Nationwide has launched an exclusive fixed-rate savings account offering a 5.3% interest rate, which is the highest-paying option on the market right now.

The building society’s new 30-month Member Exclusive Bond is available to existing Nationwide and Virgin Money customers.

You need to have had a personal current account, mortgage, savings account or business savings account or loan open with either of the two brands since November 2 2026.

Anna Bowes, personal finance expert at financial planning firm The Private Office, said: “It’s good to see a provider rewarding loyalty rather than paying the best rates to new customers only.

“We know that not enough savers regularly switch providers, so having the chance to earn a market-leading rate as a loyal customer is refreshing, especially from a high street brand.”

Savers can add a maximum of £10,000 into the Nationwide bond, which can be opened via the Nationwide website or through internet banking. You can also open an account in a branch, known as the Member Exclusive Branch Bond Issue 2.

Money must be deposited into the account within 14 days of opening it and you can only open one account per person.

Interest is credited annually and paid at the end of the 30-month term. Once opened, you can’t access the money inside the bond until it matures.

How does Nationwide’s bond compare?

Nationwide’s 30-month bond has the highest rate of all three-year fixed-rate bonds currently on the market, based on data from price comparison website Moneyfactscompare.

Afin Bank, GB Bank and Secure Trust Bank come close, offering rates of 5.28%, 5.28% and 5.27%, respectively. All of these accounts are FSCS-protected.

Nationwide’s bond is also joint-top of the best buy tables across two-year fixed-rate bonds, with RCI Bank UK’s account paying 5.3% and Afin Bank and GB Bank’s two-year deals both paying 5.28%.

The 30-month bond also currently has the top headline interest rate compared to four-year bonds. Market Harborough Building Society is offering a four-year bond with a 5.25% rate and Aldermore has a four-year fixed deal paying 5.17%.

Jessica Sheldon, deputy digital editor, MoneyWeek, said: “The tax rate on savings interest is rising by four percentage points from April 2027, making it all the more important for savers to consider if their money is better in an ISA, even if it means missing out on a higher headline rate.”

Would it be better to open a top-rate ISA?

Nationwide’s 30-month bond might be top of the market, but any savings interest you earn is taxable. If you are likely to exceed your savings tax allowances, it could make more sense to put the money into an ISA.

Based on calculations by wealth management firm Evelyn Partners, someone putting £10,000 into Nationwide’s 30-month bond on November 3 would earn £1,381.92 in gross (pre-tax) interest, with the bond maturing in May 2029.

Using the new savings tax rates announced in the 2026 Autumn Budget which take effect from April 2027, this is how much tax would be owed in May 2029 depending on your marginal tax rate:

Source: Evelyn Partners. Calculations are based on tax rates and allowances remaining unchanged, the individual staying in the same tax band and no other interest using up their personal savings allowance.

Based on MoneyWeek research, there are no 30-month fixed-rate ISAs on the market to directly compare to Nationwide’s 30-month fixed-rate bond.

However, at the time of writing, one two-year and three three-year fixed-rate cash ISAs are on the market paying 5.15%.

If you instead put the same £10,000 into a two-year ISA which paid 5.15% annually, with interest compounded yearly, you’d earn £1,056.52 in interest tax-free over two years.

Meanwhile, if you put £10,000 into a three-year ISA at the start of the term, and it paid 5.15% annually, with interest compounded yearly, you’d get £1,625.93 interest tax-free over three years.

This means a higher rate and additional rate taxpayer would actually receive more interest, after factoring in tax, from the two and three-year fixed-rate ISAs paying 5.15% interest.

David Little, partner in financial planning at Evelyn Partners, said: “Nationwide's 5.30% bond looks attractive on paper, but savers need to consider what they will actually keep after tax.

“For higher and additional rate taxpayers, a slightly lower headline rate within a cash ISA could ultimately deliver a better tax-free return. The highest advertised rate is not necessarily the most rewarding once tax is taken into account.”

Landlords have been given fresh reasons to consider exiting the buy-to-let sector after a new round of tax increases were unveiled in the Autumn Budget.

Chancellor John Healey used his debut fiscal update to reveal that a planned income tax rise on rental income next year will be higher than expected.

It is the latest blow for landlords who have been dealing with the first months of new rules and regulations under the Renters’ Rights Act.

On top of this, landlords have been hit in recent years with restrictions on mortgage interest relief, extra stamp duty charges and the responsibility for ensuring the homes they rent out meet minimum energy efficiency standards.

Chris Norris, chief policy officer for the National Residential Landlords Association (NRLA), told MoneyWeek: “Landlords were already questioning whether they could afford to remain in the sector. This further tax rise risks pushing even more landlords towards the exit, deepening the gap between supply and demand and driving rents up.”

What did the Autumn Budget announce for landlords?

Previous chancellor Rachel Reeves had already unveiled plans in the 2025 Budget to raise income tax on rental income, as well as on savings interest, by two percentage points from April 2027 to 22%, 42% and 47% depending on the individual’s tax band.

While landlords were preparing for this, Healey announced a further two percentage point hike in the 2026 Budget.

This means that from April 2027, landlords will pay 24% for the basic rate, 44% for the higher rate and 49% for those who are additional rate taxpayers.

How will higher property taxes affect landlord returns?

Property services provider Connells Group has crunched the numbers on the tax impact for landlords, including mortgage interest relief and allowing for other expenses.

The average annual rental income received by landlords, according to the estate agency brand, is £16,478. It also assumes expenses of £5,108 per year.

Assuming a mortgage rate of 5.25% and a typical mortgage payment of £7,875 per year, Connells Group estimates that landlords would have an annual profit of £3,495.

Currently, a basic rate taxpayer would owe £699 in tax on that, but that will rise to £839 from April 2027.

Higher rate taxpayers will pay £3,113 in tax, up from £2,973. This also includes mortgage interest relief, which is a 20% tax credit, based on mortgage interest payments.

This will leave a landlord on the basic rate with £2,656 of annual profit from the £3,495 instead of £2,796. A higher rate taxpayer would be left with £382 instead of £522 over the year.

That £140 difference may not look like a lot on paper, but Connells Group research director Aneisha Beveridge says it is the impact on sentiment that is important.

She says: “On its own, this is unlikely to fundamentally change the investment case, but it comes on top of higher borrowing, maintenance and regulatory costs alongside broader tax changes that have already squeezed returns.

“The increase also widens the divide between landlords who own personally and those operating through limited companies, whose rental profits are subject to corporation tax rather than these higher personal tax rates.”

Source: Connells Group

Not all landlords will have mortgages though.

Separate analysis for MoneyWeek by estate agency brand Boydens looked at a mortgage-free property renting for £1,200 a month (equivalent to £14,400 a year), with £2,400 a year in allowable running expenses. That leaves £12,000 in taxable rental profit.

Currently, a landlord on the basic rate would pay £2,400 in tax on this income and retain £9,600 per year. The amount retained drops to £9,120 under the new rates from April 2027 as the amount of tax paid will rise to £2,880.

A higher rate taxpayer would pay £4,800 tax on the rental income, holding on to £7,200 of the annual profit currently. But that will fall to £6,720 in 2027/28 after a tax bill of £5,280.

In either example, the latest Budget adds £480 a year of tax compared with current rates.

For the higher-rate landlord, that is a reduction in profit of around 6.7%, even with rent and running costs unchanged.

Is buy-to-let still worth it?

Many will see Healey's Budget as a “vindictive raid on landlords”, says Norris, from the (NRLA).

He adds: “This lands on top of pressures that are already mounting. The Renters’ Rights Act has brought a range of new costs, including a new annual registration fee for every property, and expected Ombudsman membership.

“Separately, the removal of tax relief for legitimate business costs has driven viability down and rents up. If that were not enough, borrowing costs have added around £1,100 a year to a typical new buy-to-let mortgage and mandated energy efficiency upgrades will cost many up to £10,000 per property.”

Landlords have also been battling with lower rental demand and tepid rental growth.

Average UK rents increased by 3.8%, to £1,406 in the 12 months to September 2026, according to the latest Office for National Statistics data – unchanged from August.

Philip Boyden, managing director of Boydens Estate Agents, suggests landlords will be looking more closely at the figures and exploring the alternatives.

He says: “Another tax increase becomes part of that calculation. It may affect what someone is prepared to pay, which properties they consider or whether they expand their portfolio. It does not automatically mean they will decide against investing, but the property has to justify the commitment.”

Some landlords may consider selling.

Research by Property118, a website for landlords, found that two thirds of landlords intend to sell properties or exit the rental market over the next three years.

But this isn’t necessarily “a simple response,” warns Beveridge, from Connells Group.

The Renters’ Rights’ Act has introduced longer notice periods of four months and restrictions on re-letting if a sale falls through, which could make some landlords more hesitant to start the process, even if their returns come under pressure.

There will also be capital gains tax to pay on any profits from the sale, plus there is no guarantee you will get the price you want in the current buyers’ market.

Instead, Beveridge says many landlords have already opted for moving their portfolio into company ownership where you pay corporation tax rather than income tax.

She warns: “The upfront tax costs of transferring existing properties mean it is not a straightforward solution for everyone.”

Ultimately, Nouran Moustafa, practice principal at Roxton Wealth, some landlords will absorb the costs, some will reconsider expansion and others may sell.

She adds: “The irony is that making private renting less attractive to investors doesn't automatically make renting more affordable for tenants.Property can still be a worthwhile investment, but the days of assuming any buy-to-let will generate attractive returns are long gone.”

Two Premium Bonds holders have woken up millionaires after NS&I’s latest monthly prize draw.

The Treasury-backed bank has revealed who bagged the two £1 million prizes in November, and the first winner is from Shropshire.

They won with the bond 652GW962089, which they bought in November 2025. They hold the maximum total of £50,000 in Premium Bonds.

The second winner from London secured the top prize with bond 175WW854599 which was bought in December 2010. They hold a total of £30,000 in Premium Bonds.

It comes as NS&I celebrates 70 years since Premium Bonds first went on sale.

Andrew Westhead, NS&I retail director, said: “Seventy years ago in November 1956, the first Premium Bonds went on sale, marking the beginning of what has become one of the nation’s best-loved savings products.

"It’s fantastic to celebrate this milestone with two new millionaires and generations of savers who continue to enjoy the excitement of checking if they have won tax-free prizes each month."

How many prizes will be distributed in November's Premium Bonds prize draw?

Millions more smaller prizes will also be shared out by NS&I this month, including 96 £100,000 prizes.

Meanwhile, 192 £50,000 prizes will be issued, as well as 385 £25,000 prizes.

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

Source: NS&I

How to check if you've won in October’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 November 2026, that date is 3 November.

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 an unclaimed 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 reveals half-year results

NS&I unveiled its half-year results on 28 October.

They show that NS&I delivered £3 billion of net financing to the government in the three months to September 2026, bringing its half-year total to £4 billion.

NS&I’s target for the 2026/27 tax year is £15 billion, plus or minus £4 billion.

Sarah Coles, head of personal finance at investment platform AJ Bell, said NS&I was more likely than before to get close to its £15 billion target for 2026/27 due to two factors.

First, was a pick up in fundraising in the second quarter of 2026 following increases in interest rates across its savings accounts.

Second, was the four percentage point rise in savings tax taking effect from April 2027 making Premium Bonds more attractive for higher earners.

“For anyone paying tax on a chunk of their savings interest – particularly higher or additional rate taxpayers – the allure of Premium Bonds starts to make more sense, because of the tax-free status of the prizes,” Coles said.

“The relative attraction of Premium Bonds in this scenario could help boost the coffers of NS&I without it having to hike rates across its products again.”

Chancellor John Healey’s first Budget was characterised by tweaks around the edges of policy, rather than big bang announcements. This was true for pensions too. But even the relatively small changes could have a big impact on your retirement income.

Giving Britain financial ‘breathing space’ was the theme of Labour’s 2026 Autumn Budget. Yet for pensioners relying on savings and rental income, there were some surprise tax hikes that will likely be unwelcome after similar raises last year.

Matthew Phillips, director of wealth planning at wealth manager Canaccord Wealth, said there was “relatively little in the Budget that should require people to fundamentally reconsider their financial plans”, from a wealth planning perspective.

“After several years of change, that relative stability is no bad thing,” he said.

“However, a fairly quiet Budget does not mean there is nothing for savers and investors to consider.”

Here’s all the key Budget changes for pensioners, the likely impact and what to do next.

Pension tax allowance

A new pension tax allowance is being introduced for low-earning pensioners, equal to the 2027/28 full new state pension rate of £13,037 per year.

This ensures pensioners won’t be dragged into paying income tax purely because the state pension will rise by 3.9% next April, in line with the triple lock guarantee, (which they otherwise would because that exceeds the frozen personal allowance of £12,570).

The pension tax allowance will gradually reduce as pensioners’ income increases. For every £3 of income above £13,037 (the full level of the new state pension), the pension tax allowance will reduce by £1.

So those whose total income is above £13,319 lose the pension tax allowance altogether.

Becky O’Connor, head of pensions at PensionBee, said: “Sparing pensioners the hassle of being chased by HMRC for small tax bills is welcome.

“But the pension tax allowance is worth around £93 in its first year and is withdrawn as soon as someone has a modest private pension or a bit of savings interest, so people who saved a little extra could really end up feeling penalised for it.”

Savings tax increase

Savings tax rates were due to increase, but the government is going further by adding an additional two percentage points of tax from April 2027, above what was planned. For pensioners, who often keep substantial cash balances on hand for day-to-day expenses, this will likely be unwelcome news.

The savings tax hike means that for basic rate taxpayers in receipt of more than £1,000 of savings interest, every extra pound of interest will be taxed at 24% rather than 20%.

Similarly, for higher rate taxpayers whose personal savings allowance is £500, any additional savings interest will be taxed at 44% rather than 40%.

For additional rate taxpayers the change is particularly painful, as every pound of savings interest is taxable but at 49% rather than 45%.

Neil Jones, tax and wealth planning specialist at Standard Life, said: “For those with significant cash balances or regular savings, the incentives have edged further towards ensuring money is directed towards an ISA.

“However, against a backdrop of inflation, it’s important those affected look carefully at whether their money is keeping pace with inflation and consider whether it would be better invested where there is the potential for higher returns, albeit without guarantees.”

Ways to avoid being hit by the savings tax trap include:

• Make the most of your £20,000 ISA allowance
• Transfer savings to your spouse
• Consider Premium Bonds
• Invest in low-coupon short-dated gilts

State pension triple lock

The Budget confirmed the adjustment to the triple lock from 2030. Rather than applying the highest of CPI inflation, 2.5% or average weekly earnings each year, the government will review increases over time to ensure the state pension keeps pace overall.

Claire Trott, head of advice at St. James’s Place, said: “This should smooth increases and potentially deliver significant savings for the Treasury. It also addresses the cumulative ‘ratchet effect’ seen during Covid, when a year of sharp earnings growth compounded with increases in subsequent years.”

Rental income tax increase

Many pensioners partly rely on income from buy-to-let property to help pay for their retirement. But like savings, it was announced in the Budget the rate of tax on income from property is being increased from April 2027 by two percentage points across each marginal tax band; to 24% for basic rate payers, 44% for higher rate taxpayers and 49% for additional rate payers.

Alex Pugh, financial planner and partner at wealth management firm Saltus, said the increase “lands on a group that already feels overtaxed, with 43% of high net worth individuals telling us they pay too much tax, and 56% concerned about higher taxes on investment property”.

“For many of our clients, savings and rental income are a key part of their retirement plans, so this isn’t a small change. Using ISA and pension allowances in full is now more important than ever, and anyone with significant savings interest or rental income should review how those assets are held before April 2027.”

Definition of terminal illness for pension access

Changes are being made to provide greater flexibility in the medical evidence requirements for serious ill-health pension lump sums, with the government deciding to change the definition of terminal illness to make pension savings easier to access.

Under the new rules a lump sum may be paid where the pension scheme member can be reasonably expected to die within 12 months and the supporting medical evidence may be provided additionally by a member’s medical practitioner based outside the UK.

Jon Greer, head of retirement policy at Quilter, said: “Prognoses are inherently uncertain. The revised definition needs to recognise that uncertainty and give patients, medical practitioners and pension providers a clear, workable test.

“The announcement does not yet specify the new wording or confirm whether it will align with the test used for DWP benefits, so the detail will be important.”

Pension death benefits

Pensioners, such as surviving spouses, will also benefit from the government decision to remove the requirement that pension scheme administrators must pay tax-free death benefits to beneficiaries within two years of learning of the death of a member aged under 75 (the ‘two-year rule’).

Under the change, a pension lump sum death benefit paid to a beneficiary more than two years after the pension scheme became aware of the member’s death will no longer be subject to an income tax charge.

The two-year limit is also being removed where beneficiary annuities are paid from the deceased member’s drawdown funds and where funds are designated for a UK resident under a pension scheme outside the UK.

O’Connor from PensionBee said: “Removing the two-year rule is a welcome fix: families shouldn’t face a tax bill simply because a pension payout was delayed by probate or paperwork outside their control.

“Greater certainty on how tax is collected when the lump sum death benefit allowance is exceeded should also make a difficult process less daunting for beneficiaries. In the run-up to pensions being included in estates for inheritance tax purposes, these changes are even more important.”

The annual MoneyWeek Wealth Summit takes place on Friday 6 November in central London. Our theme is The Age of Change: investing in a world of technological, political and financial revolutions. We look forward to meeting many of you there to discuss the implications.

The agenda gets underway with historian and geopolitical expert Peter Frankopan, professor of global history at Oxford University and best-selling author of The Silk Roads, The New Silk Roads and The World Transformed. He will sit down with MoneyWeek's Andrew Van Sickle to discuss how rising tensions between America, China, Russia and other powers will shape the new world order.

MoneyWeek's long-standing view is that we are heading into an era of less cooperation and more competition, and those tensions will only get worse. What does that mean for investors? There are reasons to be optimistic, but also reasons to be very cautious about anything that depends on the type of environment that prevailed a few years ago.

Our panel of Dominic Scriven (Dragon Capital and Vietnam Enterprise Investments), Jasmine Yeo (Ruffer) and Stephanie Kelly (Lombard Odier) will consider the implications for energy, security, inflation, interest rates, stocks, bonds, global trade, emerging markets and more.

Profit from top growth stories

Then we break for coffee and a chance to question Rory Stokes (Janus Henderson and European Smaller Companies) about the outlook for Europe. How does he find growth stocks in a region that is often criticised for lacking dynamism?

After that, it's time to get stuck into the big themes in today's markets. Richard Clode (Janus Henderson and Bankers Investment Trust) will consider the broader investment implications of the AI boom, which looks very different to past technology cycles. What are the opportunities and risks of this potential multi-decade investment trend?

