Two things in life are guaranteed: death and taxes. Some of us have to deal with both at the same time.

You earn money and income tax takes its cut, with National Insurance following suit. You spend some of what's left and VAT takes its share. Buying a house? Stamp duty. You sell an asset that's grown in value, capital gains tax. You take a dividend from the company you built, dividend tax. Fuel duty, vehicle tax, insurance premium tax, council tax. Then HMRC comes in with the final punch combination when you die. Beneficiaries are at risk of inheritance tax. Forty percent of everything above the threshold.

With every other tax, you can do something about it on your own. Put more into the pension, use the ISA allowance, time a disposal, restructure how you take income. With inheritance tax, the planning that reduces the bill has to be done by the person you're inheriting from, and for larger estates, it has to be done years before they die. You cannot fix it afterwards. The bill comes out of the estate, which means it comes out of what would have been yours.

There are ways to reduce an inheritance tax bill though, such as making use of allowances and gifting during one’s lifetime. Often, the inheritance tax problem becomes a communication problem rather than a tax problem. Only 30% of over-55s have ever discussed inheritance with their children, according to research by law firm Irwin Mitchell. Ask people why not and 15% say it's awkward, 12% think it's rude, a Moneybox survey said. But the powerful determinant of an inheritance tax bill is whether a family can sit through that one uncomfortable conversation.

How inheritance tax thresholds work

Everyone gets a tax-free allowance when they die called the nil-rate band (NRB). It's £325,000, and anything above it is usually taxed at 40%. If the main home is left to children or grandchildren, and your estate is worth less than £2 million, a second allowance stacks on top: the residence nil-rate band (RNRB), worth another £175,000. So one person can pass on £500,000 before HMRC takes a penny. Anything you leave to your husband, wife or civil partner is completely exempt. If they die, you inherit whatever slice of their allowances they didn't use. Stack two sets together and a married couple can pass on up to £1 million tax-free – although this isn’t marriage advice.

The problem

The Institute for Fiscal Studies, a think tank, projects that if you were born in the 1980s, you probably won't inherit until your mid-sixties, and for roughly a third of that cohort, it won't be until their seventies or later.

The average person expects to inherit £62,500, according to interactive investor’s Great British Retirement Report 2026, which polls almost 8,000 savers in the UK. I don't know about you, but I think £60k would go a lot further for me at 29 than it would at 64. For a lot of high earners, the money is inherited after they’ve paid a house deposit or after the school fees mattered.

Then there's how much of it gets taken on the way. Roughly one in twenty deaths in the UK results in an inheritance tax charge, and in 2023/24 the average bill among them was £231,000, HMRC data shows. More people will get pulled into the hole every year, and one of the reasons is fiscal drag. The NRB tax-free threshold has been £325,000 since 2009 and it's now frozen until April 2031. Had it simply risen with inflation, AJ Bell reckons it would be worth close to £555,000 by the end of this decade. So while this threshold stands still, families are being dragged into the tax net as house prices rise.

Adding more fuel to the fire, from 6 April 2027, most unused pension pots will come into the estate for inheritance tax purposes. HMRC's own estimate is that around 10,500 estates will pay inheritance tax for the first time because of it, and another 38,500 will pay more than they otherwise would, at roughly £34,000 extra each.

How talking can reduce an inheritance tax bill

Changing the conversation and framing from “let's reduce an inheritance tax bill” to “when would gifting this money actually do the most good,” and you're having a completely different conversation with the same people about the same money. The second one leads to lifetime gifting. Lifetime gifting is also the thing that reduces the inheritance tax bill.

We want our parents around as long as possible. The conversation is about the money doing some good while everyone is still here to see it.

The headline rate for inheritance tax is 40%. The average effective rate those estates actually paid inheritance tax in 2023/24 was 13%. That is due to exemptions, allowances and gifts and every single one of them was a decision someone made while they were still alive to make it.

The bottom line: speak to your family about inheritance

If you're expecting some sort of inheritance, talk to your family. The potential alternative is that some of this hard-earned money goes to the taxman. If your family is anywhere near those thresholds and with the pension change coming in 2027. If you need help, consider speaking to a financial adviser – the fee for regulated advice could end up a rounding error against a £231,000 average bill.

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

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

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

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

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

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

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

What are the current rates of capital gains tax?

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

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

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

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

Is there support for a capital gains tax hike?

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

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

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

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

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

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

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

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

The growth of passive investment means pension savers could be sleepwalking into disaster. Amid growing speculation about the potential for a stock market correction – or even just a prolonged period of flat returns – investment experts are increasingly worried about the risks many pension savers are unwittingly exposed to. Passive investment has compounded such dangers.

The reality is that most savers in workplace pension schemes never make an active investment choice – the employers' scheme Nest says more than 90% of savers behave this way – leaving their contributions to flow into default fund strategies. These largely rely on low-cost index-tracking funds that passively follow the market up and down.

Data suggests that even savers with self-invested personal pensions (Sipps), which offer more control over investment choices, are also opting for passive funds en masse. Data from platforms such as Interactive Investor repeatedly shows that index-tracking funds are among the most popular options with these savers.

The trouble with passive investment and index-tracking funds

The problem is that index-tracking investment may be riskier than savers realise. It's not just that these funds automatically follow markets down in challenging periods. The bigger worry is that many index-trackers are far more concentrated than is immediately apparent.

A low-cost fund offering exposure to the MSCI World Index, for example, sounds attractive. You're ostensibly getting a cheap way into a spread of investments on stock markets worldwide.

In practice, however, this is no longer the case. “While 20 years ago a passive investment approach provided well-diversified exposure, the same is clearly not true today,” points out recent analysis from JPMorgan Asset Management. “These benchmarks are now vulnerable to very specific risks inherent in today's shifting economic and political tides.”

In particular, the stellar performance of a handful of the large US technology giants in recent years has completely skewed the make-up of market indices. The US stock market now accounts for more than 60% of the MSCI World Index; within that allocation, the ten largest companies on the US market – mostly big tech – account for more than 40%.

In other words, investors with supposedly diversified portfolios are actually betting a very large chunk of their savings on a small number of businesses in the US tech sector.

There are similar concerns, meanwhile, about bond markets, where the huge issuance of US Treasuries to finance the mushrooming US debt has had the same effect. These bonds now dominate indices of fixed-income securities.

The impacts are significant. Pension savers are often invested via strategies that split their money by holding 60% in equities and 40% in bonds, with those allocations secured through passive funds.

But JPMorgan's analysis suggests savers who made such choices – or defaulted into them in the past – now have portfolios that look very different. A 60:40 strategy launched in 2008, for example, would have split equity and bond holdings accordingly, and allocated roughly 40% of the total portfolio to the US, with the remainder spread in markets across the rest of the world. But market movements since then mean that portfolio would today be more than 80% exposed to equities and 55% invested in the US.

Even worse, some investment experts believe passive investment increases the risk of a major stock market crash. By artificially inflating demand, passive funds drive some companies to unsustainable valuations, they argue, with the bursting of the bubble eventually becoming inevitable.

The bottom line? Your pension portfolio may be full of hidden dangers, particularly if you've left it alone for years and opted for default, passive investment strategies. Now might be a good moment to check where you stand.

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.

Gary Stevenson, a gobby former City trader turned socialist firebrand, known for his advocacy of a wealth tax and “for dressing like a 16-year-old scally despite being a 39-year-old man”, as Christopher Snowdon puts it in The Critic, was briefly all over the news during the silly season, when Parliament was in recess, and there was hence nothing better for political hacks to talk about.

Stevenson's perhaps most stunning achievement was to make and present a Channel 4 documentary about himself and his ideas in which he allowed his arguments to get severely and embarrassingly bested by people who know what they're talking about. His five minutes of fame ended with his early retirement from social media, citing burnout and exhaustion.

The big issue with wealth taxes

Sadly, his ideas have a bit more life in them yet, and for a simple reason – Andy Burnham, the new prime minister, is sniffing around for more money to fund his spending commitments. Where the cash will come from is, as Gerard Lyons says in The Times, the “defining fiscal question” of the present moment. Most economists rule out imposing wealth taxes as a solution to that problem, and for good reasons. But politicians are prone to forget sound economics when they have more pressing problems to deal with, such as huge fiscal holes to fill and political constituencies to placate.

Chancellor John Healey, now preparing his first budget for delivery at the end of October, has pointedly refused to rule out tax rises and faces the challenge of rebuilding a fiscal buffer eroded by the Iran war and weak growth while funding new spending commitments from a prime minister whose premiership so far seems distinguished mostly by his inability to see a spending commitment he doesn't like.

Healey's options are limited. The Office for Budget Responsibility is unlikely to upgrade its forecasts for economic growth or future tax revenues, and borrowing more will not be easy. Gilt issuance is already around £250 billion this fiscal year and debt servicing costs are on the rise. And Labour's manifesto commitments rule out increases in any of the main taxes. Attention has thus long been shifting to wealth and other taxes, presented as a simple way out of the predicament.

“They are not,” as Lyons says. Modern tax systems have evolved in the way they have because governments need “large, reliable and predictable” sources of revenue. That consideration means that revenues generally come primarily from taxing recurring flows of income, profits and spending. Such taxes generate around four-fifths of tax revenues across the OECD club of developed nations. Wealth taxes depart from this principle, seeking to draw income from a stock of wealth held in assets rather than from flows – and that is far easier said than done. Countries that have tried to impose them have usually ended up abandoning them. Where they remain, they have simply become another burden, not on idle wealth, but “on entrepreneurs, business owners and productive capital”.

Supporters of a wealth tax often cite the Wealth Tax Commission, the report of a group of independent experts tasked with studying the feasibility and impact of a wealth tax, but its own research undermines the case, says Lyons. Even at a tax rate of just 1%, the Commission estimated that behavioural responses could shrink the tax base by between 7% and 17%. “Many people are asset rich but cash poor. A tax that is detached from recurring cash flow eventually forces borrowing or the sale of assets simply to pay the tax. It alters behaviour, depresses asset values and adds administrative complexity.”

Why are wealth taxes so popular?

It is easy to portray those who oppose a wealth tax as “bootlickers for the haves and the have-yachts”, says Snowdon, but “the reason most economists are dismissive of the idea is the same reason governments of both right and left have abandoned them over the years: they are costly to administer, don't raise much money and drive talent out of the country”. What most people who advocate soaking the rich don't realise is that the money of the very wealthy is “not just sitting there in a bank account”. It is invested in shares, the value of which fluctuates daily and can spike or collapse dramatically. It is invested in property and possessions, the value of which is not known until they are sold. And in the case of people who technically own £10 million or more, it is the value of the businesses that they founded and own, the price of which is also not known until they are put up for sale.

The first task of a government that wants to introduce a wealth tax is to calculate how much wealth people have, but this is therefore an inevitably expensive and bureaucratic exercise requiring many arbitrary decisions that are open to challenge by those being assessed, says Snowdon. And that's just the start of the problems. In 1990, 12 OECD countries had a wealth tax. Today, there are only three. Norway and Switzerland use them as substitutes for inheritance and capital-gains taxes, and Spain's is “so full of holes that what remains can be considered largely symbolic”: it raises so little revenue that most fiscal accounts do not even bother to list it. In short, it soon dawns on governments that try to introduce them that wealth taxes are simply not worth the bother.

Why then are we still talking about them? Mainly because “more sensible proposals take five minutes to explain and therefore have little chance of being adopted in the current political environment”, says Joseph Heath, an academic philosopher writing on Substack. The main merit of the idea of wealth taxes for those on the left is that they are very easy to explain: “Billionaires are bad, so let's take away their money!” Wealth taxes are, in other words, a perfect example of “slopulism” – “policy ideas that make for quick, effective soundbites”, but that are useless and “almost universally rejected by experts”.

It is not even necessary to take a position on whether inequality is a big problem that we must deal with to see this. Perhaps you think it is. Even if so, there is nothing a wealth tax can accomplish towards whatever end you have in view that can't already be accomplished through the current tax system – that is, by taxing capital income. Some might say that this does not capture the increase in value of the stock of wealth when those assets earn a return or appreciate in value, but that is just an argument for treating the increase as income and taxing it – as happens already. All income derived from wealth in the form of dividends, interest payments and capital gains must be declared as income. The principle, as already stated, remains to tax the flow, not the stock of wealth. “For people who are angry about the Elon Musks and Peter Thiels of the world, a wealth tax offers the most immediate and intuitive way of channelling that anger. Unfortunately, the desire to punish one's enemies is not a sound basis for tax policy.”

Heath was talking about the situation in the US, but it is hardly very different here in the UK. Given that unfortunate fact, what we can expect from the current government in terms of tax policy? Nothing very pretty. Imagine you are a politician who does not believe in wealth taxes, but who wants to be popular with people who do, says Kristian Niemietz on Substack. You know wealth taxes don't work, you have economic advisers who tell you so, and you know they are usually more trouble than they are worth. But at the same time, you believe that the Gary Stevensons of this world have won the argument and, in any case, you need revenue sooner rather than later. What would you do? You would probably, says Niemietz, come up with “all sorts of policies that mimic aspects of what a wealth tax is supposed to do, without being a wealth tax proper”.

That would explain a lot of otherwise puzzling moves by the current government – why, for example, we have seen increases in the rates for capital gains taxes while tax-free allowances have been cut; why landlords face higher rates on rental income and higher stamp duty land tax rates; why we will see a “mansion tax”, a council-tax surcharge for properties worth more than £2 million. Polls show that such reforms are popular with the public. They might not be so popular when the consequences come home.

All such changes will probably decrease savings, investment and wealth generation while raising only minor amounts of additional revenue, as Niemietz points out. But other consequences will be more immediate, visible and intrusive. The government plans, for example, to send tax inspectors around the country to value homes believed to be in the price range of the mansion tax. Those inspectors will have powers to demand entry into people's homes so that they can conduct a valuation. This may seem to be an intrusion into the private sphere and a violation of civil liberties, but it is an inevitable consequence of the bureaucratic process of valuing wealth that hasn't yet been sold in order to impose wealth taxes. “If this sounds like a terribly inefficient way of raising money to you, just imagine what an actual wealth tax, which does the same thing for assets across the board, would be like.”

Policymakers need to heed the lessons of history

The popular support for higher rates and wealth taxes may not be all it seems either, says Viggo Terling, also in The Critic. Westminster has “convinced itself that the public is desperate to tax the rich harder”. But new polling conducted by the Adam Smith Institute suggests otherwise. True, asked whether they support a wealth tax, 61% of voters say yes. But told additionally that such a tax could drive high-net-worth individuals abroad and reduce the money available for public services, support plummets to 37%.

Voters should be capable of doing the maths themselves. The top 10% of earners contribute 60% of all income-tax revenue. If enough net contributors flee Britain to escape an ever-increasing tax burden, the resulting bill will land on everyone else, either in the form of higher taxes or worse public services, says Terling. Worryingly, the millionaire exodus seems already to have begun. Britain now has 442,000 sterling millionaires, down 7% since 2024 and the lowest number since the financial crisis. Britain's tax burden is already testing post-war highs – a level the Office for Budget Responsibility has called “uncharted territory” – and imposing new wealth taxes and leaving tax thresholds unchanged will change incentives dangerously for the super-rich and workers alike.

Today, earning between £100,000 and £125,140 can leave you facing an effective marginal income-tax rate of 60%. Yet 81% of the public agree that people should be able to keep more of what they earn and pass it on to their children. “That is about as close as Britain comes to a settled moral position on tax, and no major party currently builds its policy around it.”

