on calculations done by think tank Tax Policy Associates.

The so-called mansion tax was first announced by chancellor Rachel Reeves during her 2025 Autumn Budget and is set to come into force in April 2028.

As it stands, the measure will see those with properties worth over £2 million pay between £2,500 and £7,500 per year depending on the value of their home. It is expected to bring in £430 million in 2029/30.

But should Burnham win a Labour leadership contest, he will need to find ways to fund an ever-growing welfare budget and multi-billion pound hole in the Defence Investment Plan (DIP).

Lowering the entry level at which households pay the mansion tax could be one way of doing this alongside potentially scrapping the triple lock pension system.

MoneyWeek approached Andy Burnham’s office to comment.

What is the mansion tax and how will it work?

The High Value Council Tax Surcharge will take effect from April 2028 and apply to homes in England worth £2 million or more.

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.

How a reduced threshold of £1.5 million on the levy would be applied exactly is unclear, but would almost double the amount of households paying it, according to calculations done by Tax Policy Associates.

The think tank predicts around 243,000 households would have to pay at least something, up from 127,000 under a £2 million entry-level threshold.

What else is Andy Burnham considering?

In a major speech on 29 June, Burnham said he intended to reform business rates to support high streets and pubs which have taken a battering in recent years.

According to the British Beer and Pub Association, a trade body for the sector, 161 pubs closed across Britain in just the first three months of 2026. UK Hospitality, a trade body for the hospitality sector, has forecast six hospitality venues will close each day in 2026.

Rumours have been swirling about what else Burnham could introduce if he were to become the next prime minister of the UK.

The MP for Makerfield could reportedly look at reforming Capital Gains Tax (CGT) by bringing the rate paid in line with income tax. Basic-rate taxpayers currently pay a CGT rate of 18% while higher and additional-rate taxpayers pay 24%.

Burnham could also replace stamp duty with a ‘land value tax’ – an annual tax based solely on the value of the land itself.

One of the best ways to gauge how your fellow investors feel about the market is to follow the money.

The flows of cash in and out of European exchange-traded funds (ETFs) during June suggests a pivot back towards US stocks and funds and away from their European counterparts, according to analysis of etfbook.com data from investment manager Fidelity International.

June was a strong month for European ETF flows overall, attracting just under $45 billion in total funds – 29% above the three-month average monthly flow and 19% above the 12-month average.

“Strong corporate earnings, combined with new record highs in equity markets, have boosted investor confidence,” said Stefan Kuhn, European head of ETF and index distribution at Fidelity International.

If you’re considering where to invest for the coming months, it can help to have an idea of which way the money has been going recently.

Fund flows shift from Europe to America

Funds investing in North American equities saw $14.7 billion of inflows during the month, more than three times the monthly average for the region over the past year.

Much of the strength in American stocks will have been driven by demand for artificial intelligence ETFs, with the US still the major player in the theme. The sector also received a sentiment boost in June from SpaceX’s record-breaking initial public offering.

At the same time, though, European investors appear to have abandoned their domestic markets, with Europe-listed ETFs targeting European stocks registering $2.2 billion in outflows in June.

^{Source: etfbook.com via Fidelity International. Data as of 30 June 2026.}

“The story of the second quarter was the return of the United States,” said Kuhn. “While investors were allocating more heavily to Europe and other regions at the start of the year, we are now seeing a clear preference for the US market again,” he added.

June marks the third consecutive month of outflows for Europe-focused funds according to Fidelity.

Commodity ETFs slide as investors snap up active ETFs

Demand for commodity ETFs waned during June, coinciding with a decline in gold prices as expectations for higher interest rates (particularly in the US) rose and the war in Iran appeared to be simmering down.

“With the immediate escalation phase now behind us, some of the geopolitical risk premium has faded from commodity markets,” said Kuhn. “At the same time, many investors expect central banks to keep interest rates higher for longer, making non-yielding asset classes such as gold less attractive.”

Actively-managed ETFs, though, continue to soar in popularity. June was a record month for flows into this category of funds, according to Fidelity’s analysis.

