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

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

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

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

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

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

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

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

Credit: NS&I

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

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

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

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

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

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

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

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

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

Marriage rates among the over 50s have risen significantly in recent years, according to the Office for National Statistics (ONS). Latest data reveals the number of men who said ‘I do’ aged 50+ is up by 33% in the past decade; for women in that age group it’s even higher, at 47%.

Those figures are greater still for people in their 60s, where there’s been a 33% increase in men who have married aged 60+ and a 56% rise among women over the 10 years to 2022.

Later-life marriages – whether people’s first, second or subsequent – often come with children on at least one side. Estimates vary but based on ONS figures, somewhere between 10% and 33% of families in the UK are blended, which the ONS defines as at least one child having a parental relationship with both members of the couple and another child being a stepchild.

Blended families can bring complications, whether around presents or planning holidays. But what happens when the stakes are higher?

If you’re widowed or divorced and have found love again, the last thing you might want is to start thinking about the end. Yet imminent inheritance tax (IHT) rule changes mean more families may need to do exactly that.

As announced in the 2024 Budget, from April 2027, defined contribution (DC) pensions will be treated as part of an estate for IHT purposes. The change is expected to double the number of estates liable for IHT to around 8%.

For people with children from a previous marriage, it’s a reminder of the importance of planning ahead. A common piece of advice is to think about what you want to happen after you die as early as possible. When everyone’s healthy and getting along, emotions are steadier and discussions tend to be easier. Once circumstances change, those conversations can become more difficult.

What myths and misconceptions do people have about estate planning?

Many people still assume estate planning is only relevant to the very wealthy. Yet rising house prices, combined with the nil-rate band (NRB) being frozen at £325,000 since 2009, have brought more families into scope for inheritance tax.

Other common misconceptions include believing a spouse automatically inherits everything if someone dies intestate (without a will), that pension benefits automatically fall to family members, or that unmarried couples have the same legal protections as married couples.

Add in the complexities of blended families, differing financial needs and the pension changes and the value of clearly documenting your wishes is emphasised.

How do trusts fit into estate planning?

Trusts are often used to provide control over how assets are passed on.

Every trust has three key parties: a settlor, who provides the assets; the trustee, who manages them; and the beneficiaries, who ultimately benefit from them.

Assets that can be placed into trust include cash, property, investments and land.

In the UK, there are several different trust structures available.

Lifetime trusts take effect immediately and include arrangements such as bare trusts, vulnerable person’s trusts and personal injury trusts.

Will trusts are created through a will and only take effect on death. Examples include discretionary will trusts or pilot trusts, which can hold assets such as pension death benefits or life insurance payouts.

Interest in possession trusts, often known as life interest trusts, allow a surviving spouse to benefit from an asset during their lifetime without owning it outright. For example, they might have the right to live in a property or receive investment income, while the underlying capital eventually passes to your children or other beneficiaries.

Discretionary trusts offer trustees broad control over how and when assets are distributed. Provided the settlor lives for seven years after making the transfer, assets can fall outside their estate for IHT purposes, although periodic trust charges (typically every 10 years) may still apply.

Who to name as a beneficiary

Andrew Zanelli, head of technical engagement at investment platform Aberdeen Adviser warns of a potential “nomination minefield” once pensions become subject to IHT.

For blended families, the key question may be whether pension assets should pass to a surviving spouse or directly to children from a previous relationship.

You can see the attraction of leaving everything to a husband or wife. Pension wealth passing directly to a surviving spouse or civil partner benefits from the ‘interspousal exemption’ and is not subject to IHT on first death.

That exemption doesn’t just apply to the NRB but an additional residential nil rate band (RNRB), which is currently £175,000. This means a husband or wife could potentially pass on up to £1 million with no IHT consideration.

The challenge is what happens later.

The hope is that if everything passes to the spouse on first death, when they die, they would direct everything as intended – such as to the first spouse’s children or other named beneficiaries. But circumstances can change.

Zanelli shares an example: “The main issue here is the potential for the children of the first to die to be disinherited. Let’s assume the husband dies first. By nominating his wife, he is effectively handing over future control of his pension pot to her. She could change her nominations at any time in favour of other individuals, cutting out his own children. This could be motivated by remarrying someone else, or falling out with his children.”

Leaving assets directly to children presents a different problem. Any amount above available allowances may attract IHT immediately, plus the surviving spouse may have no access to those funds if they need them.

If you’re trying to look after your surviving spouse but want to commit something for your children, Zanelli says you can gain peace of mind by setting up a structure where your spouse is looked after for life – even through they don’t own the asset – and ultimately your children will be the recipients of any capital that's left.

These trust structures could take several forms, including a discretionary will trust, life interest or spousal bypass trust.

What are bypass trusts?

Historically, spousal bypass trusts have been used to balance support for a surviving spouse and protecting assets for children from previous relationships.

Whether they remain popular beyond April remains up for debate.

Dan Blandford, chartered financial planner at The Private Office (TPO), believes two broad approaches may emerge.

The first is that people may stop using bypass trusts altogether and instead leave assets directly to a spouse, taking advantage of the IHT exemption and trusting them to pass wealth to the intended beneficiaries later.

This may prove attractive for families looking to avoid an immediate IHT charge, although it relies heavily on the surviving spouse ultimately carrying out those wishes.

The second scenario he foresees is more likely among wealthier families with very large pensions expected to support several generations.

Rather than allowing pension wealth to pass down through successive estates and potentially attract IHT multiple times, some may choose to pay the tax once and move assets into a discretionary trust structure.

“I envisage that would be the second reason it will be used; do people accept a ‘one-off’ IHT charge in exchange for avoiding repeated charges as wealth passes from one generation to the next,” says Blandford.

But he believes spousal bypass trusts will still have an important role for those motivated primarily by control rather than tax savings.

For those conscious of inheritance tax and retaining oversight of family wealth, these trusts allow them to determine when assets or income are distributed and help protect beneficiaries from risks such as divorce or financial difficulties.

At the same time, he expects more people to draw pension assets during their lifetime, reducing the size of the pension pot potentially exposed to IHT.

The importance of reviewing a will

Estate planning concerns are not unique to pensions.

Tamsin Caine, director of financial planning at Smart Financial, points to the example of a life interest trust involving the family home. A surviving spouse may retain the right to live in the property for life, while the deceased’s spouse’s share ultimately passes to their children.

To achieve this, the property generally needs to be owned as tenants in common. Otherwise, ownership passes automatically to the surviving spouse, bypassing the will altogether.

Caine says careful drafting and regular reviews are essential.

“It’s important to revisit wills and keep them up to date, making sure they’re still in line with wishes, with legislation and that they still reflect everything that you’d want.”

She also cautions against viewing pensions primarily as an IHT planning tool.

“Pensions are intended to provide income in retirement. While we know people have used them for planning for the next generation, if you’re thinking about passing down the generations – in my view, pensions should be the last thing you touch,” she says.

For all these scenarios legal advice is highly recommended – ideally sitting alongside financial advice if that’s possible.

Paul Gotch is senior partner at Private Client Solicitors. He says by nature a pension will be held in trust, subject to scheme rules, depending on the individual policy. All anyone really has the power to do is change their expression of wish, or nomination form, which tells the trustee who should receive it on their death. The trustee should take that guidance but they’re not legally binding.

Think about how you’re splitting things. Does the spouse get the pension and any children get other assets? Are you splitting things 50/50? Have you got other children with the new spouse?

“You need to balance the legal perspective – what you can do, with the financial perspective – what is fair. Are you leaving your spouse sufficient funds to maintain their standard of living, the cost of the property and so on,” says Gotch.

“Equally, if assets go to that surviving spouse, there's a risk that on his or her death, they update the will and nomination to only include his or her own children, which then creates the disinheritance of the first.”

Think about care costs as well. It’s very common when a relationship is going well and is full of trust, that the surviving spouse will ‘do the right thing’ but circumstances change.

What if they’ve not fallen out with your children but they needed several years of expensive care, asks Gotch. They planned to pass on the remaining assets as their spouse intended but by the time they die, these might have been significantly depleted.

Ultimately, there isn’t a trust structure that can eliminate every risk. Family circumstances evolve, relationships change and intentions can be misunderstood. But for blended families facing a more complex IHT landscape, taking time to put clear plans in place may help prevent disputes and uncertainty later on.

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

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

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

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

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

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

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

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

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

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

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

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

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

How to track down lost Child Trust Funds

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

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

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

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

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

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

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

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

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

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

Just how much cash will you be able to hold in your ISA from next year and what will it cost you to do so? At first sight, new rules for individual savings accounts (ISAs) due to come into force from 6 April 2027 look straightforward. In practice, they are likely to prove anything but, thanks to tricky new regulations published this week.