It's beyond time that policymakers heeded the lessons of history and stopped “wasting public resources reviving failed ideas, especially ones that are more about political signalling than devising meaningful solutions”, says Cristina Enache for Project Syndicate. “To restore public confidence in our political and economic system, we should instead focus on fostering growth and expanding opportunity – on building the bottom up, not tearing the top down.”

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.

The full new state pension is set to exceed £13,000 per year next April, breaching the tax-free personal allowance for the first time.

The triple lock mechanism means the state pension increases by the highest out of wage growth, inflation or 2.5%.

The state pension is set to rise by 3.9% from April 2027, in line with the earnings growth element of the triple lock. This will likely be confirmed in chancellor John Healey’s Autumn Budget.

If confirmed, the full new state pension would rise to £250.70 per week, or £13,036.40 a year.

The first £12,570 of taxable income you get per year is tax-free thanks to the personal allowance, meaning many retirees who only received the state pension haven’t been taxed on it in the past.

State pension income will not be taxed if it's sole income, government says

If you had a taxable income of £13,036, you would usually owe around £91.48 in income tax.

However, the government said last year that pensioners will not need to pay tax if they only receive income from the state pension, even if it goes above the £12,570 personal allowance.

In the 2025 Autumn Budget, then-chancellor Rachel Reeves said: “We are ensuring that people only in receipt of the basic or new State Pension do not have to pay small amounts of tax through simple assessment from April 2027.”

She later added in an interview with broadcaster Martin Lewis in November 2025: “In this parliament, [people who only receive income from the state pension] won’t have to pay the tax, further out, I’m not going to be able to make any commitments on that, but we’re looking at a simple workaround at the moment.”

Although Reeves is no longer chancellor, pensions minister Torsten Bell confirmed the new government will stick to this pledge on 16 September.

He said: “In line with the commitment made at Budget 2025, pensioners who only just exceed the personal allowance will not have the administrative burden of paying small amounts of tax in this Parliament.

“The chancellor will set out further details on how that commitment will be delivered at the Budget.”

The government said the move will “ease the administrative burden for pensioners” and mean they do not have to “pay small amounts of tax via simple assessment”.

The system for this hasn’t been confirmed but more details may be released in the Autumn Budget.

Do you have to pay tax on other pension income?

If you have income from another source, perhaps from a workplace pension or part-time work, you will likely have to pay income tax.

Your pension provider usually calculates your tax and deducts it from your pension income through pay as you earn (PAYE), meaning any tax you owe will be automatically paid for you.

What is simple assessment, and will you have to pay tax on your state pension using it?

Simple assessment is a method used by HMRC to collect tax when a self-assessment tax return is not required but tax cannot be collected through PAYE.

It is used by HMRC to collect tax in some simple circumstances, including if you need to pay tax on your state pension.

Had the government not intervened, pensioners whose sole income is the UK state pension may have had to pay tax by simple assessment next year.

However, as the government has confirmed those who only get an income from the state pension will not need to pay small amounts of tax on it, you will likely not need to complete simple assessment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How does Monzo’s Aura credit card compare?

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

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

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

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

You can also get 35% off Santander Travel Insurance.

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

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

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

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

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

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

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

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

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

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

Investment platforms offering low interest rates on cash balances

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

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

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

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

What ISA rules are changing?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: HMRC FOI (submitted by NFU Mutual)

How the seven year rule applies to gifts

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

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

Source: Gov.uk

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

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

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

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

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

How else to use gifting to lower an inheritance tax bill

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How much will the state pension rise by?

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

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

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

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

Will retirees have to pay tax on their state pension?

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

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

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

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

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

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

How to protect yourself from income tax

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do SIPP platform fees compare?

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

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

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

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

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

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

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

How to find the best SIPP for you

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

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

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

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

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

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

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

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

Pension contributions are often the first cuts made when money is tight. It’s understandable – the benefits of these savings are not realised for many years ahead, so it’s easy to pause contributions.

But many do this with a huge misconception that you can make up for it at a later stage, and it is not as simple as that. The moment you stop, you miss out on compounding, free money from your employer, and the tax rebates – you cannot make up a pound for a pound at a later stage.

So while stopping pension contributions may seem like the obvious way to boost your immediate income, it could cost you thousands in later life.

What are the costs of stopping pension contributions?

Research from investment platform Moneybox shows the average earner (£39,000) could boost their annual income by £1,000 by pausing pension contributions for one year, but the cost of doing this is £12,000 on their overall retirement pot.

The longer you stop, the more significant the impact is. Standard Life finds a 22 year old on £25,000 paying the minimum contribution of 5% and getting 3% from their employer could build a pot of £210,000 by 68. But if they pause contributions for two years between 30 to 32, the pot would only be £200,000. A five year pause between 30 to 35 would mean you take a financial hit of £25,000. And should you take a long break of 10 years between 30 to 40, you could end up with £49,000 less.

There may be many reasons that force you to stop paying into your pension, such as taking a break to raise a family, redundancy or going self-employed. Often, just wanting more money in your pocket each month is the reason. Life happens, but is pausing pension contributions always the only solution?

What can I do instead of pausing pension contributions?

If you are looking to boost your monthly income, then instead of pausing pension contributions, take a look at other ways you can cut your costs.

For example, as simple as it may sound, having a budget in place can help identify unnecessary spending and costs. For example, are you paying for unwanted subscriptions? This is one trap I find myself often falling into.

Ask yourself if you could also get cheaper deals on broadband, mobile phones, or insurance costs. I recently saved £400 on my home insurance by simply switching to a new provider instead of accepting the renewal quote.

You may find that you can save a lot more with a budget and slashing unnecessary costs than you would by temporarily pausing pension payments.

If you have little choice, then think about gradually paying in more when you do restart pension contributions. You could even pay in bonuses or pay increases to give your pension pot an ad hoc boost. And if you're lucky to have an employer who is happy to match increased contributions, then this is worth considering as this is free cash from your workplace that you may otherwise not get.

How much do I need in my pension?

If you think losing a few thousand off your pension pot may not be a big deal, then it is first worth thinking about whether you will have enough in the first place.

Most people underestimate the income they would need in retirement and how big the pension pot needs to be to deliver that. Two-thirds of your pension will typically come from investment growth, so the longer you are invested the better.

According to Pensions UK, a single person would need to have a post-tax income of £45,400 for a comfortable retirement – or £62,700 as a couple.

The single person would need a pension pot of £691,000, according to analysis from wealth management company Quilter, while a couple would need a combined pot of £778,000.

The’ rule of 300’ for retirement

Another way to work what you need to maintain a certain lifestyle when you stop working is by using ‘the rule of 300’ by Standard Life. You simply multiply your everyday costs by 300 to estimate what it will cost you throughout retirement.

So, for example, if you pay £12 subscription a month, multiply it by 300, meaning you would need £3,600 in retirement to continue to pay for it. And if your golf membership is £75 a month, you will need £15,000 to carry on golfing.

So, before you stop pension payments, it may be worth thinking about the retirement you really want and how you will pay for it.

Reaching the age of 65 signals the beginning of retirement for many, but it can also usher in a phase of tax headaches.

The number of over-65s paying income tax has risen by more than three million over the last five years, according to figures from HMRC.

Meanwhile, greater numbers of beneficiaries of estates face paying inheritance tax (IHT) as asset values rise and with unused pensions set to be included in estates from April 2027.

The number of over-65s paying tax on their savings interest is rising too, while 38% of people who paid capital gains tax (CGT) in 2024/25 were 65 or older.

However, there are ways those in their mid-60s can minimise the damage and keep the taxman at bay.

Income tax on state, personal and workplace pensions

An increasing number of pensioners are paying income tax on their pension wealth due to frozen tax thresholds.

The personal allowance has been frozen at £12,570 and higher rate income tax band at £50,270 since April 2024. Meanwhile, the additional rate tax band was cut from £150,000 to £125,140 from April 2023.

A recent Freedom of Information (FOI) request submitted by Steve Webb, former pensions minister and partner at pension consultants LCP, revealed hundreds of thousands of pensioners are being pulled into paying more tax due to these frozen thresholds – a process known as fiscal drag.

The FOI found those of state pension age, aged 66 and over, paying income tax at 40% or 45% has more than doubled from 494,000 since 2021/22 to 1,092,000.

The number paying tax at 45% has almost tripled from 39,000 to 115,000.

With income tax thresholds frozen until 2031, these figures are likely to rise higher.

Webb said: “Many people of working age may have expected that they would be basic rate taxpayers in retirement, but few will have expected to find themselves paying 40% or more out of their pensions in tax.

“But this is the norm now for over a million pensioners, with the number set to rise further.”

How to pay less income tax on your pensions

One way to avoid tipping your income into a higher tax band is to time when you make withdrawals from your pensions, Webb said.

For example, you could split a single large withdrawal into two and spread it across two tax years to keep your taxable income in those two years lower.

Another, Webb said, is by adding more into a pension after you’ve retired.

He explained: “It’s still possible to get tax relief on contributions up to age 75, which lowers current taxable income – especially in years when you would otherwise be a higher rate taxpayer.

“For those who have income to spare in retirement, additional pension saving can be worth considering.”

It’s worth noting, there are rules around how much tax relief you can receive on pension contributions if you have flexibly accessed your pension.

For example, the money purchase annual allowance applies to contributions if you’ve accessed taxable cash from a defined contribution pension. If the allowance is triggered, tax relief is usually limited to contributions of £10,000 a year gross.

Capital gains tax

Over-65s often take up a large share of CGT liabilities in the UK.

Data from HMRC reveals that of the 551,0000 people who paid CGT in 2024/25, 212,000 (38%) were aged 65 or older.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “People tend to build assets as they go through their working life, so wealth peaks around the age of 65, and at that point they start spending their way through their wealth. This period captures that turning point.”

How to lower your capital gains tax bill

Wherever possible, you should hold assets within tax-wrappered accounts like ISAs or pensions so any gains are free from CGT.

Make the most of your CGT annual allowance as well. This allows you to dispose of gains of up to £3,000 each tax year free from CGT.

Coles, from AJ Bell, said it’s worth making the most of your CGT annual allowance each year on an ongoing basis, so you can dump assets tax-free bit by bit.

Also, if your partner hasn’t used their annual CGT allowance or ISA allowance, you could transfer assets to them to pay less tax or even a lower rate of CGT.

Source: HMRC

Income tax on savings

Over-65s are increasingly paying income tax on savings held outside tax-wrappered accounts.

The number of savers in this age group paying income tax on their savings is forecast to reach 2.1 million in 2026/27, more than four times the 517,000 in 2022/23, according to Freedom of Information (FOI) figures obtained by Paragon Bank.

The total tax liability facing over-65s in 2026/27 is expected to reach £3.34 billion compared with £795 million in 2022/23, based on the FOI figures.

How to avoid paying tax on your savings

You could try overpaying on your mortgage if you’ve got surplus cash you don’t need to access immediately. You could also pay off any credit card bills or personal loans using money from your savings pot as well.

Make sure you’re putting savings into tax-wrapped ISAs as any interest earned on them will be tax-free.

Andrew Wright, head of savings at Paragon Bank, said using ISAs was particularly critical for those aged 65 and over, as new rules limiting the annual cash ISA limit to £12,000 from April 2027 won’t apply to this age group.

“Making full use of your ISA allowance can help protect more of your hard-earned interest from tax and those aged 65 plus have the benefit of retaining the full £20,000 cash ISA allowance from next tax year,” Wright said.

Inheritance tax

Frozen IHT thresholds and rising asset prices are dragging more and more estates into HMRC’s net, including those of over-65-year-olds.

IHT receipts in the three months to July 2026 totalled £3.2 billion, according to HMRC, £100 higher than over the same three month period in 2025, and they’re expected to climb more when unused pensions form part of people’s estates from April 2027.

Ian Dyall, head of estate planning at wealth manager Evelyn Partners, said: “It’s worth remembering that it’s not strictly the deceased estate-owner who pays inheritance tax but the beneficiaries.

“However, that doesn’t make it any more palatable to those who have carefully saved and invested, and who want to pass on that family wealth without a big tax charge.

“It’s also worth pointing out that as people are living longer, many beneficiaries are in their fifties or even sixties before they inherit from their parents – so it may well be the case that more 65-year-old beneficiaries are starting to face IHT bills.”

How to lower an inheritance tax bill

Start with making the most of your gifting allowances. For example, you can give away up to £3,000 tax-free each financial year to one or more people through the annual exemption rule.

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

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

Gifts of any size can be made IHT-free if they are made seven years or more before your death.

Dyall said: “The earlier gifting is done the better as that gives the seven year rule more time to expire, which then means the gift will be fully outside the estate.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Are you eligible for a FlexDirect account?

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

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

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

Most people build an investment portfolio gradually over many decades, through monthly contributions they barely notice.

An annuity works the other way. It is bought in one transaction and cannot be undone, often leaving buyers agonising over timing. With annuity rates at an 18-year high, is now the moment, or is it worth waiting for better gilt yields?

When you buy an annuity can make a big difference. On Canada Life's benchmark, a healthy 65-year-old with £100,000 bought £4,521 a year in January 2022. By the end of September 2022 the same £100,000 bought £6,873. Those who waited nine months got an extra £2,352 a year for the rest of their life.

Then again, 2022 was not a normal year, and no one knows what will happen in advance.

Tracking annuity rates

UK consumer champion Which? tracks the annuity market each month, recording the best income a healthy 65-year-old could buy with £100,000. In 2025, the worst month to buy was February, at £7,525 a year. The best was June, at £8,011. December closed at £7,665. The difference between best and worst was £486 a year for life.

But now compare providers. In January 2026, the most generous on the market offered £7,649 on the same £100,000. The least generous offered £7,100.

You can close the provider gap by collecting quotes. But you can’t close the timing gap. You can only stop a single day setting your income for life.

While drip-feeding into equities usually leaves you worse off than buying the lot at once, because shares are expected to rise and uninvested money misses the climb, annuity rates carry no such expectation.

Buying in stages is insurance against a rate move nobody can forecast. It won’t leave you better off than a single purchase would, but spreading the purchase over several dates means no single morning's pricing sets the whole income.

Huang, Milevsky and Young worked the problem through in the Review of Finance in 2017. Give a buyer a fixed budget, improve the rate on offer by roughly a tenth, change nothing else, and the sum they should commit today jumps from about 5% of that budget to about 85%. The authors call the pattern 'an asymmetric dollar-cost averaging strategy'. The market is American and the product is a deferred annuity, so the numbers do not transfer, but the pattern does.

Standard Life's model fixes the dates in advance. It is the only detailed UK modelling of staged annuity purchase I can find, and its saver buys at 65, 70, 75 and 80 whatever rates are doing. The rate improves at each purchase, from 6.6% of the pot at 65 to 7.0% at 70, 8.1% at 75 and 10.0% at 80. Every bit of that improvement is the buyer getting older. In the model, market pricing never moves. A model in which conditions never change cannot demonstrate the value of spreading purchases across changing conditions.

Standard Life's saver starts with £150,000. About £90,000 buys a level annuity at 65, and about £20,000 more buys another at 70, 75 and 80, with whatever is left in drawdown. The model assumes 5% a year on that balance, 3% drawn from it, and good health throughout. By age 90 that saver has drawn £259,115. A single purchase at 65 would have paid £253,775. Standard Life does not do that subtraction anywhere in the release, so here it is: £5,340.