“Strong demand for active ETFs shows that investors increasingly want to differentiate between regions, sectors and individual companies,” said Kuhn. “In a market where the gap between winners and losers is widening, active security selection can provide real added value.”

Artificial intelligence (AI) could be embedded into every aspect of a financial services business by 2030 as millions of savers and investors are already making use of the tools, research by the Financial Conduct Authority (FCA) has found.

The City watchdog asked executive director Sheldon Mills to review how advances in AI could transform retail financial services.

The Mills Review, published this week, found one in five UK adults - equivalent to 11 million UK adults - are already open to AI making decisions for them in areas such as pensions and investments but there are concerns about trust and control.

The review found that while AI has the potential to improve access, personalisation and efficiency, it could also amplify risks associated with fraud, cybersecurity, consumer harm and market concentration.

Mills said: “Artificial intelligence will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy. This report sets out a roadmap for how industry regulators and government can prepare for the next phase of AI-driven change in our world-leading financial services sector.”

Here is how the FCA expects AI to reshape financial services.

Changing roles in financial services

The regulator suggests human roles in financial services will change.

It highlights that many firms are already piloting and rolling out AI tools and by 2030 they could be more independent and cover every function from customer support and underwriting to compliance, claims and product design.

AI may become the main method by which they process information, serve customers, and evidence outcomes, the FCA suggests.

This could mean the role of people within firms changes from operators close to each decision towards collaborators, approvers and, eventually observers who monitor outcomes and step in when systems move outside agreed parameters.

The FCA said: “This is a substantial organisational shift, requiring new skills and a clearer account of what human oversight actually involves.

“Firm governance will extend existing model risk management to cover more complex systems and deeper reliance on third-party providers. Successful AI deployment should lift productivity and support economic growth, though the benefits will reach consumers only where firms remain accountable and markets stay competitive enough to pass them on.”

The review suggests the human role becomes one of challenge, judgement and review rather than direct production of every output.

The rise of agentic AI

Consumers are increasing using AI applications to act on their behalf and automatically follow preset instructions, known as agentic AI, and the FCA predicts this could grow in financial services.

This may involve easier bank switching, embedding insurance into other platforms, auto-rebalancing in savings and investments and pension pot consolidation.

The FCA said: “Overtime, AI systems will move beyond offering information and recommendations towards trusted AI agents that can act continuously for consumers within agreed limits, providing ongoing financial management and optimising people’s financial lives.

"If done well, this could help consumers achieve more while doing less, addressing long-standing problems such as low switching, advice and protection gaps, and improving outcomes for people with lower financial capability.”

The FCA warns that consumers will still need to be able to oversee, understand and challenge AI-driven decisions, especially when things go wrong, the report adds: “Unequal access to high-quality applications risks widening inclusion gaps - but well-designed AI systems also present an opportunity to radically improve outcomes for those who need more support.”

Changes in market power

The rise of AI could reshape who holds the power in financial services.

Investors and savers may flock to well-known investment platforms or providers now but the FCA says AI has the potential to drive greater beneficial competition in financial services and to support new entrants.

This could make the suppliers more powerful and there are risks of dependance on a few technology firms.

The FCA said: “Control of the AI-mediated customer interface may become a major source of market power.

"As consumers rely on agents to search, compare and transact, the owner of that AI layer may influence which products are visible, how choices are ranked and where value is captured, shifting the customer relationship away from financial services providers.”

AI risks

While AI could help consumers manage their finance more effectively, the FCA review wants that there will also be more fraud risks.

The report said: “Deepfakes, synthetic identities and personalised social engineering are taking fraud and cyber risks into a new era and changing how fraud and cyber-attacks are conducted. Existing weaknesses can be exploited far more quickly than before, and defenders will need to keep pace.

“Defensive, supervisory and enforcement capability must evolve at least as quickly as the threat. To remain effective, firms, regulators and their partners will need access to many of the same AI capabilities as those used by attackers.

"They will also need to share the right information with those best placed to act, when it matters and before harm escalates.”

Is AI regulated?

Artificial intelligence isn’t regulated but Mills suggests that existing rules such as the Consumer Duty and Senior Managers Regime should cover some of the risks associated with how savers and investors may use AI.