Steady income can be a good anchor in changing markets. Martin Connaghan (Aberdeen and Murray International) runs one of the few trusts that invests in both developed and emerging markets. He'll be outlining his views on finding diversified, global income with growth.

Higher defence spending is sadly a reality in an unstable world. Investors need to face reality. So Tom Bailey (HANetf) is joining us to explain how technological changes and geopolitical threats will determine which companies benefit the most.

The new commodity supercycle seems to be under way, with prices of critical metals rising. Olivia Markham (BlackRock and BlackRock World Mining) will examine why supply is set to struggle to keep up with new sources of demand that range from AI data centres to electric vehicles.

We're stopping for lunch, but the ideas will keep coming. Our exchange-traded fund (ETF) masterclass will examine key trends in these products – which are no longer simply cheap trackers for major stock markets – and discuss how investors can best employ them in portfolios. Our expert guests for this session are Natali Monardo (IncomeShares), Dan Gold (Stratiphy) and Jamie Gordon (VettaFi).

Take a hard look at Britain

After lunch, we focus on the outlook for the UK for a few sessions. We will be recording a discussion about the implications of this week's Budget live episode of our MoneyWeek Talks podcast, hosted by MoneyWeek's Kalpana Fitzpatrick.

Independent economist Julian Jessop, multi-asset manager Emma Moriarty (Capital Gearing) and adviser Lisa Conway-Hughes (LCH Wealth) will discuss the prospects for “good growth in every postcode”, what the bond market makes of the government's spending plans, and the key implications for our own financial planning.

The UK stock market remains perennially unfashionable, yet the large-cap end of the market has performed relatively well in recent years. Ian Lance (Redwheel and Temple Bar) will examine how a focus on unfashionable value stocks of the type that now make up much of the UK offer valuable diversification from a global index increasingly driven by tech and growth, as well as giving some protection against geopolitical uncertainty.

The UK investment trust sector has been through difficult times, with discounts widening and activist investors putting pressure on boards. The trend now seems to be changing as trusts focus on improving performance, but share prices continue to lag in some parts of the market.

Tom Treanor and Charlotte Cuthbertson (Asset Value Investors and MIGO Opportunities) will discuss whether these offer value, and why investors should focus on situations where there is a catalyst for extracting value.

Our focus on Britain will continue into the afternoon coffee break, with a Q&A session for Ben Ritchie (Aberdeen and Dunedin Income Growth). We'll be asking him about foreign buyers snapping up UK firms on the cheap, and how investors should respond.

Invest for lift-off

The final session of the day focuses on ideas that are – in one way or another – looking for lift-off. We begin with a look at venture capital trusts (VCT) with Shane Gallwey (Guinness Ventures). These funds play a key role in providing capital for early-stage firms to scale up and grow. How will the changes to tax relief on VCT subscriptions affect demand from investors?

After that, it's time to discuss cryptocurrency tokenisation and related matters, with regular MoneyWeek contributor Charlie Morris (ByteTree) and early sceptic turned partial convert Izabella Kaminska (The Blind Spot). Are digital assets set to revolutionise the financial system? Or are they at most a new form of plumbing, like the switch from paper records and forms to electronic transactions that took place decades ago?

We wrap up the main agenda with a trip above and beyond. Space is one of the very few areas that can compete with AI for excitement right now. However, this is not simply a technology story – it's also about geopolitics and security, with countries that lack space capability set to lose strategic autonomy. Rob Desborough (Seraphim Space) will set out the opportunities and risks this poses for investors.

That wraps the main agenda, but not the event. We're holding an evening drinks reception to talk over the themes of the day with fellow attendees, MoneyWeek contributors and guests. Drinks are included in the ticket price, along with breakfast, coffee and lunch.

Book your place and join us at this year's venue, Together at 88 Wood Street in the City of London. Tickets are £219 for MoneyWeek subscribers and £299 for non-subscribers.

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 highest earners face a near-50% tax rate on savings interest from April 2027 after chancellor John Healey launched a tax raid on savers.

Tax on savings income was already set to rise by two percentage points in April, but will now rise by four percentage points after Healey announced a further two percentage point rise in the 2026 Autumn Budget.

The move will bring savings tax rates to 24% for basic rate taxpayers, 44% for higher rate taxpayers, and 49% for additional rate taxpayers in the 2027/28 tax year.

You will normally be taxed on your savings when you earn interest from money held in a non-ISA savings account that goes over the amount you can have tax-free.

The main mechanism that allows people to earn savings interest outside an ISA without paying tax is the personal savings allowance.

The allowance is £1,000 for basic rate taxpayers, £500 for higher rate taxpayers. Additional rate taxpayers do not get the allowance.

People on incomes lower than £18,570 can also earn up to £5,000 extra from savings interest tax-free thanks to the starting rate for savings. This £5,000 allowance is reduced at a rate of £1 for every £1 you earn in non-savings income over £12,570.

Bear in mind that savings interest counts towards your taxable income. Interest earned could therefore tip you into a higher income tax band and potentially reduce or remove your personal savings allowance.

High earners with taxable income over £125,140 will be especially hit by the policy as any interest they earn on savings held outside a cash ISA will be taxed at 49%.

At the Budget, Healey said that despite increasing tax rates, “88% of people will pay no more tax on their savings”.

Isabella Galliers-Pratt, senior investment director at wealth manager Rathbones, said: “The decision to increase tax on savings income makes holding large amounts of cash on deposit increasingly unattractive, particularly for higher and additional rate taxpayers.

“Cash will always have an important role in providing liquidity, but the tax changes significantly alter the equation for money held beyond immediate needs. For an additional rate taxpayer facing a 49% rate on taxable savings income, a 4% savings rate would deliver just 2.04% after tax.

“For those holding substantial excess cash, that growing opportunity cost will become increasingly difficult to ignore.”

The table below shows how much more tax you can expect to pay on your savings interest after you use your tax-free savings allowances following next year’s changes.

Source: AJ Bell, assumes all interest shown is taxable, any available tax-free allowances have already been used, and the interest falls entirely within the stated band.

Cash ISA allowance changes axed

While tax rates are set to increase significantly on cash held outside an ISA, the silver lining for cash savers is that chancellor John Healey decided to reverse the previous government’s unpopular ISA reforms.

The annual cash ISA limit was set to fall from £20,000 to just £12,000 for under 65s from April 2027, but Healey reversed these changes at the Budget, meaning it will stay at £20,000. This is the overall annual ISA allowance, and contributions can be split across different types of ISA.

How to avoid paying tax on your savings interest

With tax rates on interest earned outside an ISA rising, keeping cash in a tax-wrapper will become more important than ever for savers.

We look at what you can do to avoid paying tax on your savings interest.

Check your personal savings allowance

Your personal savings allowance lets you earn a set amount of savings interest from a non-ISA before any tax is due.

Before you put money into a savings account, you may want to calculate how much interest you expect to earn from your deposit and see if it will exceed the tax-free allowance.

If the interest you expect to receive is within your allowance, then you will not need to do anything as your interest will not be taxed.

But if you find the deposit will earn more interest than your tax-free allowance, you may want to consider moving the money into a tax wrapper if you can.

If your income is very close to the next tax threshold, you should check whether your savings interest will push you into a higher tax band and cause your personal savings allowance to be reduced.

Put your cash into an ISA

Individual Savings Accounts (ISAs) are one of the most powerful tools savers have to protect their money from tax.

You can hold investments and/or cash in ISAs, and any growth you get from money held in them – whether it is interest payments or investment returns – is entirely exempt from income tax, capital gains tax and dividend tax.

Jason Hollands, managing director at wealth manager Evelyn Partners, said: “The looming tax increases on cash savings and already implemented hikes on [capital gains tax] and dividend taxes, make maximising ISA allowances incredibly important whether you’re a saver or an investor.”

You can only put a maximum of £20,000 into ISAs each year. You can put this amount into one type of ISA or divide it between different types, such as an investment ISA and a cash ISA.

That means if you use most of your annual ISA allowance for cash savings, there will be less left over to protect your investments from tax.

Hollands says you should review the balance of your wealth held between cash and investments.

“Having a cash rainy-day fund is very wise; it can help cover unexpected bills and avoid having to sell investments at the wrong time. But holding more cash than you need for several years can mean missing out on the potential for longer-term investment growth.

“The much tougher tax treatment of savings interest than gains on investments and dividend income is a further consideration. Of course, investments involve more risk as markets can fall as well as rise, so this course of action won’t suit everyone.”

Consider Premium Bonds

Premium Bonds are a savings product offered by government-backed savings bank National Savings and Investment (NS&I).

You don’t earn a guaranteed interest rate with this product. Instead, Premium Bonds holders are entered into monthly prize draws where you have the chance to win prizes between £25 and £1 million.

Every £1 you save in Premium Bonds translates into one entry into the monthly Premium Bonds prize draw and you can hold up to £50,000 in Premium Bonds.

Any Premium Bonds prizes you win are entirely tax-free, but as the prizes are distributed randomly there is no guarantee that your money will actually grow.

Consider alternatives to cash

Cash savings are popular because of their simplicity and safety. The money you hold in cash won’t fall in value, although it can be eroded by inflation.

If you are trying to avoid paying tax on your savings interest, and you already have an emergency savings pot in an easy access account, there are other options that offer cash-like returns and safety.

Galliers-Pratt at Rathbones said: “For money that is not needed immediately, investors may want to look more closely at alternatives, including short-dated, low-coupon gilts. While the coupon is subject to income tax, any capital gain on a gilt is generally free from capital gains tax for individual investors.”

Gilts are UK government bonds that are issued when the government needs to borrow money and can be bought by investors.

They are effectively an “IOU”. You buy a gilt and the government promises to pay the money back to you after a certain amount of time, including a fixed rate of interest called the coupon.

“At current yields, some short-dated, low-coupon gilts can offer a post-tax return of more than 4% for an additional rate taxpayer. Once the 49% savings rate [for additional rate taxpayers] takes effect, a savings account would need to pay more than 8% gross to produce a comparable net return,” says Galliers-Pratt.

“The message is not that people should abandon cash. It is about distinguishing between money needed for emergencies and short-term spending, and substantial excess cash that could potentially be working harder elsewhere.”

One of the more eye-catching measures announced in chancellor John Healey’s first Autumn Budget was the creation of a ‘Starter ISA’.

Little is currently known about this product, besides that it will be developed with the UK’s investment industry and will aim to encourage more Brits to start investing, but there is optimism that it could mark a more positive step than previous attempts to foster an investing culture.

“A Starter ISA could be a much more effective way of creating a new generation of investors than simply trying to push people out of cash,” said Isabella Galliers-Pratt, senior investment director at wealth manager Rathbones. “The real barriers to investing are often confidence, understanding and fear of losing money, rather than a shortage of tax-efficient products.”

The context for the Starter ISA

The UK is disproportionately a nation of savers. Despite the historical long-term outperformance of investments compared to savings, analysis from wealth manager Vanguard found that in 2024 34% of UK household financial assets were held in cash, compared to just 16% in investments.

In the 2025 Autumn Budget, then-chancellor Rachel Reeves sought to address this by reducing the annual deposit limit for cash ISAs to £12,000 for under-65s from April 2027 – with the goal of encouraging the remaining £8,000 of the total £20,000 per year annual ISA allowance to be invested in stocks and shares.

The policy attracted criticism for over-complicating the ISA system. Healey has scrapped it, confirming in his Budget that the annual cash ISA limit will remain at £20,000.

What might the Starter ISA look like?

Healey is not abandoning Reeves’s goal of getting more Brits investing. Instead of cutting cash ISA limits, a new ‘Starter ISA’ will be created which will, in Healey’s words, “reward first-time investors” and be developed in association with the investment industry.

The official government Budget document said the government will: “explore a new ISA incentive for people investing in a stocks and shares ISA for the first time. The detailed design will be developed with industry.”

So there is very little to go on at the moment in terms of what this product will look like and how it will get people investing, but the wording suggests that this will take the form of some kind of financial incentive to invest in a stocks and shares ISA over the cash equivalent – as opposed, for example, to a completely new ISA product.

Martin Lewis, founder of consumer finance site MoneySavingExpert, discussed the scheme in a post-Budget video in which he claimed to have spoken to Healey about incentivising people to start investing.

“My proposal for that was basically, you get a 10% uplift on the first £2,000 you put into a [stocks and] shares ISA,” said Lewis, who also claimed he would be involved in the government’s consultation with industry.

There is no clarity yet, though, whether this is the form the incentive will take.

“The detail will matter, but a meaningful incentive to make that first investment, alongside the right education and support, could help turn more savers into long-term investors,” said Galliers-Pratt of Rathbones. “That could take the form of a government top-up on an initial investment, for example, giving people a tangible reason to take that first step.”

“The focus should be on making investing feel accessible and worthwhile, rather than simply making cash less attractive,” she added.

Maintaining as much simplicity within the ISA system as possible is likely to be key to its success.

“As we consider the new Starter ISA, policymakers need to learn lessons from the complexity and unpredictability of changes to ISA rules in recent years,” said John Owen, chief executive of the Investment Association, an industry body that represents the UK’s fund managers. “We therefore urge the Government to now take a consistent, long-term approach to policy affecting ISAs to help people achieve greater financial resilience.”

Chancellor John Healey put the focus on addressing rising living costs when he announced the first Autumn Budget of his tenure.

Nestled within the Budget document and his speech on 28 October were a number of measures to help households with a higher cost of living and energy bills.

A series of policy changes affecting businesses were also confirmed including targeted support for the ailing high street, while measures will be introduced to encourage entrepreneurship and innovation.

Here are some of the major announcements made.

Defence spending

The government has committed to fully funding the £15 billion Defence Investment Plan, including £4.7 billion which was previously unfunded.

It means spending on defence spending will be worth 2.7% of Gross Domestic Product (GDP) in 2027/28.

The chancellor also pledged over £10 billion in additional economic and military support to Ukraine.

While the government will work with manufacturer Rolls-Royce on a joint 10-year £2.5 billion programme to develop gas turbine technology for civil and aerospace defence.

Taxes on businesses

A surcharge charged to banks on their profits will rise from 3% to 6% for 15 months, starting in January 2027.

Meanwhile the threshold at which high street shops start paying business rates in England will be increased from £12,000 to £18,000 from April 2027.

Vape shops and adult gaming centres in England will also no longer benefit from business rates relief from the same date as part of government efforts to “clean up” the high street and ensure support is targeted at shops, pubs and cafes, as well as other businesses.

Taxes on gambling machines will also be hiked from 20% to 25% for higher stakes machines, which allow gamblers to make larger bets, from next April.

The government has said it wants to close a tax loophole which allows foreign firms to sell services to some UK businesses without accounting for UK VAT.

Taxes on savers and landlords

Tax rates paid on income made from property or savings held outside tax-wrappered accounts will rise by a further 2% from April 2027.

The basic rate will go up to 24%, the higher rate to 44% and the additional rate to 49%.

Budget documents say 84% of income tax payers will be unaffected by the change, with the revenue raised from the move expected to come from the top 10% of households.

Energy bill and cost of living support

A £100 ‘Household Energy Payment’ will be made in the form of a council tax rebate to up to 20 million households in England from January 2027. The rebate will be issued to households in council tax bands A to D.

A further £100 million will be distributed among councils in England to provide targeted support to households most impacted by rising energy bills, some of whom are in council tax bands above A to D.

The VAT cut on electricity bills, which had already been announced by the government and was due to end on 31 March 2027, will be extended to 1 July 2027, taking £50 off the average energy bill.

From April 2027, over 10,000 energy-intensive businesses will have their energy bills cut by as much as 25% through the British Industrial Competitiveness Scheme (BICS).

Healey also confirmed the gas standing charge will be ditched, with the government hoping it can be abolished by the end of next year.

The National Living Wage will be increased by 3.9% to £13.21 an hour from the same date, adding £910 to workers’ annual wage.

The 5p freeze to fuel duty has also been extended to 1 July 2027 while the Gas Shipper Obligation, a new planned levy on gas bills to fund hydrogen projects, will be removed from energy bills and be funded by the government, subject to its commitment to the obligation.

Income tariffs on over 100 everyday food and drink products will be reduced, which the government says will save households up to £21 on their grocery shop per year.

Encouraging investment and entrepreneurship

The National Wealth Fund and British Business Bank will receive an additional £20.4 billion in government funding to boost investment and business growth in the UK. The National Wealth Fund will receive a further £15.4 billion.

The trading allowance, available to those making trading or miscellaneous income, will be tripled from £1,000 to £3,000 from April 2027.

Healey also said the government will launch a new ‘young entrepreneurs allowance’, which will cover a year of living costs for young business founders.

From next April, a new ‘Capital Gains Tax Founders’ Relief’ scheme will be introduced, offering a reduced 10% CGT rate on up to £10 million of lifetime gains.

Few details have been published, but Budget documents say venture capital schemes will be improved so founders can raise capital with “greater certainty”.

Housing

The government has committed to putting £4.7 billion towards the Your First Home scheme for first-time buyers which it estimates will help 70,000 people onto the property ladder.

Meanwhile £1.5 billion in funding will be put towards building social and affordable housing.

A further £432 million will be pumped into ending rough sleeping, one of the major pillars of Burnham’s premiership so far, over the next two years.

Plans have also been unveiled for a new first-time buyer ISA, while from today the Lifetime ISA withdrawal charge will be reduced from 25% to 20%.

Support for low-income pensioners

A new pension tax allowance will be introduced meaning some pensioners will pay less income tax.

From April 2027, if pensioners’ total income is more than the £12,570 personal allowance but less than the value of the full new state pension (£13,037), they will not pay income tax.

If their income is between £13,037 and £13,319, they will receive some allowance and pay some income tax, but less than they would have before the change.

Total income classes as income received from the state pension, private pensions, earnings from work, savings and property or dividend income, or a combination of some or all of these.

Cash ISA changes reversed

Healey ditched his predecessor Rachel Reeves’s proposal to reduce the annual cash ISA limit for under 65s from £20,000 to £12,000 from April 2027.

He also said he will work with the sector to create a new starter ISA to reward first-time investors.

The number of people living alone is rising. The latest data from the Office for National Statistics (ONS) reveals 8.6 million lived by themselves in the UK in 2025, up from 7.7 million in 2015. This equated to 29.5% of households in 2025 and 28.6% in 2015.

If you live alone, you’re more exposed to rising essential costs such as food, energy bills and transport.

Single people spend £8,100 a year on housing, bills and groceries, compared to £7,800 per person for couples, according to research by investment platform Hargreaves Lansdown.

But it’s not just ongoing costs that can be more expensive for singletons.

When it comes to inheritance tax (IHT), single people can miss out on significant tax breaks, potentially leading to higher bills for their beneficiaries. Divorcees and cohabitees suffer from a similar treatment too.