Across 25 years, that is 2.1% more income.

The staged buyer pays for that £5,340 up front. In year one the income is £8,155 against £10,151 for a single purchase, a fifth less. Annual payments catch up at 75. But a decade of shortfall takes some making up, and the running total does not favour staging until 88. The model stops at 90, so the whole gain lands in the last three payments. The drawdown pot is empty by 80, which means the flexibility being sold runs out eight years before the money arrives.

The cost of waiting to buy an annuity

The cost of waiting is built into the rate. An annuity pays more at 80 than at 65 partly because the insurer expects to pay out over fewer years, and partly because buyers who die early subsidise those who live longer. Money still sitting in drawdown earns no share of that subsidy. It sits in markets instead, taking a different risk while it waits. The better rate at 80 is what waiting since 65 has already paid for.

Can you split your annuity pot?

Splitting a pot is easy enough. Aviva, Canada Life, Legal and General and Standard Life all set a £10,000 minimum on what is left after tax-free cash, so £250,000 divides four ways at each of them.

Pricing the split is harder. Phoenix Life, which shares an underwriting company with Standard Life, tells consumers that some providers may pay more on one large purchase than on several small ones. It doesn't say how much more. Standard Life's adviser site, meanwhile, says an annuity is unlikely to suit a client who wants savings kept invested for growth, which is what staging asks of them for 15 years. I can find no published estimate of what a UK annuity ladder would actually have returned.

But one argument for staging survives. Insurers price on life expectancy, so a condition that shortens it lifts the rate, and a later purchase may qualify where an earlier one did not. Which? found a 65-year-old in relatively poor health quoted six% above the standard rate by Legal and General and 15% by Aviva. Nobody can plan around that, but it is real.

So the order matters. Collect quotes first: in January 2026 the gap between the best and worst provider was £549 a year, and it is the one gap in this decision you can close. Then decide whether a fifth less income at 65 is worth paying to spread a risk nobody can forecast.

Staging is insurance. Sold as anything else, it is a poor deal.

Retirement planning and making the most of pension pots is firmly under the spotlight with more people facing a shortfall when trying to achieve a comfortable retirement.

The government’s Pension Commission warned in a recent report around 15 million people aren’t putting enough away for later life, particularly low and middle-earners, the self‑employed and women.

Meanwhile 45% of working-age adults, around 18 million people, are not saving into a pension at all despite nearly half of them being in work, the report found.

Greater numbers of people are forecast to be renting into retirement as well, according to recent research by retirement firm Standard Life, increasing the financial burden on pensioners.

All the while, the cost of the triple lock is coming under strain and the state pension may not be as generous in the future.

Given the context, your pension savings should be working as hard as possible. Experts say, though, for a lot of people, they're not and basic errors are costing savers potentially tens of thousands of pounds.

Steve Webb, partner at pension consultants LCP, Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown, and Daniela Silcock, director of Daniela Silcock Pensions Research, shared six pension mistakes you should be avoiding.

Not keeping paperwork

An estimated £31 billion is sitting in lost pension pots, according to the Pension Tracing Service. If you have a pension you have forgotten about, then some of this money could be yours.

Losing tracking of a pension pot can be easily done if you've misplaced paperwork containing contact details for pension providers and policy numbers.

These types of details will usually be on annual account statements or sometimes welcome packs or joiner letters from your pension provider.

Webb said: “I have lost count of the number of people who have contacted me asking for help tracking down a lost pension from a previous job.

“Those who have kept paperwork have a far better chance of success, enabling us to work out where the pension money is now held.”

If you’ve looked thoroughly and can’t find key pension paperwork anywhere, there are other ways to track down policy numbers and contact details for providers.

If you’re looking for an old workplace pension pot, you can try getting in touch with a previous employer through Companies House. Failing this, you could contact the free-to-use Pension Tracing Service.

Not making the most of employer matching

Under auto-enrolment rules, workers earning more than £10,000 a year are automatically put into an occupational pension scheme by their employer.

Under the rules, you contribute a minimum of 5% of your monthly salary to the pension and your employer adds 3% on top.

However, you can contribute more to a workplace pension if you want and some employers will ‘match’ this amount.

For example, you could pay 8% a month and your bosses would add 8%. If you have the budget, then matching is worth considering as it could give you a significant boost to your pension savings with extra free cash from your employer.

Research by Standard Life found someone starting working at 22 on a salary of £25,000 increasing monthly contributions into a workplace pension by just 1% could add £26,000 to their pension pot.

Webb said: “[It] is an incredibly efficient way of rapidly building up a pension pot, as every extra contribution is effectively doubled overnight.”

Not claiming tax relief on pensions

Pension tax relief is a tax break offered by the government to encourage people to save for retirement.

It is applied at your marginal tax rate, for example a basic-rate taxpayer would receive 20% tax relief and a higher-rate taxpayer 40%.

All basic-rate taxpayers receive pension tax relief automatically, however, if you are in a ‘relief at source’ pension scheme, you will need to proactively claim tax relief if you are a higher or additional-rate taxpayer.

Roughly 800,000 people failed to claim higher rate pension tax relief worth over £1 billion in 2023/24, according to a Freedom of Information request submitted by Webb.

He said so many people were missing out simply because they “will not realise that there are two different ways in which pension tax relief can be delivered”.

“This may be news to many people…but it matters hugely – if you pay £80 into a pension you get £20 basic rate relief making a gross contribution of £100 into your pension. But having made a gross contribution of £100 you are entitled to £40 relief if you are a higher rate taxpayer, not £20, and £45 if you are an additional rate taxpayer.

“You only get this if you claim it. The missing amount is £20 per £80 that you have paid in, which could amount to thousands of pounds for some people.”

You can claim tax relief either through your tax self-assessment tax return or via gov.uk.

Transferring a defined benefit pension into a defined contribution pension

A defined benefit (DB) pension, sometimes called a final salary pension, typically pays out a certain amount based on your salary and how long you’ve been part of a pension scheme.

Defined contribution (DC) pensions pay out a certain amount depending on how much you and potentially an employer have put into them, as well as how your investments have done.

You can transfer a DB pension into a DC pension, however Silcock explained once you’ve done this, the guaranteed benefits that come with it are permanently given up.

“A DB pension provides an income for life with protection against inflation. It may also provide an income for a partner or other dependent after the member dies.

“After a transfer [to a DC pension]…poor returns or high withdrawals could mean that the money runs out.”

That said, there can be advantages to transferring to a DC pension, including that you get more flexibility in choosing how your pot is invested.

You can also withdraw all the money from a DC pension in one go, which could work out more cost-effective than a DB pension if you don’t have long to live or you need the money to cover medical expenses if you have a terminal illness.

In addition, while most DB pensions will continue to pay a portion of your pension income to any of your dependents after you die, DC pensions can typically be left to a wider set of people, giving you more choice in who inherits your pension funds.

Adding too little into your pot and for not long enough

Not putting enough into a pension throughout your life, and starting too late, will reduce the size of your retirement pot.

Silcock pointed out that some people don’t contribute to pensions because they’re taking on caring responsibilities or simply because they can’t afford it, however others delay saving simply because “retirement feels a long way off”.

“People are likely to get more from their pension if they start contributing when they are young and continue throughout their working life,” Silcock said.

She gave the example of someone’s pension growing at 5% a year, with £1,000 contributed at age 20. This would be worth around £7,040 by the time the person turned 60.

This same amount added to a pension at age 50 would be worth just £1,630 – £5,410 less.

Silcock said for someone who doesn’t have the budget to start saving into a pension, it’s worth exploring if a partner can make contributions on their behalf.

Assuming you will get a full state pension

The full new state pension is worth £241.30 a week and can form the bedrock of your retirement pot, but not everyone will get that amount. Anyone planning for retirement should take time to look at how much state pension they will get.

To receive the full amount, you need 35 years’ National Insurance (NI) contributions, however you may be missing years, for example if you’ve had to leave a job to care for a child or relative.

Morrissey warned: “Don’t assume that you will receive a full state pension. If you’ve spent any time out of the workforce, you could have gaps in your National Insurance record that mean you get less.”

If you are missing years, you can top up your state pension with voluntary contributions – but before you do, consider whether it is worth topping up National Insurance contributions.

If you're young and still working, you have plenty of time to make up for the gap.

Young savers could be missing out on lower fees and higher returns by leaving money in a child trust fund (CTF) rather than transferring into a Junior ISA (JISA).

CTFs were a tax-free savings account available to children who were between 1 September 2002 and 2 January 2011. These accounts were given a funding kickstart from the government with an initial deposit of £250. The idea was to build a savings habit for children early on, letting the accounts earn savings interest or invest in the stock market before they could access the funds at age 18.

CTFs were replaced by Junior ISAs in November 2011, pushing responsibility onto parents to set up their own savings for their children. This also made CTFS ‘zombie’ accounts as providers shifted their focus onto Junior ISA.

But millions of savers still hold CTFs. The oldest children on the scheme turned 18 in September 2020 and around three million accounts have matured since then.

Of these around 2,285,000 were claimed or automatically transferred to an ISA as of April 2025, while 758,000 CTFs have not been claimed.

Experts warn that those who still have money left in both ongoing and matured CTFs could be better off with a Junior ISA where there are wider range of fund options for investments and better rates for those who kept their money in interest accounts. Even the fees attached to investment accounts can be lower.

What's the difference between a Child Trust Fund and a Junior ISA?

Both CTFs and a Junior ISA aim to encourage people to start saving with tax-free cash and stocks and shares versions.

You can’t open a CTF anymore but they were offered by banks, building societies and asset managers. If you are a parent of a child who was eligible for a CTF but did nothing with the money, the government will have put it into a default account for you which you will have to track down – there is currently £1.6 billion sitting in unclaimed CTFs.

Similarly, Junior ISA are offered by banks and you can open a stocks and shares version with investment platforms such as Hargreaves Lansdown and AJ Bell.

The annual contribution limit of £9,000 is the same and both offer the same tax advantages with no UK income or capital gains tax to pay on any returns.

There are differences when it comes to account administration. Most Junior ISAs can be opened and managed online, while there may be CTFs where you can only make changes and find out details via the post or over the phone.

Since CTFs are no longer available, providers will also be putting greater resources into Junior ISAs, meaning the fund options for investment are also going to be bigger.

For both accounts, the money is locked away until the child turns 18, at which point they become the legal owner of those assets.

While Junior ISA become adult ISAs at maturity, CTFs don’t change and the money can just stagnate until action is taken, which is another reason to consider moving your money.

Other differences emerge when it comes to returns and charges.

Should you move a CTF into a Junior ISA?

JISAs have more to offer than CTFs, says Alice Haine, head of personal finance for Hargreaves Lansdown.

“A child can only hold one CTF and switching between cash and investments may require a transfer to another provider.

"With a JISA, a child can hold both a cash Junior ISA and stocks and shares one simultaneously, with the savings limit split between the two as desired. So there can be benefits to transferring across.”

Money left in a cash CTF could be getting a poor return compared with JISAs as banks and building societies have little incentive to offer decent rates, plus the rate tends to drop after maturity.

High inflation could also mean the lower returns in a CTF mean you are losing money in real terms.

How do the returns on a Junior ISA compare with a CTF?

Product choice is wider when it comes to choosing a cash Junior ISA and returns can be slightly higher.

For example, savers in Yorkshire Building Society’s now-closed CTF are getting a rate of 3.65%, which drops to 2.35% at maturity.

An average CTF pot of £2,200 would earn £80 of interest in a year or £51.70 if it had already matured.

In contrast, Leek Building Society has a top cash JISA rate of 3.85%.

The typical £2,200 CTF pot would earn a little more interest at £84.70 in a cash Junior ISA in a year or around £30 more under a matured interest rate.

A bigger difference emerges if you are investing. This is where charges can hit your CTF returns harder compared with stocks and shares Junior ISA.

While cash CTFs don’t have charges, millions of investment accounts were opened on behalf of parents by HMRC as default stakeholder options - typically backing tracker funds - that had fees capped at 1.5% per year.

Charges can be lower for a Junior ISA plus there are typically wider investment options beyond UK trackers that were offered by CTFs.

A 1.5% fee is expensive for what's typically a basic UK tracker fund, says Antonia Medlicott, founder of Investing Insiders. “Over 15 years, the average fund in the Investment Association's global sector grew by around 240%, while stakeholder CTF returns tracked closer to the far more modest bond and mixed-investment sector averages.

“That's two decades of compounding working against these children rather than for them.”

A modern Junior ISA can cost as little as 0.15% to 0.35% depending on the investment platform before underlying fund charges.

”This isn't a marginal saving, it's the difference between a fund that's barely kept pace with inflation and one that's actually done its job.”

How to transfer a CTF to a Junior ISA

Once you find the best Junior ISA to transfer the funds to, you will need to complete a transfer form with the new provider.

The transfer can only be completed by the registered contact, usually the parent or the child once they turn 18.

You will need to provide details such as your child’s Unique Reference Number, which you’ll find this on your annual CTF statement as well as the details of the account type and the provider. If you have lost the details, you can use HMRC’s CTF finder at gov.uk.

A transfer can take between two to six weeks and some platforms may even pay cashback for moving money across. Not all providers let you transfer a CTF into a Junior ISA.

You cannot hold both, so the CTF must be transferred in full and closed. This means that before moving, parents should compare charges, investment choice, performance and any valuable existing features.

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

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

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

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

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

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

Why should the government remove the triple lock?

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

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

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

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

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

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

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

He made no comment about replacing the triple lock.

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

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

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

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

Triple lock under pressure

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

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

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

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

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

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

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

For people retiring within the next 15 years who have not saved enough for their retirement – or even those who just want to protect and grow the pension pot they have – now is the time to confront the numbers.

More than half of UK adults (56%) say they feel hopeful or excited about retirement, according to new research from PensionBee from a survey of 1,000 UK adults in August 2026.

Yet this emotional optimism is rarely matched by financial certainty. Just 16% have both worked out how much they will need and feel confident they’re on track to reach their retirement goals. More than a third (38%) have no idea how much their desired retirement will cost.

Fifteen years might not feel like a long time when it comes to retirement planning, but it is certainly not too late to make a meaningful difference, Lily Megson-Harvey, policy director at My Pension Expert, said.

“The worst thing people can do is bury their heads in the sand because they are worried they have fallen behind.”

15 years from retirement? The first steps

To retire by 2041 with your finances in the best shape, the first step is to get a clear picture of where you stand. That means finding out what you have saved across all your pensions and ISAs, what income you might realistically need in retirement, and whether there is a gap between the two.

“From there, you can look at what is within your control, whether that means increasing contributions where affordable, making the most of employer pension contributions or reviewing when you plan to retire,” said Megson-Harvey.

1. Prioritise pension saving

Pension saving should still be the primary vehicle for retirement saving at this stage. This is because of the incredibly valuable tax relief at your marginal rate – where the government essentially tops up your contributions by 20%, 40% or 45%.

Compounded over 15 years, this additional boost can lead to substantial extra savings – with the growth inside a pension remaining free of capital gains tax and dividend tax.

2. Salary sacrifice – use it before you lose it

Those who benefit from pension salary sacrifice arrangements get the most benefit of all, with extra savings on National Insurance and often employer top-ups, Andrew King, pensions specialist at wealth management firm Evelyn Partners, said.