The confusion stems from changes announced in last November's Budget. Chancellor Rachel Reeves stressed her determination to use the tax system to encourage risk-taking investment into UK companies and infrastructure; she therefore announced that from the 2027-2028 tax year onwards, the annual limit on investments into cash ISAs – where your money is simply held in a risk-free bank or building society account – will fall to £12,000. By contrast, the annual stocks and shares ISA allowance – where your money flows through into productive investments – will remain at the full £20,000.

So far, so good. But what about cash held in a stocks and shares ISA? You're also entitled to hold cash in these accounts. Perhaps you're concerned about market volatility, or think you might need to make a withdrawal soon; maybe you just want to maintain a small cash balance to fund fees and investment charges; you may even have opted to take dividends from existing holdings in cash, potentially to be invested later on.

Moreover, what about cash-like investments in a stocks and shares ISA? Opting for a money-market fund, say, is akin to holding your ISA savings in cash, even if you're technically making an investment.

Reeves's new ISA changes will affect everyone

These complexities have prompted some head-scratching at the Treasury, which delayed publication of the detailed regulation on how the new rules will apply to stocks and shares ISAs until earlier this week. Now, however, it has published an “anti-circumvention rules fact sheet” that is more demanding than many had expected. Most strikingly, the Treasury plans to introduce a new tax on interest earned on cash held in a stocks and shares ISA, even though the tax-free nature of money held in such accounts is meant to be sacrosanct. A 22% tax charge will apply, in line with the rate of savings interest tax, from April 2027 onwards.

While a similar arrangement operated in the UK until 2014, some ISA providers believe the change will fundamentally undermine the tax efficiency of ISAs. Providers will no longer be able to describe all ISAs as tax-free in order to encourage savers and investors, they say. Some ISAs will be more tax-free than others.

The Treasury has also confirmed plans to restrict savers from holding cash-like investments in their stocks and shares ISA. Money-market funds will not qualify for ISAs if they account for the entirety of the investor's stocks and shares ISA portfolio; ISA managers and platforms will then be forced to intervene.

There will also be a veto on transfers of money into a cash ISA from holdings in a stocks and shares or innovative ISA, which is currently allowed. Again, while the goal is to stop investors getting round the new rules, one result will be to limit financial planning and constrain the flexibility of investment strategies.

This will affect everyone. In last November's Budget, the Treasury said savers and investors aged 65 or over would be exempt from the lower annual allowance on cash ISAs, maintaining their full £20,000. The thinking is that older people are often in a phase of running down their savings and may therefore need to take a more risk-averse approach to managing their money. This week, however, the Treasury revealed that the over-65s won't be exempt from tax on interest from cash or from the ban on investing an entire stocks and shares ISA in money-market funds, although they will be allowed to transfer to stocks and shares Isas to cash ISAs.

All of which adds a great deal of complexity to the ISA rules – and plenty of scope for adverse outcomes for investors. Plus, ISA providers themselves will muddy the waters. JPMorgan Personal Investing, for example, has already announced that, from this week onwards, it will no longer pay interest on cash held in a stocks and shares ISA if an investor's entire pot is held in cash. The move is in line with the intent of the Treasury's thinking, but will naturally save JPMorgan Investing some money. And previously, the Financial Conduct Authority has warned the whole ISA industry about paying poor interest rates on cash held in a stocks and shares ISA.

Elsewhere, ISA providers – including leading online platforms – are already beginning to rethink their policies on what they will and won't allow investors to do. They will want to get ahead of restrictions and may simply withdraw certain products and services completely. Maybe they'll no longer allow investors to receive cash dividends, for example, requiring everyone to use accumulation funds.

Will Reeves stay chancellor long enough?

All of which is a reminder of how strongly the law of unintended consequences applies in the world of tax. The desire of the Treasury to shift money out of cash ISAs into stocks and shares accounts that are seen as more supportive of economic growth is understandable – the most recent official statistics reveal investors put £69.5bn into the former in the 2023-2024 tax year against only £31.1bn in the latter. But more doubt and complexity may simply put people off, reducing the size of the whole pie.

There's one final unknown, meanwhile. This scheme is the brainchild of Rachel Reeves and her team. But will she remain chancellor long enough to finalise the remaining details – a short technical consultation will take place between now and the autumn – let alone to see it come into operation next April? Maybe a different chancellor will want to do something completely different.

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

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

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

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

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

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

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

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

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

What is probate?

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

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

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

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

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

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

How do you apply for probate?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Investors will face a charge on any interest paid on cash in a stocks and shares ISA, the Treasury has confirmed in its latest guidance on ISA reforms.

Plans are underway to reduce the cash ISA allowance to £12,000 per year from April 2027 for savers under age 65.

The Treasury is also disincentivising holding uninvested cash in a stocks and shares ISA and restricting how much can be held in cash-style products within this type of ISA.

It has confirmed plans for a 22% charge on any interest or alternative finance return paid on cash held within a non-cash ISA, from April 2027. This may be money that account holders haven’t invested yet or from dividends paid out.

But in some good news for investors, money market funds will be allowed in a stocks and shares ISA as long as they do not make up 100% of the investments.

Common investments held in stocks and shares ISAs such as individual shares, funds, investment trusts, exchange-traded funds and corporate and government bonds, including UK gilts, will not be treated as cash-like assets, the Treasury said.

James Carter, head of platform policy at Fidelity International, said: “We are pleased to see that cash-like investments will remain eligible for non-cash ISAs.

“These products are genuine investment products, holding short-term government and high-quality debt, and form a valued part of many balanced portfolios. Removing them from the stocks and shares ISA framework would have undermined the government’s objective of encouraging more people to invest, by giving customers a cliff edge choice between staying in cash or moving directly into higher-risk, more complex products.”

New restrictions on transfers into cash ISAs

Transfers from stocks and shares ISAs into cash ISAs will not be permitted but it will be allowed the other way round.

Individuals aged 65 and over will still benefit from a higher cash ISA limit of £20,000 per year, if they wish to use the full annual ISA allowance for that type of account.

The transfer restriction will be stopped from this point but the charge on interest earned on cash in a stocks and shares ISA and the prohibition on 100% cash-like investments will remain in place.

A technical consultation is due to be released by the Treasury on how the charge will work.

Greg Davies, head of behavioural finance at Oxford Risk, has already warned that the measure risks backfiring.

He said: “Getting people invested is an inherently behavioural challenge. You do not encourage nervous savers into investing by making the first step feel more complicated, more punitive and harder to reverse.

“People move from cash into markets when the journey feels clear, safe enough, and matched to their goals, time horizon and financial circumstances. Adding tax charges and transfer restrictions to an already confusing ISA system sends precisely the wrong behavioural signal.

“For many would-be investors, this will not create confident investors. It will create more hesitation, more disengagement, and more people doing nothing.”

Rachel Vahey, head of public policy for AJ Bell, warned that the changes are “increasingly complex” and “riddled with unintended consequences” and may mean people just keep money in cash ISAs instead.

She said: “The new rules mean a charge of 22% will be applied to interest paid on cash in investment ISAs. This is a flat rate charge, meaning the same rate applies whether the ISA account holder is a basic rate taxpayer, higher rate taxpayer, or indeed doesn’t pay any income tax.

“The ISA holder cannot invest 100% of their (non-cash) investment portfolio in money market funds, or that would be classed as a ‘non-qualifying’ investment. This means they could invest 99% in money market funds and 1% in, say, UK equities and that would be allowed.

“It also means they could hold 50% of their portfolio in cash, but if the remaining 50% was held in money market funds that wouldn’t be allowed. Whereas if they held 49% in money market funds and 1% in UK equities, this would be permitted under the rules.”

Will investment platforms stop paying interest on cash?

Several investment platforms such as Bestinvest, AJ Bell, interactive investor, Fidelity and Hargreaves Lansdown pay interest on cash held within a stocks and shares ISA.

The rates are not that competitive but the benefit for investors is that they can get cash in the wrapper or receive dividends and decide how they want to invest it.

It is currently unclear if platforms will stop paying interest or if investors will just need to be aware of the charge.

Carter said: “We have consistently welcomed the government’s recent focus on encouraging more people to invest, supporting better long-term outcomes. Recent initiatives such as a review of risk warnings, the introduction of a targeted support regime, and an education campaign on the benefits of investing, will all help to reset the approach to risk and bridge the gap between precautionary cash savings and long-term investment.

“We look forward to the publication of the technical consultation which will include further details required to enable providers to implement these changes.”