Ed Wood, financial planning director at wealth management firm Rathbones, said: “The inheritance tax system can produce very different outcomes depending on an individual's relationship status.

“Single people, divorcees and cohabiting couples may face a larger inheritance tax bill than married couples with comparable assets because they do not benefit from some of the same allowances and exemptions.”

How inheritance tax can be higher for singletons, cohabitees and divorcees

Whether an inheritance tax bill is due depends on the value of your estate – your property, possessions and money – when you die.

If the value of your estate is worth less than £325,000, known as the nil-rate band, there’s no tax liability, however some people are entitled to extra allowances.

If you give away your home to your children (including stepchildren, adopted children and foster children) or grandchildren, you receive an additional residence nil-rate band worth up to £175,000, taking your nil-rate band up to £500,000, if the estate is worth less than £2 million.

If you’re married or in a civil partnership, you can transfer any unused nil-rate band, as well as the residence nil-rate band, to a surviving husband, wife or civil partner.

This means, in some cases, estates worth up to £1 million can be passed on IHT-free.

On top of this, you can pass your estate to your partner when you die free from IHT through the spousal exemption.

These benefits aren’t afforded to single people, divorcees or cohabitees though.

How it works in practice

If you’re single

It effectively means single people miss out on a significant boost in the amount they can pass to beneficiaries without them having to pay IHT.

For example, a single person without a child, stepchild or foster child, receives just the basic £325,000 nil-rate band upon death.

Anything in their estate worth over this figure will usually be taxed at the standard 40% inheritance tax rate.

Meanwhile, a single person with children would only be able to pass on £500,000 free from IHT.

Cohabitees

Cohabiting couples can also miss out on increased IHT allowances.

If a person in a cohabiting couple without children dies and wants to pass their estate to the other, as laid out in their will, IHT would typically be owed on anything over the first £325,000.

This is because the surviving partner does not benefit from the spousal exemption and any unused nil-rate bands.

This tax treatment can leave the surviving cohabitee facing a significant IHT bill, potentially needing to sell the family home to pay for it.

Ben Glassman, head of family and managing partner at leading UK wealth management firm Evelyn Partners, explained: “If an unmarried partner is left a property, or a share of a property, worth significantly more than the deceased’s available nil-rate band, they could potentially have to sell or borrow against the home to meet the tax.

“While IHT can in some circumstances be paid by instalments where property is involved, the need to calculate and arrange payment of the liability as part of the estate administration process – in order to obtain probate – can still create considerable financial and emotional pressure for a cash-poor family.”

Changes to the tax landscape from April 2027 will make the situation worse for single people, cohabitees and divorcees.

Unused pensions are set to form part of estates for IHT purposes from this date. Any leftover pension funds left to spouses or civil partners will benefit from the spousal exemption. Cohabitees, however, won’t.

What can you do to lower your inheritance tax bill?

There are two things single people and divorcees can do to mitigate the IHT blow – lifetime gifting and making a will.

Lifetime gifting, when used correctly, can lower the value of your estate and give loved ones a financial boost while you’re still alive to see them enjoy it.

However, beware of the seven-year rule and the common misconception around how it applies, if your gifts exceed inheritance tax gifting allowances.

Wills can also ensure assets go to the right beneficiaries, which can lower your IHT bill in certain circumstances.

For example, if you name a charity as one of the beneficiaries on your will and leave at least 10% of your net estate to it, the IHT rate on the remaining estate can decrease from 40% to 36%.

Cohabiting couples can get married or enter into a civil partnership to benefit from the tax advantages that come with it, explore lifetime gifting and ensure they have wills set up.

It’s recommended you ensure your nomination of beneficiary forms, sometimes known as expression of wish forms, have been returned to your pension providers and are up to date.

These forms tell providers who you want to inherit your pension, rather than leaving it to the discretion of the pension trustees or administrators.

Wood, from Rathbones, said: “Proactive estate planning is especially important.

“Many choose to focus on gifting during their lifetime, supporting wider family members, or incorporating charitable giving into their plans.

“Taking a deliberate approach can help ensure your wealth is distributed according to your wishes while minimising unnecessary tax.”

Nearly a quarter of people who started claiming the state pension in the 2024/25 tax year didn’t get the full amount, according to new figures obtained by MoneyWeek.

Of the 776,330 people who began getting the new state pension that financial year, 76% (591,530) were entitled to the maximum weekly rate at the time of £221.20, according to a Freedom of Information (FOI) request submitted to the Department for Work and Pensions (DWP). This suggests around 24% (184,800) qualified for less.

Some 16% (124,860) of the people who started claiming the new state pension in 2024/25 received less than £200 a week. Just over 26,400 received less than £100 a week – equating to around 3% of people who began getting the payment that tax year.

Full figures for the 2025/26 year are not yet available, but the most recent data provided by the DWP via the FOI showed 489,730 people claimed the new state pension between April 2025 and November 2025.

Of this amount, 71% (349,490) received the full new state pension, which was £230.25 per week in 2025/26. This suggests 140,240 (29%) did not.

Sarah Pennells, consumer finance specialist at retirement firm Royal London, said: “We often talk about the full state pension amount, but as these figures show, approximately one in four pensioners claiming last year got less."

Steve Webb, partner at pension consultants LCP and former pensions minister, added: “There will always be people short of the full rate.

“In some cases this will be because of years when they were paying a lower, contracted out, rate of NI contributions, or because they simply have gaps in their record when they were not working or getting NI credits.”

How to top up your state pension

Your state pension entitlement is based on your NI record.

You need at least 10 qualifying years to receive the minimum new state pension amount, currently £68.90 a week, and 35 to get the full amount, which is £241.30 a week in 2026/27.

The number of qualifying years and the weekly rate is different for people getting the old state pension.

You can get a state pension forecast to see if there are any gaps in your National Insurance (NI) record.

If you’re not receiving the full amount, or want to top up what you’re currently getting, you may be able to fill gaps in your National Insurance record through credits or voluntary contributions.

Claim credits

Before paying for National Insurance contributions (NICs), it’s worth seeing if you’re eligible for free credits first.

You might be eligible for Specific Adult Childcare Credits if you have previously taken on childcare responsibilities.

You can claim these credits both before and after claiming your state pension.

The credits are available to grandparents or other family members who have cared for a child under the age of 12 if the parents are working and receiving Child Benefit.

If the parent makes National Insurance contributions through their work, they will get qualifying years on their National Insurance record. They therefore wouldn’t need the credits from the Child Benefit so can transfer them.

You can apply for the credits if you’ve taken on caring responsibilities since April 2011, were aged 16 and over but under state pension age when you provided care for the child, and were a UK resident.

To apply, you need to fill in a CA9176 form online via gov.uk, then print it and post it to HMRC using the address shown on the form.

Buy missing National Insurance years

If you want to fill gaps in your National Insurance record and can’t claim credits, you could buy Class 3 National Insurance contributions (NICs). You can do this before or after you begin claiming the state pension.

For the 2026/27 tax year, Class 3 contributions cost £18.40 a week, or £956.80 a year.

You can backdate filling in gaps in your NI record by six tax years and the deadline is 5 April each year. For example, if you wanted to make up gaps for the 2025/26 tax year, you would have until 5 April 2032 to do so. The deadline to top up 2020/21 is 5 April 2027.

You can buy Class 3 contributions a number of ways including through the gov.uk state pension forecast tool if you’re below state pension age, through your Personal Tax Account or over the phone. You can find out more via gov.uk.

Some people will have gaps in their NI record because they weren’t working or weren’t earning enough in a given year, however others may have gaps because they were ‘contracted out’ under the old state pension system in place pre-2016.

Those who were contracted out would have seen more of their NI contribution go towards a private pension instead of the state pension.

If being contracted out has left you with a less than full new state pension, you can top it up by filling in missing NI years from the previous six tax years.

Charlene Young, head of technical at investment platform AJ Bell, said: “Although it was abolished in 2016, three quarters of people reaching state pension age between 2016 and 2036 would have been members of contracted out schemes at some point in their working lives, particularly those in a final salary or career average scheme.”

Is it always worth topping up your state pension?

It’s not always worth topping up your state pension.

Topping up can push you over a threshold making you ineligible for benefits, while those not likely to live long won’t get much value out of filling gaps in their NI record.

If you have reached state pension age, you should contact the Pension Service to see whether it makes sense to buy voluntary contributions.

Webb, from LCP, said the main groups of people who should be “careful” about filling missing National Insurance years are “those who think they are at risk of being on benefits in retirement, because a higher pension could simply mean less benefit, and those who sadly have a short life expectancy”.

“For those who reached pension age before 2016 it will be hard to boost their pension because the deadline for voluntary contributions has passed,” he added.

It could be worth speaking to a financial advisor to assess whether increasing your state pension entitlement is worth it.

Separately, you could increase the amount of state pension you get by deferring it, meaning you don’t claim it when you reach state pension age.

What to do if you have a low state pension and are on a low income

If your state pension entitlement is low, you may be able to claim Pension Credit. Hundreds of thousands of pensioners are believed to be eligible but missing out on the benefit.

There are two parts to Pension Credit, but essentially it tops up your income if you're on a low amount.

The average claim is worth £4,500 a year and entitlement to the benefit also gives you access to a host of other benefits such as Cold Weather Payments and the Warm Home Discount.

You can claim Pension Credit up to four months before reaching state pension age. You can apply any time after reaching state pension age, but your application can only be backdated by three months.

US insurance company Lemonade (NYSE: LMND) was founded just over a decade ago. It uses AI at every stage of the insurance process, from selling policies to dealing with claims, though it still employs human staff, arguing that this helps cut administrative costs.

While it is true that AI is undoubtedly going to change the world, not every AI-related share is a compelling investment. To make a success of AI, a company must pass several tests.

First, it has to come up with a way of doing something more efficiently. Next, it must find a way to make money. It will need to fend off competition, both from incumbents and new entrants into the sector. Finally, even firms that meet all these criteria can become poor investments if the shares rise so far that they become overvalued.

Lemonade is still losing money

Lemonade says it spends approximately 5% of the money it earns from premiums on handling claims, as opposed to the 9% figure typical for the industry as a whole in the US.

Lemonade also believes that AI can significantly accelerate operations, with over half of claims paid out instantly and most policies sold in under 90 seconds. Lemonade is undergoing a period of rapid growth, with sales increasing from $94 million in 2020 to $738 million in 2025. Revenue is expected to keep expanding at around 30% a year.

But the company continues to lose money, with estimates suggesting that – at the very least – it will be in the red both this year and in 2027 (though management believes that the firm may start to achieve positive earnings before interest, taxes, depreciation and amortisation – Ebitda – in 2027).

The competition is catching up to Lemonade

Another difficulty is that while Lemonade may be ahead of the technology curve today, other companies are catching up by pouring large sums into AI. For example, rival Allstate announced this summer that it is launching ALLIE (Allstate's large language intelligent ecosystem), while other major competitors such as State Farm plan to use AI too.

And while Lemonade argues that its status as an AI-driven company will always give it an advantage over companies built around legacy systems, it also has to compete with other AI-driven companies, notably Root.

Lemonade could begin to turn a consistent profit and fend off competition from both new and old rivals. But investors still have to acknowledge that its valuation is relatively expensive.

It trades at 3.7 times sales, more than four times the 0.83 times sales that Allstate, a profitable and fast-growing company, sells for. Moreover, Root, which operates a similar tech-driven model but manages to turn a profit, only trades at 0.48 times sales. Furthermore, Lemonade's recent share-price performance suggests that investors are starting to sour on it. The stock has fallen by more than 50% from its 52-week high and has lagged the wider market over one, three, six and 12 months.

It is also below both its 50- and 200- day moving average. I would therefore go short at the current price of $46.46 at $45 a share. Put the stop-loss at $67.46, which gives you a total downside of £945.

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In September 2008, just days after Lehman Brothers collapsed, Abu Dhabi finalised its purchase of Manchester City Football Club in a deal that came “to define the use of sport as a platform for projecting soft power”, says the Financial Times. The club, chaired by Khaldoon Al Mubarak, went on to win eight Premier League titles.

Yet it now faces “an existential crisis”, having been found guilty by an independent panel of artificially inflating its financial position by more than £900 million, in breach of financial fair play rules, via “sham” commercial deals that overstated its income. The club's proud Abu Dhabi royal owners find themselves in the dishonourable position of presiding over “one of the biggest scandals in Premier League history”.

The debacle, and City's initial “aggressive, confrontational stance” against the football authorities, is a “rare mis-step” for Khaldoon Al Mubarak – a smooth operator with a reputation for tightrope-walking his way through tricky politics, says The Guardian. He appears to have broken the “cardinal law” of ambassadors: “don't embarrass the boss”.

Khaldoon Al Mubarak, 50, is one of Abu Dhabi's most powerful non-royals. He more usually “straddles global finance, diplomacy and football with a polished assurance that mirrors the emirate's meticulously managed image”, notes an FT profile. That has made him a leading power broker in the emirate's international relations. He is “diplomatically in charge of the UK file as well as the China file… and the main liaison with the US administration”.

As group CEO of Mubadala, he is also “the world's longest-serving head of a sovereign investment fund” – a key figure overseeing oil-rich Abu Dhabi's $1.5 trillion in wealth.

Who is Khaldoon Al Mubarak?

Khaldoon Al Mubarak learned the tough realities of politics the hard way, says Sky News. In 1984, when he was eight, his father Khalifa Al Mubarak – a diplomat serving as the UAE's ambassador to France – was gunned down in Paris by the Abu Nidal terrorist group, a forerunner to Hamas. Their justification was that the UAE had become too seduced by “American imperialism”. The young Khaldoon was “mentored” by the Abu Dhabi royal family in the wake of the killing. Indeed, he became a “quasi-adopted son”, says The Guardian.

The royal family hired Al Mubarak when he graduated from Tufts University in Massachusetts. In 2002, he was selected to lead the newly founded Mubadala Development Company, which was “charged with helping diversify Abu Dhabi's oil-dependent economy and investing its hydrocarbon wealth in new industries and infrastructure”, says the FT.

He enjoyed such success – including negotiating an annual Formula One Grand Prix in 2007 – that he was the shoo-in to lead the revival of Manchester City. There are plenty of people with good things to say about him – including “suave” and “incredibly capable”. One Dubai business associate goes further. “He's a good human being… he's funny, he's probably the best friend you can get if you are lucky. And he's clean.” Certainly, Al Mubarak has avoided personal association with controversies that have dogged the emirate. Until now.

The saga is far from over. Manchester City has rejected the ruling and lodged an appeal. Meanwhile, the UK government is fretting over the possible fallout if sanctions imposed on the club prompt Abu Dhabi to turn off its massive investment spigots. Ultimately, the Emiratis may be forced to sell Manchester City.

Al Mubarak, who has UK diplomatic immunity, “could well emerge from this fiasco largely untarnished”, says The Guardian, because City is such “a tiny part of his portfolio”. Still, these are uncomfortable times.

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Putting your affairs in order during your lifetime can give you and your loved ones peace of mind for the future and make sure your wishes are carried out after you’re gone.

Sorting all the paperwork and administration involved can be difficult and time-consuming, but planning ahead and creating a record of your personal and financial details, as well as communicating your wishes to your loved ones, can make a big difference.

We look at some steps to consider taking.

Write your will

Writing a will means you can officially declare what you want to happen after you die, giving you control over how your assets and belongings are inherited.

Without a will, your possessions could be split in ways that you may not have wanted and make the process of inheritance more difficult.

Your will should include instructions about how your money, property, and belongings (like jewellery or other personal items) should be divided once you die, who you want to inherit parts of your estate and if you want to give any money to charity.

The will should also detail who you want to look after your children if you die while they are under 18, who you want to be the executor of your will, and other relevant wishes for what you want to happen after you die.

While you don't need a solicitor to write a will, it is recommended you get advice from a professional if your will is not straightforward.

You will need to make sure your will is legally valid.

You can keep your will at home or store it with your solicitor, bank, the national probate registry, or a company that stores wills. Tell your executor, a close friend or relative where it is.

It’s sensible to write a will early on but review it every few years and after major life events, such as marriage or divorce, to make sure it still reflects your wishes.

Olly Cheng, financial planning divisional lead at wealth manager Rathbones, said it can be a good idea to start having conversations about what will happen to your assets after you die early on.

“The first thing is for people to get comfortable with the idea of having those conversations,” he said. “Going in, you need to understand that your children [if you have them] will have opinions but that's okay because the final decision is still yours. But having that conversation will save a lot of hurt later.”

Check your pension inheritance wishes and how they will be undertaken

You may be able to leave your pension wealth to your loved ones but you can’t leave your pension in your will.

Who inherits your pension is decided by who you nominate in an “expression of wish” or “nomination of beneficiary” form that you give to your pension provider(s).

In this document, you will nominate a person or multiple people who you want to inherit your pension.

There are two main ways this can be set up: under direction, or under discretion.

If you chose inheritance to be under direction then who you nominate in this form will be final.

However, there are scenarios where this could cause problems.

For example, you may have filled out the form early in your life and forgot to update it after a major life change, such as remarriage, meaning the stated beneficiary may not be who you want to inherit your pension.

In this scenario, your pension scheme would legally have to pay your pension out to the state beneficiary regardless of when that form was submitted.

This is where choosing inheritance to be under discretion can help. When you choose this, a pension scheme administrator will use your ‘expression of wish’ form to help guide their decision, but it will not be the final say.

If the administrator’s investigation concludes that the stated beneficiary is different to who they believe you would have wanted to inherit your pension, then they can overrule the form.

Most pension schemes are under discretion, according to the government.

Clare Moffat, pensions and tax expert at Royal London, said that while it can be daunting to give this power over to somebody else, it can be a sensible decision.

She said: “It's useful to remember that the main purpose of the scheme administrator is to find out where you would have wanted that money to go. If that's not clear because you've not filled out a form or it's a very old form, then they will investigate to find out where that money should go, and they will ask different people.

“They'll get evidence from solicitors. They'll ask how many family members there are. They'll ask lots of questions, but if inheritance is set up under direction and you don't keep your forms up to date, then that money could be going to someone you didn't want it to go to.”

Either way, it is important to update your relevant pensions inheritance forms regularly, to ensure your pension goes to the right person.

If you have bought an annuity or are considering one, you should check what its inheritance rules are. Some annuities provide lump sums or continue for beneficiaries after you die, while others stop payments immediately.

For example, if you bought a joint life annuity, then payments will continue to be made to your surviving partner after you die, though rules about the exact amount paid will differ. On the other hand, if you bought a single life annuity then the beneficiary wouldn’t inherit the annuity.