The review does add that regulation may have to evolve though to focus on shared models between firms though rather than focusing on individual conduct.

It also suggests that the FCA review AI tools such as ChatGPT and Claude to assess if there are regulatory overlaps and risks in the results generated.

Commenting on the report, Amal Jolly, chief executive of the AI company Saturn, which specialises in financial advice, said: "AI brings new opportunities to close the advice gap, improving the financial lives of millions of adults, but as this report shows it also brings huge risks.

“In financial services, AI is the new Wild West: consumers are left with no protection. Only 9% of people have access to regulated human financial advisers, but 100% of people have access to ChatGPT and other AI platforms. This is not just a theoretical problem, but can cause real harm to people who are entrusting major life-changing financial decisions to unregulated AI.”

SpaceX has joined the Nasdaq 100, meaning passive funds that track the index will now automatically hold positions in the company, which listed on 12 June.

SpaceX (NASDAQ:SPCX) joined the index today (7 July), a week after it was added to the Russell 1000 Index (29 June).

Bloomberg reported SpaceX could look forward to an estimated $5.4 billion of inflows as a result of ‘forced’ buying by index funds that track these two indices.

Elon Musk’s space exploration company was fast-tracked for inclusion following rule changes by the index providers, put in place to reflect the unprecedented size of some initial public offerings (IPOs) coming to market.

Nasdaq’s new rules now allow freshly listed companies to be included in as few as 15 trading days, rather than its previous minimum period of three months after an IPO.

What will SpaceX index inclusion mean for flows?

Nasdaq says globally, there is around $1.4 trillion in assets tracking its component companies’ combined market capitalisation (market cap) of $31.5 trillion, around half of which do so through exchange-traded funds (ETFs). The other half is in derivative products, such as futures and options.

The Nasdaq 100 index represents the largest 100 companies, excluding financials, listed on the Nasdaq Stock Market. Often described as a tech-focused index, it contains all ‘Magnificent 7’ names – Alphabet, Amazon, Apple, Tesla, Meta, Microsoft and Nvidia. But it also contains many other companies with a value of $100 billion or more from healthcare, industrials and materials, for example, with representation across 10 of the 11 standard industry classification sectors.

When a stock joins an index like the Nasdaq 100, funds tracking that index are effectively forced to buy its shares so that they still reflect the index. This creates additional demand for a stock and could push up its share price.

The UCITS version of Invesco’s Nasdaq-100 ETF (LON:EQQQ) is the largest Nasdaq-tracking ETF available to UK investors. Barclays Smart Investor platform lists it as the seventh most popular purchase during the week of 26 June to 2 July.

Alongside the uplift from index fund inclusion, several investment banks have issued positive analyst statements on SpaceX, marking the end of the ‘quiet period’ that typically follows an IPO. Morgan Stanley, Goldman Sachs, UBS and Bernstein Research are among the names backing the stock with ‘buy’ recommendations or equivalent, based on asset strength and long-term growth prospects.

Average house prices have increased for the first time since the outbreak of the Iran war in a boost for homeowners.

The newly-named Lloyds House Price Index, rebranded since the bank retired the Halifax name, showed average property values rose 0.2% in June.

The slight rise in house prices is an improvement on the previous month's 0.2% fall, while annual growth was at 0.6% compared with 0.5% a month before.

This put average UK house prices at £299,330.

It is the first monthly rise in average prices since February as confidence has been dented by the Iran conflict.

But hopes of a peace agreement and lower swap rates may now be filtering into the housing market and mortgage pricing, helping to boost demand.

Amanda Bryden, head of mortgages at Lloyds, said: "Recent price trends continue to reflect wider economic uncertainty, including the impact of global events on inflation and interest rate expectations."

Affordability remains stretched for many buyers, said Bryden, but this has been mitigated by mortgage rates easing from their recent highs.

"While latest industry data shows the number of new mortgage approvals dropped in May, this wasn’t unexpected given the spike in rates seen earlier this year, and we ’d expect to see activity recover assuming borrowing costs continue to fall," Bryden added.

Where are house prices rising?