A spokesperson for AJ Bell was unable to comment on whether the platform will stop paying interest on cash.

Jason Hollands, managing director of Bestinvest, described the anti-circumvention measures as a "disproportionate response to a problem that may never meaningfully materialise."

He added: "Investors will also need to weigh up the relative difference in returns on a money market fund minus any platform fees, versus holding cash and having the 22% charge deducted."

MoneyWeek has asked Hargreaves Lansdown and interactive investor for comment.

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

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

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

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

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

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

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

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

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

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

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

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

How would the First Time Buyer ISA work?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Who can use the FTB ISA?

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

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

What will happen to the Lifetime ISA?  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Which NS&I accounts will pay more?

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

Credit: NS&I

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Is a regular savings account the best option for you?

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

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

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

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

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

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

The Labour leadership election may be set to dominate the news agenda and dinner party conversations for the next month or so but it may not have as much of an impact on your investments as many fear.

Sir Keir Starmer resigned as Labour leader this morning, paving way for a leadership election and a new prime minister to be appointed before the summer recess.

Newly-appointed Labour MP Andy Burnham is the only candidate to have thrown his name in the ring so far and it is unclear what his policies will be and who else will challenge.

Stock markets don’t like uncertainty but investors have had to get used to plenty of political upheaval in recent years.

Starmer is the fifth prime minister to resign since 2016, starting with when David Cameron stepped down in the aftermath of the Brexit vote.

The most recent resignation before that was Labour leader Tony Blair in 2007.

But exclusive analysis by wealth manager Quilter for MoneyWeek shows that while these resignations make good headlines, they don’t actually have a drastic impact on stock markets, which could be good news for investor portfolios.

What impact do leadership elections have on financial markets?

Quilter analysed economic indicators such as equities, gilts and the value of sterling against the dollar in the three month build up to a prime minister’s resignation and the three months after.

The analysis showed a mixed picture.

Tim Armitage, investment strategist at Quilter Cheviot, said: “Leadership resignations often prompt headlines about market uncertainty, but history suggests markets do not react to resignations themselves, rather they respond to the underlying risks those resignations expose or resolve.

“Across recent UK history, market reactions tend to fall into three broad patterns – where the resignation follows an external shock, reflects a loss of policy credibility, or occurs against an already dominant macro backdrop.”

UK equities were up by 3.8% in the three months before Tony Blair stepped down in May 2007 and fell 7% in the three month aftermath.

But in some cases, such as the resignations of David Cameron in May 2016 and Liz Truss in October 2022, UK equities actually rose in the three month aftermath by 13.6% and 12.3% respectively.

Armitage added: “In the case of David Cameron, his resignation followed the Brexit referendum, which drove a sharp fall in sterling. While this created immediate volatility, it also supported UK equities and bonds due to the international earnings profile of many listed companies.

“In contrast, Liz Truss’ resignation followed a clear crisis of policy credibility linked to unfunded tax cuts. Markets had already reacted sharply, particularly in gilt yields, and stabilised as her departure removed a key source of uncertainty alongside intervention and reassurance from the Bank of England.”

The impact on sterling has also varied, falling by 7.2% against the dollar when Boris Johnson resigned in July 2022, but rising by 9.2% when Truss left Downing Street.

Armitage said: “Boris Johnson’s resignation came during a period dominated by global macro forces, namely rising inflation and the energy shock following Russia’s invasion of Ukraine, meaning there was little discernible shift in market direction attributable to domestic political change.”

The FTSE 100 and FTSE 250 don’t appear to have been impacted since Starmer’s resignation.

Armitage said: “For investors, the key takeaway is that political change tends to matter most when it alters confidence in fiscal and economic policy. Periods of uncertainty can create short-term volatility, but markets often stabilise quickly once a clearer policy direction emerges.

“Looking ahead, any market reaction to Sir Keir Starmer’s resignation will depend less on the event itself and more on whether it reduces or increases uncertainty around fiscal policy, regulation and economic direction. Early signals on policy continuity and key appointments are likely to be more important for investors than the leadership change alone.”

The key lesson appears to be that time in the market, rather than timing the market, remains the main policy that investors should follow.

Andrew Prosser, head of investments at InvestEngine, said: “Political instability – such as a change in prime minister – can create both risks and opportunities for investors but those who want to grow their money over the long term should not be worried. This upheaval may move markets in the short term, but history has shown markets always recover, and often quicker than expected.

“The investors who tend to come out ahead of periods like this are the ones who stay diversified and stay invested. Our advice is that long-term investors should avoid making knee-jerk decisions, ignore the noise and sit on their hands. Time in the market, as ever, matters more than timing the market.”

Tadashi Yanai is living out his dream. Of all the many art books lining his wood-panelled office in Tokyo, the most “sacred text” turns out to be a Next catalogue from 1987, shot by the now famous Vogue and Vanity Fair photographer Koto Bolofo. “This inspired me most, back in the Eighties,” says Yanai, who at 77 is Japan's richest man with a fortune put at around $69bn. “Ordinary people looking cool and casual… I wanted to deliver this kind of clothing for current times. Clothes to make people happy.”

You know when a brand has conquered the zeitgeist when the vocabulary around it goes mainstream. For Uniqlo – the fast-fashion phenomenon with a mission to dress the world in its anonymously chic “wardrobe building blocks” – that moment came when the word “unibare” entered the lexicon, says The Times. It expresses the moment you realise that someone is wearing Uniqlo, “rather than anything more expensive”.

In April, shares in Fast Retailing – Uniqlo's parent company – hit a record high on the back of roaring overseas growth in the US and Europe, says Bloomberg. They've now gained 45% year-to-date. Fast Retailing is the third biggest apparel company in the world after Zara's Inditex and the H&M stable, and its humble brown paper bags have become a fixture from Oxford Street to Fifth Avenue.

In a business culture “famed for grey conformity”, Tadashi Yanai “can't help but swim against the tide”, says Time – happily flaunting his success despite local taboos against ostentatious wealth. He owns two golf courses on the Hawaiian island of Maui alone. Yet when you walk with him through Uniqlo he reveals some “quintessentially Japanese traits”, says Bloomberg Businessweek: “attention to detail, supply-chain prowess, minimalist aesthetics” – and frugality.

Tadashi Yanai was born into the rag trade

Tadashi Yanai grew up in the trade – his parents ran a menswear shop in Ube on the main Japanese island of Honshu. The event that changed his life was the Vietnam war, which interrupted his studies in political economy at Tokyo's Waseda University because of a student walk-out. The break enabled him to travel to the US and UK, where the proliferation of mid-market clothing shops planted a seed. In 1972, after a brief stint selling men's clothes for a supermarket chain, Tadashi Yanai was handed the keys to his father's now expanded business.

In 1984 he opened the first branch of the Unique Clothing Warehouse in Hiroshima to pursue a more casual style. The firm's big breakthrough came in 1998 – as Japan was reeling from its burst economic bubble – when Yanai opened Uniqlo's first Tokyo outlet and sold a lightweight fleece for just £15. “Every fourth Japanese consumer bought one.”

When Tadashi Yanai published his autobiography, One Win and Nine Losses, he had a cathartic time describing his many mistakes down the years – not least overhasty expansion efforts, which necessitated a humiliating retreat. These days, Uniqlo's expansion is more measured, but has a relentless quality, says The Times. Having targeted national capitals, it's going for the regions – in the past year, opening new British stores in Liverpool, Glasgow, Edinburgh and Bristol. A series of designer collaborations – with minimalist Jil Sander and, latterly, Dior maestro Jonathan Anderson – has boosted the brand's appeal.

Tadashi Yanai, who is building sponsorship programmes with art galleries globally, has strong ideas about being “a force for good” and giving back to society. Yet he runs his own fiefdom like “a dictator”, says Time. With two sons now working in the business, questions about the succession abound. But he's giving nothing away. “When I get older my dream is to take a walk every day on the streets of London” – a continuing source of inspiration, he told The Telegraph in 2015. No sign of that happening any time soon.

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.

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

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

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

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

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

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

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

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

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

AI is making investment scams easier than ever

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

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

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

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

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

How to protect yourself from fraud

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

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

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

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

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

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

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

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

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

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

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

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

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

Who will get payouts?

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

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

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

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

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

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

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

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

Small-cap stocks have been abandoned by investors. That is bad news not only for the companies themselves, but for the wider UK economy. In the past, the smallest businesses listed on the London stock market have played an important role in Britain's economy. Ambitious young companies could raise money, expand their operations and, if successful, grow into much larger businesses. Investors who backed them early often enjoyed excellent returns along the way.