Plan for inheritance tax

In the UK, your estate will only be liable to inheritance tax if it is worth more than £325,000 and you leave it to someone other than your spouse. If you are leaving your home to your children or grandchildren, then the threshold increases to £500,000.

Anything in your estate above this threshold is taxed at 40%, or 36% if you leave 10% or more of the net value of your estate to charity in a will.

If your estate is likely to be above this threshold, you might want to plan to reduce inheritance tax liabilities during your lifetime.

Cheng at Rathbones, said: “The biggest misconception is that you need all these complex structures [like trusts], but actually for most people it can be really simple. The idea is, if you can gift money to your kids, that's usually the best thing to do.”

The ‘seven year rule’ means that you can give away as much of your estate as you like during your lifetime, and if you live for seven years after the gift is given, it won’t be subject to inheritance tax.

There are various inheritance tax gifting allowances that can be used each year to give money or assets away free from inheritance tax liabilities. This could lower your overall estate.

Cheng said that while structures like trusts can be useful for some people, most people assume they need complex tools when they do not.

“Trusts and all these other things are often about control, not about tax – if you put money in trust, you're still going to have a seven-year clock. So, what most people miss is that actually the best thing is just to have a really grown-up conversation with your children. And there may be reasons not to give them money directly, but it should always be the starting point.”

This being said, there are situations where setting up a more complex structure like a trust can be the right thing to do. This may be because you have a blended family, or you do not want to give your children all the money at once.

If this is the case, consider speaking to a professional wealth manager or financial planner and see if a trust is the right way forward.

However, Cheng warned that when starting to plan for inheritance tax, you should not immediately start gifting your estate away without first considering how much you actually need to live through retirement.

Plan for your funeral

Some people may decide to outline their funeral wishes before they die.

If you want to do this, consider creating a detailed document that provides straightforward instructions of what you want to happen at your funeral.

Some things you may want to include are the location, whether you want to be cremated or buried, whether you want to donate your organs, whether you want a religious funeral, and any particular wishes.

Tell your loved ones where they can find this document. You can also outline these wishes in your will, although they aren’t legally binding.

You can also prepare for how the funeral will be paid for.

Some life insurance policies will include funeral cover and if yours does then you should tell your loved ones this. You may consider buying a pre-paid funeral plan. Otherwise, funeral costs can be taken from your bank account even if it is frozen.

Create a fact file and tell your loved ones where to find it

Creating a file of your finances can mean your loved ones don’t need to search for personal and financial information after your death.

In this document, include a list of all your financial accounts with a description of what they are, what they are used for, and how to get into contact with the organisation. This may include your current account and credit card providers, mortgage lender, pension provider, and insurance brokers.

Royal London has created a “When I’m gone” document covering many of these areas that you can access for free, print, and fill out. Don't write security information about your accounts, such as passwords and PINs in the document.

Keep the document securely in a place that you remember and your loved ones know about. For example, this could be in a locked filing cabinet in your home, or in your solicitor's office. It may be a good idea to keep it in the same place as your will.

Additionally, you could include a list of your important online accounts, like social media profiles, so your loved ones can access them and close them or turn them into memorial accounts.

Patient investing has driven the number of ISA millionaires – those with £1 million or more held in their ISAs – to a record high of 7,730 in the latest tax year.

The figures, revealed in a Freedom of Information (FOI) request sent to HMRC by savings and investment app Plum, mark an increase of more than 50% in the number of ISA millionaires in the 2023/24 tax year, compared to 5,070 in the tax year prior.

The average ISA millionaire now has a pot worth £1,348,000, virtually the same as the average in the 2022/23 tax year despite over 5,000 more individuals becoming ISA millionaires.

“A jump of more than 50% in a single year is really telling,” said Will Bryant, director of wealth strategy at Plum. “These aren’t people who suddenly saved their way to £1 million. It’s the result of years of patient investing, where the growth on your growth starts doing the heavy lifting. That’s the bit people underestimate.”

The number of ISA multi-millionaires has also increased, with 320 individuals sitting on ISA pots worth between £2 million and £3 million, 40 with pots between £3 million and £4 million, and 60 with accounts worth over £4 million.

Among those 40 with pots worth more than £4 million, the average account value was £7,708,000. This figure balloons to just under £12 million when looking at only the top 25 ISA investors in the UK.

As any money held in an ISA is shielded from capital gains tax and dividend tax, returns from these portfolios will be protected from a hefty tax bill. For example, a portfolio of £1 million which grew by 15% – the average return from the S&P 500 index over the last 10 years – will have brought tax-free returns of £150,000.

Bryant added: “These investors didn’t reach millionaires’ row by selling every time things got scary. They’ve sat through financial crises, Covid, rising interest rates and tariff worries, all of it.

“Staying put is harder than it sounds, but it’s time in the market, not trying to time the market, that works. And this data is proof of that.”

Are there any cash ISA millionaires?

While it is theoretically possible for someone who put their full £20,000 ISA allowance into cash each year since 1999 to have become an ISA millionaire, it is incredibly unlikely.

The vast majority of ISA millionaires joined the club by putting their ISA contributions into the stock market.

A separate FOI request sent to HMRC by Murphy Wealth in 2025 found that in the 2021/22 tax year, not a single ISA millionaire managed to reach the figure through cash ISA holdings alone.

The request found that 94% of the UK’s ISA millionaires got there exclusively through stocks and shares ISAs while the remaining 6% held money in a combination of cash and stocks and shares ISAs.

How can you become an ISA millionaire?

While joining the ISA millionaire’s club may seem a distant dream, diligent and patient investors could get there sooner than you may think.

Data from Plum shows that someone starting from scratch today and putting their full £20,000 ISA allowance into a stocks and shares ISA could reasonably expect to become an ISA millionaire in around 22 years, assuming annualised returns of 7% after fees.

Any investors who want to reach £1 million in their ISA should remember that patience is key.

Charlene Young, head of technical at AJ Bell: “ISA millionaires paint a great picture of what can happen when investors combine time, regular contributions, patience and perhaps a bit of good fortune.”

She said that those who want to build up £1 million in their ISAs will need to adopt a ‘get rich slow’ mindset and start as early as possible.

“There will be younger investors with a high-risk appetite who have achieved huge returns, but ordinary investors are normally best served by a diversified portfolio held for the long term.”

As for what you should invest in, Young says there isn’t a single route to becoming an ISA millionaire.

“Analysis of AJ Bell’s ISA millionaire investors has shown that shares and [investment] trusts are especially popular, but there are plenty using funds too. The important thing is to invest in what you feel comfortable with and understand the level of risk you are taking in return for the potential reward.”

Further changes to the tax regime would deter businesses from investing in the UK and stunt economic growth, entrepreneur and HomeServe founder Sir Richard Harpin warns.

Prime minister Andy Burnham was rumoured to be looking at bringing capital gains tax rates closer to income tax rates in the upcoming Autumn Budget, but self-made billionaire Harpin says this, or the possible introduction of a wealth tax, would be “absolutely devastating for British business” and result in an exodus of the wealthy – neither of which would help the UK economy.

Speaking to digital editor-in-chief Kalpana Fitzpatrick on the MoneyWeek Talks podcast, which you can also watch on YouTube, Harpin said: “We’ve clearly seen people have already left the UK, and we don’t want to see more people leave.”

The threat of higher taxes on the wealthy means as many as one in ten UK adults are considering leaving the country, according to a YouGov poll commissioned by wealth manager Tideway Wealth following the 2025 Autumn Budget.

“There’s got to be incentives for risk-takers to invest and work 24/7 to make a business successful here in the UK, to hopefully grow it and expand it internationally,” said Harpin.

“So we can’t have a situation where capital gains tax is the same level as income tax. There have got to be rewards for risk-takers. That’s the key to growing the UK economy.”

Following weeks of speculation, chancellor John Healey has reportedly rejected calls to raise CGT to match income tax rates, according to the Financial Times on Tuesday.

Some argue Britain’s wealthiest should pay more tax. In July, over 100 UK-based millionaires, including broadcaster and businessman Gary Lineker and musician Brian Eno, penned an open letter to Burnham saying they would be happy to pay a wealth tax.

When asked whether billionaires should pay more tax, Harpin said, “I don’t think they should”, arguing that those billionaires had taken a lot of risk and made a lot of sacrifices in order to make their businesses successful.

“It’s a difficult job as an entrepreneur,” Harpin said. “Failure is only one step away. Those billionaires have earned their money. If they’re still in the UK, they’ve paid their capital gains tax if they’ve sold their businesses. The businesses themselves have paid a high level of corporation tax so we should not have a period of double taxation.”

How HomeServe went from losing £50,000 a month to being sold for £4.1 billion

Harpin knows the risks that entrepreneurs take better than most. His lifelong dream of becoming a successful businessman nearly led to his business running out of money – twice.

Harpin and his business partner began their company in 1992, with their combined life savings of £50,000.

The business venture, then called A1 Fast Fix, hit major stumbling blocks. "We literally saw our life savings go down the drain in the space of six months,” he said.

Harpin says the problems were due to the wrong business model, high costs and a lack of repeat business.

In December 1992, they had to borrow money from friends and family to keep the business going.

The following spring, they got £500,000 in investment from South Staffordshire Water for 52% of the business.

There was a "big sense of relief", Harpin said: “I thought, right, now I can really grow the business, and it got bigger every month.”

But the company continued to haemorrhage money. "All that happened was I took £10,000 a month of losses and they became £50,000 a month of losses,” he said.

A little over a year later, the business was back in the same position. “[We’d] run out of money. [We were] literally down to our last £10,000”, Harpin said.

He continued: “Even my business partner came to me and said, ‘Richard, your life's dream of becoming an entrepreneur…you’ve got to face it, it’s over’.”

But Harpin refused to give up. “When you’ve got a life’s dream, you’ve got to make it happen,” he said.

Luck did strike, and Harpin found out about a water company in Surrey offering annual plumbing cover.

“I went down to Surrey, stopped people in the high street and said, ‘Have you joined up? What did you like about it? What did you not like about it? And literally designed our plumbing insurance membership on the street.”

The insurance memberships took off and customer growth exploded. By 1997, HomeServe had one million customers in the UK and by 2010, five million globally.

In 2023, Harpin sold HomeServe for £4.1 billion.

How can you become a billionaire?

After selling HomeServe three years ago, Harpin is now helping other entrepreneurs grow their businesses.

In 2015, he set up Growth Partner, which provides funding and advice to medium-sized businesses to help them scale. In 2023, he acquired Business Leader, a private network where chief executives and founders of businesses worth over £3 million can receive coaching and tips on how to grow their firms.

This summer, his book ‘How to Make a Billion in 9 Steps’ was published. Harpin discussed some of those steps on the MoneyWeek Talks podcast, including why “copying” and adapting existing ideas can be a recipe for success.

“We’re taught at school that copying homework is bad. In business, it’s definitely good to copy somebody else’s idea, like I did, and then do it better and bigger and quicker,” he said.

Harpin also discussed the importance of "honing your character" and focusing on the things you’re good at – step nine from the book.

“I was only good at a very small number of things and I was really bad at lots of things,” he said.

“I used to get really miserable at my performance review with my chairman, until I realised that what I needed to do was just focus on my couple of strengths and then hire people that could do all the things that I was bad at, that I didn’t like doing, and that was the magic bullet.”

‘Why you should start a business in the UK now’

The vast majority of businesses Growth Partner works with are UK-based.

And although economic growth remains sluggish, Harpin believes it is still a good place for businesses to thrive.

“I still believe that there is no better place in the world to run a global business from,” he said. “There’s a relatively low level of red tape, and what better time to open a business or expand a business than in a difficult time?

“It will eventually get better, and if you can grow through difficult conditions, then think about how easy it’s going to be in the future.”

To learn more about Richard Harpin’s life and his tips for succeeding in business, watch MoneyWeek’s full podcast on YouTube, or wherever you get your podcasts.

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 Sholto Heaton are joined by influential guests – from CEOs and entrepreneurs to economists and fund managers – to share their top tips on managing money, investing wisely and building wealth.

Follow the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence. You can also watch the episodes on our YouTube channel.

Sheikh Tahnoon is the younger brother of the UAE’s ruler, Sheikh Mohamed bin Zayed (MBZ). He combines his role as the emirates' top money man and dealmaker – he runs the UAE's largest sovereign wealth fund and the First Abu Dhabi Bank – with a vital position as head of national security. He is perhaps the individual who has done most to further his country’s relations with the US.

Twenty years ago, the United Arab Emirates was “at the centre of a political firestorm” when a bid to buy up six major US seaports, through the Dubai-owned logistics company DP World, triggered uproar, says the Financial Times. Alleging the oil-rich Gulf state was a financing hub for al-Qaeda, some in Congress warned of a dire threat to US security if the UAE was allowed to run strategic ports. DP World was forced to back out of the sale. It also proved “a watershed moment for the UAE – and its relationship with America”.

The ruling Al Nahyan dynasty, implacably opposed to Islamic extremism, decided it was time to fix this “fundamental misunderstanding”. And they did. Two decades on, the UAE is one of America's most capable allies and business partners in the Middle East.

Sheikh Tahnoon, who is rarely seen in public without his trademark dark glasses, cuts an enigmatic figure, says The Guardian. His influence is global. He presides over an economic empire worth roughly $1.5 trillion – equal to the entire output of Indonesia or Turkey – with an extraordinary breadth of investments. In the UK alone, he oversees healthcare providers and property giants and manages investments in public utilities such as Thames Water. This summer, the sheikh's investment conglomerate IHC bought a controlling stake in Richard Caring's Ivy hospitality empire.

Sheikh Tahnoon's race to global dominance with G42

But the business that has done most to cement relations with the Trump administration and Silicon Valley is Sheikh Tahnoon's AI and cybersecurity company G42, which has now successfully positioned itself at the heart of the global AI establishment. Microsoft has invested $1.5 billion and its vice-chair, Brad Smith, now has a seat on the G42 board. G42 is either a direct investor in or a major partner of Anthropic and OpenAI.

Donald Trump has “clutched Tahnoon and G42 close to his bosom”, and last year reversed a decision to restrict the export of AI chips to the UAE, paving the way for the construction of the biggest data centre in the world in a campus outside Abu Dhabi, says The Wall Street Journal. Dubbed “Stargate UAE”, the completed facility will have a 5GW power capacity, up to five times the size of today's largest hyperscale data centres. The US chip deal was announced two weeks after one of Tahnoon's investment vehicles acquired $2 billion worth of cryptocurrency issued by the Trump family's company, World Liberty.

Sheikh Tahnoon's father, Sheikh Zayed, who established the ruling dynasty following independence from Britain in 1971, is believed to have fathered 30 children, but it was the offspring of his third and favourite wife, Fatima, who emerged as the nation's powerbrokers. Tahnoon and his five brothers are known in the UAE as the bani Fatima, or “sons of Fatima”, says The Guardian, and grew up steeped in her “worldview that placed their family at the centre of the universe”.

Whether playing chess, video games or throwing Brazilian jiu-jitsu moves, Tahnoon, 57, is “obsessed with winning”. But his activities as the UAE's security chief reveal a darker streak, says The Guardian. “The UAE has a long history of enforced disappearances, secret detention sites and vicious reprisals against the family members of exiled dissidents.” Indeed, G42 is the “culmination of Tahnoon's dual identity as a financier and spymaster”. Much of its expertise derives from DarkMatter, a now-dissolved company renowned for its hacking and surveillance activities.

It may trouble some that the UAE is emerging as such a strong global force in AI and that Tahnoon is at the heart of it. Very few people outside the UAE even know his name. “He's quiet,” one former US national security official told The Guardian, “and he's always everywhere.” If he gets his way, his global reach has only just begun.

What are tax havens?

Tax havens are small, well-governed, offshore financial centres that offer low or zero taxes, combined with secrecy – or at least strict privacy – regarding client and ownership information.

Many of them are islands connected in some way with Britain to exploit the country's legal frameworks, stability and access to the City of London, but with the convenience and flexibility of separate fiscal regimes. The islands have a massive incentive to take advantage of their position, and specialise, given financial services can generate vastly more income than other local industries.

Which British territories are tax havens?

Offshore financial centres linked to the UK fall into two categories: Crown Dependencies and British Overseas Territories. The first group is made up of Jersey, Guernsey and the Isle of Man, which have enjoyed varying degrees of fiscal and legislative independence for many centuries (and are not legally part of the UK). When international finance took off in the 20th century, these islands had the advantage of independent legal and tax systems, plus close links to one of the world's biggest financial centres.

By contrast, Overseas Territories (the Cayman Islands, Bermuda and the British Virgin Islands are the big three financial centres) are legacies of empire – self-governing microstates with their own tax and legal systems, but with the British monarch as head of state.

How big is the offshore financial centres industry?

The Cayman Islands is the legal domicile for 30,000 investment funds, with about $9.1 trillion in assets under management, according to its government's figures, with more than 75% of offshore hedge funds domiciled there.

The British Virgin Islands are specialists in company incorporation, holding companies and trusts – home to 352,000 registered companies, according to figures from the Organisation for Economic Co-operation and Development (OECD) for 2024. According to the Tax Justice Network, some $2.6 trillion of foreign direct investment passed through British Virgin Islands structures that year.

Bermuda's specialism is insurance and reinsurance, with 1,210 registered firms handling $2.17 trillion in total insurance assets and about $300 billion in assets under management through licensed investment businesses. In each case, the territories claim to provide an essential and legal tax-neutral framework that enables global commerce. Critics say they facilitate aggressive tax avoidance and profit shifting, allowing corporations and individuals to pay hundreds of billions of pounds less in tax.

Is being an offshore tax haven sustainable?

There's definitely increased pressure on low-tax jurisdictions, both from global trends towards greater transparency and from the UK itself. The Crown Dependencies and British Overseas Territories are part of the OECD's Common Reporting Standard (CRS), meaning they must exchange financial-account information with foreign tax authorities. They are also subject to the OECD's 15% global minimum tax for large multinational groups, meaning the likes of Bermuda and Jersey – which both had zero-rate regimes – have been obliged to meet that minimum.

Meanwhile, the UK has been gradually pushing for more transparency when it comes to “beneficial” (ultimate) ownership of assets, with the Sanctions and Anti-Money Laundering Act 2018. Progress is far from complete, however, and wrangling continues. The Cayman Islands, for example, finally agreed to allow “legitimate interest” access in 2025, but in practice the process is slow and subject to expensive appeals and delays that critics say are designed to discourage access requests.

Will Britain's tax havens survive?

Neither of these trends are set to lead to the collapse of the UK's offshore tax havens. But the picture is morphing from one of “tax haven” bank secrecy and zero or low tax, to one of offshore centres providing tax-neutral legal and financial infrastructure for global capital. Strikingly, in 2025 the Overseas Territories between them froze more than $11 billion of assets under sanctions regimes, on Foreign Office figures. In other words, they are well on the way to being integrated into international anti-money-laundering and sanctions enforcement.