Salary sacrifice is set to be capped at quite a low level of £2,000 per year from April 2029, so those with access to such schemes might consider “frontloading” their workplace contributions in the next few years, potentially also directing any bonuses into the pension scheme, King pointed out.

“Not only will they get the tax benefits of salary sacrifice but those savings can still benefit from compounding effects over a period of 15 years, and more if the pot remains invested into retirement,” he added.

3. Inheritances can work harder in a pension

Increasingly, King is seeing people receive inheritances well into their fifties and sixties as parents live longer. If they’re funnelled into a pension at this critical stage, these lump sums can go a long way to securing a comfortable retirement.

“Anyone who comes into a lump sum can take advantage of the substantial annual allowance of £60,000 and even three years of carry forward to turbo-charge a pension pot,” said King.

You can’t pay more into a pension than you earn in the current tax year, though, so if that is limiting, a big lump sum could be drip-fed into a pot over a number of years.

Investment strategies to consider if you’re 15 years from retirement

Investment choices are a growing concern of pension holders in the private sector as the vast majority are now saving into defined contribution workplace schemes – where the saver bears all the investment risk.

“Many people automatically think they should reduce investment risk as retirement approaches. While that can feel more comfortable, 15 years is still a long enough period for a significant allocation to shares and other growth assets,” said Lisa Caplan, director of Charles Stanley direct advice and guidance.

Growth remains important because inflation steadily reduces spending power over time. A pound today will not buy the same amount in 15 years' time; the Bank of England inflation calculator shows £1 of goods and services in 2011 costs £1.52 today as inflation has compounded at an average of 2.8% since then.

With one eye on growing your pot and the other on protecting it, an investment approach that can work well is the ‘three bucket’ strategy, said Caplan.

1. The first bucket contains long-term investments that are intended to remain invested for many years and focus primarily on growth.
2. The second bucket holds investments that aim to provide a mix of income and modest growth. This can act as a bridge between your long-term investments and your spending needs.
3. The third bucket holds cash and cash-like investments that can be used to fund withdrawals to cover your regular spending.

“The biggest mistake I see is becoming too cautious too early,” Caplan said. “With 15 years to go, investors still have time to recover from market setbacks and benefit from long-term growth.”

Another common pitfall is reacting emotionally to market falls. “Investors often move into cash after markets decline but then struggle to decide when to invest again. As a result, they miss part of the recovery and risk seeing their money lose value in real terms because of inflation,” Caplan said.

15 years from retirement – fund and investment trust ideas

With a 15 year time horizon, equities and bonds will still form the basis of most savers’ portfolios. But those in workplace pensions should check they are in an appropriate fund.

For instance, “lifestyling funds” will gradually switch you almost entirely into lower-risk bonds from age 50 or 55 – which can be far too soon, and cause investors to miss out on substantial gains.

Rob Morgan, chief investment analyst at Charles Stanley Direct, said for those happy to maintain an adventurous approach, a good-sized proportion of global equity exposure “makes sense”.

His top picks are:

1. JOHCM Global Opportunities fund

This offers a balanced share portfolio focused on durable businesses with strong balance sheets and consistent cash generation, he said, “which makes it worth considering as a core holding”, said Morgan.

“It can work on its own for those leaning towards being a bit more conservative, or alongside a passive strategy such as a global tracker fund or ETF such as Fidelity Index World or iShares Core MSCI World UCITS ETF,” he added.

2. RIT Capital Partners investment trust

With this investment horizon, Morgan also said it’s worth considering a multi asset approach that spreads risk across various asset classes. “RIT Capital Partners investment trust offers a ‘one stop shop’ across a wide spectrum of assets including selected shares and specialist externally managed funds,” he said.

Troy Trojan fund

For those wanting to keep things more conservative, Troy Trojan fund takes a flexible approach to preserving the real value of wealth against the ravages of inflation, said Morgan.

“This involves blending solid and reliable global companies with diversifying assets such as inflation-linked bonds and gold. The strategy is also available in Personal Assets Investment Trust for those that would prefer to buy shares rather than fund units.”

Don’t forget the power of passive

For those who want a more hands off approach, passive index investing can offer a neat solution – and one that has been endorsed by one of the most famous names in the finance world.

In 2013 Warren Buffett instructed the trustee managing his wife’s inheritance to put 90% of the cash into a low-cost S&P 500 index fund and just 10% into short-term government bonds.

The allocation decision underscores a broader investing lesson that diversification, low fees and long-term market exposure can matter more for building and preserving wealth than complicated portfolios or attempts to repeatedly beat the market.

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

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

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

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

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

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

What is the NatWest Premier account?

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

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

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

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

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

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

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

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

Who is eligible for the NatWest £500 welcome bonus?

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

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

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

Should you switch to NatWest Premier?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Is Santander’s switching deal worth it?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: NS&I

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

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

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

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

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

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

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

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

Does a fresh lick of paint in the kitchen increase the value of the house? Or a heated towel rail in the bathroom? Or an attractive water feature at the back of the garden?

We learned this week that the government is planning to appoint teams of inspectors to visit people's homes, and decide whether the owner has to pay the new “mansion tax”.

An extra levy will be imposed on homes worth more than £2 million, on a sliding scale going up to beyond £5 million.

It is meant to come into force in April 2028, but it is already proving a lot trickier than ministers seem to have realised.

Earlier this year, HMRC said it was hiring hundreds of inspectors to help with the valuation of everyone's home.

They will all have powers to enter a property to assess what it might be worth.

We can see what the authorities are getting at. If you simply rely on previous sale prices, it takes no account of how a house might have been improved, and lots of homes may well slip through the net.

There is a catch, however. It illustrates that while a mansion tax might appeal to the class warriors on the Labour backbenches, it is going to be very difficult to implement in practice.

There are three big problems. Firstly, going through a large house and trying to figure out how much each “improvement” or “feature” has added to its value is a huge task, and one that will take several years, at a minimum, of training before the “value police” are ready to start work.

It is a huge undertaking, from a state machine that can't build a new railway, or reservoir, or any extra houses. It is hard to believe it is all actually going to happen, and even if it does there will be years of delays as there is with every other government project.

A mansion tax could create a legal quagmire

Next, many of the valuations, quite rightly, will be taken to court.

The Office for Budget Responsibility (OBR) gave us a glimpse into the legal train wreck heading towards us earlier this year with a forecast that 20% of valuations would be challenged in court and that 40% of the legal cases would be successful.

The courts are going to be clogged up for years deciding how much individual homes are worth, creating huge backlogs and crowding out time that should be spent on far more serious issues.

Even worse, the top end of the British housing market is now in freefall, in part because of the looming mansion tax.

In Westminster, prices are down by 25%; in Kensington and Chelsea, 15%. Those falls are starting to ripple out into other boroughs and into the leafy commuter suburbs as well.

With those kinds of price declines, homes are going to drop below the £2 million threshold in huge numbers. The inspectors will have to change valuations constantly, and some owners are going to be heading back to court every year to try and get the tax removed.

Finally, the tax will only raise tiny sums anyway. The OBR has already downgraded its forecasts for the amount of revenue it will raise from £400 million in its first year, rising to £435 million by 2030-2031.

But it also warned that revenue would fall by £370 million before April 2028 because of reduced stamp duty, capital gains tax and inheritance tax receipts as households sold or downsized.

In other words, once all the costs are taken into account, the mansion tax may not end up raising any money at all.

All those expensive inspectors, with generous holiday allowances and gold-plated public-sector pensions that will stay on the government's books forever, will have been employed for absolutely nothing.

Those are just the practical details. The government still needs to deal with the moral issues.

What will it do about elderly homeowners, for example, who might not be able to sell a big house, but also can't afford to pay the extra tax on it?

Will it be able to face down the inevitable political backlash?

And given that the top 10% of earners already pay 60% of all the income tax collected in Britain, how can it justify yet more taxes on people who are already paying for most of what the state does?

And if the tax does cost more to implement than it raises in revenues, as it almost certainly will, how can it justify the drain on public finances at a time when the deficit is already soaring out of control?

The tax has not come into force yet. But it is already turning into a disaster.

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.

What's the current situation with adult social care?

A few years ago a parliamentary committee memorably summed up the adult social care system in England as “unfair, confusing, demeaning and frightening” – and that remains a good summary.

A central problem is the “care lottery” involved in a complicated patchwork of funding rules, means-testing, local-authority decisions and private providers – with families taking up the slack.

Whereas a patient with cancer receives free state-funded treatment on the NHS, someone with dementia must fund long-term care costs themselves if they have assets worth more than £23,250 – so even modestly wealthy individuals can be forced to sell their homes to fund residential-care costs, which can easily top £100,000, or indeed multiples of that for the most unfortunate.

Addressing that unfairness in a way that's acceptable to taxpayers, those requiring care and those eager to protect hard-gained assets is a problem that has so far proved unsolvable.

What about quality of adult social care?

The squeeze on funding for local authorities, which provide social care, has led to a “fragile and fragmented market of providers”, says the Financial Times– leading to even lower pay levels, problems in recruiting and retaining staff and huge variations in quality.

As the population ages, demand is growing – at present only 42% of requests for help can be met. But it's not just about age: half of council care budgets go toward care for working-age adults, whose care needs can last much longer.

Overall, two million people have unmet care needs because they can't afford help, while more than 30,000 died last year while waiting for a social-care package, such as residential care, to be provided.

Under this badly functioning system, unpaid family carers absorb enormous personal costs, while delayed discharges owing to gaps in social care account for almost one in ten hospital beds, adding costs and stress onto the NHS.

What has Andy Burnham announced?

Andy Burnham has reconfirmed Labour's pledge to reform and rebuild adult social care in England via the creation of a National Care Service.

So far, though, that is very much an aspiration, with no fixed plan on how to achieve it – nor a clear picture of what that service will look like.

Burnham has also begun cross-party talks, and last month launched a “big conversation” with the public to get buy-in for whatever funding model is ultimately proposed.

And he has asked Louise Casey, a cross-bench peer, to bring forward delivery of her Independent Commission, begun under Starmer, to the summer of 2027.

Haven't we been here before?

Many times. Ominously, even Andy Burnham himself has been here before. As health secretary in 2009, Burnham floated a national-care scheme to revitalise and fund social care in England.

The Conservatives promptly branded the funding model – a levy on estates – a “death tax”, a label that stuck. But even so, Labour went into the 2010 election with a very familiar sounding policy – the creation of a National Care Service implemented in phased stages.

Under the Conservatives, a series of white papers were promised, but successive PMs failed to take action, with Theresa May's attempt at the 2017 election backfiring spectacularly with voters.

Labour accused her of planning a “dementia tax”; in fact she'd proposed a rather promising state-sponsored equity-release scheme that protected assets up to £100,000.

What are the funding options?

The phrase “National Care Service” suggests a universal NHS-style service free at the point of use and paid for out of general taxation. But the Health Foundation estimates the costs at £18.5 billion a year – and the UK's delicate fiscal position, demographics and low-growth economy make such a scenario highly unlikely.

More money will be needed, either via some form of hypothecated tax, or some form of compulsory social insurance that caps liabilities and pools risks – a model that works well in Germany and Japan. Here, civil servants have produced a model where workers over 34 pay an extra 1.8% income tax (above a £6,240) threshold to fund a national Later Life Care Fund.

Separately, Burnham has mooted scrapping inheritance tax and introducing a 10% levy on all estates, not just the largest 5% or so. Such a system would be simple and potentially raise large sums, but it's a tough sell politically and open to the “death tax” accusation.

So what's the solution?

Britain can't afford a “blank cheque” National Care Service that pours resources into a “taxpayer money hole”, says Eamonn Butler on CapX. But it urgently needs a “targeted safety net against genuine catastrophe”.

The first stage of any resolution will surely draw on the 2011 Dilnot report, says the FT: impose a lifetime cap on individuals' contribution to care costs and raise the assets threshold for making them pay. Such a cap would remove the threat of crushing expense that would overwhelm all but the very wealthy. And it would “create an insurable risk against which consumers could take out private insurance, avoiding having to sell their homes in their lifetime”.

The second plank, says Bloomberg, should be to “make more private provision workable”, for example by more stringent regulation that facilitates transparency and comparability, and by ensuring no one is penalised insuring themselves. “New financial instruments – from auto-enrolment pensions with a social-care component to annuities attached to home equity – could play a role if carefully regulated.”

In terms of funding, there “will be fights over thresholds, taxes and who gets what. So be it. The option Burnham can't afford is the one governments have been choosing for decades: pretending the bill disappears if nobody opens it.”

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.

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

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

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

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

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

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

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

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

Source: Quilter

How does dividend tax work?

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

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

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

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

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

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

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

How to protect your dividends from the taxman

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

Use a stocks and shares ISA

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

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

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

Do a ‘Bed and ISA’

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

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

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

Transferring assets between spouses

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

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

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

Consider alternative investments

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

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

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

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

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

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

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

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

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

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

Is renting in retirement on the rise?

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

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

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

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

The true cost of renting in retirement where you are

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

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

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

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

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

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

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

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

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

Should you rent in retirement?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When will I receive the top-up?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do the savings accounts work?

Fixed rate cash ISAs

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

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

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

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

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

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

Fixed rate bonds

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

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

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

Are the boosted savings accounts worth it?

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

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

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

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

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

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

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

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

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

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

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

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

How families could be hit

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

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

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

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

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

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

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

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

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

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

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

Source: NFU Mutual

How to lower the impact from a potential triple tax blow

Gifting

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

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

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

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

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

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

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

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

Take your 25% tax-free lump sum earlier

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

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

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

Consider an annuity

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

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

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

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

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

Having sufficient savings is an important step towards financial independence.

To ensure your nest egg is working hard for you, it’s a good idea to understand tax-free allowances, how inflation affects your finances, and the rules around how different savings accounts operate.

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• What is an ISA? How they work and what you need to know

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

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

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

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

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

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

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

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

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

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

The risks of a pay rise

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

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

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

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

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

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

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

How to cut your income tax bill

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

The first recommendation is to increase pension contributions.

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

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

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

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

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

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

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

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

Almost one in 10 people in the UK own cryptoassets, but HMRC suspects tens of thousands are failing to pay tax on them properly.

According to the Financial Conduct Authority (FCA), 8% of UK adults held cryptoassets in 2025, up from 4% in 2021.

However, there’s concern some crypto investors don’t understand the tax implications of receiving, holding and selling these assets.

HMRC sent out 81,000 warning letters to crypto investors it suspected of underpaying tax in 2025/26, according to a Freedom of Information (FOI) request by accountancy firm UHY Hacker Young, up from 65,000 in 2024/25 and 27,700 in 2023/24.

Neela Chauhan, a partner at the firm, said: “A lot of the traders are young, have had little previous exposure to HMRC and often work under the assumption that HMRC has limited visibility over their activities.”

Recent FCA research found UK-based crypto investors tend to be younger, with 15% of 18 to 34-year-olds owning cryptoassets versus 9% of 35 to 54-year-olds.

Chauhan added: “The tax treatment of cryptocurrency in the UK is complex, and many individuals do not fully understand their reporting obligations or recognise when transactions give rise to taxable income or gains that must be disclosed to HMRC.

“Crypto investors often forget that you may still have made a taxable gain even when you are swapping one cryptocurrency for another and might not be aware that the income you can earn by lending cryptocurrencies is taxable.”