Today, that system is breaking down. A series of regulatory changes and industry shifts has steadily diverted money away from smaller companies and towards the largest firms in the market. The result is a funding drought for many promising businesses and fewer opportunities for savers seeking long-term growth. Because these changes are now deeply embedded, a reversal looks unlikely anytime soon.

That does not mean investors should ignore small caps. In fact, the current environment may offer some of the best opportunities seen for years. But investors need to adapt. Simply buying cheap shares and waiting for the market to recognise their value is no longer enough. Many small-cap stocks remain overlooked for years. The most attractive opportunities are often companies that can grow rapidly, recover from temporary setbacks, or unlock value through corporate activity. In other words, investors should be looking for tomorrow's mid-caps rather than today's statistically cheap shares.

Finding bargains in small-cap stocks isn't enough

The UK stock market is shrinking as listed companies disappear through takeovers, private-equity bids and delistings. At the same time, fewer investors are directing money towards small caps. As a result, prices at the lower end of the market often fail to reflect the underlying performance of a business. In theory, that should make stockpicking easier. If markets become less efficient, bargains should become more common. The problem is that cheap shares can now remain cheap for a long time. Buying undervalued stocks only works if someone eventually notices that they are undervalued.

To understand why this is happening, it helps to look at how the wealth-management industry has changed. Not long ago, stockbrokers and fund managers devoted considerable resources to researching smaller companies and allocating clients' capital across the market. That process helped ensure that money flowed to promising businesses and that share prices broadly reflected reality. Things have changed. Building bespoke portfolios has become increasingly expensive and administratively burdensome. Faced with rising compliance requirements and growing scrutiny over fees, many advisers have stopped making investment decisions themselves. Clumsy rules from the regulator triggered this shift. To eliminate compliance risks and operational costs, advisers stopped managing money altogether. Instead, they outsourced the process entirely to mass-market model-portfolio services (MPS).

That trend has concentrated massive wealth into a handful of firms. Four dominant discretionary managers now control the bulk of the UK MPS market. Quilter WealthSelect, Tatton Investment Management, Timeline Portfolios and AJ Bell Investments manage more than £70 billion combined and are growing rapidly. Today, the MPS marketplace relies almost entirely on passive tracking funds. Driven by regulatory pressure to keep fees low, providers invest in cheap index funds that replicate the wider market. Human judgment has been replaced by algorithms. Instead of analysing whether a business is worth buying, a passive fund allocates cash based purely on how large a company it already is.

The big four allocate a combined £9 billion to the UK stock market. Yet tracing the money down to the underlying holdings reveals that almost none of it reaches smaller companies. When investment committees use passive UK equity trackers, index rules determine where the money goes. These index rules explain why the largest wealth managers hold next to nothing in smaller companies. In the past, a balanced portfolio routinely allocated several percent to small caps. Today, that support has vanished. Quilter WealthSelect and Tatton Investment

Management control around £50 billion between them, yet their reliance on broad market benchmarks dilutes actual small-cap exposure to around 0.3% of total assets. AJ Bell relies on trackers that systematically lop off the bottom 3% of the investable market, so its allocation to pure small caps sits at virtually nothing.

This starvation of capital has triggered a destructive feedback loop, worsened by past regulatory mistakes. New rules permanently damaged the stock market by forcing brokers to charge separately for research and trading. When active funds dominated the market, brokers employed armies of researchers to write detailed reports, helping fund managers choose where to invest. In the past, brokers spent time analysing small companies to drum up interest among investors and find buyers for their shares, funding the work through trading in large companies. This research gave smaller firms visibility and kept their share prices accurate. Once the regulator banned this so-called bundling, the commercial model for small-cap broking collapsed because passive tracking funds do not buy research.

Analysts' coverage for companies valued under £250 million has all but vanished. Today, hundreds of listed British businesses are completely ignored by the market. With no regular broker reports, private investors have to work much harder, using specialised resources to find out how well these businesses are performing. Institutional investors will not buy shares in a company that nobody covers and brokers will not spend money writing about companies that the big wealth platforms are blocked from buying. Investing is becoming a purely automated exercise driven by index size, leaving high-quality small companies completely cut off.

How to find the right small-cap stocks

Yet all is not lost. For savvy investors who understand this breakdown, the dysfunction creates a lucrative hunting ground. To succeed, investors must leave behind old-style value investing. Buying a stock simply because it looks cheap on paper is a mistake, as passive investing means that value stocks may remain cheap forever. Instead, investors must look through these three specific lenses to find the stocks that can entice money from investors.

The first lens focuses attention on structural growth – that is, high-quality businesses expanding their operations and becoming more valuable in the process, generating high levels of real growth by deploying a proven commercial formula. This could make them the mid-caps of the future. When a company grows its earnings consistently, the compounding effect eventually overwhelms the lack of market interest. Even if the valuation multiple stays depressed, the sheer scale of the underlying profit expansion forces the share price higher, dragging the business out of the small-cap index to where there are far more investors.

The second lens reveals recovery plays that have hit cyclical lows. The turbulent economy of the last few years has battered corporate earnings, causing share prices to collapse and pushing formerly substantial businesses down into the small-cap sector. But this is often a temporary condition driven by external cyclical factors rather than permanent structural decline. The goal is to identify businesses that have survived the worst of the downturn and have the strength to capitalise on the inevitable rebound. When the cycle turns, these companies will enjoy a dramatic recovery, delivering an explosive bounce in earnings.

The third lens focuses on corporate activity – revealing under-the-radar businesses where an activist investor has built a stake to force operational change, unlock shareholder value or streamline the group. The activity can take many forms – from cost-cutting programmes to selling off non-core assets, or shrinking the share count using excess cash – and create prime targets for full takeovers by external corporate buyers. Private-equity firms and larger international corporations routinely scan the UK small-cap market for high-quality assets trading at steep discounts to their private market value. When a corporate buyer launches a full cash takeover bid, the market reaction can deliver value for shareholders. The following companies are examples that meet some of these three criteria.

Nine of the best UK small-cap stocks

Fintel (LSE: FNTL) is a structurally growing business that is priced as if it is not. It provides critical compliance data and fintech software to thousands of British financial advisers through its dominant SimplyBiz and Defaqto brands. The result is a highly predictable stream of recurring subscription income, with demand likely to increase as regulation across the retail wealth sector becomes more stringent. Yet the market prices the combined entity at a steep discount to the price that other similar businesses have been acquired for. This allows investors to buy a highly scalable fintech at a bargain valuation, long before the compounding earnings force a market rerating.

Software Circle (LSE: SFT) aims to generate structural growth via a disciplined consolidation strategy. It is actively buying up niche software businesses within highly fragmented sectors across the UK. Operations are at an early stage, but management is progressing sensibly, securing acquisitions at very attractive multiples while maintaining a lean head office and a decentralised operational structure. This playbook closely mirrors the model of other firms that have generated immense long-term wealth. Though tiny today, this firm has all the traits necessary to deliver exceptional multi-year shareholder returns.

Amcomri Group (LSE: AMCO) operates a strict buy, improve, build strategy across the fragmented UK engineering and manufacturing sectors. The business targets high-quality industrial firms facing the owner's retirement, acquiring them at low single-digit multiples before driving organic margin improvements. This roll-up model generates highly predictable structural growth completely independent of the wider macroeconomic backdrop. Recent final results confirm this operational formula is working, with pre-tax profits significantly ahead of market expectations.

Vanquis Banking Group (LSE: VANQ) is a cyclical recovery play. Formerly a FTSE 100 stock called Provident Financial, the lender shrank into a micro-cap minnow after major operational disasters. Management has finished cleaning up the wreckage, yet the market still prices the shares as if collapse is certain. Vanquis provides credit cards and vehicle finance to millions of sub-prime borrowers that mainstream banks ignore. Management targets mid-teens returns on tangible equity by 2027. If they deliver, the shares will be unbelievably cheap and a sharp market rerating should drive the share price up to reward investors who timed the recovery correctly. The bank operates as a far better business than its depressed price reflects.

Focusrite (LSE: TUNE) is a clear case of a former stockmarket darling caught at a cyclical low. The audio-products group enjoyed an unprecedented sales boom during the pandemic. However, as global demand normalised, the business wrestled with severe inventory overstocking and costly distribution headaches that clouded performance for several years. Recent trading updates indicate that these operational problems are finally clearing. Trading on a low multiple of its current depressed earnings, Focusrite offers massive upside. As underlying profits recover toward historic levels, this corporate recovery could trigger a rise to a much higher share price.