The relationship between the UK and its dependencies and territories has sometimes been fraught, with Jersey occasionally threatening independence if London gets too heavy-handed. But they are a positive asset and shouldn't be taken for granted, says James Price in City AM. The Overseas Territories account for 4.4% of the UK's services exports – more than Spain or Italy, or any Asian country except China. And they entrench the City's global dominance, channelling “enormous sums of money into the country and fuelling finance with access to worldwide asset pools. In turn, this stimulates investment, drives productivity and more than offsets lost tax revenues”.

How is Jersey as an offshore financial centre?

It's still one of the world's leading offshore centres, says Simon Nixon on Bloomberg. But tougher competition from rivals such as Dubai, Singapore and the Cayman Islands means the island is “locked in an increasingly difficult battle to preserve a financial-services industry that accounts for 40% of its government revenues and 44% of gross value added”.

Brexit hasn't helped – EU rules mean that funds marketed to European investors must be administered on European soil and Jersey has lost business to Dublin and Luxembourg. London, the source of Jersey's deal flow, has lost business to the Middle East and Asia.

And the UK's post-financial-crisis ringfencing rules (surplus deposits can no longer be lucratively parked with UK banks) has seen the number of banks on Jersey shrink by a third since 2017. A Jersey government-commissioned review put it well earlier this year: that “the privilege has shifted”. For decades, Jersey operated on the assumption that “access to the island was itself a privilege; now, Jersey must go out and compete for business like everyone else”.

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High earners are being increasingly squeezed as fiscal drag, a cliff edge for support towards childcare, and a high tax burden bite.

Despite having a high salary, a growing group of professionals don’t have enough to enjoy the lifestyle of someone who is truly wealthy, with this cohort often being described as HENRYs (high earner, not rich yet).

HENRYs are relatively young – in their late 20s or 30s – and likely have a job in London, but will struggle to afford a nice home in a desirable part of the capital on a single salary. They may have children, but will struggle to afford private school fees and childcare.

High inflation and the cost of living crisis have eroded the amount HENRYs have left at the end of the month and fiscal drag means more of their earnings are being dragged into higher tax bands.

HENRYs are also being hit hard by a quirk of the UK’s tax system, where those earning over £100,000 can end up paying an effective tax rate of 60% on a portion of their income while getting certain benefits like some free childcare revoked at the same time.

How HENRYs are being hit by high tax

The highest earners in the UK are the most lucrative for the government, with 60% of the total income tax collected in the 2026/27 tax year expected to be paid by the top 10% of earners (those earning around £70,000 and above).

The average earner in the UK makes around £39,039 a year, and pays around £5,294 in income tax each year. However, someone earning £100,000 a year will pay around £27,422 in tax, over five times more than the average earner despite only earning around 2.5 times the average salary.

By the time you earn £120,000 a year, you will pay almost 7.5 times more tax (around £39,440 per year) than the average earner despite only earning just over three times more than the average.

High earners pay the higher rate of income tax (40%) on income over £50,271 to £125,140 and any income above that is taxed at 45%. But a quirk of the tax system means once you earn more than £100,000, you start paying a marginal tax rate of 60%.

This happens because your tax-free personal allowance starts to taper away at a rate of £1 for every £2 you earn above £100,000 until it is entirely removed at £125,140.

This means high earners end up paying an effective tax rate of 60% on income over £100,000 and up to £125,140 – and this can get to as high as 69% for those who are also paying off student loans.

More high earners are being pushed into this trap as their income rises each year but the £100,000 tax trap remains unchanged and tax thresholds haven’t risen since April 2021.

HENRYs with young children are penalised even more

There are other penalties that come when you earn a salary over £100,000.

Parents of children aged nine months to four years old get 30 free hours of childcare a week for 38 weeks of the year. But there's a cliff edge in eligibility – you automatically lose access to this government scheme if you earn a penny over £100,000 a year.

Tax-free childcare, which is worth £2,000 a year per child, is also removed when your earnings hit £100,000, although the universal 15 free hours of childcare a week for 38 weeks a year for 3 to 4 years olds is retained.

You also start losing some Child Benefit once a person’s individual income is over £60,000. It’s lost entirely at £80,000.

The structure of household income can make a difference.

For two-parent households with two nursery-aged children, with total income of £120,000, that difference can be as much as £9,800 a year, investment firm IG modelling shows. This is because of the removal of Child Benefit and funded childcare hours.

For example, where there’s a primary earner bringing in around £110,000 and the second person earns £10,575 (the minimum required to qualify for funded childcare), the household loses £2,300 in Child Benefit per year and £7,500 in funded childcare support.

Additionally, earning £110,000 a year means the high earner would be caught in the 60% tax trap.

In comparison, if there are two mid-earners in a household, who both earn £60,000 each, they wouldn’t lose Child Benefit, tax-free childcare or face the £100,000 tax trap.

What HENRYs can do to “become rich”

There are some steps you can take to reduce the pain of high taxation.

Increase your pension contributions

Fundamentally, the only way for HENRYs to escape the 60% tax trap is to reduce their taxable income.

Pensions are a powerful financial tool, as you get tax relief on contributions and this will push your annual income to below the £100,000 threshold, allowing you to avoid the tax trap and the removal of the 30 free hours of childcare.

Malvee Vaja, a financial planner at Rathbones, said: “If you're someone whose bonus plus salary takes them into that tax trap area, a really easy way to move yourself out again is by making a pension contribution.”

For example, if you earn £110,000, putting an extra £10,000 into your pension means your income would drop to £100,000.

This means you wouldn’t lose the personal allowance so wouldn’t be taxed at 60% on a portion of your income. Instead, the money is put tax-free into your pension for when you retire.

Beyond tax-efficiency, focusing on building up your pension pot while you are stuck in the tax trap zone can be hugely beneficial for your future – especially when you only expect to take money from your pension in 20 or 30 years time, according to Vaja.

“What [maximising your pension contributions] allows you to do is, when your salary gets to a certain level, and you're not able to use your pension allowance that much, you've still got a really stable base in your pension. That then, if invested correctly, will keep accumulating wealth for you in the background.”

She adds that having a strong base in your pension early on means that if at some point you need to reduce your pension contributions for any reason, your pension “will still work hard for you while your career and your salary goes up and up and up.”

Know your tax-free allowances

You should also make the most of your tax-free allowances to protect your savings and investments from even more taxation. But Vaja says many of her high-earning clients do not know much about how to maximise those allowances.

She said: “It’s a case of knowing what to do. They do some things like putting money in their pension or using their ISAs, but they're not thinking, ‘Am I maxing out my pension? Am I using the tools that I have most efficiently?’”

For example, you can put £20,000 per year into ISAs. You don’t have to pay any tax on any savings interest or investment returns you make on money in an ISA.

Meanwhile, the pensions allowance means you can contribute 100% of your salary up to £60,000 into your pension a year. You can also use the pensions carry forward allowance means you can use any unused annual allowance from the past three years.

This in particular can be helpful for HENRYs who are maximising their pension while in the tax trap zone, Vaja notes.

Beware lifestyle creep

Once you are earning a six-figure salary, you are firmly in the top 6% of earners. While it may mean you can afford to do your weekly shop at more expensive supermarkets, you are not yet at the point where you can spend money without thinking.

Vaja warns that lifestyle creep – the tendency for people to increase their spending on luxuries when their earnings increase – is one reason many of her clients still feel poor despite their high salaries.

She said: “Don't let lifestyle creep happen. Try and control the luxury items that you spend money on, like a luxury gym membership, or an expensive car if you don't really need them. If you're living in London, spending £300 to £600 a month on a car that you barely use doesn't seem worthwhile.”

Vaja recommends trying to keep lifestyle creep under control. This then gives you more surplus income that can be put into pensions, ISAs and general investment accounts, where you can make use of tax-efficient allowances.

You have time on your hands

While being stuck in the 60% tax trap and having benefits like childcare taken away can be painful, Vaja says that despite the doom and gloom there is hope on the horizon.

As younger earners, most HENRYs are not even halfway through their working lives and therefore have a lot of time on their hands to increase their earnings, get out of the tax trap zone, and build up their long-term finances to finally "become rich”.

“HENRYs have time on their side,” she said. “Getting a decent amount in your pension quite early on and using your carry forward allowance so you've got a sizable amount in your pension, means it can work in the background for you.

“Make sure it's invested and make sure it's invested in the right way with a diversified portfolio that’s aligned to your risk level.”

She adds that people in their 20s or 30s have a much longer time horizon for their investments to ride out volatility in the market so may be able to afford to take on a bit more risk in their pensions.

“Sometimes I think the danger for a lot of people is thinking, ‘This is my pension, therefore I need to be overly cautious with it’, but being overly cautious sometimes means not taking enough risk, and I think that's a big problem.”

The public have had their say on which four animals will feature on the next series of £5, £10, £20 and £50 banknotes.

Almost 480,000 Brits voted in a consultation launched by the Bank of England in June to decide which fauna will replace historical figures on the notes, and the results are in.

The public has voted for the Atlantic puffin, barn owl, buff-tailed bumblebee and European hedgehog to feature as the central images.

It has not yet been decided which of these animals will feature on each denomination.

Victoria Cleland, chief cashier at the Bank of England, said: “I am delighted that nearly half a million people responded to our wildlife imagery consultation, showing that cash still matters.

“I would like to thank everyone who engaged, including those who I met at our events. With their support, we have chosen four distinct and inspiring animals that not only showcase the great variety of wildlife we have in the UK but will also enhance the security of our banknotes.”

The Bank of England launched an initial consultation in July 2025 asking members of the public to decide which theme they wanted the new notes to follow.

In March 2026, the bank confirmed the theme was animals, with 60% of the 44,000 responses saying it was one of their preferred themes.

The new animal-based notes, which are being launched over the next few years, will come with the latest technology, making them harder to counterfeit.

How did people vote?

In the consultation earlier this summer, the Bank of England released a shortlist of 18 animals to choose from across three categories: Mammals, birds and amphibians, insects and fish.

Here is how many votes each animal received:

Mammals

• European hedgehog (259,665)
• Red fox (244,651)
• Brown hare (130,614)
• Grey seal (92,043)
• Pine marten (82,773)
• Bottlenose dolphin (48,847)

Birds

• Barn owl (270,596)
• Common kingfisher (211,277)
• Atlantic puffin (183,137)
• Great spotted woodpecker (86,839)
• White-tailed eagle (46,109)
• Eurasian curlew (44,521)

Amphibians, insects and fish

• Buff-tailed bumblebee (360,399)
• Emperor dragonfly (143,894)
• Common frog (120,382)
• Marsh fritillary butterfly (108,467)
• Basking shark (69,699)
• Atlantic salmon (45,090)

What other new banknotes have entered circulation in recent years?

A host of new banknotes featuring King Charles III’s face were launched in 2024 following his ascension to the throne in 2022.

The £5, £10, £20 and £50 denominations featured the new monarch on one side and historical figures on the other.

The £5 note was circulated with former prime minister Winston Churchill on the reverse side while the £20 note was printed with the artist J. M. W. Turner on one side.

The £10 note featured early nineteenth century author Jane Austen on the reverse side and the £50 note has mathematician Alan Turing on one side.

Some of these new notes which were the first to enter circulation have sold for thousands of pounds since being printed.

It’s not just new notes which have entered circulation since the King’s ascension to the throne – coins bearing his face started arriving at Post Office branches in late 2022.

It’s been a year since my partner and I had solar panels installed for free on the roof of our home.

In that time, I’ve learned a few unexpected things about the energy-saving tech, both good and bad.

The panels were installed at the start of October 2025 after our local council got in touch to tell us we were eligible through the Warm Homes: Local Grant.

Through the scheme, qualifying households can get carbon-reducing upgrades made to their home including insulation, heat pumps and solar panels.

The scheme is open to homes in England. Typically, the home must be privately owned by yourself or a landlord and have an Energy Performance Certificate (EPC) of D, E, F or G.

Household income must normally be £36,000 a year or under too, although you could still qualify if you earn more than this and live in a specific postcode or are on benefits.

My partner and I had the panels installed for free because the EPC rating of our home was D and we live in an eligible postcode.

Here’s what I’ve learned about solar panels after one year with them.

We’re virtually electricity self-sufficient over the summer months

When looking at electricity usage alone, the solar panels have enabled us to be virtually self-sufficient over the warmer, sunnier months.

From April to September this year we’ve had to pay less than £3 for our electricity per month, on top of our electricity standing charge.

We are paying more for consumption over the colder, gloomier months. In January, we paid £32, in February £25 and in March £12.

We’ve been able to sell electricity back to the grid

Part of the reason our energy bills have been so much lower is that we’re now selling power back to the grid when the solar panels generate more power than we’re using.

We could do this because we had a battery installed which, when full, offloads any excess electricity to the grid which we are paid for.

In total, we’ve sold £197 of power since January this year. Our best months were July and August where we earned £41 and £32, respectively.

We’ve got to see real-life examples of the environmental impact the solar panels are having

We’ve installed a smartphone app that tracks how many kilowatts of electricity the solar panels produce each day, as well as how many kilowatts we consume.

It also tells us when electricity is discharged from the battery and when energy from the panels is used to charge it up.

One particularly impactful feature of the app is the section which shows us how many kilograms of carbon dioxide and how many litres of oil we’ve saved since having the solar panels installed.

In total we’ve saved more than 2,700 kilograms of carbon dioxide and more than 337 litres of oil. It’s reassuring and empowering to see the positive difference we’ve made to the environment quantified.

The battery can be noisy and looks ugly

Not everything about the solar panels has been positive. The battery, while allowing us to store excess electricity, can be noisy at times.

During the summer months, it will produce a low humming noise as the internal fan tries to keep the unit cool.

It’s also not the prettiest thing to look at bolted onto the side of your house, although we have managed to get around this by installing a wooden trellis screen around it.

Would I have installed solar panels if they weren't free?

The solar panels have driven down our electricity bills and despite the initial logistical hassle of having them installed, they’ve since been extremely low maintenance.

That said, if we’d have had to pay up front, we may have put the money towards paying off some of the mortgage instead.

High street lender Barclays has become the latest bank to introduce a bumper switching bonus for customers.

Customers could get up to £600 when switching to a Barclays account, making it the highest-paying deal on the market.

However, there are a few hoops to jump through if you want the full £600, and not everyone is eligible for the free cash.

Barclays £600 switching bonus

The £600 offer is only available to those who switch to a Barclays Premier account. It pays customers £350 for switching, plus £150 in monthly rewards. Neither is subject to UK income tax.

However, to be eligible for the account, you need to earn £75,000 a year or have at least £100,000 in eligible savings or investments with Barclays.

To qualify for the initial £450, you must complete the following steps within 30 days of opening your Premier account:

• Complete a full switch using the Current Account Switch Service
• Move at least three direct debits
• Pay in at least £5,000

To receive the additional £150 Monthly Engagement Reward (which is paid as £30 a month for five months), you have to make at least 10 eligible debit card transactions per month. This excludes any pending transactions.

A Barclays Premier account gives you access to several rewards, including:

• Access to a dedicated Wealth Planner and a Wealth Manager, provided you have an investment portfolio of £150,000.
• A free Apple TV subscription, usually worth £9.99 per month

Premier customers also get access to exclusive savings rates and mortgage options, cashback on spending and fee-free spending abroad with a black Premier debit card. The fee-free spend on the card is only valid until 27 September 2027.

Barclays £300 switching bonus

If you’re not eligible for the £600 switching bonus, Barclays is offering another market-leading deal that pays customers up to £300 for switching to a Barclays Bank Account.

It is paying customers £150 in free cash and £150 in Monthly Engagement Rewards. Neither is subject to UK income tax.

To qualify for this bonus, you must complete the following steps within 30 days:

• Open a Barclays Bank Account through the Barclays app.
• Complete a full switch
• Move at least two direct debits
• Deposit a minimum of £2,000

To get the additional £150, paid as £30 a month for five months, you must make at least 10 eligible debit card transactions each month, excluding any pending transactions.

Is Barclays offering the best switching deal on the market?

Currently, Barclays has the highest-paying switching deal on the market, whether you’re a higher earner or want to switch to a standard current account.

Barclays takes the top spot thanks to the £150 in monthly rewards, which brings its £450 Premier bonus to £600, and £150 current account switching bonus to £300.

Here’s how it compares with other deals currently available.

Keep in mind that you can only apply for a Premier account if you meet the relevant income or savings/investment requirements, so check the eligibility criteria before applying.

There are rules around who qualifies as a new customer. For instance, if you bank with HSBC, you cannot take advantage of First Direct’s £175 switching bonus, and vice versa, as First Direct is a division of HSBC. Make sure you check your eligibility before switching.

Should you switch to Barclays?

Jessica Sheldon, MoneyWeek’s deputy digital editor, said: “If you aren’t happy with your bank, it can make sense to take advantage of a current account switching offer. Make sure you’ll meet the requirements and consider if the cash bonus outweighs any benefits your current provider gives you before applying.”

There are many reasons you may want to switch from one banking provider to another. Before doing so, it’s worth considering whether the account you’re moving to suits your needs beyond the headline switching bonus.

If you prefer in-person banking, check whether there is a branch near you. Barclays has closed 1,236 branches since 2015, according to Which?, making it the individual bank to have reduced its network the most in the UK. Barclays has recently announced plans to open three new branches this year.

If you’re after better savings rates, compare what’s available from the provider. Barclays pays customers between 1% and 3.96% for an easy-access account, 1% and 4.55% for an ISA, and up to 4.55% for a fixed bond.

In contrast, the best savings accounts on the market are paying more than 5% on your cash, so your money might be better off in a different account. You don’t have to hold your savings in an account with the same provider as your current account.

While Barclays’ latest switching offer pays the most overall cash bonus, you will only receive the full amount after around six months.

NS&I has hiked rates on eight of its fixed-rate savings accounts for the second time in two months.

The Treasury-backed bank has improved the rate on its one, two, three and five-year fixed rate accounts, with several now paying more than 5%.

It comes as NS&I strives to meet its net financing target of £15 billion for the 2026/27 tax year, up from £13 billion in 2025/26.

Andrew Westhead, retail director at NS&I, said the move to increase interest rates comes in response to changes across the wider savings market.

What NS&I savings accounts have improved interest rates?

NS&I has raised rates on its British Savings Bonds, made up of Guaranteed Growth and Guaranteed Income Bonds, from today (6 October).

NS&I last increased rates on the accounts in August.

All eight of the accounts are fixed-rate, but the Guaranteed Growth Bonds pay out interest annually while the Guaranteed Income Bonds pay interest monthly.