The housing market has been quieter in recent months as the volatility caused by geopolitical tensions has pushed up swap rates, making mortgages more expensive and hitting buyer demand.

More stock is also on the market, which some attribute to a landlord exodus linked to the Renters’ Rights Act.

Higher supply and reduced demand has pushed price growth down.

But there have been signs of life in the housing market more recently as tensions have eased in the Middle East.

Northern Ireland continues to record the strongest annual house price growth in the UK, with average prices up 7.4% over the past year to £229,000, Lloyds said.

Scotland has the next highest annual growth at +3.9%, with an average price of £223,277.

In Wales , property price growth has strengthened by 0. 9% on annual basis to £ 231,142.

Meanwhile in England, stronger price growth remains concentrated in northern regions. The North East saw prices rise 2.8% over the year to £181,133, while the North West recorded annual growth of +2.4%, with the average property now costing £248,218.

In contrast, southern markets continue to see prices fall. The South East led declines, with prices down 2% year-on-year to £381,654, while London saw average values fall by 1.1% to £534,831 .

Will house prices rise in 2026?

The housing market has struggled to get going in 2026 and while the latest price rise may look good if you are hoping to sell your property, analysts remain cautious.

Amy Reynolds, head of sales at Richmond-based estate agency Antony Roberts, said "On the ground, the picture is more nuanced than national headlines suggest."

While the rate-dependent end of the market is exhibiting caution, well-priced family homes in the right roads are still seeing sustained interest from cash- or equity-rich buyers.

Reynolds suggests there is the familiar pre-summer push from families wanting to be settled before the new school year, but warns that the mood is steady and selective rather than booming or stalling, adding: "We expect a quieter, price-sensitive summer, with activity firming again in the autumn once buyers have more clarity on rates and the geopolitical noise has died down."

Sarah Coles, head of personal finance at AJ Bell, said the small rise in prices in June will owe something to the Iran peace agreement, which lowered inflation expectations and brought mortgage rates down, but warns that one swallow doesn’t make a summer.

"One small bump doesn’t mean the end of tougher times for the property market," said Coles. "There’s still a huge amount of global uncertainty as the peace deal remains fragile. Closer to home, the picture has started to look marginally more positive, with unemployment falling a little and economic growth edging up. But this is unlikely to move the dial just yet."

Coles highlights that unemployment has been trending up for the past four years and while economic growth might be positive right now, real household disposable income still fell in the first three months of this year, so prospective buyers may be feeling overstretched already.

Bryden is a bit more optimistic, saying: "We expect the housing market to continue moving at a measured pace. Lower borrowing costs should provide some support for demand, though affordability constraints remain an important factor. The outlook for house prices will depend largely on inflation continuing to ease and household confidence gradually improving."

Cohabiting couples who are not married or in a civil partnership are set to receive new rights to finances under new rules proposed by the government.

The proposals could see unmarried partners allowed a portion of the proceeds from a house sale, a percentage of a pension, automatic inheritance rights, and more when a relationship ends.

The measures are part of a new framework by the government that aims to bring family law “into the modern age” as more couples cohabit without getting married.

Cohabiting couples who are unmarried have far fewer financial protections than married couples under current laws. This can lead to complications if a relationship ends.

The government says these difficulties disproportionately affect more vulnerable groups such as women, children, and victims of domestic abuse.

The framework for new financial rights is set to establish more concrete rules for how assets should be split when a separation takes place.

The consultation proposes that courts should have access to similar actions that are available in the case of a divorce, though options are set to be narrower to maintain the unique status of marriage in law.

David Lammy, deputy prime minister and justice secretary, said: “We’re launching this consultation to make sure our new family law builds a fair system that offers the most vulnerable protection in the event of a breakup, and at a time where the country is facing cost of living pressures.

“Whether you’ve been left bereaved by the sudden and unexpected death of a partner, or escaped horrific domestic abuse, our laws should work to protect you.”

The consultation launched on 5 June and will run for 10 weeks, closing on 14 August. The government will then use the findings to help inform future reforms, which will be made law “when parliamentary time allows”.