When you might owe capital gains tax cryptoassets

You may be taxed when you dispose of cryptoassets for gain or profit, as is the case with other assets like stocks or shares.

Disposing of a cryptoasset involves selling it, exchanging it for another type of cryptoasset, using it to pay for goods or services or giving it to another person, unless that person is a spouse, civil partner or you are giving it to charity.

Different types of cryptoasset, such as Bitcoin and Dogecoin, are typically treated as separate assets and gains need to be calculated on each type individually.

Everyone receives a capital gains tax (CGT) allowance of £3,000 each financial year. This means you can make up to £3,000 in capital gains without owing any CGT.

If you make more than this allowance in gains when disposing of assets, including cryptoassets, you will likely owe CGT.

Typically, the gain made is calculated by working out the difference between what you paid for the asset and what it sold for.

However, sometimes you have to use the market value to work out a gain, for example if you have cryptoassets that have been transferred between ‘connected persons’ – such as a spouse or civil partner.

How to report and pay cryptoasset capital gains

You can report gains on cryptoassets by either completing a self-assessment tax return at the end of the tax year or by using the CGT ‘real time’ service.

If you’re reporting your gain on a self-assessment return, you should complete it in pound sterling within the cryptoasset section.

You can use the real time CGT service to report assets sold in the current or previous tax year.

When working out your gain you can deduct certain allowable costs. This includes transaction fees (exchange or trading fees) and costs incurred for advertising a cryptoasset for sale.

You can also offset capital gains made from cryptoassets with capital losses, but you must report these losses to HMRC.

Meanwhile, if you’ve paid income tax on a cryptoasset, you won’t pay CGT on that amount. You may have to pay CGT when you come to dispose of that asset though.

Once you’ve reported any gains, HMRC will send you a letter or email with a payment reference number starting with ‘X’.

You use this reference when paying the tax, either through the online tax payment service or through online banking or cheque.

You have to report any gains by 31 December in the tax year after you made them, and pay by 31 January.

For example, if you made a gain in the 2025/26 tax year, you would need to report it by 31 December 2026 and pay the gain by 31 January 2027.

When you might owe income tax on a cryptoasset

You may also owe income tax on cryptoassets if you received them in a specific way.

Mining

‘Mining’ involves helping to solve difficult mathematical problems and maintaining a cryptoasset network, for which you can earn rewards.

HMRC generally treats income made from mining as trading or miscellaneous income which means it’s subject to income tax.

Staking

‘Staking’ is when you temporarily lock up your cryptoassets to keep a blockchain network running. In return, you can earn extra cryptoassets as a reward.

Like mining, you have to pay income tax on these earned cryptoassets.

Airdrops

A cryptocurrency airdrop is when someone is given free tokens, sometimes as part of a market or advertising strategy to raise awareness of a new digital currency.

You may also receive airdrops for answering a survey or helping promote a digital currency through social media.

Typically, if you received airdropped cryptoassets in return for a service, you will owe income tax.

Employment income

If you receive cryptoassets as income from an employer, they count as ‘money’s worth’ and the value of the asset will be subject to income tax.

Allowance for money earned through trading income and miscellaneous income

You receive a £1,000 allowance per year for trading income or miscellaneous income.

This can apply to income earned through mining, staking and airdropping, so income tax would only apply on income above this threshold.

UK fintech PensionBee (LSE: PBEE) has carved out a successful niche for itself, to become the UK's most recognised pension consolidator with the UK pensions sector undergoing a major transformation over the last ten years.

Following the introduction of the Auto Enrolment scheme in 2012, assets in defined-contribution (DC) schemes have exploded, and the pensions industry has rapidly had to adapt to this new norm. The DC pension market has two main segments: workplace schemes and personal or individual wrappers. The latter is dominated by the self-invested personal pension (SIPP) market and the consolidation of legacy workplace schemes. This market is worth around £600 billion and is growing.

The larger workplace-scheme segment is far bigger and more complex. The government is pushing through regulations to consolidate this market, with a goal of consolidating pots into £25 billion-plus mega funds. Although the market has consolidated significantly over the past ten years, hundreds of schemes remain, some with as few as 100 members, which can add cost and complexity.

Where PensionBee comes into the picture

Auto-enrolment is widely recognised as one of the most successful pension reforms worldwide. Under the current rules, an employer must enrol an employee in a pension scheme if they are a UK resident, work in the UK, are aged over 22 and earn more than £10,000. The minimum contribution is 8% of salary, 5% from employees and 3% from the employer.

Employers can pick one of two approaches: either a contract-based approach, or a trust-based scheme. Under a contract-based scheme, individual contracts are agreed between the scheme member (the company) and the pension provider, usually an insurance company or investment platform. With a trust scheme, the company agrees a relationship with a large pension master trust, such as Nest or the People's Pension.

Auto-enrolment has greatly reduced the burden on employers of setting up pensions for employees. It also helps employees save for the future, as they are, as the name suggests, auto-enrolled in the scheme and contributions scale up with wage growth. But people do switch jobs regularly throughout their career and due to the fragmented nature of the industry, there's no guarantee your next employer will be able to offer access to the same scheme as you had previously.

How PensionBee consolidates retirement pots

PensionBee markets itself primarily as a pension-consolidation platform, but it also provides private-pension schemes, such as those for the self-employed. It does not manage the underlying investments itself, but takes a platform fee and partners with institutional giants such as BlackRock, State Street and HSBC to provide a range of low-cost funds.

PensionBee's real edge is its technology platform. Pension transfers and consolidation can be costly and time-consuming. PensionBee aims to complete electronic transfers within two weeks, although more complex transactions can take longer. The company's focus on technology, marketing and simplicity has really resonated with consumers. It estimates it generates around £100 of net asset inflows for every £1 it spends on marketing. It has a 57% brand-awareness score among consumers, one of the highest among pension brands, and customer retention of 95%.

The last time I covered the company in early 2022, it had just reported £5.8 billion in assets under management. According to its latest half-year results, that figure has grown to £8.6 billion of assets under administration across 327,000 invested customers.

With exposure in both the UK and US, the firm operates across markets representing more than $30 trillion in retirement assets. Currently, the US market is still tiny, with less than $5 million of assets under management. However, the company is in talks with more than 100 intermediaries and has an estimated $1 billion in potential recurring annual inflows over the medium term from this business line. This growth should be relatively inexpensive as it has already spent heavily on the technology it needs. As a result, most of its day-to-day spending is now on marketing, plus select technological improvements. PensionBee should be able to scale quickly and efficiently.

Profitability is in sight for PensionBee

In the first half of its 2026 financial year, the firm reported group adjusted Ebitda of -£1.1 million. The UK market alone generated adjusted Ebitda at £1.5m million in the first half or £7.5 million over the last 12 months.

According to estimates compiled by analysts at Peel Hunt, the company is expected to report adjusted Ebitda of £0.5 million for the full year across all markets. Analysts believe PensionBee will achieve sustainable profitability from 2027 onwards and reach management's 20% adjusted Ebitda margin by 2029.

PensionBee is still a small-scale business in a large market with much bigger and deeper-pocketed competitors. However, the opportunity should not be understated. Peel Hunt believes the firm will report £1.5 million of adjusted Ebitda by 2027 and then £8.08 million by 2028, as the group finally reaches an inflexion point in its growth. Sales are expected to rise from £43 million for 2025 to £83 million by 2028, according to Berenberg, as assets under management rise to near £13 billion. Canaccord Genuity has similar figures.

If the company hits these targets, it could achieve a return on invested capital of 34.5% by 2028. If there's one number that illustrates just how profitable PensionBee could be at scale, it's this. The next few years could transform its fortunes.

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.

Millions of people rely on the state pension but the cost is ballooning – and it’s only set to surge further.

The full new state pension has risen in value by 55% over the last 10 years alone and is forecast to have cost the government £146 billion in 2025/26.

The Office for Budget Responsibility (OBR) projects it will cost 9% of GDP by 2075/76, up from 5% now, putting the rise down to an ageing population and the cost of the triple lock – the policy which means the state pension rises annually by the highest figure out of inflation, wages and 2.5%.

The UK’s ageing population and falling birth rate are compounding the strain on taxpayers, as pensioners will likely live for longer but there will be fewer workers to pay taxes.

There were 585,396 births in England and Wales in 2025, according to the latest available data from the Office for National Statistics (ONS), down from 594,677 in 2024 and the lowest number since 1977 (569,259).

Meanwhile, life expectancies across the UK are on the up. Over 19% of girls and 12% of boys born in 2024 can expect to live to 100, according to the ONS. By 2049, this is forecast to rise to 26% for girls and 18% for boys.

Source: ONS

These factors are forecast to push up the cost of the state pension to ever greater heights.

Heidi Karjalainen, senior research economist at the Institute for Fiscal Studies (IFS), said an ageing population will also seep into health spending, “creating greater overall pressure on public finances”.

What could the UK state pension look like in the future?

These surging costs could prompt the government into ditching the triple lock and/or raising the state pension age higher than currently planned.

The state pension age will rise to 68 by 2048, but in an April 2026 report, the IFS said there was a “good case for legislating for further increases in the state pension age beyond 68, as part of the response to rising life expectancy and the resulting public finance pressures”.

Considering the growing cost of the state pension, swathes of think tanks have called on the government to ditch the triple lock policy.

How think tanks like the Intergenerational Foundation, IFS and Tony Blair Institute for Global Change (TBI) think the rising cost of the state pension should be combatted varies, but all three agree it needs to put less pressure on the public purse.

However, for now at least, the triple lock is here to stay. Prime minister Andy Burnham has pledged to honour the Labour manifesto pledge and retain the policy.

What happens to the mechanism afterwards is less clear. But despite fears it might not be as plentiful in the future, some Brits seem undeterred.

A recent survey by investment platform Hargreaves Lansdown found that one in 10 people expect to be totally dependent on the state pension in retirement, while two thirds said they will rely on it “to some extent”.

How much do you need for a comfortable retirement?

Trade body Pensions UK’s Retirement Living Standards give an indication of how much money you need each year for a certain standard of living in retirement.

The standards are updated each year and based on someone owning their home, and after tax deductions.

To meet a ‘moderate’ standard of living, a single person household currently needs £32,700 a year. This rises to £45,400 a year for a ‘comfortable’ lifestyle.

The amount needed for a ‘minimum’ standard of living in retirement is £13,900 for a single person.

Calculations from wealth management firm Quilter estimate you would need an overall pension pot of £691,000 to match Pension UK’s comfortable standard of living. To meet the moderate level, you would need a total pot of £413,000.

Quilter’s calculations are based on someone receiving a full new state pension (£12,548 per year) and using their pot to buy an annuity paying 6.1%.

Someone who started saving into a pension at 25 would need to contribute £270 a month to reach the £691,000 figure by age 66, assuming growth of 6% and after fees.

That same person would need to contribute £162 a month to reach the £413,000 figure by age 66, assuming the same growth and after fees.

But what about if your state pension was reduced?

Assuming someone received a new state pension of £3,583 a year (based on 10 National Insurance years), the size of the pension pot needed for a comfortable standard of living rises to £838,000.

To meet the moderate level, the size of the pot needed rises to £560,000.

Someone who started saving into a pension at 25 would need to contribute £328 a month to reach the £838,000 figure by age 66, assuming growth of 6% and after fees.

For the moderate standard of living, that same person would need to contribute £219 a month to reach the £560,000 figure by age 66, assuming the same growth and after fees.

Source: Quilter, based on a single person household. The amount of income needed for couples is different.

Source: Quilter, based on a single person household. The amount of income needed for couples is different.

How to prepare for retirement without having to rely on the state pension

Increasing pension contributions

Contributing more to a workplace pension is a good place to start. The total minimum contribution for a UK workplace pension is 8%, made up of 3% from your employer and 5% from you, including some tax relief.

But you can contribute more and some employers will increase their contributions.

If you’re in your 30s, 40s and 50s, consolidating private or workplace pensions can make it easier to keep track of savings and save you money on fees. Be careful to check the features of the pension before you do this though.

Make sure you’re not consolidating one that comes with a guaranteed annuity rate, Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown said.

Guaranteed annuity rates pay out a guaranteed rate. They generally come from older plans and can pay out much more than more modern plans.

Morrissey added: “When looking to consolidate, check whether the [new] provider meets your needs – do they offer the investment choice you want, the educational resources or access to a helpdesk? These can prove extremely important.”

Consider building other investment pots

You can also add money into an ISA, alongside your pension, if you’re after more flexibility in how you can access your savings.

An approach like this can be beneficial for someone who is self-employed and may want to draw on money earlier due to a lack of work and a drop in income.

Morrissey said: “You can benefit from investment growth in a stocks and shares ISA and still access money if you need it – any income taken will also be tax-free. Using this alongside a pension means you still benefit from the tax relief of a pension with the flexibility of an ISA.”

Can you boost your savings?

Make sure you check how hard your savings are working too.

Recent research by savings app Spring revealed £227 billion was sitting in current accounts with over £10,000 in them earning no interest.

If you're starting saving, it's a good idea to put the money into a high-paying easy-access savings account and build up an emergency buffer, which you can use for unexpected expenses, such as a boiler breakdown or loss of a job.

Typically, you should have enough in this account to cover three to six months’ worth of essential outgoings such as your mortgage and bills.

Any spare money after this could be put into a savings account or you could invest it. Research has shown investing over the long-term tends to offer better returns than putting money into a savings account.

But remember, investing means the value of your money can go up or down at any time and there are risks attached. You should generally invest any money for at least five years to allow your investments time to ride out any dips in the market.

If you invest, make sure money held in a general investment account or stocks and shares ISA is actually invested, with not too much held in cash or money market funds.

Claire Trott, head of advice at wealth management firm St. James’s Place said: “Allowing it [money] just to sit in cash or cash-like funds can feel safe but they will have their buying power eroded over time by the increase in the cost of living and inflation.”

Suddenly, it seems, a member of the Tata family – Noel Tata – is back in the driving seat of the gigantic “salt to software” group, which owns Jaguar Land Rover, Air India and Tata Steel, and is India's largest private-sector employer. And not everyone is happy.

Tata Group, India's largest conglomerate has been consumed by boardroom drama for months. Now, though, matters have come to a head, says The Economist. Natarajan Chandrasekaran – chair of the $280 billion group's holding company Tata Sons – has announced he will step down after his term ends next February.

“This is very much the beginning of the Noel Tata era,” one investor told the Financial Times, and it began with a rout. Shares in Tata's listed companies – including its cash-cow IT outsourcer Tata Consultancy Services – dived as investors worried about what lies ahead.

Noel Tata, a half-brother of the group's legendary leader Ratan Tata, who died in 2024, is commonly described as lacking “the stature” of his sibling. Nonetheless, on Ratan's death, he acquired a key role in the 158-year-old conglomerate's firmament when he took over as chair of Tata Trusts – a collection of charitable trusts that majority-own the holding company. That set him on a collision course with Chandrasekaran.

The main cause of the boardroom feud that came to dominate business gossip in the country was over whether to list the Tata holding company – as demanded by India's central bank, which had classified it as “one of the country's largest shadow banks” in 2022, and was pushing for greater transparency.

Noel Tata was set against the move, arguing that staying private meant more freedom to make “long-term strategic bets” and conserve the company's “founding ethos and desire to serve India”.

His critics say his real motive was “to exert more control” so he could set up the eventual succession of the rising generation of Tatas – his 33-year-old son, Neville, and daughters Leah and Maya – before he exits the stage on his 70th birthday in November.