Marshalls (LSE: MSLH) serves as another example of a business hitting a cyclical low, operating as a highly respected supplier to the struggling UK building industry. High interest rates, inflation and uncertainty about policy have brought domestic construction to its knees, dragging the business down with it. This company once commanded a premium valuation as a well-known mid-cap, but it has now fallen into obscurity. The shares historically traded at a multiple to book value, yet they currently languish at a clear discount. When building activity inevitably recovers, Marshalls will benefit immensely, potentially driving a sharp recovery in its share price.

Capita (LSE: CPI) is another cyclical recovery play, a fallen angel offering massive potential for recovery. The outsourcing giant once sat in the FTSE 100 before a collapse dragged it down to micro-cap levels. New management has aggressively cleaned up the balance sheet, selling non-core software assets to eliminate debt. The business still generates more than £2.4 billion in annual revenues, yet trades at a deeply depressed valuation. This turnaround relies entirely on internal cost-cutting rather than macroeconomic growth. As administrative cost-cutting leaves more free cash in the bank, the shares could enjoy a substantial and justified market rerating.

Funding Circle (LSE: FCH) is an underappreciated growth story driven by massive operational gearing. The digital platform matches small business borrowers with institutional lenders. This matching model requires very few incremental cost rises to service new volume. This structural efficiency allows expanding revenues to drop straight to the bottom line. Pre-tax profits recently surged from £3.4 billion to £20.3 billion and are on track almost to double again to £35 million this year. The wider market remains blind to this compounding scaleability, mispricing a high-margin financial matchmaker as just another lender.

SDI Group (LSE: SDI) offers a double whammy by combining structural growth with a cyclical margin recovery. The company runs a highly disciplined buy-and-build strategy, acquiring niche scientific-instrument businesses that specialise in optics and photonics for laboratories. This consolidation model delivered excellent long-term returns until a recent downturn in its core scientific end markets depressed the group's earnings. This temporary pain leaves the shares trading at a very cheap valuation. As laboratory budgets normalise and operating margins recover, investors could capture the combination of compounding growth and an explosive rebound.

The best specialist funds in the sector

Picking individual micro-cap stocks requires patience and knowledge, and is certainly not for everyone. For investors who prefer to delegate the task, backing a specialist fund manager with a proven record is sensible. Two specific investment trusts have proved their ability to navigate these markets with skill. The lead manager of Rockwood Strategic (LSE: RKW), Richard Staveley, has more than 25 years of experience and runs a concentrated portfolio of undervalued businesses. He engages directly with boards to unlock value, a strategy that has delivered a stellar record. Staveley targets unloved, mispriced assets and drags them through a turnaround process until the wider market is forced to pay attention.

For those looking even further down the market scale, Onward Opportunities (LSE: ONWD) provides exposure to some of the smallest companies listed in the UK. Lead manager Laurence Hulse launched the trust in March 2023 on the Aim junior market and took it to the main market in April 2026. He deliberately operates in the smallest, most illiquid territory and his execution has been outstanding, delivering a very good performance since the trust's inception.

For those selecting individual stocks today, three of the stocks mentioned above look particularly interesting. Focusrite is a cyclical recovery play that has finally cleared some post-pandemic hurdles and positioned its manufacturing operations for a strong earnings recovery. Vanquis Banking Group remains absurdly mispriced, trading at a steep discount to its underlying net asset value while the market completely ignores its mid-teens profitability targets. And Software Circle provides an underappreciated growth story with a disciplined, decentralised model for integrating niche acquisitions efficiently. Investors who back these stocks will gain direct exposure to tangibly improving businesses.

For investors who prefer to delegate the stockpicking, Rockwood Strategic is the ideal vehicle. It has a long record of active engagement by the board and offers instant diversification across a concentrated basket of deeply undervalued turnaround plays.

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 Caprons, Lewes, East Sussex

This Grade II-listed Georgian house in the centre of Lewes was once home to historian Asa Briggs, who was also a Bletchley Park code breaker. The garden includes a Grade-II listed, octagonal summer house. 5 bedrooms, 4 bathrooms, 3 reception rooms, kitchen, cellars, roof terrace, walled garden.

Price: £2.1m Jackson-Stops 01444-484400

Broomshields Hall, Satley, Bishop Auckland, County Durham

A Grade II-listed Georgian house with gardens that include a one-bedroom cottage, two summer houses and a lake. The house has a carved oak staircase and a large kitchen with an Aga. 4 bedrooms, 4 bathrooms, 3 reception rooms, library, 18 acres.

Price: £1.75m Finest Properties 0330-111 2266

The Manor House, Great Harrowden, Northamptonshire

A Grade II-listed manor house in a popular village, set in south-facing gardens with a kitchen garden with a greenhouse and a circular summer house with sofas and a fridge for wine. The house has beamed ceilings, panelled walls and period fireplaces. 6 bedrooms, 4 bathrooms, 3 reception rooms, breakfast kitchen, attic, pond, 0.8 acres.

Price: £1.15m Fine & Country 01604-309030

The Court, Axbridge, Somerset

A Grade II-listed Georgian house in Axbridge with views towards Glastonbury Tor. The house is set in gardens that include a summer house and an area dedicated to archery. It has flagstone and oak floors, period fireplaces and an indoor swimming pool with a gym. 7 bedrooms, 5 bathrooms, 3 reception rooms, breakfast kitchen, garden room, cinema, courtyard, parking, walled gardens, kitchen garden, 1.15 acres.

Price: £2.395m House & Heritage 01257-441990

Orchard Cottage, Wood End, Ardeley, Hertfordshire

A Grade II-listed, 17th-century house comprising three original cottages, with a summer house with a wood-burning stove and Wi-Fi. The house has exposed wall and ceiling timbers and inglenook fireplaces. 4 bedrooms, 2 bathrooms, reception room, gardens, 0.75 acres.

Price: £1.15m Fine & Country 01920-443898

Polwarth Terrace, Merchiston, Edinburgh

A duplex apartment on the first floor of a period property in the sought-after area of Merchiston. The flat retains its period fireplaces and has a dining room with French doors opening onto a balcony and a spiral staircase leading to a garden with a summer house. 6 bedrooms, 3 bathrooms, reception room, office/bedroom 7, dining kitchen, garage, summer house, parking.

Price: £985,000+ Savills 0131-247 3770

Moreves Manor, Great Waldingfield, Sudbury, Suffolk

A Grade II-listed, 17th-century house set in large gardens that include a wildlife pond and a summer house complete with a shower, sauna and wood-burning stove. The house has exposed wall and ceiling timbers and a breakfast kitchen with an Aga. 6 bedrooms, 2 bathrooms, 2 reception rooms, office, garden room, outdoor swimming pool, 1.58 acres.

Price: £950,000+ Strutt & Parker 01473-220444

Heamoor, Penzance, Cornwall

A renovated, Grade II-listed Cornish long house set in landscaped gardens with a tree house, an orangery overlooking the kitchen garden and a summer house that is used as a pottery studio. The house has Georgian sash windows, open fireplaces and a newly fitted kitchen with French doors leading onto the gardens. 4 bedrooms, 4 bathrooms, 3 reception rooms, study, utility with en-suite shower, workshop, paddock, stable block, 2.5acres.

Price: £1.2m Savills 01872-243 200

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.

Stepping away from a professional boxing career just a few years after winning gold at the Commonwealth Games might seem a strange decision for some – but not Delicious Orie.

Orie, who retired from the sport last May, has now embarked on a career in the financial world, which offers him something boxing couldn’t – fulfilment.

Orie spoke to MoneyWeek on the latest episode of the MoneyWeek Talks podcast, which can be viewed on YouTube and most podcast platforms.

He said: “I was no longer fulfilled in the sport of boxing. I signed a very good professional contract, and I was going to earn good money, money that I know I’ll probably never earn again. And I didn’t feel anything.”

Instead, Orie, now based in the West Midlands, is training to be a financial planner and help people reach their financial goals. Ultimately, the decision to make the switch was all about making peoples’ lives better.

Orie says: “One of the things I absolutely loved about boxing was the capability of me to be able to travel the world and speak to so many different types of people and understand people’s culture, appreciate the way they perceive life.

“So I thought, 'Right, as an investment manager, is that something that I’ll be able to get?' Because I value that so much…with the very limited research I did, over time I found out that investment management might not be that thing I’m looking for.

“So [I did] a little bit more research and I came across financial advice where you’re able to have that connection to the investment management world, but at the same time have that connection to people and enrich peoples’ lives, financially. So I thought, 'Right, that’s what I’m going to do’."

How boxing and early childhood experience has shaped his financial career

Despite leaving the sport, boxing nurtured plenty of skills in Orie that transfer to the financial world – namely discipline, drive and "obsession".