Separating couples could be entitled to a portion of a partner’s pension

The new framework will provide family courts with a number of new remedies they can use when an unmarried couple separates. These mirror the ones available in divorce cases.

Possible remedies include property adjustment orders which can transfer interest or ownership in a property from one party to another, potentially entitling a partner to partial ownership of a house.

Separating couples may be entitled to a percentage of their partner’s pension too under the new rules as courts will have the power to enforce pension sharing orders.

Courts could be granted the power to order one partner to pay a lump sum of money to the other partner.

The government also says in exceptional circumstances time-limited maintenance orders that require one party to provide regular payments to the other may be granted by a court.

Couples would need to cohabit for at least three years or have a child together for the rules to apply to them. Courts must also be satisfied the couple are in an “enduring family relationship”.

The consultation adds that while cohabitants may have access to the same measures as divorcing couples, this does not mean there would be equivalent financial outcomes to divorce.

Prenups and postnups set to become legally binding

Pre-nuptial agreements (prenups) and post-nuptial agreements (postnups) are becoming increasingly common in the UK.

Around 20% of couples sign prenups before marriage today, up from just 8% in the 1990s, according to research by the Marriage Foundation.

Prenups and postnups are written contracts made before a marriage or civil partnership that outline how assets will be split in the event of separation, divorce, or death.

In the UK, these agreements are not currently automatically enforceable by courts in England and Wales. Instead courts are simply told they should consider them unless doing so would be unfair, so long as the agreements were entered into freely and with full understanding.

This means that there is a degree of uncertainty around when the agreements made in prenups and postnups apply and when they do not.

However, as part of this new set of reforms, prenups and postnups are set to become enforceable contracts that “are not subject to substantive scrutiny by the court” as part of the new framework proposed by the government, eliminating much of this uncertainty.

This would allow couples to make legally binding agreements about financial arrangements in the event of divorce, though the consultation adds that safeguards would still need to be met.

Cohabiting couples set to get automatic right to inherit

The new framework is also set to extend new rights to couples when a partner dies without a will.

Under the current rules, when a couple have been living together for years but have remained unmarried there is no automatic right for the surviving partner to inherit a portion of the other’s assets if they die without leaving a will.

However, if the proposed laws come in, qualifying couples will receive an automatic right to inherit parts of their partner’s estate with similar rights as spouses or civil partners even if they are unmarried and have not left a will.

Investment trusts are often a sound investment but picking one that stands out from the crowd can really boost your returns.

So if you’re trying to decide where to invest for the second half of the year it could pay to see which trusts and sectors have outperformed the rest over the last six months.

The top funds and stocks for DIY investors have reflected a slant towards technology so far this year. Investors who followed that trend were rewarded, as technology-focused investment trusts delivered greater returns than any other sector.

According to the Association of Investment Companies (AIC), an industry body representing the UK’s investment trusts, the average investment trust performed better than the UK stock market’s flagship large cap index, returning 9.4% during the first half of the year compared to the FTSE 100’s 5.7%.

Some investment trust sectors generated average returns well above this level.

The top-performing investment trust sectors of H1 2026

Tech was the top-performing investment trust sector, returning over 50% in the first six months of the year.

“The historic boom in AI spending continued to drive returns in the first half of 2026, most obviously in the technology sector,” said Annabel Brodie-Smith, communications director at the AIC.

^{Source: theaic.co.uk / Morningstar. Share price total return in % to 30/06/26.}

Tech and AI might be more heavily represented in the top-performing investment trust sectors than is initially apparent: the theme is also having a significant impact “in Asia and emerging markets where some of the world’s largest AI hardware and microchip manufacturers are based”, said Brodie-Smith.

It has also been a good six months for global small caps, with the sector returning 23.7% on average to make it the fifth-best-performing investment trust sector. The average Japan-focused investment trust, meanwhile, returned 18.2%.

Which investment trusts were the top performers in H1 2026?

While technology was the top-performing investment trust sector overall, the top-performing individual investment trust came from the commodities sector.

Baker Steel Resources (LON:BSRT) returned over 65% in the first six months of the year. The trust is a diversified commodities investment trust; it holds producers of precious metals like gold and silver, but as of 31 March its portfolio has the largest weighting towards tungsten producers – making up 23% of assets.