People close to the family dispute these alleged manoeuvres. Certainly, Noel Tata hardly comes across as an aggressively Machiavellian operator, says The Indian Express. Known for “his quiet demeanour, discretion and aversion to public attention”, he has “built his reputation not through flamboyance but steady performance” – making a successful fist of building Trent, the conglomerate's retail arm, and later serving as a director at its aircon arm Voltas and the Tata Investment Corporation.

Will Noel Tata win Tata Group's succession drama?

Some Indians of a more nationalist bent are wary of Noel Tata's international credentials. Although born in Mumbai, his mother Simone Tata hailed from Switzerland and he himself holds Irish citizenship – via his marriage to Aloo Mistry, a member of another prominent Indian business dynasty whose mother, Patsy, was born in Dublin. He also spent much of his early life abroad, including in Britain and France.

Still, after decades of being overlooked for the conglomerate's top jobs, some argue Noel Tata deserves his chance to steer the tanker. He lost out in 2011 when his brother-in-law, Cyrus Mistry, was announced as Ratan Tata's successor – and then again in 2016 “when Mistry was dramatically ousted from the chairmanship” and Chandrasekaran (the first real outsider to lead the group) was installed, says The Indian Express.

But the price paid for this, says Reuters Breakingviews, is yet more turmoil in a conglomerate renowned for its “abysmal record on managing succession” – at a critical time for many of its companies.

It's up in the air whether Noel Tata's family will eventually assume control; meanwhile, the group is rudderless. But “this was a long time coming”, one Mumbai-based investor told the FT. Neville Tata has been “groomed very carefully. I don't think these guys will let go of the opportunity.”

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

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

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

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

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

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

What is a plug-in solar panel?

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

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

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

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

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

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

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

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

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

It may therefore take a few years to breakeven.

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

Is a plug-in solar panel worth it?

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

But there is less capacity for energy savings.

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

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

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

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

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

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

Orientation matters as well.

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

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

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

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

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

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

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

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

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

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

Source: NS&I

NS&I boosts rates on savings accounts

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

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

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

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

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

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

Rates are increasing by between 0.09 and 0.15 percentage points.

Source: NS&I

Are the savings accounts worth it?

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

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

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

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

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

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

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

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

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

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

Tax-free allowances let you shield some of your savings and investments from the taxman.

For instance, you can put £20,000 into tax-sheltered ISAs each tax year, and you won’t have to pay tax on any interest or investment returns earned on it.

Each allowance has its own rules, and they can be difficult to keep track of – but making the most of them each tax year can mean you keep more of your money.

Isabella Galliers-Pratt, senior investment director at Rathbones, said: “Once you’ve used ISA and pension allowances, the question becomes: where does my next pound go? The right route depends on time horizon, risk tolerance and personal tax circumstances.

“It’s important to balance the understandable desire to shelter investments from tax with the risks involved. Paying tax isn’t a bad thing – it typically means your investments have performed well.”

ISA allowances

An individual savings account (ISA) is a savings or investment account where you do not have to pay tax on the interest or returns you make.

All adults in the UK can put up to £20,000 a year into ISAs. There are four types, but the main two are the cash ISA and the stocks and shares ISA.

You don’t have to pay tax on the interest you earn in a cash ISA. This differs to traditional savings accounts where the interest can be taxed if it exceeds savings allowances.

Stocks and shares ISAs also differ from General Investment Accounts (GIA) as the investments you hold in an ISA are not liable for capital gains tax or dividend taxes.

This makes ISAs incredibly useful for people who want to reduce the amount of tax they pay on their savings and investments.

While you can put up to £20,000 into ISAs each tax year, the allowance operates on a “use it or lose it” basis, meaning the moment a new tax year starts, you can no longer use the previous year’s allowance.

That’s why it’s recommended you use as much of your ISA allowance as you can each tax year. This will protect your interest or returns from the taxman.

Savings allowance

While interest earned on savings not held in an ISA is taxable, you can earn some tax-free.

For instance, you can earn a certain amount of interest tax-free via the personal savings allowance (PSA). The threshold is £1,000 of interest for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers have no PSA.

You do not have to pay any tax on income, including from savings interest, that falls within your £12,570 tax-free personal allowance.

If you have an income of less than £17,570 a year, you also get an additional tax-free savings allowance known as the starting rate for savings.

This is worth a maximum of £5,000 and you lose £1 of it for every £1 you earn above the personal allowance.

Once the interest earned goes above the threshold for your tax band, you will start to pay tax on your savings.

You can do a rough calculation of how much interest you will get in one year by taking the interest rate of your account and working out what that is as a percentage of your savings.

If this ends up being higher than your savings allowance, consider ways to reduce your tax liability – potentially by moving your savings into an ISA or using another allowance.

If you’ve used up your savings allowances, you could consider Premium Bonds, a savings vehicle run by the government-owned National Investment and Savings (NS&I).

Unlike savings accounts, Premium Bonds do not pay a set level of interest. Instead, you could potentially win tax-free prizes, worth between £25 and £1 million, in the monthly prize draws.

Each £1 you hold in Premium Bonds gives you one entry into the draw, and you can save up to £50,000 in them. As the prize draw is random, prizes are not guaranteed, but the more you have saved in them, the more likely you are to win.

Pensions allowance

Most people can put a maximum of £60,000 into their pension each year while benefitting from tax relief from the government.

This is lowered to £10,000 if you start to take your pension in multiple lump sums (a one-off lump sum of up to 25% does not count), take an annual income from your pension, or take your entire pension in one go. This is known as the Money Purchase Annual Allowance (MPAA).

The annual tax-free total includes contributions made by you, your employer, and the tax relief from the government.

You can also make use of unused allowances from the previous three tax years, meaning if you haven’t put any money into your pension for the past three years, you could put up to £240,000 into your retirement pot in a given tax year.

Galliers-Pratt at Rathbones said: “If you’ve only maximised your ISA, it’s worth taking another look at your pension. The annual allowance is £60,000, and the three-year carry forward rule allows unused allowances from previous tax years to be topped up in one go. For higher earners, the associated tax relief can be particularly valuable.”

Capital gains tax allowance

Capital gains tax (CGT) is a tax you pay on the profit you make when selling assets. In terms of investments, you may need to pay some when you sell your stocks and shares held in a General Investment Account (GIA).

All UK adults have a tax-free CGT allowance of £3,000 regardless of their tax band.

It can be difficult to predict whether the gains you realise from your investments will breach this allowance as how much your investments will grow cannot be perfectly calculated.

To be on the safe side, consider transferring your investments into an ISA to ensure they are not taxed.

One way to do this is through a process called “Bed and ISA”, where you sell investments held in a GIA and buy them back immediately inside an ISA. Most major platforms are able to do this for you, but you can do it yourself if you wish.

You may have to pay some tax when transferring the investments as you are selling them and then buying them back, but they will be shielded from any further tax once they are inside the ISA.

If your ISA allowance is already used up, there are some things you can do. You only need to pay CGT at the point of sale, meaning if you are not in a rush to get the money, you can wait until the next tax year to sell your shares when the allowance refreshes.

Galliers-Pratt said: “GIAs offer flexibility, but income and gains are taxable. Making full use of annual capital gains and dividend allowances, and carefully timing realised gains, can help keep tax bills under control.”

Dividend allowance

UK adults also get a dividend allowance that allows you to be paid up to £500 in dividends before paying tax.

Dividends above this threshold are taxed at 10.75% for basic rate taxpayers, 35.75% for higher rate payers, and 39.35% for additional rate payers.

The exception to this is if any dividend income falls within your £12,570 personal allowance, which is not taxed.

You do not pay any tax on dividends paid from investments in your ISA, meaning if you are expecting more than £500 in dividends a year it may be a good idea to prioritise holding these investments in your ISA.

Transfer money to spouse

There are certain tax benefits available if you’re married or in a civil partnership and you share your finances.

Galliers-Pratt said: “Couples can effectively double their ISA, dividend and CGT allowances. Transfers between spouses are typically tax-free, making this a simple but often overlooked planning opportunity.”

Every UK adult gets the allowances listed above – they are given to an individual, not a family or household.

That means that if you share your finances you can effectively enjoy a £40,000 ISA allowance, meaning you can protect more of your savings or investments from the taxman.

As for capital gains tax or dividend tax, you can carefully plan who holds which investments to keep money within the tax-free allowance. The same principle can be applied for cash savings.

If you or your spouse have an income below the £12,570 personal allowance and the other is a basic rate taxpayer, you can also get up to £256 worth of tax relief a year through the marriage allowance. This allows one partner to transfer £1,260 of their personal allowance to the other, which can mean the couple reduces the amount of income tax they pay overall.

IHT gifting allowance

Each tax year, the ‘annual exemption’ means an individual can give away up to £3,000 worth of gifts without them being added to the value of their estate for inheritance tax purposes.

Any unused part of this allowance can be carried forward to the next tax year, but only for one year. That means if you did not give any gifts in the previous tax year, you could give £6,000 in gifts this year.

The small gift allowance allows you to give up to £250 per person each tax year as long as you have not used another allowance on them. Birthday and Christmas gifts given from your regular income are also exempt from inheritance tax.

You also get gift allowances for weddings and civil partnerships. It is £5,000 if the recipient is your child, £2,500 if they are your grandchild or great-grandchild, and £1,000 if they are anyone else. The wedding/civil partnership allowance can be used alongside the £3,000 annual exemption.

Regular payments to another person (for example to help with the living costs), are exempt from inheritance tax as long as you can afford the payments after your own living costs, and they are paid from your regular monthly income. This can be used along with any other allowance apart from the small gift allowance.

Any gifts beyond these allowances are subject to the ‘seven year rule’. This states that assets given away are still counted as part of your estate for inheritance tax purposes, and therefore potentially taxed, unless seven years have passed.

Children's ISA allowance

If you have children, you can pay into their Junior ISA (JISA) and it will be protected from tax.

You can put a maximum of £9,000 into a JISA each year, but be aware that the money held in a Junior ISA is legally your child’s.

Consider Venture Capital Trusts (VCTs)

If you have used up all of your available allowances and still want to invest in the most tax-efficient way possible, you could consider looking into Venture Capital Trusts (VCTs) or the Enterprise Investment Scheme (EIS).

Both these schemes are designed to encourage investment into early-stage companies in the UK by offering tax relief, but they can be complicated and riskier than traditional investments so it is important to know how they work before you invest in them.

In the 2026/27 tax year, you can get 20% tax relief on investments through VCTs (down from 30% in the 2025/26 tax year) and 30% relief on investments through the EIS.

Galliers-Pratt said: “VCTs and EIS continue to attract wealthier investors seeking tax advantaged exposure to UK growth companies. Risk, time horizon and complexity vary significantly, so suitability should drive decisions.”

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

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

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

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

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

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

What are the new rates?

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

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

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

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

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

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

Source: Nationwide, 14 August

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

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

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

Source: Nationwide, 14 August

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

Are Nationwide’s new savings accounts any good?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Which water firms are increasing bills?

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

Source: Ofwat

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

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

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

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

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

How you can cut your water bill

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

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

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

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

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

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

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

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

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

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

Stamp duty land tax is another cost to factor into the equation when buying property in England or Northern Ireland.

It is applied at different rates depending on the value of the property, if the home you’re buying costs more than £125,000. That threshold rises to £300,000 for first-time buyers purchasing a home worth £500,000 or less.

The average house price in England was £292,095 as of May 2026, according to the latest data from HM Land Registry, meaning the typical mover would pay around £4,604 in stamp duty.

A first-time buyer would not have to pay any stamp duty for the same transaction.

Regional house price variation means the average amount of stamp duty is drastically different depending on where in England you are moving to, with analysis of home buyer enquiries across England in the first half of 2026 by Zoopla showing a stark North-South divide.

Around half of all first-time buyers in London, the East of England, and South East England have to pay stamp duty, compared to just 10% in the north of England as property prices in these regions eclipse those in the north.

The story is not much different for home movers. While almost all of those buying their next home in England have to pay some stamp duty, the amount they pay on average is very different.

The amount you’ll pay in the north of England will typically be between £1,500 and £2,200, while in some parts of the south, stamp duty bills can rise to almost ten times this.

Richard Donnell, executive director at Zoopla, said: “For home movers, stamp duty is a near-certain cost wherever you live – and in Southern England it runs to five figures. Six in ten property purchases are made by existing homeowners.

“When the cost of moving becomes a meaningful friction, some of those moves don't happen, especially with lower levels of house price inflation in recent years across southern England.”

The analysis did not include the data for buyers in Northern Ireland.

Average stamp duty costs by region for first-time buyers

If you’re buying your first home and it’s worth £500,000 or less, you could benefit from first-time buyers' relief. This means you’d only pay stamp duty on any portion of the property value over £300,000, at a rate of 5%.

The difference in house prices across regions means many first-time buyers in certain parts of England may not need to pay any stamp duty on their first home, or pay relatively low amounts.

Only 2.1% of first-time buyers face a stamp duty bill in the North East, Zoopla said, and for those who do, the median stamp duty bill is £3,750.

In Yorkshire and the Humber, 3.8% of first-time buyers pay stamp duty. This rises to 6.2% of first-time buyers in the North West and 9.3% in the West Midlands. The median bill in all of these locations for first-time buyers is £2,500.

As average house prices in London, the East and South East of England are much higher than elsewhere in the country, first-time buyers’ relief is less generous. In each of these regions, over 50% of first-time buyers have to pay stamp duty.

This percentage peaks in London, where around 80% of all first-time buyers pay some stamp duty.

The average stamp duty bill for a first-time buyer in the capital is £8,750, while it’s £5,000 in the South East, and £4,500 in the East of England.

Average stamp duty costs by region for home movers

Almost all home movers will have to pay stamp duty when they buy their next house – but the amount they have to pay depends on property value.

The North East region has the fewest home movers paying stamp duty, though a majority still pay it (63%). The amount paid is relatively low, though, with an average bill of £1,500.

It reflects how the North East is the cheapest region in England for house prices, as the average house costs just £163,933, according to HM Land Registry, more than £100,000 less than the average for England.

Between 82% and 92% of home movers pay stamp duty in the other northern regions, the Midlands, and the South West.

The highest average stamp duty bill among these regions is the South West, where the typical home mover will pay £5,000.

These numbers steeply rise in London, the East and South East of England. The typical home mover will pay around £10,000 in stamp duty in the East of England, £11,250 in the South East, and an eye-watering £20,000 in London.

Almost all home movers pay stamp duty in these regions too.

How stamp duty is paid

Stamp duty is due in England when the price of the home you are purchasing is above the tax-free threshold.

Home movers have to pay stamp duty on properties worth over £125,000 and the amount you pay depends on the price of the property. The table below shows the rates at which it is levied.

If you already own a residential property and are buying a new one, you’ll usually have to pay 5% on top of these stamp duty rates, if it means you’ll own more than one home.

First-time buyers have a larger tax-free threshold of £300,000, and pay slightly different rates of stamp duty. These are shown in the table below.

You will have to pay the full stamp duty amount to HMRC within 14 days of buying your property.

After years of being told to spend our pensions last because they could be handed down free of inheritance tax, a new rule coming in from next April flips that guidance on its head. From 6 April, 2027, most unspent pensions passed on will be included in the estate for inheritance tax (IHT) purposes and could be taxed at 40%.