It was this drive that prompted his decision to complete his initial financial planning exams in five months, a process which can take up to two years for some.

He says: "When I stopped boxing, I thought, 'Right, let me just take it easy'. Since I was 18, I was constantly pushing myself and my body to the next level. I was addicted to it.

“When I stopped boxing, I was like, 'Right let me be present', only to realise that probably about two months after I stopped boxing, I cannot do normal things…I have to consistently push myself to a point where it feels a little overwhelming.”

His early childhood helped pique his interest in financial literacy too.

Describing himself as a business “nerd” growing up, he adds: “I loved business at the time…I’m not talking business in the sense of making money, more in a sense of understanding the inner workings of business and why business and trade happens."

He adds: “I think it stemmed from, as a child, as a family, we didn’t have much, and you sort of question that as a kid.

“You think to yourself, 'Why is that my mum would work 50-hour weeks, 60-hour weeks, and I could barely afford lunch?’”

Why financial literacy gives you ‘control’ over your life

Although he walked away from a lucrative career in boxing, Orie’s biggest regret isn’t hanging up his gloves.

He says: “People were saying, ‘You’ve walked away from potentially multi-millions of pounds’, and I could look them in the eye and say ‘yeah’, and genuinely feel so clean within me.

“Like, ‘Yeah I know I did’, so do I regret boxing? No. What do I regret? I would say investing. Not investing early enough.”

He adds: “If there’s one message I can give and send to the younger generation, [it’s] open up a junior ISA or something. Just do the most random job, do some pot washing, open up a bank account, under your parents or whatever, just put some money in…£10 a week, £20 a week. I promise you, it will pay dividends, huge dividends when you’re 30, 35 years old.”

That’s not the only piece of wisdom he has for the younger generation either. Orie is passionate about spreading the message that financial literacy gives you agency over your life.

“I say this to the younger generation – a pound of debt that you get into is a piece of your future that somebody controls…if you are not in control of money, money will control you,” he says.

“And this [applies] from somebody who’s a high net-worther to somebody who is just about scraping by, it doesn’t matter where you are on that spectrum.”

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick and Andrew van Sickle are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

Subscribe to the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence.

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

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

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

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

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

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

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

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

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

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

Early state pension lump sum

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

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

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

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

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

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

What would an early state pension lump sum cost?

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

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

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

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

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

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

Tax on proposed state pension lump sum

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Who can open a Santander Rewards credit card?

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

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

You can only have one Santander Rewards credit card.

Is the Santander Rewards credit card worth it?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What are retirement interest-only mortgages?

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

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

We compare equity release versus downsizing in a separate article.

How does a retirement interest-only mortgage work?

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

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

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

Demand for retirement interest-only mortgages

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

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

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

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

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

Mortgage help for self-employed

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

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

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

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

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

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

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

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

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

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

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

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

Complex IHT forms

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

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

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

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

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

Missing out on inheritance tax reliefs

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

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

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

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

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

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

The latest government data on business rate appeals contains good news and bad news. On the downside, there has been a surge in the number of businesses launching cases: almost 130,000 business owners began the process during the first three months of the year, five times more than in the fourth quarter of 2025; that will probably lead to delays in processing claims. More positively, the data also shows that 57% of firms challenging their business rates bills eventually secured a reduction; in other words, your chances of winning are pretty good.

The statistics, published by the Valuation Office Agency (VOA) at the end of May, underline the importance of checking your business rates assessment quickly. New assessments of the rateable value of more than two million business properties in England and Wales came into force on 1 April; this rateable value, based on the VOA's estimate of the commercial rent potentially chargeable on each property, is what determines your business rates bill.

It's now too late to appeal business rates set following the previous VOA revaluation, which took place in 2023; the deadline was 31 March, which is part of the reason for the spike in claims in the first quarter. But you can challenge the rateable value that came into force in April. If you can show the VOA is overestimating how much rent your business property could secure – either what you are paying to rent it, or if you own the property how much you could rent it out for – you could get a reduction.

Check, challenge and appeal your business rates

Such cases involve three stages. Step one is known as a “Check”. Effectively, you're just asking the VOA to confirm the factual details it holds about your property, so you can check you're not being overcharged because of inaccurate data. Relatively few Checks result in a reduction, so most businesses then move on to stage two, known as “Challenge”.

Following a Check, you have four months to submit a Challenge. This is your opportunity to present evidence suggesting your rateable value has been wrongly estimated. That could include, for example, details of the open-market rent agreed on the property, or details of other leases on similar properties nearby. Alternatively, there may have been a material change to your property – you're using it for a different purpose, say, or there have been developments in the area that could affect its value.

Cases that don't succeed at the Challenge stage can be appealed at the independent Valuation Tribunal Service. There's a fee of up to £300 to launch an Appeal – stage three of the process – and you must file your claim within four months of receiving the Challenge decision. You'll get your fee back if you win.

In theory, you can handle each stage of a business rates case yourself, but many businesses appoint a professional agent to manage the process on your behalf – particularly if they proceed to Appeal. Agents can give you advice on whether it's worth bringing your case and handle the work for you, using their experience to maximise your chances of success.

Make sure you appoint a reputable agent. The Royal Institution of Chartered Surveyors can provide details of firms that abide by their professional standards and code of best practice.

Finally, it's important to note these processes can result in your business rates bill rising rather than falling. This is relatively unusual, but certainly not unheard of. Make sure you're not presenting evidence that gives the VOA reason to think it has underestimated your rateable value.

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Zhou Qunfei sparked curiosity as the “mystery woman” placed between two of the US's most powerful technology chieftains, Elon Musk and Tim Cook, during the Chinese state banquet for Donald Trump last month. “Placement” is critical, says Struan Stevenson in his book The Course of History: Ten Meals That Changed the World. And Zhou Qunfei’s placement was a fine example of “dining diplomacy”, which can shape global political and economic outcomes – for better or worse.

Zhou Qunfei is the little-known (in the West) founder of Lens Technology, a leading touchscreen supplier and one of the richest self-made women in the world, says the South China Morning Post. The decision to put her next to two of her most important clients certainly created an opportunity to bend their ears. But from the point of view of Beijing's image shapers, it was also a powerful reminder to American plutocrats that the Chinese Dream is as potent as their own. Within the country, Zhou is held up as an inspirational figure who “rose from humble beginnings” by dint of hard work, resilience and talent, to take her place among China's foremost industrialists. For millions of Chinese migrant workers, she's viewed as the archetypal role model. Forbes puts her current wealth at around $20 billion.

The “touchscreen queen” began life “in utter destitution”. Born in 1970, in a village near the city of Xiangxiang in Hunan province, her mother died when she was five and her father was severely maimed in an industrial accident. Her days were spent planting vegetables, raising pigs and collecting plastic waste to earn money. “I had to constantly think about where my next meal would come from,” she told CNBC. Zhou Qunfei's “hunger years” provided “a foundation of grit”, says Jing Daily. At 15, she set out on the long journey to Shenzhen, initially finding work as a security guard before joining the assembly line of a factory producing glass for watches. She attended night classes in accounting, computing, Cantonese and screen printing and even obtained a licence for driving large vehicles.

Zhou Qunfei's “sharp problem-solving skills” and drive rapidly saw her promoted. But at 23, she took the leap into setting up her own business with relatives, operating out of a three-bedroom flat. They began with silk-screen printing before reverting to manufacturing glass for watches. When mobile phones began proliferating in the early 2000s, Zhou retooled the business, eventually securing orders from Motorola, HTC, Nokia and Samsung. A pivotal moment came in 2007 when Lens Technology became a supplier for Apple's first-generation iPhone touchscreens, says Tatler Asia. The contract catapulted the company “into a dominant position in China's tech manufacturing” sector and made her a billionaire. In 2015, when Lens Technology went public on the Shenzhen Stock Exchange, Zhou rose to national prominence. Lucrative new contracts with carmakers such as BYD, Tesla and BMW followed.

How Zhou Qunfei bounced back from a $6.8 billion loss

Donald Trump nearly proved her undoing, noted Bloomberg in 2018. Zhou Qunfei lost 66% of her fortune, or $6.8 billion, when the US/China trade war erupted, prompting a sell-off of Apple's suppliers. But as the decade turned, Lens bounced back. Last year, Zhou's wealth rose a further 75% when Lens pulled off a dual-listing in Hong Kong. But Zhou Qunfei is still most at home pacing the factory floor, says Tatler. “She'll dip her hands into a tray of water to check if the temperature is just right” and “can explain the intricacies of heating glass in a potassium ion bath”. She has the same intense – often obsessive – interest in operational detail as Elon Musk and, like him, is famous for sleeping on site to troubleshoot. Doubtless, they had much to discuss over their pan-fried pork buns.