^{Source: theaic.co.uk / Morningstar. Share price total return in % to 30/06/26.}

Technology is unsurprisingly a recurring sector in the rest of the 10 top-performing investment trusts list. Three of the trusts – Polar Capital (LON:PCT), Manchester & London (LON:MNL) and Allianz Technology (LON:ATT) – are all designated to the technology and innovation sector by the AIC, while Seraphim Space (LON:SSIT) and Schiehallion Fund (LON:MNTN) have significant overlap with technology as a theme.

Asian and emerging market trusts like Pacific Horizon (LON:PHI) also featured amid the AI boom. Pacific Horizon’s top two holdings as of 31 May were chipmakers Samsung and Taiwan Semiconductor.

“The strong performance is extremely welcome, but this is only a snapshot. It is important to remember that investing is a long-term commitment and that any sector or trust should form part of a broader, diversified portfolio,” said Brodie-Smith.

The Magnificent 7 stocks (Mag 7) are starting to look mediocre. The group, which is made up of Nvidia, Alphabet, Apple, Microsoft, Amazon, Tesla and Meta, has been in the vanguard of the AI boom. Between the beginning of 2023 and the start of this year, the seven US technology mega-caps added $15 trillion in value between them and grew to account for a third of the entire S&P 500 by market capitalisation, say Emily Herbert and Tim Bradshaw in the Financial Times. Yet over the past month, they have collectively lost $2.2 trillion in value. Many of these firms are “hyperscalers”, with plans to lavish about $1 trillion on AI data centres. Investors are increasingly sceptical about whether such huge sums will ever generate a meaningful return.

Microsoft's and Meta's shares are in a “bear market”, having fallen more than a fifth from their peak, says David Goldman on CNN. The others are down at least 10%. There are growing signs of nervousness about technology valuations. The Nasdaq index fell every day last week. Korea's Kospi, which plays host to some major AI plays, has been on a wild ride this year, including another 10% plunge on 23 June.

Magnificent 7 stocks decline, but semiconductors soar

Yet while the Magnificent 7 stocks are falling out of favour, a boom in the firms selling computer chips to them at eye-watering prices has “more than made up the difference”. Micron's shares have gained 265% this year, Samsung is up 144%, and Intel has surged 254%. The semiconductor industry alone now accounts for 19% of the S&P 500's market value. The iShares Semiconductor exchange-traded fund (ETF) rocketed a staggering 110% in the first half of the year, says Ines Ferre for Yahoo Finance.

That pushed the US technology sector to its best first-half performance in three years, the slump in the Magnificent 7 stocks notwithstanding. AI data centres require specialised computer kit, but there is now an acute shortage and “it takes years to build new production facilities” for chips, says James Mackintosh in The Wall Street Journal. The result has been soaring prices: Micron's have “quadrupled” in the past year. Consumers have been caught in the crossfire, with Apple hiking prices for its computers. The net effect is “an enormous transfer of cash” from the AI hyperscalers to memory-chip makers. The problem for the AI industry is that firms such as ChatGPT-maker OpenAI were already loss-making (venture capital has been subsidising an expensive grab for market share). Now the maths looks even more challenging for the businesses that started the AI boom.

In retrospect, the best thing to do over the past six months would have been to go long chip stocks while shorting software firms, says John Authers on Bloomberg. Korea's chip-dominated Kospi stock market index has almost doubled since 1 January, while the S&P 1500 software index is down 17.5%. US technology-related capital expenditure is now slightly above the 5% of GDP peak it reached in 2000 during the dotcom bubble. By attracting “more capital than they can productively use”, investment bubbles ultimately “sow the seeds of their own destruction”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Brits 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 on 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.”

Grieving families now face paying out more money to help resolve a loved one’s estate after the cost of applying for probate rose by 75% this month.

The Grant of Probate fee - giving someone a legal right to deal with the assets of a person who has passed away - increased on 13 July from £300 to £526.

It has almost doubled since May 2024, when it was £273.

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.”

A Ministry of Justice spokesperson said the cost helps improve its service.