The move has triggered a big change in behaviour, with many over-55s (the earliest you can currently take your pension) withdrawing more of their money sooner rather than later, often to help out younger generations. Experts are cautioning about knee-jerk financial decisions, however.

Michelle Holgate, director and wealth manager at RBC Brewin Dolphin, said: "The inclusion of pensions in estate calculations for inheritance tax purposes from April 2027 is already reshaping how clients and advisers are approaching planning conversations.

“For some retirees, the instinct to act quickly by drawing down a pension and gifting the proceeds to children is understandable, but there are a number of important considerations.”

Record pension withdrawals

In the 2025/26 tax year, £22.4 billion in taxable payments was withdrawn from pensions flexibly – marking a new record, according to HMRC. This has increased by £3.8 billion in the previous financial year (2024/25). It is also up by £7.1 billion since 2023/24.

Much of this money is being given away to younger generations as gifts during their parents or grandparents’ lifetime. More than half of first-time buyers received financial help from family in 2025, for example, amounting to a total of £8.3 billion, according to research by estate agency Savills.

At the same time, just over two thirds (67%) of parents and grandparents already funding private school or university costs say the inheritance tax change is motivating them to provide further financial support during their lifetime, a separate survey of 1,010 people in May 2026 by Rathbones found.

“More clients are choosing to help children and grandchildren now – whether that’s supporting housing, education or other financial needs – rather than waiting for assets to pass on death,” said Ross Coombes, senior financial planning director at Rathbones.

“For many, the ability to see the impact of that support during their lifetime is a key motivation, alongside the tax considerations.”

Gifting – things to consider

1. Care costs

Before taking any action, experts said it is important to be realistic about your retirement needs and health so you can plan around how much money you are likely to need during your lifetime.

Giving away lump sums may cause issues further down the line if you need to rely on local authority support to meet care costs. The rules on ‘deliberate deprivation of capital’ may mean that the local authority may seek to recover their extra costs from you or those you have made the gift to.

Nick Clark, chartered financial planner at Lubbock Fine Wealth Management, said: “If you make large gifts or spend your tax-free lump sum too quickly, you cannot get that money back later in your retirement when you might need it most – and you may face undue tax liabilities during your lifetime.”

2. Income tax

Pulling large amounts from your pension to avoid your loved ones paying an IHT bill tomorrow could leave you with a big income tax bill today.

“While up to 25% of any withdrawal may be tax-free, the balance is added to your other income in that tax year. For some this may mean they pay 40% (or 45%) on some or all the taxable amounts [of the pension withdrawal],” said Sean McCann, chartered financial planner at NFU Mutual.

Becoming a 40% (or 45%) taxpayer has other knock-on consequences, such as a reduction in the tax-free savings allowance of £1,000 to £500 if you become a 40% taxpayer and complete loss if you move into the 45% band, he added.

Some of the other consequences of moving up a tax band include paying a higher tax rate on dividend income (if you have used your £500 a year dividend allowance) and the loss of the marriage allowance (if your spouse or civil partner claimed it) if you’re no longer a basic rate taxpayer.

If the taxable pension lump sum together with your other income means you breach £100,000 of taxable income per year, you begin to lose the tax-free personal allowance. “In which case, anything between £100,000 and £125,140 is effectively taxed at 60%’’, McCann said. This is known as the 60% tax trap.

Taking more than the 25% tax-free allowance will also trigger the Money Purchase Annual Allowance, restricting future gross annual contributions to a maximum of £10,000.

3. Inheritance tax

Inheritance tax is one of the most feared but least understood taxes. The rules can be tricky to navigate so it may be worth speaking to a professional financial adviser, but there are some key things to remember.

First up is the seven year rule. ‘’Lump sum gifts remain in the estate for seven years – they effectively ‘eat’ the £325,000 tax-free allowance first. The reduction if you die between years three and seven only applies if more than £325,000 gifted’’, said McCann. In some cases, earlier gifts also need to be reviewed. Ensuring the history of gift making is properly analysed is essential and easily overlooked.

Gifts from regular income, which don’t impact normal standard of living, are free of IHT immediately. McCann said many people are buying annuities and giving away excess income, “in the knowledge they can stop the regular gifts if their circumstances change’’. Keeping good records of the gifts are essential, though.

You can also give away up to £3,000 each tax year and carry forward any unused allowance for one year, via the annual exemption. Used consistently it can make a meaningful difference, provided clear records are kept, Tony Cockayne in the disputed wills and estates team at law firm Michelmores says.

Marriage and civil partnership gifts can be exempt, but only within set limits: £5,000 from each parent, £2,500 from each grandparent or great-grandparent, £2,500 between the couple, and £1,000 from anyone else.

The gift must be made before the ceremony and conditional on it taking place, so leaving it until afterwards risks losing the exemption, Cockayne warns.

Thousands of households living near new or upgraded electricity pylons and power lines are set to start receiving an energy bills discount worth £250 a year.

The government has revealed the first locations where outdated electricity infrastructure will be upgraded, with households living close to these projects eligible for money off their bills.

The scheme is due to start in the first half of 2027, with most eligible households getting an automatic discount on their electricity bill every six months via their electricity supplier.

It is understood up to 50p a year will be added to all energy bills to fund the initiative.

Michael Shanks, energy minister, said: “Upgrading Britain’s electricity grid is a vital part of how we deliver secure, homegrown energy and unlock economic growth across the country.

“It is a moment of national renewal – upgrading what was built largely in the 1960s for the modern age to bring down electricity bills for households across the country.

“It’s vital we build again as a country and we are determined those communities which host pylons should benefit, which is why we’re bringing down the energy bills of those hosting this vital national infrastructure.”

Who is eligible for the discount?

Households who live within 500 metres of the new or upgraded electricity infrastructure, such as pylons and power lines, will be eligible for the Bill Discount Scheme.

The government expects between 120,000 and 160,000 homes to receive a discount through the scheme over the next 10 years.

However, the locations where the updates will be carried out are being released in waves. The first 43 locations where these upgrades are planned to take place have now been released by the Department for Energy Security and Net Zero (DESNZ).

England

• Bramford to Twinstead – East Anglia
• Norwich to Tilbury – East Anglia, and East of England
• Eastern Green Link 3 - converter station – East of England
• Eastern Green Link 4 - converter station – East of England
• Sea Link - converter station – East Anglia
• Grimsby to Walpole – Yorkshire and the Humber, and East of England
• North Humber to High Marnham – Midlands
• Brinsworth to High Marnham – Yorkshire and the Humber, and the Midlands
• Chesterfield to Willington – Midlands
• North London Reinforcement – London/ South of England

Scotland

• Banniskirk Hub 400 kV substation and HVDC converter station – North Scotland
• Cambushinnie 400 kV substation – North, and central Scotland
• Fort Augustus Substation 400 kV Upgrade – North Scotland
• Spittal - Loch Buidhe - Beauly 400 kV overhead line – North and North West Scotland
• Beauly - Peterhead 400 kV overhead line – North, and North East Scotland
• Carnaig 400 kV substation – North Scotland
• Hurlie 400 kV Substation – North East Scotland
• Kintore - Tealing 400 kV overhead line – North East Scotland
• New Fanellan 400 kV substation and Converter Station – North Scotland
• Creag Dhubh – Dalmally 275 kV overhead line – West Scotland
• Edinbane substation – West Scotland
• Broadford substation – West Scotland
• Skye 132 kV overhead line reinforcement – West Scotland
• Netherton Hub – North East Scotland
• Tealing - Westfield 400 kV overhead line – Central, and East Scotland
• Bingally 400 kV Substation – North Scotland
• Greens (New Deer 2) 400 kV substation – North East Scotland
• Lewis Hub – West Scotland
• Emmock 400 kV Substation – North East Scotland
• Crarae 275 kV Substation – West Scotland
• Coalburn Substation – Central Scotland
• Mark Hill Substation– South West Scotland
• Stranoch OHL and Substation – South West Scotland
• Chirmorie – South West Scotland
• Branxton Substation – South East Scotland
• Sanquhar Substation- South Scotland
• Denny to Wishaw 400 kV Reinforcement (DWNO) – Central Scotland, and South Scotland
• Eastern Subsea HVDC Link from Westfield to South Humber (TGDC) (EGL4) – East of Scotland
• Kincardine North – Tealing 400 kV Substation (TKUP) – East of Scotland
• Kincardine North 400 kV Substation (LWUP) – East of Scotland
• Kincardine North – Wishaw 400 kV Reinforcement (DWUP) – Central Scotland and East of Scotland
• Gala North – Harker Area 400 kV (CMN4) – Scottish Borders

Wales

• Pentir to Trawsfynydd – North Wales

If you live within 500 metres of the above locations, you may start receiving a discount on your energy bills from early 2027.

Some of the 43 projects in this first wave have not yet received planning consent or are still going through an appeals process though. Households will only qualify for the Bill Discount Scheme after construction has started on them.

How will the discounts be applied?

Most qualifying households will automatically receive the discount.

Some households, such as those on commercial meters, may need to apply for the discount. The government or Ofgem will contact you if you need to take action.

Discounts will be applied to households’ electricity bills by their supplier every six months.

Why is the government updating the network?

The government wants to update the network as most of it was built in the 1960s.

The network is being upgraded to handle a higher capacity of energy, including from renewable energy produced by solar panels and wind farms.

The government also says upgrading the network will reduce the UK’s reliance on imported gas and lead to cheaper energy bills for consumers.

It comes as ministers look to tackle higher energy bills more broadly for households, including removing VAT on electricity bills from October which is expected to take £45 off the yearly price cap.

Inheritance tax (IHT) receipts are on the up and expected to rise further as more estates are dragged into HMRC’s net.

The government raked in £8.5 billion in inheritance tax receipts in 2025/26, with the Office for Budget Responsibility (OBR) forecasting the tax take will increase to almost £15 billion by 2030/31.

The watchdog says rising equity and house prices, frozen tax thresholds and the impact of policies announced in the 2024 Autumn Budget, namely unused pensions falling under the scope of IHT from April 2027, will, in part, cause the rise.

It means families may want to take steps to ensure their estate’s eventual IHT bill is as low as possible.

Unfortunately, many are still making six costly mistakes, says Clare Moffat, pensions and tax expert at retirement firm Royal London.

1. Not knowing the implications of cohabiting vs. marrying

Every person receives a £325,000 tax-free threshold, known as the nil-rate band. Any portion of the estate over this threshold could be subject to IHT.

For example, if you died and your estate was worth £300,000, there would be no IHT liability.

If you have a husband, wife or civil partner and you die, any unused nil-rate band is passed to them, taking their threshold up to a potential £650,000.

If a property is being passed to children or grandchildren, there is an additional residence nil-rate band of £175,000 which can be transferred as well, potentially taking someone’s IHT-free allowance to £1 million.

However, these bands can only be transferred if you’re married or in a civil partnership, rather than if you’re cohabiting with someone.

Moffat says: “For me, this tops the list of mistakes that people can make if they're in a long-term relationship.

“This means unmarried couples are potentially missing out on a total of £1 million in inheritance tax exemption.”

2. Not making the most of exemptions during your lifetime

There are a host of exemptions and allowances which mean you can gift money during your lifetime and it won’t fall into your estate for inheritance tax purposes.

For example, you get a £3,000 annual exemption each year. If you didn’t use it all in the previous tax year, you can carry the unused allowance forward to the next – but only for one tax year.

You can also donate £250 cash gifts to as many people as you want per tax year, unless you have used another allowance, like the annual exemption, on that person.

You can also gift an unlimited amount of money, so long as it is made out of ‘surplus income’ – that is money from pensions, rent or dividends – and it doesn’t reduce your standard of living.

Gifting money out of surplus income could become a useful way to reduce inheritance tax liabilities when unused pensions fall under the scope of IHT from April 2027.

Moffat says: “Gifting during life is not for everyone but for people who know that they will have more than enough to live on when they're retired, the benefits are that it can help family when they need it most, be stopped at any time and you don’t need to worry about the seven-year rule.”

The seven-year rule means you can give away as much of your estate as you like during your lifetime, and if you live for another seven years the gifts won’t be subject to IHT.

3. Not keeping records

Keeping detailed records of any gifting throughout your lifetime will make it easier for the executors of your will to evidence it when they have to pay the IHT bill.

A lot of people don’t do this. Research from financial firm Canada Life found 54% of over 55s who had given a financial gift in the previous seven years had kept no record of it.

Executors need to fill in the IHT400 form upon someone’s death to report the full value of their estate. The IHT403 form has to be filled in alongside it to disclose lifetime gifts.

Delays in this form-filling process can mean a longer wait for probate to be granted and can increase the risk of queries from HMRC, prolonging the closure of the estate.

4. Not having important conversations

IHT disputes among families are on the rise, so having honest conversations with loved ones has never been more important.

This can prevent legal costs racking up and delays in probate being granted, leaving you unable to deal with the estate.

Moffat says: “Having good, open conversations about gifts or what a person's wants and wishes are for what's to happen after their death could prevent costly legal action at what is a difficult and emotional time for family, friends and loved ones.”

5. Forgetting the £2 million taper

The residence nil-rate band starts to reduce by £1 for every £2 your estate is worth more than £2 million.

Once someone’s estate reaches £2.35 million, the £175,000 residence nil-rate band is lost completely. A surviving spouse completely loses their residence nil-rate band once their estate breaches £2.7 million.

Moffat says: “For people who might be close to this bracket it's important to know this as they'll need to keep an eye on how much their total estate will be worth.

“They could take steps to reduce it to below £2 million using some of the options to gift during their lifetime, meaning the residence nil-rate band is available again.”

6. Not considering where inheritance tax should be paid from

If you make a larger gift which is not covered in the gifting exemptions and exceeds your inheritance tax allowance, for example to a child or grandchild to buy a house, and then die within seven years, IHT could be owed on that gift.

The beneficiary of the gift may not be able to pay this bill if it comes unexpectedly, the gift is tied up in property or has already been spent.

To reduce the risk of this, the donor of the money could take out a ‘gift inter vivo’ life insurance policy. This would cover the cost of the eventual IHT bill for the beneficiary, should you die within seven years.

Typically, these policies pay out less over time, as taper relief is applied to the IHT liability depending on when a gift was made.

For example, if you make a larger gift and die less than three years later, it would be taxed at 40%, but if you die six to seven years later, the rate drops to 8% on the gift.

Younger people faced with historically high housing prices and ongoing cost of living pressures may be hoping an inheritance will help them out.

Nearly one in four (23%) Gen Z (born between 1997 and 2012) say they are not prioritising retirement saving because they expect to inherit money or property.

This view is also common among Millennials (born between 1981 and 1996), with one in five (20%) of this generation saying the same, according to a Standard Life survey of 6,000 people conducted in June 2026.

Grandparents who have benefited from house price increases and may be enjoying bumper pensions, and who are worried for their younger loved ones’ financial prospects, could feel pressure to give away their homes to grandkids now, in an attempt to reduce the risk of them paying inheritance tax later.

Experts have said it’s trickier than just handing over the keys, however.

How much can I give away free of inheritance tax?

To quickly recap on the key inheritance tax rules – every homeowner has two inheritance tax-free allowances.

You have a nil rate band of £325,000 and there is a residence nil rate band of up to £175,000 when a family home is passed to direct descendants, including grandchildren, though this second allowance is tapered for estates above £2 million.