The Guaranteed Growth and Guaranteed Income one-year bond rates have been increased to 4.99% gross/AER and 4.88% gross/4.99% AER, respectively.

The Guaranteed Growth and Guaranteed Income two-year bond rates have been hiked to 5.07% gross/AER and 4.96% gross/5.07% AER, respectively.

Rates on the Guaranteed Growth and Guaranteed Income three-year bonds are now 5.10% gross/AER and 4.99% gross/5.10% AER, respectively.

The Guaranteed Growth and Guaranteed Income five-year bond interest rates have been raised to 5.17% gross/AER and 5.06% gross/5.17% AER, respectively.

Source: NS&I

How do the British Savings Bonds compare to the rest of the market?

All eight of the British Savings Bonds were already competitive before these changes and they’ve now shot up the best buy tables.

The one-year bonds can be beaten only by thisbank’s one-year bond which is paying 5.10% at the time of writing, while the two-year deals are the fourth best on the market in terms of headline interest rate.

Meanwhile NS&I’s three and five-year bonds are among the top three for the highest interest rates for those types of account.

These rankings are based on an initial investment amount of £500 and comparing deals on data firm Moneyfacts’ website.

Rachel Springall, finance expert at data firm Moneyfacts, said NS&I’s latest interest rate rises are “likely to grab the attention of savers looking for a guaranteed return, particularly those who value the reassurance of having their money 100% backed by HM Treasury.”

Springall added: “The rate rises from NS&I reflect the wider uplift in savings rates and expectations surrounding future interest rate decisions.

“Competition in the savings market is good news for consumers, but attractive deals don’t always last for long, particularly if a provider attracts enough deposits and pulls a product from sale.”

Lifetime gifting can be an effective way to reduce the value of your estate and lower an inheritance tax (IHT) bill.

Larger gifts that fall outside other allowances, such as the £3,000 per year annual exemption and the £250 small gift allowance, are known as potentially exempt transfers (PETs).

How much inheritance tax is owed will depend on when the PETs were made.

Under the seven-year rule, if gifts were given at least seven years before death, they won’t be subject to inheritance tax.

If you die between three and seven years after giving a gift, a taper rate of IHT could apply on it.

But the way the seven-year rule is applied is misunderstood, according to Sean McCann, chartered financial planner at insurance firm NFU Mutual.

He said there is a “widely held misconception that if you make a gift and survive at least three but less than seven years, the inheritance tax due on the gift reduces on a sliding scale”, but the reality is different from this.

How does the seven-year rule work?

Gifts given between three and seven years before death may be taxed on a sliding scale, known as taper relief. These rates range from 32% to 8%.

Taper relief only applies if the total value of the gifts given during the seven year period before death exceeds the standard inheritance tax threshold, known as the nil-rate band.

The nil-rate band is an amount you can pass on to your beneficiaries tax-free and it’s currently £325,000.

Gifts made up to three years before your death face the standard 40% rate. No IHT is owed on gifts made more than seven years before your death.

The misconception is that the sliding scale always applies. In reality, the gift ‘eats’ your £325,000 nil-rate band first, with the taper relief applying to any part above that amount.

For example, a gift of £100,000 would leave someone with a nil-rate band of £225,000, if no other gifts were made within seven years of someone’s death. This would mean no tax would be owed on the gift.

If a gift of £425,000 was made within that period, there would be no nil-rate band left and the remaining £100,000 be subject to IHT. What rate it would need to be paid at would depend on when the gift was made.

The rest of the estate would then be subject to IHT at a rate of 40%. For example, if the remaining estate was valued at £100,000, £40,000 in IHT would be owed on that amount, in addition to the tax on the £425,000 gift.

If you leave your home to a child or grandchild, you get an extra £175,000 residence nil-rate band, taking your tax-free allowance to £500,000, provided your estate is worth less than £2 million.

However, this boosted allowance only applies to your remaining estate and not to lifetime gifts.

Chris Black, director of wealth management at RBC Brewin Dolphin, said: “For gifts made within seven years of death, the amount of IHT will be determined with reference only to the standard nil-rate band of £325,000 even if the deceased qualifies for the additional £175,000 residence nil-rate band.”

Source: Gov.uk

How does the seven-year rule work in practice?

Lifetime gifts use up your £325,000 nil-rate band if you die within seven years of giving them.

This means gifting sooner rather than later can be tax-effective, but it’s worth exploring this with a financial adviser to make sure you don’t run out of money.

Below are two scenarios of how it would work in practice.

Scenario A: Someone without children or a partner gives £500,000 to a nephew and survives more than seven years. Their remaining estate is worth £1 million.

The gift would fall outside the person’s estate for IHT purposes. IHT would be owed on £675,000 (the remaining £1 million minus the £325,000 nil-rate band) at a rate of 40%, meaning an IHT bill of £270,000.

Scenario B: Someone without children or a partner who gives £500,000 to a nephew and survives for three and a half years. The rest of their estate is worth £1 million.

The gift would fall inside the person’s estate for IHT purposes.

£325,000 of the gift would eat into the tax-free nil-rate band. The remaining £175,000 of the gift would get taper relief of 32%. This means the IHT charge on the gift would be £56,000. The remaining £1 million of the estate would be taxed at 40%, costing £400,000 in IHT. This means the total IHT bill would be £456,000.

The above calculations are based on no earlier gifts being made within seven years of death.

IHT is calculated on gifts in chronological order, so one that was made earlier will eat into your nil-rate band first.

Scenario C: Someone without children or a partner gives nothing in their lifetime and their estate is worth £1.5 million. The total IHT bill would be £470,000.

Just 4% of fully self-employed people currently save into a private pension, according to figures from the Pensions Commission, the inquiry set up by the government to investigate the state of the UK population’s retirement planning.

One problem is that self-employed people sit outside the auto-enrolment system, under which all employers must offer their staff access to a pension scheme and sign them up for it unless they explicitly opt out. This also means self-employed people miss out on pension contributions from employers, which members of occupational schemes enjoy.

Another issue is that self-employed people often don’t have the means to make pension contributions – or at least to commit to regular savings. When they’re building their businesses, spare cash may be short. And the earnings pattern of self-employed workers is often lumpy and unpredictable.

However, it’s not all bad news. The pensions system is more flexible than many self-employed people realise – it’s possible to make contributions in a way that reflects your shifting income streams.

Also, although you may not get an employer’s contribution, the government will top up your savings through tax relief at your highest marginal rate of income tax – making a £1,000 contribution, say, will cost basic-, higher- and additional-rate taxpayers only £800, £600 or £550.

To secure that tax relief, you will need to open an authorised pension plan – a self-invested personal pension (SIPP), available through online investment platforms, is a good option for many self-employed people. Once you’ve set up your SIPP, you don’t have to make fixed monthly payments if your income doesn’t make this easy, though doing so is good financial discipline. Instead, you can make one-off contributions as and when your finances allow – during higher-earning periods, say, or when you’re paid for a lucrative contract or project.

What self-employed savers need to consider

Self-employed savers need to consider the annual allowance rules that cap how much you can pay into your pension in any given tax year at 100% of your income for that year, or £60,000 if you earn more than this amount.

But again, there’s some flexibility – you can use the carry-forward rules to make use of any annual allowance you didn’t use in the previous three tax years in the current tax year. This can be a really useful feature for self-employed savers whose income fluctuates significantly from year to year.

Another possibility to consider for self-employed savers who set up a limited company – rather than working as sole traders – is to make an employer’s contribution to your pension through the business. Not only will this swell your pension savings, but pension contributions also come off your company profits before your corporation tax bill is calculated, reducing what you owe. There’s also no employer’s national insurance due on remuneration paid out this way.

Finally, remember that you don’t have to use designated pension plans to save for later in life. Alternative vehicles, including individual savings accounts (ISAs), also offer opportunities to save tax-efficiently, but come with more freedom to make withdrawals if you need to. This can provide an important safety net for self-employed workers worried they may need access to their savings – though money drawn down now is not, of course, available to you in retirement.

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The Principality of Liechtenstein is currently mired in a dispute that is “consuming Europe’s wealthiest monarchy” – with rebel royals threatening to sue the prince regent, Prince Alois, says the Financial Times. At issue are his progressive plans to reform their “dynastic status – and the allowances that come with it”.

Extended family members claim the 58-year-old prince has used long overdue reforms – including opening up the succession to women and giving them voting rights in family affairs – as cover for a series of less attractive measures that will “tighten his grip” over their own lives and weaken their power.

The mooted changes (reportedly opposed by a third of the 50 princes eligible to vote) give Alois more authority over “their titles, coats of arms and dynastic membership” of the “princely house”. Also at stake is the multi-billion dollar family fortune, much of it centred on LGT – the private bank owned by the princely house and overseen by Alois’s brother, Prince Max. In 2025 the bank, worth more than $400 billion, paid out a dividend of about $878 million. No one wants to be cut out of their share.

The situation is complicated by Liechtenstein’s governance structure. The “house law” governing the ruling family – which dates from 1136 – sits outside the microstate’s constitution. Yet the ruler has “power to veto laws, dismiss governments and dissolve parliament”. Two decades ago, the Council of Europe’s body of legal experts called this arrangement “astonishing”. It is currently still in force.

Who are the House of Liechtenstein?

The combination of “royal status and business savvy” has long set the House of Liechtenstein apart from every other monarchy in Europe, says Salon Privé. The dynasty has bred a long line of bankers, not least Prince Max, 57 – the second son of the official reigning monarch Hans-Adam II and a former alumnus of JPMorgan Chase – who has been running LGT since 2006. Under his watch, it has expanded “from a regional European bank to a global operation” with 6,000 employees across 30 countries and now seems well positioned “for another century of success”.

More recently, a younger family member, Gisela Bergmann, 36, has been making waves, says The Times. In August, the Pope appointed the princess – who previously ran the family’s wealth management business – to manage the Vatican’s finances. She has the perfect credentials to run a wealthy microstate, once observing: “We look at wealth and family from a holistic perspective, always thinking in terms of generations” – a message likely to go down well at the Vatican.

Still, the most significant, and increasingly controversial, member of the tribe is Prince Alois, who has been acting as regent to his father since 2004. Born in 1968, he attended Sandhurst, becoming a second lieutenant in the Coldstream Guards, before studying law at the University of Salzburg. Alois worked at a firm of London chartered accountants before returning to the family ancestral home, Valduz, in 1996.

For years, the prince had the perfect public profile. As the Australian Women’s Weekly approvingly noted, he was known “for his more contemporary outlook, balancing tradition with global diplomacy”. But recent opposition stretches beyond his family, says the Swiss news site Blue News. “Liechtenstein is in an uproar” over everything from the prince’s stance over abortion to his far-reaching constitutional powers. A recent hacker attack – which has “shaken confidence” in Liechtenstein’s financial centre – hasn’t helped.

For decades Liechtenstein was regarded as “the epitome of stability” and “synonymous with prosperity”. It’s going through an unusually turbulent period.

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Retirees withdrew over £22 billion from their pensions in tax-free lump sums in the 2025/26 tax year, up more than 20% compared to the previous tax year.

Pensioners took over £40 billion in tax-free lump sums in the last two tax years alone, Financial Conduct Authority data shows.

Under pension tax-free cash rules, you can normally withdraw up to 25% of your pension pots free from tax.

Experts at AJ Bell say the boom in withdrawals may have been driven by fears of increased taxation at Labour’s first two Budgets when rumours circulated that then-chancellor Rachel Reeves would increase taxation on pensions.

Between 2018/19 to 2022/23, FCA data shows the total taken in tax-free pension lump sums never exceeded £8.7 billion, but rose to just over £10 billion in the 2023/24 tax year, and then soared to £18.3 billion in 2024/25.

Despite speculation of a tax raid, Reeves left pension tax-free cash untouched in the 2025 Autumn Budget.

Michael Summersgill, chief executive of AJ Bell, said: “These figures should end any doubt about the real-world consequences of allowing pension tax speculation to run unchecked. The rush to take tax-free cash began in 2024 and the latest FCA data confirms another repeat around the 2025 Budget, just as pension providers warned.

“This trend is bad for households and bad for the economy – pulling billions of pounds out of pensions prematurely reduces the capital available for long-term investment.”

AJ Bell has urged the new chancellor John Healey to publicly commit to not making any major changes to pension tax-free cash and tax relief to avoid a similar rush before this year’s Budget.

“A chancellor focused on putting households on sound financial footing and boosting growth should see this as an open goal. Confirming pension tax stability would solve the problem overnight without a penny of new Treasury spending, while clearly signalling the government stands behind its promises to savers,” added Summersgill.

How tax-free pension lump sums work

You can usually take up to 25% of your pension pot out without having to pay any tax on the money, up to a maximum of £268,275. The minimum age you will be given this option is 55, although this is set to rise from April 2028, and you are able to withdraw your tax-free lump sum in one large payment or multiple smaller ones.

The 25% maximum is calculated from the total money you have in any of your pensions, not just one. For example, if you had £50,000 in one pension and £50,000 in another, the maximum lump sum you could take from either would be £25,000.

Income from the lump sum is not included in your tax-free personal allowance. Any money withdrawn from your pension over the 25% tax-free portion or £268,275 maximum will be taxed according to the tax band you are in.

The risks of withdrawing your pension lump sum

Having the option to take up to 25% of your pension pot as a lump sum can give you more freedom in retirement. But while the option being available can be useful, you should know the risks of taking money out of your pension too early.

Sarah Coles, head of personal finance at AJ Bell, said: “The vast majority of people take some tax-free cash from their pension, and millions do so before they reach retirement age.

“There will be some people who have drawn up their plans carefully, for whom this makes perfect financial sense. However, there are others taking it purely because of worries about what might lie in the Budget – particularly in the past two years – who could be doing immeasurable damage to their retirement income.”

For example, having a large pension pot means the effects of compound interest are stronger, and if you take money out of the pot, the returns you get from compound interest are lower, meaning your pension pot will grow slower.

Coles said: “If, for example, you had a pot of £400,000 at the age of 55, which grew untouched at 6% for 10 years, the pot could grow to £716,339. If you took the £100,000 and spent it, your £300,000 could grow to just £537,254 over a decade.”

She said other risks included taking a lump-sum too early because people “don’t trust the government not to mess with tax-free cash in the Budget”, and spending it before thinking about whether you would like an annuity instead.

Withdrawing and spending a quarter of your pension pot also means you will have less money to use later on in your retirement which increases the risk of outliving your retirement savings.

Meanwhile, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “The FCA’s data shows the enormous impact Budget speculation can have on people’s behaviour. Many people took money they didn’t need and when the anticipated announcement failed to materialise, they were left with few options.”

She warned that once you take the tax-free lump sum, you will not be able to put the money back into your pension without incurring extra tax if you have second thoughts.

That means if you have already used up your other tax-free allowances like your annual ISA allowance then the money you have taken out may be subject to capital gains and dividend tax. Meanwhile, leaving the money in cash means it will slowly be eroded away by inflation.

Morrissey said: “Building a pension takes years of disciplined investing and planning and this should not be put at risk by short term speculation. Pensions are the ultimate long-term investment, and people need a stable tax framework that allows them to make informed decisions and build their retirement pot with confidence.”

Andy Burnham knows reforming the state pension triple lock carries a political risk, and it could lose him votes. “I won’t pretend some of this won’t be difficult,” he said. “I accept I may pay a political price. But someone has to go through the pain barrier and rip the plaster off.”

Speaking at the recent Labour conference, the prime minister announced that he intends to change the triple lock – the policy which uprates the state pension each year by the highest of average earnings, inflation and 2.5% – if his party won the next general election. From 2030, if Labour stays in government, the state pension will rise each year at least by prices or 2.5%, while maintaining its value relative to earnings over time.

Burnham has picked up the triple lock hot potato that previous leaders have avoided for years now. While the policy was introduced in 2010 to improve the standard of living for pensioners, its "ratchet" effect is unsustainable and unpredictable.

Public spending on the state pension in 2026/27 is £154 billion a year, and according to the think tank Institute for Fiscal Studies (IFS), spending on the state pension is now £16 billion per year higher than it would have been without the triple lock. But the cost will continue rising.

The state pension currently costs around 5% of GDP, and is projected to rise to around 9% of GDP by 2075/76, according to the Office for Budget Responsibility (OBR) in July 2026. This is driven by an ageing population and the cost of the triple lock. But if the state pension were instead uprated in line with average earnings, state pension spending reaches around 7% of GDP, the OBR said.

By 2035, the government will spend more on welfare payouts, the greatest proportion of which is the state pension, than it gets in National Insurance, according to research by the think tank Adam Smith Institute.

The triple lock conversation is overdue

The triple lock can’t last forever, so we need to have an honest discussion about the state pension’s future – and sooner, rather than later, so everyone can take steps to plug any income gap.

Burnham says the “significant savings” will help fund a new National Care Service, with social care free at the point of use. We don’t yet know where the bulk of the money will come from for the new care system. But it’s wrong for critics to say the change is “betraying” pensioners. Putting the savings from an adjusted triple lock towards solving the adult social care crisis is sensible given many state pensioners would benefit from the service – around three in four people over the age of 65 are expected to need care and support during their life, with one in seven facing costs of more than £100,000, the government says.

Who would be affected by the adjusted triple lock?

AJ Bell estimates that if Burnham’s proposed method had been used since 2011, the full new state pension would be worth around £600 less per year today. For those getting the full old basic state pension, the difference would be around £490 per year.

Burnham’s announcement may come as a blow for retirees, but no change is proposed until 2030, and it could take several years before a significant gap in state pension is noticeable.

“For someone who has just started claiming the state pension at age 66, they could be 84 and a half years old before they face a gap of between £500 and £600 in today’s prices,” Sarah Coles, head of personal finance at AJ Bell said.

“Men have an average life expectancy of 85 at the age of 65, and women have one of 87, so not only will it take a significant period for the gap to build to this level, but this could be the final extent of the impact for them.”

The change would affect younger generations, although I’m already hesitant about the future of the state pension. The government has two levers to pull to rebalance the numbers for the state pension: change the triple lock or raise the state pension age. The latter is already increasing and is set to rise further to 68 in the future.

Changing the system now at least gives our generation time to plan, and put more aside each month into personal and workplace pensions where we can.

Relaxing and enjoying retirement is the ultimate life goal for many – but not everyone is comfortable spending the money needed to achieve it.

Almost two thirds (63%) of UK adults are concerned about running out of money in retirement, according to research from investment and retirement firm LV=.

And anxiety is particularly prevalent among older people, financial experts have told MoneyWeek.

The reasons for this fear can be multi-faceted, said money psychotherapist Vicky Reynal, but they are in part an “emotional defence”.