The spokesperson said:  “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.”

While the application fee has increased, the charge for copies of the probate documents – when requested alongside the application – has been cut from £16 to £2.

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.

How to help your loved ones with the probate process

You can’t do much about the cost of applying for probate, but Sarah Coles, head of personal finance for AJ Bell, suggests people can ensure their own affairs are in order so it is easier for their loved ones to manage their estate.

This includes making sure your wishes are clear by making a will, make a list of your financial arrangements including bank accounts and pensions and ensure any paperwork for taxes or unpaid debts can be found.

Coles says: “Having to pay a fee for probate is bad enough, given it creates an endless pile of admin for those you leave behind, so a 75% hike in the fee is adding insult to injury.

“For those who can’t afford it, there’s a Help with Fees remissions scheme, to cover the cost.

“For everyone else, this is one more horrible hoop to jump through that makes the paperwork and processes after death such a nightmare. It means we could all benefit from taking steps to make the process easier for our loved ones after our death.”

Chancellor Rachel Reeves looks set to follow her boss Keir Starmer out of government when Andy Burnham becomes prime minister on Monday 20 June.

Though Reeves has been lobbying to keep her job, it seems highly unlikely that Burnham will keep her on – not least because of how unpopular she is.

As a figure so closely associated with the Starmer project, keeping Reeves in No 11 would send the wrong signals to a country that Burnham is promising to change. His platform is much closer to the Labour soft left, and that would not make a good fit for the centrist Reeves.

Choosing a replacement for Reeves will be one of the most important decisions Burnham makes as prime minister, as who he chooses to replace her will reflect the style of economic policy he intends to pursue.

Currently, no official statements have been made by the Burnham camp about who the next chancellor will be, but there are rumours.

Who could be the next UK chancellor?

With Reeves almost certainly leaving, there are several high-profile candidates that could replace her. Who are they?

Shabana Mahmood

The current front-runner is Shabana Mahmood, the home secretary, who is now heavily rumoured to replace Reeves as chancellor after Ed Miliband has fallen out of favour with the Burnham camp.

Mahmood was previously the justice secretary but has not held any economic positions within government.

The closest economic experience she has is when she served as the shadow financial secretary to the Treasury from 2013 to 2015 and shadow chief secretary to the Treasury in 2015 under then Labour leader Ed Miliband. When Corbyn became leader in 2015, she did not join his shadow cabinet.

Mahmood belongs to the right of the Labour party and has been instrumental in pushing through controversial, harsh immigration rules. However, we have little basis to predict what her economic policies may be.

Sarah Coles, head of personal finance at AJ Bell, said that 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.

“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.”

Before going into politics, Mahmood was a barrister and specialised in indemnity law. She read law at Lincoln College, Oxford (she was in the year below former PM and chancellor Rishi Sunak), graduating with a 2:1.

Ed Miliband

Energy secretary Ed Miliband has also been tipped as the next chancellor. He was widely anticipated to replace Reeves in Burnham’s cabinet, but his stock has fallen in the past few days.

The reason Miliband was expected to replace Reeves is because he belongs to the soft left of the Labour party, just like Burnham, and has held a number of economic positions both in government and in opposition.

Miliband has by far the most economic expertise of any of Reeves’ potential successors. He worked as a special adviser to Gordon Brown in the Treasury between 1997 and 2002, taught economics at Harvard, then rejoined the Treasury team in 2004.

He also read philosophy, politics, and economics (PPE) at Corpus Christi College, Oxford and went on to get a postgraduate degree in economics from the London School of Economics.

“Miliband’s position on the soft left might raise the possibility of more spending and borrowing,” said Coles.

“However, his experience in senior roles, including as a special adviser to Gordon Brown, may lie behind reports that 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.

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.

Wes Streeting

Wes Streeting is another contender for the role. Prior to Starmer’s resignation, he launched a bid to replace Starmer as prime minister, but immediately stood down to make way for Burnham on 22 June after Starmer resigned.

“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 Matthew Ryan, head of market strategy at financial services firm Ebury.

Susannah Streeter, chief investment strategist at wealth manager Wealth Club, 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.

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.”