Married couples and civil partners can inherit each other’s allowances, meaning up to £1 million may be passed on by them after death before IHT becomes due.

Also, most gifts a person makes during their lifetime are exempt from inheritance tax – but the person must survive for seven years after giving it (these are known as ‘potentially exempt transfers’).

A gift can be money, property or possessions – anything that has value. A gift must reduce the value of the estate and you must include any loss incurred as part of the gift. For example, if a person sells their house to a child for less than it’s worth, the difference in value counts as a gift.

An outright gift is where value is transferred to another individual without conditions.

Losing legal control

Many people assume giving away their home – often one of their most valuable assets – is a straightforward way of reducing inheritance tax. The reality is often far more complicated.

Legally there are a number of things to consider.

When the original owner gives their property away, they lose legal control over it. This is true whether the original owner remains living in the property or not – but several factors mean it can be especially tricky if they continue to reside there.

Laura Walkley, partner and head of the private client department at TWM Solicitors LLP, said: “Even where there is complete trust between family members, circumstances and relationships can change over time. In a worst-case scenario, the original owner could lose their home.”

Four key scenarios could put the person giving away the property at risk, Walkley pointed out; disputes, debt, divorce and death.

1. The donor and recipient could fall out, and the recipient may decide to evict the original owner or to sell the property.
2. The recipient might also need to borrow against it, exposing the property to claims by creditors.
3. If the recipient goes through a divorce, the property may be vulnerable to claims for financial provision by a former spouse.
4. If the recipient dies before the person who made the gift, unless suitable arrangements are put in place, the property will pass under the recipient’s will or intestacy, potentially ending up in the hands of people the donor never intended to benefit.

Inheritance tax property gifting rules

Giving your home away while continuing to live in it is also one of the biggest inheritance tax misconceptions – it doesn’t automatically mean your loved one avoids inheritance tax.

Shaun Moore, tax and financial planning expert at financial advice firm Quilter, said: “If you gift a property but still benefit from living there, HMRC will treat it as a 'gift with reservation of benefit'. This means the property would still be counted as part of your estate for inheritance tax purposes.”

To avoid this, you would typically need to pay a full market rent to the new owner, plus your share of the bills. This creates its own complications and could generate an income tax liability for the recipient, who would also need to declare that rent on their annual tax returns.

You do not have to pay rent to the new owners if you only give away part of your property and the new owners also live at the property.

There’s normally no inheritance tax to pay if you move out and live for another seven years.

Capital gains tax problem

Grandparents with more than one property who want to give one away to a grandchild could also find there may be capital gains tax implications if the property is not the giver’s main residence.

Only a person’s private residence is exempt from capital gains tax. “So, if I gifted a buy-to-let, for example, the gift is viewed as a disposal for CGT purposes that realises any gain made,” said Moore.

This triggers an immediate CGT bill. Even if you receive no money for the property, you must pay capital gains tax on the difference between what you originally paid for it and what it is worth on the day you gift it.

Care costs

Permanently giving away your home could also create headaches if you come to need care in later life. You won’t be able to sell your home or use equity release, for example, to unlock some of your housing wealth to pay for your care.

At the same time, under deprivation of assets rules, local authorities could scrutinise gifts made later in life if they believe assets have been transferred primarily to avoid care costs.

Consequently the council may be reluctant to pay for your needs or even demand money back from the grandchild you gave the property to.

Alternatives to grandparents giving away property

Before taking the huge step of giving away your home (or another property) to your grandchildren, it is important to establish whether gifting property before death is even necessary.

Tom Kimche, financial adviser at Netwealth, said: “Outside of property, there are several other ways to gift which could be a better fit during your lifetime.

“For example, beyond the annual £3,000 gifting exemption, gifts from surplus income can often fall outside the scope of IHT if properly structured and documented.

“Larger gifts can also leave your estate for IHT purposes if you survive for seven years after making them.”

Structure is another important consideration. Gifts can be made directly or through relatively simple structures such as bare trusts.

“If you would like greater control and asset protection, discretionary trusts or Family Investment Companies (FICs) may be worth considering, though they add cost, complexity and additional tax considerations,” said Kimche.

Insurer Admiral Group (LSE: ADM) is among several firms which earlier this year saw their share price slump because of fears that AI-powered rivals could capture most (or all) of their business. However, since then many of these stocks have bounced back, with investors deciding that such fears are overhyped.

Admiral Group's shares fell by 14% in January after US firm Lemonade, which uses AI to process claims, launched a cheap policy for self-driving cars. While the policy was aimed at US consumers, it fuelled fears about AI being used to undercut traditional insurers.

Investors also fretted that the better driving record of autonomous vehicles compared with those steered by people could reduce the need for car insurance. Some analysts, such as AJ Bell's Dan Coatsworth, wonder whether car insurance will eventually be purchased by car manufacturers rather than by individual drivers.

How Admiral Group is using AI to cut costs

Yet even if such fears come true in the very long run, it's worth noting that full self-driving for individual cars (as opposed to a relatively small number of taxis currently on the streets) is at least a decade away from mass adoption. In any case, Admiral Group has itself been using AI and digitisation to cut costs and give it an advantage over its main rivals.

Earlier this year, Admiral Group also bought Flock, a technology firm it had been working with. The purchase gives it full access to, and ownership of, Flock's technology, which uses AI and telemetry (the process of collecting data from remote sources and passing it to a receiving system) to judge how well people are driving.

Meanwhile, Admiral Group has been taking steps to diversify its business by branching out into household, travel and pet insurance. While these areas currently make up only a small proportion of overall profit, they are growing at an extremely rapid rate, which should improve the group's medium-term prospects.

Meanwhile, sales almost tripled between 2021 and 2025, and are forecast to keep growing over the next few years. While profits have been more volatile, they have increased since 2021. Admiral boasts strong margins, with a double-digit return on capital employed. This has allowed the group to raise dividends to record levels. The stock's valuation also looks attractive at 15 times expected 2027 earnings and a dividend yield of just under 5%.

Admiral Group's share price has plenty of momentum behind it, having beaten the overall UK market over the last one, three and six months. It is trading well above its 50- and 200-day moving averages, and has also been one of the best performers in the FTSE 100 over the last six months. I suggest that you go long at the current price of 3,772p at £1 per 1p. I would put the stop-loss at 2,800p, which would give you a total downside of £972.

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.

Do you dream of giving up the day job and enjoying the freedom that would bring? You’re not alone. But many don’t want to wait until retirement age winter years to kick back. Can the FIRE movement help?

FIRE - financial independence, retire early – is a personal finance strategy that involves extreme investing and frugality during your working life in order to enable early retirement and financial freedom. In theory.

The concept was first established in the US in the 1990s, and encourages a series of tactics that have the potential to allow someone to give up work in their 40s.

So, how does FIRE work and can it really help you stop work sooner and 'retire' comfortably?

What types of FIRE strategy are there?

There are number if ways you can approach a FIRE strategy. These include:

• ‘LeanFIRE’ requires strict frugality and living on a bare minimum budget to achieve your goals faster;
• ‘FatFIRE’ means putting significantly larger amounts away in the hope of a more luxurious retirement;
• ‘BaristaFIRE’ strives for an early retirement funded by a healthy income-generating investment pot, topped up with a part-time or low-stress job.

Katharine Photiou, managing director, workplace savings at Legal & General (L&G) says the approach that appeals to most people is likely the third, because it offers maximum choice for less sacrifice.

“We go from birth to nursery, into primary school, then secondary school, university or further education, then work... there’s all this structure and process. There’s no sense of freedom.”

She says the true benefit of FIRE-related movements is raising awareness of money matters.

“They shift the conversation from being one of ‘when can I retire’ to one of financial freedom. And anything that gets people thinking about their finances – especially encouraging youngsters to engage with their finances sooner – is positive.”

If FIRE taken to the letter feels extreme, she says thinking about the kind of life you want to live, what makes you happy or how much is enough are healthier conversations.

“At its heart, FIRE is about control, flexibility, choice and having options. Having a career break, reducing your hours, starting your own business or taking a sabbatical, these are all positive.”

What can the FIRE movement teach you?

Louise Matthews is an advertising copywriter who lives in North London. She stumbled upon the Rebel Finance School – which runs courses to help people better manage their money (and advocates the FIRE movement) – on Facebook.

“At first the group felt quite aspirational, and at times annoying,” she says. “People were talking about having a lot of money and it didn’t feel aligned to my situation. I almost left a couple of times. But since participating in the course, I’m finding it more helpful – plus a lot more people have joined who are just starting out and have debt questions.”

Matthews was self-employed for over a decade before taking a full-time job two years ago, seeking financial security as freelance life was looking more precarious.

“My partner started his own business about five years ago and hasn’t been able to contribute much to the household bills, so it’s pretty much all on my shoulders.

The couple doesn’t have a mortgage (they rent from a private landlord), nor any real savings besides a £3,000 nest egg set aside for their daughter. Matthews has around £50,000 saved into a pension.

“Finances-wise, we’re in quite a bit of debt, which was my impetus for doing the course. I have a personal loan with around £11,000 still outstanding (it was £25,000 so I’ve paid quite a bit off over the past two years), and another £14,000 on interest free credit cards.”

One lesson the course teaches is to try and put away £1,000 into an emergency fund before proactively paying off any debt.

Like many Brits, even though she’s only 42, she’s feeling the consequences of not starting sooner.

“I grew up with a mentality that money is fun money – ‘you only live once’ – that has made it hard to get out of debt. I used to say ‘yes’ to everything and worry about it later, hence having lots of interest-free credit cards,” she says.

Financial independence, or freedom, for Matthews isn’t about giving everything up to retire in her 40s, but about building better habits for a financially ‘freer’ future.

“What I’ve learnt is that [my lifestyle] isn’t sustainable. I don’t want to be in debt anymore. So my priority is to work hard to get out of it.”

Why investing earlier is so important

L&G’s Decades Ahead research estimates around nine million people aged 25-54 are currently not on track for an adequate retirement, taking into account basic needs, current income and housing costs.

Starting early and taking small steps beyond the bare minimum (like the 8% auto-enrolment through a workplace pension) has such a greater impact than thinking about saving huge amounts, says Photiou.

“A 27-year-old putting in just an extra £30 a month, at state pension age would have an additional £100,000. Just invest as early as you can, and stay invested.”

Alex King, founder of personal finance education platform Generation Money says it’s worth bearing in mind that, traditionally, the FIRE movement came from the US, so to beware guidance may be aimed at different audiences.

Done well, he says FIRE can deliver real freedom, but it relies on strong earnings, careful planning and navigating risks like inflation, market volatility and longevity.

Is FIRE for you?

There are limitations to such strategies.

Having a reliable income is a basic starting point. Being employed obviously helps, because of the employer contributions on offer.

It’s more challenging if you have dependants, be they children or elderly parents, says Photiou.

Anyone renting or paying off a mortgage has further outlay – especially high if they live in London or another major city.

“FIRE has clear appeal but works best for a specific group,” says King.

“In the UK, it favours higher earners who can save aggressively and benefit from higher pension tax relief, while keeping spending in check. At its core, it’s a simple mix of disciplined saving and smart use of tax wrappers like ISAs and pensions.”

So while the dream may be to kick back and relax for the next 40 years, the reality of ever achieving that looks quite different.

Recent years have thrown a series of cost-of-living challenges, with the majority of people undersaving and underinvesting.

Rules of thumb around optimal savings rates vary but assuming 8%-12% for a moderate retirement – based on a ‘normal’ retirement age, anyone hoping to retire sooner needs to do some serious budgeting.

In Australia, they suggest a 15% contribution rate, while in the US many suggest a ‘half your age’ savings rate (if you’re starting age 20, save 10% of your salary; if you’re starting at 30, 15%; those starting at 40 should save 20% and so on).

But these frameworks or ‘rules’ are blunt instruments, overlooking a multitude of factors.

Traditional retirement plans talk about a U-shaped expenditure path, with more outlay at the beginning, followed by a period of lower outgoings, which may pick up again if long-term care has to be factored in.

Photiou says: “The Australians call them the go-go years, the slow-go years and the no-go years.”

But if you’re looking at FIRE, you’ll likely be wanting more go-go, and less slow-go. So Photiou suggests a higher proportion of working life salary will be required.

Like the sound of FIRE?

L&G have kindly crunched some numbers for MoneyWeek using certain assumptions such as starting work age 22 and using the minimum, moderate and comfortable lifestyle costs as estimated by Pensions UK in its Retirement Living Standards.

Almost half of all adults in the UK struggle with financial literacy. Many do not understand the three key concepts – compounding returns, inflation, and risk.

Without understanding these concepts, building financial independence becomes harder. Indeed the rising levels of young people not in education, employment or training can be linked back to poor numeracy skills in schools.

A landmark report by former minister Alan Milburn found around one million young people (one in eight) are NEETs, and this number is rising.

That presents a “huge national challenge”, says Lizzie Gaisman, chief executive of The Richmond Project, a charity founded by former prime minister Rishi Sunak to champion numeracy.

One of the factors contributing to this rise is a lack of confidence with numeracy, Gaisman tells Kalpana Fitzpatrick, digital editor-in-chief, on the MoneyWeek Talks podcast.

“We all believe – and now hopefully our research underscores – that confidence with numbers and what that means in terms of people’s daily life and finances, is an absolutely critical driver of social mobility for people.

“Without it, it’s really hard to find opportunities, to make the most of opportunities, and the downside risk is also really strong for those who don’t have that core conceptual understanding [of finance].”

Gaisman says issues like the rising number of NEETs in the country are always complex with many different root causes, but adds: “I do feel very strongly – and I wouldn’t be in this job if I didn’t – that numeracy and financial literacy are sitting really at the heart of that web for our young people.”

Why do Brits have poor financial literacy?

There are major disparities between the financial literacy of different groups in the UK. Research by The Richmond Project shows there are large socioeconomic, age, and gender gaps that are leaving people without the financial education they need.

Gaisman says: “We’ve got quite a big challenge in front of us as a country, and that’s particularly acute for groups who have already got quite a lot to contend with.”

There can be many reasons people do not have the financial education they need. Gaisman notes that a lack of confidence in maths plays a key role.

“Our research shows if you’ve got poor financial literacy, you are four times as likely to say maths was your least favourite subject at school. There is an element of what we know to be quite a negative emotional association with maths or with your confidence around maths that’s playing a role here.”

She adds that for things to change, there needs to be a cultural shift to make people more comfortable with basic numerical concepts to boost financial confidence and literacy.

There is also an inter-generational challenge. “We know that if your parents don’t feel that they have the tools that they need to manage their financial life, it is really hard for you as a child to absorb those skills in your home life because you're not seeing the role-modelling.”

One way to help bridge this gap is by introducing more financial education in schools. The Richmond Project has already partnered with the Department for Education to help children learn more about these concepts in their classrooms.

“The big three things [compounding returns, inflation, and risk diversification] are transformational for people to learn and we’ll be testing the curriculum because it’s not only the ‘what’, it’s also the ‘how’ you’re taught as a child that makes a big difference.”

For more on why Britain needs higher levels of financial literacy and more, listen to the full episode of MoneyWeek Talks with Lizzie Gaisman on YouTube or wherever you get your podcasts. You can also catch up with our previous podcast episode with Rishi Sunak, talking about how his charity wants to help change financial education.

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick, Andrew Van Sickle and Cris Heaton are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

Subscribe to the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence.

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.

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.