“As people become more conscious of ageing, physical decline, and mortality, which are frightening prospects that feel outside of one’s control, they may cling more tightly to the areas of life in which they still feel they have some sense of agency,” Reynal said.

Reynal has previously discussed the reasons why some people feel guilty about spending their money on the MoneyWeek Talks podcast. But there are reasons why this appears to be a particularly acute issue for those in retirement.

Why do retirees find it hard to spend money?

It isn’t just emotions holding retirees back from spending their money – there are also cognitive and behavioural reasons.

Reynal said a lot of people struggle to transition from spending a salary to drawing down on savings.

“It’s money [they] worked hard to protect and have up-to-this point, focused on growing,” she said.

Others may be fearful of spending money because of embedded cultural traits.

Money coach Dennis Harhalakis said a lot of Brits feel proud about being thrifty and frugal and identify with the feeling that “self-denial is virtuous”.

“There’s that whole stuff around ‘oh, look at so and so, flashing his money around with that new car and that big TV’. Those messages still exist in our culture.”

Generational attitudes towards money also have an influence on spending habits, Harhalakis said.

A lot of people reaching retirement now will have had parents who grew up in a post-World War Two bubble when lives were more austere and “part of peoples’ ethos was saving, making do”, he said.

Lucie Spencer, partner at wealth manager Evelyn Partners, said retirees often need “permission” to spend money in retirement.

“A lot of clients who are coming up to retirement now, they lived through some really tough times in the 70s and 80s and they’re frightened of going back to those tough times where they had mortgage rates around 15% or 17%.

“They’re just inbuilt with that mindset of ‘must save, must save’, and switching that to ‘okay, it’s alright to spend’, that’s quite a difficult mental shift to make.”

What to do if you’re worried about spending money in retirement

Financial advisers can help map out your retirement spending based on factors such as your desired lifestyle and savings.

You will have to pay for the service, which costs between £100 to £350 per hour, according to government advice website MoneyHelper.

Evelyn Partners’ Spencer said she draws up cash flow models with clients which are revisited at regular periods, for example once per year.

Cash flow models can be used to project your income, spending, savings and investment over time and how they might be impacted by lifestyle choices.

Effectively, they offer you a tangible sense of how much you have to live on in retirement and how certain financial decisions will impact your pot.

Reynal said having this type of structured financial plan in place can provide reassurance. If, after this point, you’re still feeling anxious, it could be worth seeking help.

Reynal said: “In some cases…therapy can help: having a space to talk about and face fears of dependency and ageing can help them not be located in the material or financial.

“It’s helpful to ask oneself questions like: ‘what was the money accumulated for? What amount can one allow oneself to spend without feeling too much fear or guilt instead of just defaulting to “spend the least amount possible”? What might I regret not doing while I still had the health, energy or opportunity? Am I protecting myself from a realistic risk, or trying to eliminate uncertainty altogether?’”

How much do you need in retirement?

This will depend on a range of variables including how long you expect to live, how much you have saved and what type of lifestyle you want.

For a basic sense of how much income you’ll need to live on, you could start by looking at Pension UK’s Retirement Living Standards.

These standards factor in the income one or two people might need to sustain three different standards of living, excluding rent and mortgage costs.

Jon Doyle, founder and financial planner at financial planning firm Juniper Wealth Management, also said he encourages clients to hold a "Sleep at Night" fund: an emergency savings pot covering six to 12 months of essential living costs in a worst-case scenario.

Starling Bank has launched a market-leading easy-access savings account which pays an interest rate of 5%.

The account is available for new customers, and you can make unlimited withdrawals without incurring a penalty.

What does Starling’s easy-access saver offer?

Starling’s Easy Saver is paying new customers 5% on balances of up to £25,000.

The account has a fixed bonus of 2.5% for six months, on top of an underlying standard variable rate of 2.5%.

While you can save up to £1 million in this account, the top rate is only payable on balances of up to £25,000. The rate will drop to 2.5% on any balances above this threshold.

Customers will need to open a Starling current account to apply for the easy-access saver. You can make unlimited penalty-free withdrawals with this account, and interest is accrued daily and paid monthly.

Starling is a digital bank, which means the account may not be right for you if you prefer to do your banking at a branch.

This 5% offer is only for new customers – loyal customers are offered a lower 4% rate, including a 1.5% fixed rate bonus for six months.

Is Starling’s easy-access saver a best-buy?

Starling’s 5% saver pays the most on the market as of 1 October, making it the top easy-access savings account in terms of interest rate. Starling has also been voted one of the UK’s best banks.

However, there are a few caveats to keep in mind when considering the savings account.

Jessica Sheldon, MoneyWeek's deputy digital editor, said: “Starling's 5% easy access savings account looks attractive but it includes a 2.5% bonus rate for six months, so you might want to check if you can get a more competitive rate elsewhere in half a year's time. Plus, the underlying rate is variable, meaning it could change at any time.”

Customers can close their Starling Easy Saver without incurring a penalty, so once the bonus period comes to an end, you might want to review your options to find a better savings account.

The next best account is Zopa’s Limited Access pot, which pays 4.56% and has a fixed rate of 1.05% for 12 months, followed by Cynergy Bank’s 4.55% saver, which includes a 2% fixed bonus for 12 months.

Alternatively, if you wish to fix your savings, you could earn up to 5.12% with AlRayan Bank if you lock away your cash for a year.

Two Premium Bonds holders have woken up millionaires thanks to NS&I’s October prize draw.

The first £1 million jackpot winner is from East Sussex. They bought their winning bond for £5,900 in May 2018.

Their winning bond number is 331QY484133 and they have the maximum holding of £50,000.

The second is from Somerset, bought the winning bond only months ago, in July 2026, and holds £16,000 in total in Premium Bonds. Their winning bond number is 681KK770541.

Meanwhile, 96 people have won £100,000 in the October prize draw. A further 191 people got a £50,000 payout and 382 won £25,000 each.

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

Millions more smaller prizes will also be shared out by NS&I this month, including 957 £10,000 prizes.

Over 1.7 million £25 prizes and 2.3 million £100 prizes will also be making their way to winners.

In total, more than 6.5 million prizes worth £498 million will be distributed in the October draw.

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 October’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 October 2026, that date is 2 October.

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.

More than half of UK savers do not expect to have enough to retire on, meaning more people could be forced to use their property wealth for an income boost.

This typically involves equity release plans, which enable homeowners to exchange some of the home equity for tax-free cash payments.

Insurance firm LV= found that almost six in 10 (58%) non-retired UK adults aren’t confident they will have saved enough for a comfortable retirement, and that 39% would consider using property wealth as a source of retirement income.

While equity release may feel attractive, and can allow you to stay in your home and provide a cash boost in retirement, there are major drawbacks to consider.

Lucie Spencer, partner at wealth manager and financial planning firm Evelyn Partners, said: “Equity release may not be the right approach for everyone, and it could be that it is more costly than drawing down other assets, so should be considered alongside other options.”

What is equity release?

Equity release is a way of freeing up the equity you’ve built up in a home in exchange for tax-free cash.

Equity is the part of a property you own. If you have a mortgage, the equity is the difference between your home’s current market value and what’s left to pay on the mortgage.

For example, if your home is worth £300,000 and you have £50,000 left to pay on your mortgage, your equity is £250,000.

Equity released from a property can be taken as a lump sum, smaller withdrawals over time or a mixture of both.

Typically, equity release products are only available to those aged 55 and over.

By releasing equity from your home, you’re taking out a loan which has to be paid back with interest added on top, either when you die or when you move into a care home and your property is sold.

There are two different types of equity release: a lifetime mortgage and a Home Reversion Plan.

Lifetime mortgages are more common and usually have a fixed rate of interest applied for the life of the loan. When you die or move into care, the home is sold to repay the loan and any leftover money goes to your beneficiaries.

Through a Home Reversion Plan, you sell a percentage of your home in return for a lump sum. When your property is sold, the equity release company receives their percentage and the remaining balance is paid to the estate.

Should you use your property for retirement income?

You may want to use equity from your property to fund retirement. Or maybe you want to gift money to a loved one.

But, there are pros and cons to consider.

Pros

Most lifetime mortgages don’t require monthly repayments, which means the loan and any additional interest don’t have to be repaid until you die or move into a care home.

Some lifetime mortgages let you make monthly repayments if you want to keep the overall balance of the loan and interest down and lower the eventual bill.

Equity release can also lower the inheritance tax (IHT) bill for your beneficiaries as you are reducing the size of your estate.

One major advantage to equity release is that you get to stay in your home.

Spencer, from Evelyn Partners, said: “You can stay in your family house for longer and use the funds to spend as you wish to, for example improving your lifestyle.

“You don’t need to release everything in one go and can opt to take smaller sums.”

Cons

Borrowing against your property can see interest build up significantly over time, especially if you take out a loan earlier in your retirement, meaning your beneficiaries are left with less or you don’t have enough to pay for care.

Spencer said: “The whole property could end up being owed [to the equity release company] once interest has been rolled up and the debt can increase substantially due to compounding [interest] which could significantly impact the amount of assets you leave behind to children or other family members.”

Some equity release products come with a ‘no negative equity guarantee’ – which means your estate will never owe more than the property is worth when sold. It’s worth finding out if a product you’re looking at has one of these.

Another drawback to equity release products is that some come with early repayment charges, so if you want to pay off a bit of the loan early, you’ll have to pay a fee.

Taking out equity release can also impact your eligibility for means-tested benefits which are based on your income, such as Pension Credit.

Having to pay for equity release could be a shock to beneficiaries upon your death as well.

Spencer said: “I would really stress that [you should] involve the family members that are going to be dealing with your estate or benefitting from your estate when you pass away.

“Most of the complaints [we notice around] equity release are when the kids don’t know [it’s been taken out].”

Meanwhile, some equity release companies will attach certain conditions or rules to letting you take out equity on your home such as not smoking in the property or repainting the home.

Spencer said: “Because, effectively, you’ve signed over a chunk of your house to them, and even though it’s still your house, they can put provisos on it to keep it up to a [certain] standard to make sure they get their money back.”

Spencer advised those considering equity release to take professional advice from a Financial Conduct Authority-authorised financial advisor.

She added: “I’d strongly recommend doing so with an adviser who is a member of the Society of Later Life Advisers, who has specialist expertise in this area.”

What are the alternatives?

Downsizing

Downsizing from a more expensive house to a cheaper one can free up equity and could also lead to lower council tax, energy, or other household bills.

You will have to factor in the cost of moving home though, including conveyancing and survey costs, as well as removal company and estate agent fees.

Spencer said: “A lot of clients prefer it [downsizing] because they’re not running the risk of high interest charges clocking up.

“They know their family is still going to inherit the estate and all of the money is still within the estate.”

Retirement interest-only (RIO) mortgages

These types of mortgages are generally designed for those aged 50 and over, and work like other interest-only mortgages where you pay off the interest each month and then pay off the principal loan when you sell your home.

They can be a cheaper alternative to lifetime mortgages because interest isn’t allowed to grow each month, leaving you with a bigger balance when the home is sold.

“It’s not like where the interest rolls up and you can lose the entire value of your house,” said Spencer.

You can also use the money gained from the loan as a gift to a loved one and if you die more than seven years after making it, it will fall outside your estate for IHT purposes, Spencer explained.

MoneyWeek has always been a strong supporter of investment trusts, largely because they offer their managers freedom to take a longer-term view when constructing their portfolios. Other characteristics such as the ability to use gearing (borrowed money) or the chance for investors to buy at a discount to the value of their assets can help to improve returns, but it’s their “permanent capital” that is most valuable.

If you are investing directly into sectors such as property, infrastructure and private equity – where you can’t simply sell assets in a few days because your investors suddenly want their money back – the need for permanent capital speaks for itself.

However, even with listed investments, sectors such as smaller companies often suffer from high volatility and limits on how quickly you can buy and sell holdings. No high-conviction investor wants to be at the mercy of rapid inflows and outflows, so investment trusts are a natural structure for such portfolios. And in today’s short-term markets – where sentiment hinges on quarterly results, monthly data and what feels like daily geopolitical upheavals – there’s much to be said for a structure that encourages a long view, whatever you are investing in.

Investment trusts have been around since 1868, with all the ups and downs that implies; they can surely help investors navigate this age of rapid change as well. That said, the past few years have been difficult. Discounts soared, bringing pressure both from opportunistic activists and disgruntled shareholders. This was partly due to external factors, but it’s fair to say the sector was due a shake-up. Some boards had been too complacent. There was a clear need for consolidation. The failure to reach new investors was becoming critical.

Thankfully the outlook is now improving, and we hope this special supplement makes clear why the diversity of investment trusts to choose from should ensure a bright future.

~ Cris Sholto Heaton

Saving for your retirement is one of the most important financial goals of your working life as you build up enough money to cover you later in life.

Most people build up their retirement pots through their workplace pensions, but you could use a self-invested personal pension (SIPP). If you're self-employed, you might decide a SIPP is a good option.

But when building up a retirement fund in a SIPP, you should be aware of the fees involved, which over the long term could cost you tens or even hundreds of thousands of pounds.

Although fee amounts can look like incredibly small percentages, even a small increase can take a large chunk out of your retirement savings.

If you contribute £250 to your pension each month from age 25 to 66, you would build up a pension pot of £392,000 by the time you reach retirement, assuming a 5.5% average annual return and a 0.5% fee.

But if those fees were twice as high, at 1%, £47,000 would be lost from your pension pot, leaving you with just £345,000, according to analysis by investment manager Vanguard.

If the fee was 1.25%, you'd be £66,000 worse-off compared to a 0.5% fee, and you'd miss out on £87,000 if the fee was 1.5%.

Do higher fees affect your pension returns?

As fees are often taken as percentages, the amount you lose to them is proportionate to the amount you have saved in your pension, meaning if your pension pot is large you can expect to lose more of your pension to fees.

James Norton, head of retirement and investments at Vanguard Europe, said pension investors should look at the fees they are paying on their retirement pots and take control of the investment costs they pay.

He warned: “When buying a car, it’s common for a more expensive vehicle to perform better than a cheaper one. So, you may think that higher fees should lead to better investment outcomes. But the higher the fees you pay the less returns you get to keep for yourself.”

Put simply, higher fees mean lower returns.

“Our analysis shows that if you keep your pension pot with a low-cost provider, in the long term you could keep significantly more of your returns and significantly improve your retirement," Norton said.

"It is your money and you’re taking the investment risk, so make sure you keep as much of your returns as possible.”

How to reduce fees on your pension

If you contribute to a workplace pension, you likely do not have the power to get your employer to move to a different provider with lower fees. However, if you contribute to a private pension, shop around for providers to find the best deal.

However, fees are not the only thing you should consider.

For example, while Vanguard’s fees are low, they only give access to Vanguard’s own funds so you have a more limited range of investments than provided by other platforms.

Below is a list of some popular SIPP providers and the fees they charge.

The state pension triple lock is set to be replaced with a double lock system in April 2030 to help fund a new free social care service, prime minister Andy Burnham has announced.

Burnham affirmed that he will stick to the 2024 Labour manifesto commitment to keep the triple lock in place for the rest of this parliament, but said he will “adjust” the promise if Labour win a second term in power.

“I won't pretend some of this won't be difficult. I accept I may pay a political price, but someone has to go through the pain barrier and rip the plaster off,” he said during his speech at the Labour Party conference.

Under the current triple lock system, the state pension increases every year by whatever is highest out of inflation, average earnings, or a flat 2.5%.

From April 2030, the first tax year after the next general election, Burnham said the state pension “will continue to rise every year, at least by prices, or 2.5%”.

Assuming Labour won the election so they could change the policy, this would effectively turn the triple lock into a ‘double lock’, protecting the state pension against inflation but ending the direct relationship between the state pension and annual average earnings.

Burnham said the state pension will also “hold its value relative to earnings over time, so that pensioners will always share in the rising prosperity of the nation”.

Kate Smith, head of pensions at Aegon, speculated that this link to earnings over time “could possibly involve an element of smoothing of earnings increases over a few years relative to the increases in prices and the 2.5% increase,” but said that it is currently unclear how this will work in practice.

Smith welcomed the change to the triple lock, saying that it is time for the country to have “serious conversation about how the state pension can remain affordable, sustainable, and fair across generations.”

She added: “It is important to remember that nothing changes for pensioners now. The government has reiterated that the triple lock remains in place until 2029. For millions of people, the state pension is the bedrock of retirement income and will continue to be so.”

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Now that the move from the triple lock to the double lock has been announced, the government must also provide savers with a stable tax environment and publish a five-year tax roadmap that sets out its plans on the important issues that influence how people plan for retirement such as tax-free cash and pensions tax relief."

Savings from triple lock removal will fund new social care system

Burnham said that scrapping the triple lock in its current form would “generate significant savings” that will be used to create a new ‘national care service’ if voters grant Labour a second term in office.

The proposed service would provide social care for the elderly and operate under NHS principles of being universal and free at the point of use, and would be at the heart of Labour’s next general election manifesto.

Burnham called the plan “a landmark policy as significant as the creation of the NHS itself, and utterly essential to securing its future. We will start laying the ground now for the National Care Service and introduce it in the next Parliament.”

He added: “So this is the deal: a state pension that rises every year, no care charges, and a high-quality national care service to give peace of mind in later life. Conference, I am going to go out and argue for a good deal for our pensioners and for older people in the 21st century.”

Residential adult social care costs an average of £54,000 a year

Implementing a free and universal social care system could save families hundreds of thousands of pounds on average on residential care.

Residential adult social care costs more than £54,000 a year on average in England, while nursing care costs over £71,000, according to a report by Laing Buisson in 2025.

Meanwhile, new data from investment platform AJ Bell suggests caring for a loved one yourself over 20 years can cost £1 million in lost salary and pension wealth.

Sarah Coles, head of personal finance at AJ Bell, said: “When we think about the cost of care, we tend to consider the expense of formal care, which is eye-watering. However, in 2023/24, an estimated 5.4 million people were informal carers, and for them, there’s every chance their responsibilities are costing them dear too.”

For years, cash had to apologise for itself. It was safe, certainly, but the return was miserable.

Cash can now look investors in the eye with a promise of return that beats inflation.

The best one-year savings accounts pay about 5%, with no stock market drama and no risk of waking up to find your investment has fallen sharply. It is a fair question to ask: are shares worth the risk at all, or is saving better than investing?

The answer starts with time. Cash is for money you may need soon and shares are for money you can leave invested for years, accepting short-term falls in pursuit of greater long-term growth.

What does the evidence show?

Some of the best-known historical evidence gives surprisingly different answers. Barclays Private Bank says UK shares beat cash in 91% of rolling 10-year periods since 1899, meaning every possible 10-year stretch, each starting a month or year apart.