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You pay capital gains tax when you make a capital gain over a certain allowance. However, these allowances have changed in the last few years, meaning more people are being brought into the net.

That makes it all the more important to know how the tax works, and when you need to pay it. Test your knowledge in our quiz below.

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The government is considering plans to hit non-UK resident property owners with an extra "mansion tax" charge in a bid to raise more cash.

A consultation launched by HM Treasury explores the possibility of applying a “non-resident premium” on top of the High Value Council Tax Surcharge (HVCTS), also known as the “mansion tax”.

The consultation says: “In high‑pressure housing markets, particularly in areas such as London, there is interest in understanding whether demand from non‑UK resident owners may be contributing to pressures on housing availability and prices.”

The extra non-resident surcharge is just being considered and will not necessarily come into effect. The government’s consultation closes on 14 July.

An HM Treasury spokesperson said: “The government is inviting views on whether there could be a case for a non-resident premium, as part of a wider consultation which seeks to address a longstanding council tax unfairness in this country.

“We welcome views from all interested parties, including on whether demand from non-resident owners may be contributing to housing pressures.”

What is the mansion tax and how would a non-resident premium be applied?

The HVCTS will take effect from April 2028 and apply to homes in England worth £2 million or more. The charge will be owed once per tax year.

The chancellor has claimed the surcharge will make the council tax system fairer.

The Valuation Office (VO), which is part of HMRC, is set to carry out a valuing exercise to assess which homes the surcharge will apply to.

Homes valued at £2 million or more but less than £2.5 million will be charged £2,500.

Properties worth £2.5 million or more, but less than £3.5 million will need to pay £3,500. Homes worth between £3.5 million and £5 million will need to pay £5,000. Properties worth £5 million or more face a £7,500 surcharge.

These charges are set to be increased each year in line with the Consumer Price Index (CPI) measure of inflation. Revaluations will be conducted by the VO every five years.

When it comes to the non-resident premium, there is no further detail in the government’s consultation on how the extra levy would be applied if it did come into force.

What could the effect of the premium be?

Marc Acheson, global wealth specialist at pensions and life insurance firm Utmost, said: “This latest proposal is likely to raise far less revenue than envisaged as more people will consider selling London properties, putting further downward pressure on valuations at the top end of the housing market.

“More broadly, it risks further damaging the UK’s reputation as a destination for wealth and accelerating the ongoing exodus of wealthy international individuals that began in earnest following the abolition of the non-dom regime at the Autumn 2024 Budget.

“The economy cannot afford to lose these individuals, who are the largest contributors to the tax base, and once this cohort leaves it is very hard to replace them.”

Sian Armitage, tax director at tax advisor Mark Davies and Associates, said the premium could push non-resident property owners weighing up a sale into putting their property on the market.

“For those that are undecided, they may treat this as yet another reason to sell, or consider this as an indication of things to come,” Armitage said.

However, Armitage added that because the levy would be applied to non-residents “it does imply that those individuals are not spending significant time in the UK in any case, so I don’t envisage this policy alone as having a negative impact”.

Meanwhile, Peter Ferrigno, director of tax services at consultancy Henley and Partners, said making the HVCTS slightly higher for non-UK residents would be an “inconvenience”, but it was unlikely the introduction of such a premium on its own would be enough to make wealthy individuals sell up.

But, he said the bigger issue is they could leave when also considering “many other changes, and an indication that there will still be more demands for a bit here, a bit there, a bit more after that, and then...who knows what's next”.

What is a non-UK resident?

Non-UK residents pay tax on their UK income, but not on their foreign income. In contrast, a UK resident would typically pay UK tax on income from both sources.

You are generally classed as a non-UK resident if you spend fewer than 16 days in the UK each tax year or work abroad full-time and spend fewer than 91 days in the UK each tax year and no more than 30 of those days are spent working.

The statutory residence test (SRT) determines whether you are resident in the UK under UK domestic tax law for tax years 2013/14 onwards. You can find out more on gov.uk.

Almost three million people could cut back on pension saving as a result of the impending salary sacrifice clampdown, the government’s own data suggests.

Chancellor Rachel Reeves used her 2025 Autumn Budget to announce a £2,000 cap on the amount workers and their bosses can add into pensions via salary sacrifice before being hit with National Insurance (NI) charges.

The changes will come in from April 2029 and are expected to raise £4.8 billion for the Treasury in 2029/2030 and £2.5 billion in 2030/2031.

But while this may be good for the nation’s finances, it could be a blow for people’s own pension savings.

Research by former pensions minister Steve Webb, now a partner at consultancy LCP, found the government’s own estimates suggest more than 2.8 million workers are expected to cut back on pension saving as a result of the changes.

It comes despite the government-backed Pensions Commission recently warning that people aren’t saving enough for their retirement.

The impact of pension salary sacrifice changes

Salary sacrifice has long-been a popular way for employees to make pension contributions.

Money is added into an employee’s pension pot from their gross pay, adjusting their net income. This also reduces the payroll taxes paid by an employee and employer.

But government guidance shows the cost of the relief has increased markedly, from £2.8 billion in forgone National Insurance contributions in tax year 2016/2017, rising to £5.8 billion in 2023/2024.

Without any change, it is expected that this would almost triple to £8 billion by 2030/2031.

Capping the relief will save the government money.

HMRC has previously disclosed that an estimated 7.7 million employees currently use salary sacrifice to make pension contributions.

Of these, 3.3 million sacrifice more than £2,000 of salary or bonuses.

The Office for Budget Responsibility has already warned that a consequence of the policy could be a reduction in contributions.

A Freedom of Information (FOI) request to HMRC by Webb has revealed the extent of this.

The FOI asked for the government’s assessment of the number of employees that are assumed to cut their contributions in 2029/30.

HMRC said it expects more than 2.8 million workers to reduce their contributions.

This is broken down as 2.2 million earning above the £50,270 upper earnings limit, while 666,000 will generally be basic rate taxpayers.

Webb said: “The government has presented the changes to salary sacrifice for pensions as being a relatively painless way of cracking down on a tax break mostly enjoyed by the well off.

“But these figures show that the effects of the policy will be far more damaging than had previously been admitted.”

He suggests it is hardly ‘joined-up government’ to be stressing the need for more pension saving one day through the Pensions Commission and then implementing a policy that will reduce the pension savings of millions the next.

Webb added: “At a time when the government is running a major Commission to tackle the issue of pension under-saving, it is shocking that a separate government policy will result in more than 2.8 million workers cutting back on pension saving.”

A Treasury spokesperson said: “High earners piled in huge bonuses through salary sacrifice without paying a penny in tax – a taxpayer funded perk largely benefitting the better off.

“Our fair reforms protect 95% of workers earning under £30,000 using salary sacrifice, and as IFS analysis shows, over three quarters of under 30s will be unaffected.”

Is retirement something you know you should think about but – like the 15 million identified by the Pensions Commission – are vastly underprepared for?

Research by Standard Life shows that many retirees believe modern retirement lasts longer, costs more and is harder to navigate than expected.

There’s a lot of focus on saving into a pension during working life but less attention on what to do with the savings once you get there. The insurance company found that around 30% of private pension pots are accessed at the earliest possible opportunity, with around half withdrawn in full. Nearly half of this money is spent on large expenses such as cars, holidays or home improvements, raising concerns that some people may be drawing on retirement savings too quickly without fully considering their longer-term needs.

Add to that the fact that less than 9% of Brits have a financial adviser, meaning many of you are likely fending for yourselves. Standard Life’s research found 17% of retirees underestimated how much money they’d need in retirement, while 16% admit they had not expected retirement to last as long as it has.

To counter these feelings of regret – or rather, feeling the acute benefit of hindsight – it’s sensible to plan earlier.

We asked two Chartered financial planners about some of the key questions to ask yourself when planning for retirement.

1. What does retirement actually mean to you?

Retirement once upon a time used to be a drastic, immediate change in status from ‘working’, to ‘not working’. Huge numbers of the population had worked one, maybe two, jobs their whole life. They typically retired at a predetermined age. It could take some getting used to.

Today, it can be a more gradual transition, inviting questions such as whether you want to stop work altogether or reduce hours, or what an ideal week would look like if you took phased retirement.

What are your objectives? Often plans involve more travel, house or garden renovations and finding ways to spend all that newfound free time. It’s also important to think further ahead; about security, flexibility or any legacy planning.

Estimates range from outgoings in retirement being 60%-80% of outgoings during working life but Roger Clarke, Chartered financial planner at The Private Office (TPO), said to beware blunt calculations.