Paul Lewis, presenter of BBC Radio 4's Money Box, found something very different in research published in 2016. Across rolling ten-year periods between 1995 and 2016, a FTSE 100 tracker beat the best savings accounts only half the time.

Lewis set shares a harder test than Barclays does. He used the actual returns from a FTSE 100 tracker after charges and compared them with the best one-year savings account available each year. Barclays uses three-month Treasury bills instead, partly because they provide a consistent measure of cash stretching back more than a century.

Using the best available savings rates, rather than Treasury bills, gives cash a stronger showing. Timing matters too. For investments starting on the first of any month from October 1999 to September 2001, cash beat the tracker over every holding period Lewis could measure, up to 15 or 16 years.

What happens with more recent data?

I applied a similarly demanding test over a different period. My own analysis starts in December 2000, as far back as the relevant MSCI sterling total-return data go. I compared the MSCI UK and MSCI World indices, after a 0.2% annual charge, with cash rolled into a new one-year fix each year. For cash, I used the Bank of England's average one-year fixed savings rate plus an allowance for best-buy accounts.

Over rolling ten-year periods to August 2026, UK shares beat cash 91% of the time. Global shares did so 90% of the time, so going global barely changed the odds.

The period contains only two non-overlapping decades, the same limitation as Lewis's data. The analysis confirms Barclays' result on fresh data rather than replacing it.

Why does time matter?

Ten years is only one horizon. Barclays found that UK shares beat cash in 70% of rolling two-year periods since 1899, rising to 91% over ten years. A 70% chance of beating cash is also a 30% chance of falling behind, which is exactly the risk that makes cash the safer home for money with a date on it.

Even ten years offered no guarantee. Cash still came out ahead in about one period in 11. The percentages are historical frequencies, not forecasts.

And cash has a time problem of its own.

In July 2008, the Bank of England's average one-year fixed savings rate was 6.06%. A one-year fix guarantees that rate for one year only. After that, you take whatever rate is available when you renew.

For money held over 15 or 20 years, that means renewing again and again at rates nobody can know in advance. The same Bank of England average stayed below 2% every month from January 2013 to August 2022. Best-buy savers did better, but faced the same broad decline.

Rates may rise as well as fall. Today's rate cannot be locked in for decades.

How much cash do you need?

When Lewis published his research in 2016, I was sceptical. Cash paid next to nothing then, and I saw little reason to hold more of it than necessary.

My view has shifted. My wife and I are very likely to move house within the next two years, probably to a more expensive area. We also want to travel much more than we have and already have several destinations in mind. Those are foreseeable calls on our money, even if we cannot put exact dates or amounts on them yet.

So I now keep more in cash, though most of my wealth remains invested in shares. This is not a retreat from equities so much as a clearer division of labour.

MoneyHelper, a UK government-backed financial guidance service, suggests three to six months' essential outgoings as a rule of thumb, while wealth manager Hargreaves Lansdown says money you may need within five years should generally be kept in savings rather than invested. Investing that money is a real risk: from December 2000, global shares fell 41% and did not regain their starting level until March 2006.

For retirees, Hargreaves Lansdown suggests keeping one to three years' essential spending in cash. These rules of thumb give you two useful buckets: money for emergencies, and money for foreseeable spending. The harder question is what to do with everything left over.

What is the cost of staying in cash?

In my test, £10,000 invested in a global tracker from December 2000 to August 2026 grew to about £67,600 after charges. Rolled through one-year fixes over the same period, including an allowance for best-buy rates, it reached about £25,000. The global tracker ended with more than two and a half times as much as cash.

A UK tracker reached about £41,800 – or around 1.7 times as much as cash despite no exposure to US shares. US strength helped widen the gap between the UK and global results, while sterling weakness also gave the global result a modest boost.

The lesson is not that cash is bad. It is that once your needs are covered, holding more of it has an opportunity cost that compounds.

Work out what you are likely to need soon and keep that in cash. For money you will not touch for many years, accept the short-term falls that come with shares.

Then look at what is left. If it is still sitting in cash, ask why. If the only answer is that today's rate feels reassuring, that is not enough.

The mistake is letting a one-year rate decide where long-term money belongs.

Back in 2016, French insurance giant Axa (Paris: CS) was known for its complexity. The majority of the company's earnings came from its life insurance and long-term savings business, the health of which was tied directly to interest rates. That began to change under CEO Thomas Buberl, who took over the group in 2016. Buberl's vision for the company was simple. The new boss wanted to turn Axa into a leading global insurer in the “short-tail”, relatively capital-light business of property and casualty insurance (P&C).

One of the main issues with life insurance is its “long tail” business – once the insurer has written the life insurance or annuity policy, it's stuck with the contract for decades, even if it becomes unprofitable. As a result, regulators tend to demand that these firms hold high levels of capital reserves to meet upcoming liabilities and unforeseen developments.

How Axa freed up billions in capital

One of Buberl's first moves was to carve off its US life-insurance arm, Axa Equitable, which freed up billions of dollars in capital for the group to go shopping. Almost as soon as the company announced the transaction, it launched an offer for XL Group, a leading global P&C insurer. Axa paid $15.3 billion for its peer and was instantly catapulted into the ranks of the world's largest P&C insurers. As part of its Vision 2020 growth plan, management continued to exit non-core businesses, de-risking the group's exposure to highly volatile and loss-making segments of the global insurance and reinsurance market and cutting costs.

As a result, the group's revenue mix has changed markedly since 2026. In 2016, before the transformation began, the group reported total revenue of €100 billion, with 50% coming from life and health insurance, and net income of €5.8 billion. By 2022, revenue had fallen 34% to €66.6 billion. However, net income fell just 13% to €5 billion.

Around this time, the group also started to benefit from the dramatic upswing in global insurance and reinsurance prices. Starting around 2019, a combination of inflation and losses has pushed insurers to raise insurance prices globally to offset the added cost of claims.

At the same time, higher interest rates have boosted the returns insurers can earn on the investment portfolios they hold to back up underwriting. Thanks to this double tailwind, insurers have reaped the benefits. Axa's combined ratio, a measure of underwriting profit, fell to just 90.6% in its 2025 financial year, from 99.5% in 2020. Anything below 100% signifies an underwriting profit while anything above signifies a loss. Thanks to this tailwind, Axa's net income rose to €9.8 billion in 2025, on a total revenue of €75 billion. Of that total, €58 billion comprised revenue from P&C underwriting.

The company's next move was to sell its asset-management business. Axa sold this division, Axa Investment Managers (Axa IM), to BNP Paribas for €5.4 billion – 15 times earnings at the time of the deal. The combination of Axa IM and BNP Paribas created an asset manager with total assets under management of €1.5 trillion, giving it the scale to compete in the increasingly competitive asset-management market. Axa immediately gave the bulk of the proceeds from this deal back to shareholders via a share buyback.

Axa's new plan for growth

Axa has changed completely since 2016 and, on 15 September, the group published its new plan for 2027-2029. The new plan builds on the work management has done over the past decade to get the business to where it is today, and the focus is earnings growth. Management wants Axa to reach earnings growth of 7% to 9% on a compound annual basis over the next three years, above the top end of the 6% to 8% target in the previous plan.

To do this, analysts believe the company will have to broaden its base in Europe, notably in the small and medium-sized enterprise sector, while seeking up to €7million a year in cost savings. Overall, analysts at investment bank Berenberg believe cost savings (mostly from AI) will add 1% a year in earnings across the group, a significant figure.

Management is also forecasting higher cash generation from the group's subsidiaries. The plan is to generate €25 billion of cumulative cash over the three-year period, up from €21 billion in the 2024-2026 period. A good chunk of this will flow straight back to investors. Berenberg has the group returning €5.4 billion in 2027 and €5.8 billion in 2028, with the stock trading at a 5.8% dividend yield. Buybacks between 2024 and 2028 could shrink the share count by more than 10%. The total shareholder yield, including dividends and buybacks, is pencilled in at 7.8% for 2027 and 8.4% for 2028.

Based on the bank's estimate of future earnings growth, Axa shares are trading at a forward price-to-earnings (P/E) ratio of eight and a price-to-book ratio (P/B) of 1.59. That looks cheap compared with the group's earnings outlook and plans to return cash.

There is, of course, risk. A soft insurance market, where prices start to fall, could wipe out growth across the business, and a jump in losses could vaporise profit and force the group to postpone returning cash. All insurers face similar risks, which is why they generally carry a lower rating than the rest of the market.

In Axa's case, however, its rating seems too low. Indeed, because Axa's insurance policies are short-tail and reprice every year, the group could quickly adjust to a new environment. As one of the largest players in the global P&C and health-insurance market, Axa shares are worth a closer look at their current valuation.

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 co-founder and CEO, Nik Storonsky, has often boasted about his plans to take Revolut from a private tech start-up to a banking giant with technology so advanced, other banks would not be able to compete.

In just over a year after receiving its full banking license, Revolut has done just that. It has become the first UK bank to roll out biometric payments, allowing you to make payments at a store using facial recognition only.

I was invited to demo the system - Pay with Smile - at a nearby coffee shop in London. The face recognition technology requires a customer to simply look at a camera at the till point, smile, and 'kerching'. I was told you don’t have to smile if you’re not the smiley type, but you do have to be moving to ensure the camera is capturing a real person and not just a photo of one.

“And what if you have a twin?” I asked. Revolut said the technology is advanced enough to know the difference between them, recognising distinctive features in movement.

A Revolut colleague guided me through the system. He ordered a coffee, looked into a camera at the till, and in around 3 seconds his payment was made. There is no need to have a phone, card or wallet at hand – and in fact, your phone could be at home.

Alex Codina, general manager of merchant payments at Revolut Business, said: “By combining high-performance processing with facial recognition technology, we’ll replace outdated, fragmented tills with a hyper-efficient checkout experience designed to solve consumer and merchant pain points.”

Revolut claims merchants lose around £2,500 a year in technical glitches and that its advanced technology can help avoid losses caused by terminal outages.

For its banking customers, it claims it offers a speedy way to pay, and perfect for when you are out for a run perhaps and choose not to take your phone, forget it, or want a stress free way to pay without digging out your phone from your bag.

Revolut has started the roll out this week, but is yet to announce which retailers will be adopting this new technology.

Would you pay with facial recognition?

If you have a modern smartphone, then you are no stranger to facial recognition technology. But while you may happily use it to unlock your device and open apps, using your face to pay at stores may feel futuristic.

As you may expect, my first question to Revolut was over safety. Sharing biometrics over till points feels risky and could possibly leave you vulnerable to hackers, but Revolut assured me that no data is stored and staff at till points cannot access the information. It comes with high level banking security and similar technology used in Apple products.

I felt safe with this new advanced tech, but whether it is the future of payments is yet to be seen. Merchants would need to purchase a Revolut register, which is being offered at 0% processing fees. But, while it may feel attractive to small independent retailers like Kiss the Hippo, the coffee store where the biometric payments are available, the real game changer will be when the likes of Tesco or Sainsbury's adopt the system.

Who can use biometric payments?

If you have a Revolut account, you can use facial recognition payments where available.

You do not have to have a premium Revolut account, but you must opt in and scan a QR code at the store for first time use, after which you can be phone-less.

There are no costs to use it, but you may be limited to purchases of up to £200 and there will be times when you have a pin prompt, but you do this on the merchant’s screen and do not need your contactless device at hand.

While I was impressed with the tech, I'd like to hear what you think.

Most people expect that if they still have money left in their pension pots when they die, their spouse or children will inherit it.

While you can pass on a pension, you cannot do so solely through your will.

Instead, most people will need to tell their pension provider who to pay their pension to when they die through a form.

Why you can’t leave your pension in a will

Under current rules, you are not able to leave a pension in your will.

This is because pensions are not treated as part of your estate in the same way as your other assets and are therefore not included in the remit of your will.

That means if you mention your pension in your will, your provider is not legally bound by the request. Instead, you will need to fill out an ‘expression of wish’ or ‘nomination of beneficiary’ form with your provider to choose an inheritor.

Pensions will be treated as part of your estate for inheritance tax purposes from April 2027, but you will still not be able to leave it in your will.

That doesn’t mean you shouldn’t mention your pension in your will though.

It is still good practice to name who you want your pension to be inherited by in your will, as well as an expression of wish form, as your pension provider will likely take this into account despite not being legally required to.

How to pass on your pension

To pass on your pension, first and foremost you should check what the specific procedure used by your pension provider is, as some may have slightly different arrangements.

However, broadly speaking, pension providers will usually have a ‘nomination of beneficiary’ or ‘expression of wish’ form that you fill out to tell them who you want your remaining pension wealth to be inherited by.

Your beneficiary can be one person (for example, your spouse), multiple people (like your children or grandchildren), or even an organisation like a charity.

For a defined contribution pension, the beneficiaries will usually be given the choice of what to do with the money. Depending on your pension scheme, they may choose whether they take it as a lump sum or leave it invested and draw an income from it.

If you have a defined benefit pension, you will not have a pot of money left after you die. Instead your specific pension scheme will decide what is paid to your beneficiaries.

Sarah Pennells, consumer finance specialist at Royal London, warned that as pension beneficiaries are worked out from your nomination form, it can be easy to forget who your pension will be paid out to when you die.

“It's important to keep these forms up to date, especially after major life events such as marriage, divorce, having children or entering a new relationship. A form that you filled in 20 years ago may not reflect your current situation,” she said.

Note that this only applies to private or workplace pensions. Under most circumstances, you cannot pass on your state pension after you die.

What happens to an annuity after you die?

Some people choose to buy an annuity with their pension wealth to get guaranteed income in retirement.

If you have an annuity, you should be aware that there are different rules for what happens to it after you die – some annuities pay money out to beneficiaries while others do not.

Pennells said: "If you've already used your pension savings to buy an annuity, what can be passed on will depend on the type of annuity you chose.

“For example, a joint-life annuity can continue paying an income to a spouse or partner after your death, whereas income from a single-life annuity will normally stop when you die unless it includes features such as a guarantee period.”

To make sure you and your loved ones are prepared, you should check what your annuity’s policy on inheritance is and plan accordingly.

It could be useful to produce a short document containing useful information about your financial affairs, which your executor and heirs can easily find after you die.

Pension provider Royal London has put together a template document called “When I’m Gone”. You can include details about which pension provider(s) to contact, as well as the location of your will and your funeral wishes.

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 will rise to £13,036 a year from April 2027, breaching the £12,570 personal allowance for the first time.

The rise is thanks to the triple lock, a mechanism which increases the state pension by the highest out of wage growth, inflation or 2.5% every year.

As earnings growth was the strongest of these metrics this year, coming in at 3.9% in the three months to July, the full new state pension will rise to £250.70 a week for the 2027/28 tax year.

It means that for the first time, retirees who only receive an income from the full new state pension will pass the tax-free £12,570 personal allowance.

The state pension is a form of taxable income, but previously fell within the tax-free personal allowance, which is frozen at £12,570.

While the rise was due to tip some lower-income pensioners into the basic rate tax band, a pension tax allowance, announced in the 2026 Autumn Budget, means those who only receive income from the state pension will not need to pay tax.

How the pension tax allowance will work

If you had a taxable income of £13,036, you would usually owe around £94 in income tax.

However, chancellor John Healey announced that a new tax-free allowance will be introduced in the 2027/28 tax year that means those who only receive an income from the state pension will not need to pay any tax.

The pension tax allowance will be set at £13,036 for the 2027/28 tax year and will be uprated with the full new state pension until at least April 2030.

The government says the new allowance will reduce the administrative burden for pensioners who would have otherwise had to pay small amounts of tax through simple assessment.

The pension tax allowance will be applied automatically for those eligible.

What if I have a small amount of income alongside the state pension?

If you receive a very small amount of extra income a year alongside the state pension, then you may still get some tax relief from the new allowance.

For every £3 in income you receive over £13,036, you lose £1 of the pension tax allowance.

Any extra tax relief from the pension tax allowance is lost by the time your income reaches £13,319 a year.

It means if you have an income of between £13,037 and £13,319, you will receive at least some tax relief and pay less income tax than you otherwise would.

But if your income is over £13,319, you will not receive any of the pension tax allowance.

Do you have to pay tax on other pension income?

If you have income over £13,319 from your state pension and another source, perhaps from a workplace pension or part-time work, you will have to pay some income tax despite the new allowance.

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.

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 receive an above-inflation rise in their state pension next April, tipping the full new annual amount over £13,000 for the first time.

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.

CPI inflation rose by 3.5% in the 12 months to September 2026, while revised earnings figures published in October showed earnings in May to July 2026 increased by 3.9%.

This means the state pension will go up by 3.9% from April 2027.

Pat McFadden, secretary of state for work and pensions, said in a written statement to Parliament: “I am pleased to announce that the basic and full rate of the new state pensions will be increased by 3.9%, in line with the increase in average weekly earnings in the year to May to July 2026.

“This delivers on our triple lock commitment throughout this Parliament to increase these rates in line with the highest of growth in prices, growth in earnings or 2.5%.”

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, will increase from £241.30 per week (around £12,547 per year) to £250.70 per week (around £13,037 per year) from next April.

The basic state pension, paid to older pensioners, is increasing 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.

Meanwhile, extra amounts of state pension received from deferring don’t rise in line with the triple lock and instead increase based on inflation.

Will retirees have to pay tax on their state pension?

More pensioners faced paying income tax from April 2027 due to the ongoing freeze to income tax bands and a rising state pension.

However, in the 2026 Budget, the government confirmed low-income pensioners will be protected from paying income tax from April 2027.

Under chancellor John Healey’s new pension tax allowance, if a pensioner’s total income is more than the £12,570 personal allowance but less than the value of the full new state pension (£13,037), they won’t pay income tax.

If their total income is between £13,037 and £13,319, they will pay some income tax, but less than they would have before the change. Those with a total income over £13,319 won’t receive any pension tax allowance.

How to protect yourself from income tax

If you’re a pensioner with a total income over £13,319, there are other methods you can use to lower your income tax bill.

One is to 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.

Changes afoot for the triple lock

The state pension will continue to rise under the triple lock for now, but will be scrapped in April 2030 if Labour stays in power.

Prime minister Andy Burnham plans to replace the mechanism with a double lock to help fund a new free social care service.

It comes as the cost of the uprating system rises as people live longer and there are fewer workers to fund the state pension.

Previous projections by the Office for Budget Responsibility (OBR) suggested the triple lock would have cost 9% of GDP by 2075/76, up from 5% now, in part due to the triple lock.

Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown, said: “We don't know exactly how much the triple lock reforms will affect future state pension incomes, but for those concerned how the latest changes may impact your retirement income it pays to be organised and plan ahead.

“Even relatively small increases in your pension contributions now could make a big difference to your retirement income in the long run and cover any shortfall.”

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.”