“Many of these estimates can be quite crude. You may no longer have to buy a season ticket, expensive sandwiches or suits for work, but for some their expenditure will increase because they think, ‘right, I've retired, now I want to do all the travelling I've ever wanted and buy myself a nice car’.”

2. Do you know where your retirement assets are, where they’re invested and how to access them?

This is about taking stock – and doing so early.

First, think about your state pension entitlement. Megan Rimmer, Chartered financial planner at Quilter Cheviot Financial Planning, said a couple’s combined entitlement could exceed £25,000 a year, significantly covering many basic expenses. But she warned to check early whether you’re on track for full entitlement, as some people – more likely women – may not have the full qualifying years. In these cases, if you’re still working you can pay NIC3s or make additional voluntary contributions (AVCs) to make up any shortfall.

Possibly the more laborious task is taking stock of any personal or workplace pensions. According to LV, the average British worker changes jobs every five years and will have between nine and 12 jobs during their lifetime.

This means keeping on top of admin will be ever more important. Do you have final salary scheme pensions (defined benefit, or DB) or defined contributions (DC)? Where are your personal pensions?

Rimmer said: “The first thing I’d do is identify the assets that I have, where are my pensions, and what are they invested in? So many people have got pots here, there and everywhere, and they don’t know what their value is or what they’re invested in.

“They also don’t always know how they can take those benefits. A modern pension scheme typically offers full flexibility – you can draw a flexible income or purchase a guaranteed income, or annuity – but some older pension schemes don’t offer that, which is important to know.”

Describing final salary schemes as like “gold dust”, Clarke added: “It’s important to not lose track of those, because you know they can easily disappear into the ether if you’re not careful.”

Your scheme administrator should keep you informed, so if you’ve not heard from them for a while, it’s probably worth getting in touch.

Around 3.3 million pots are estimated lost, worth a combined £31.1 billion, with failure to update contact details among the top reasons. The government offers a pensions tracing service, which might be a useful resource if you think you have an outstanding pension from a previous job that you’ve lost track of.

3. Will you be able to afford the lifestyle you want in retirement?

This is where budgeting is crucial if you want to maintain a similar lifestyle.

Rimmer said to categorise expenditure into three headings: basic, discretionary and holidays. Basic covers all the essentials: household bills, mortgage and food. Discretionary is the fun stuff: clothes, eating out and leisure activities. She advises mapping out holidays separately, covering big annual spend and smaller weekends throughout the year.

Clarke said at TPO they refer to the ‘smile’ model of retirement expenditure, with more discretionary spend in the early years of retirement, which then tails off slightly before potentially picking up again if long-term care costs become necessary.

It’s important to ask not ‘how big is my pension pot?’, but ‘what level of income will support the life I want?’

Using a cashflow planning tool, ideally five to seven years out from retirement age, can help model various scenarios and identify any potential shortfalls.

4. Are all your savings and investment pots structured in their most tax-efficient way?

Pension contributions are one of the most tax-advantageous investment tools you can currently make. This is especially true for higher-rate taxpayers, company directors and limited company owners.

The Pensions Commission report, out earlier this month, revealed that just 4% of self-employed people were saving for retirement.

While pensions can make more of long-term growth and tax relief, the flexibility and tax-free access of ISAs are their main plus points.

“Pension contributions are particularly attractive if you’re a higher-rate taxpayer because most people, whether they’ve got a personal or a workplace pension plan, they’re paying in and getting relief at the higher rate.

“But then when they retire, in most cases they’ll go from being a higher-rate taxpayer to a basic-rate taxpayer,” Clarke said.

For business owners, he believed there’s no more tax-efficient way of getting money out of the company than to pay employer pension contributions.

5. When should I start thinking about retirement?

There are different facets to ‘thinking about retirement’.

While it’s advisable to start saving for retirement as early as possible, to allow your investments to benefit from more time in the market and compounding, when it comes to the more detailed planning aspects described above, Rimmer said many people start to give it serious thought in their 40s.

They’re likely earning more, their kids may be a little older, school fees may be behind them, a deposit was saved and mortgage payments are underway.

Plus, if you take the State Pension age as 67 or 68, then to start thinking about it 20-25 years out feels near enough to be relevant, while allowing plenty of time to get organised.

In terms of reviewing your investments, both advisers suggest at least five to seven years out from the age you hope to retire. This allows time to understand if you’re on track to meet your objectives and if not, allow time for any adjustments. These might include saving more, taking more risk to increase your potential returns or restructuring any investments into more tax-efficient accounts.

Two savers have woken up millionaires after NS&I confirmed the winners of June’s Premium Bonds prize draw.

The first person to get £1 million is from Leeds and won with the bond number 662EK268242. They bought the winning bond in February 2026 and have £42,425 in Premium Bonds.

The second person to win the top prize is from Cheshire and West Chester, purchasing their winning bond of 573GA618329 in March 2024. They have a total holding of £33,800.

It is the fifth time someone from Leeds has won the top £1 million prize and the second time someone from Cheshire and West Chester has bagged the jackpot.

Both this month’s £1 million prize winners will have received a knock on the door by Agent Million, an anonymous NS&I employee that travels the country to inform jackpot winners of their newfound wealth.

While June’s jackpot winners have already been announced, Premium Bonds holders can find out they’ve won smaller prizes from 2 June.

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

Just under six million tax-free prizes will be paid to Premium Bonds prize draw winners worth a total of £376,627,975 in June.

This month, there were 136,955,621,672 £1 Bonds eligible for the draw.

While just two people won £1 million in June, 71 £100,000 prizes will be paid out, as well as 143 payments of £50,000. Over 2.8 million prizes worth £25 will be awarded.

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

Credit: NS&I

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

NS&I’s Agent Million will inform the Premium Bonds prize draw jackpot winners of their win in person.

NS&I says bond holders can check if they have won prizes ranging from £25 to £100,000 the day after the first working day of each month. You can check using the Premium Bonds prize checker app, by visiting the NS&I website or by asking Alexa. For June 2026, Premium Bonds holders can check from 2 June.

The prize checker app and website will show you prizes you’ve won that month, anything you’ve won in the previous six draws and any older prizes you haven’t claimed yet. Just make sure you’ve got your bond or NS&I number to hand so you can access your account.

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

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

For example, there is a £25,000 prize from June 2023 yet to be claimed in Cheshire & West Chester.

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

If you can understand compound interest, inflation and risk diversification, then you’re probably doing alright when it comes to managing your money effectively.

Yet, only 28% of UK adults can explain these three financial concepts correctly, according to a large-scale study, Number Nation.

The survey of 10,000 people was run by The Richmond Project charity set up by former prime minister Rishi Sunak and his wife Akshata Murty.

The study, one of the biggest of its kind, shows that millions are at risk of making poor financial decisions around retirement, savings and investing without the basic level of knowledge.

For example, this is often apparent when people stick to cash savings, thinking it is ‘safer’ and ‘risk-free’, when in fact, inflation can erode the value of cash. Without the understanding of risk diversification, taking steps into investing can feel difficult, and ultimately, not knowing how compounding works can reduce wealth accumulation.

The questions, originally developed by professor Annamaria Lusardi of Stanford University and professor Olivia Mitchell of the Wharton School, are the globally accepted benchmark for evaluating basic financial knowledge which every adult should grasp to have the right level of confidence.

But in the UK, only 28% fully pass the test and four in 10 fall into the poor or very poor categories overall, answering none or one of the questions correctly about how inflation, compounding and risk-diversification works.

Watch the MoneyWeek Talks podcast interview with Rishi Sunak and Kalpana Fitzpatrick where he discusses these core concepts and why everyone can be better with maths.

Rishi Sunak, co-founder of The Richmond Project, stressed that while the lack of financial literacy is not a personal failing, “it is a structural problem with measurable economic consequences – for individuals, for families and for our country”.

How poor is financial literacy in the UK?

When compared to other countries, the UK is by far one of the worst compared to Germany, Switzerland, the Netherlands, Australia, Canada and Finland which have some of the highest levels of understanding of the core concepts.

“The UK is falling behind our competitors. But there’s no reason why we can’t have as good financial literacy as Germany or the Netherlands. Closing this gap must be a priority, not an afterthought,” Sunak said.

The financial literacy gap

The Number Nation study also found that men did better than women when it came to grasping key concepts.

In particular, it found the gap widening in midlife, from around 10 percentage points in early adulthood to 22 percentage points by ages 45 to 54.

But for women, this could mean they end up making poorer decisions at a time when retirement planning, mortgages and childcare costs come heavily into play.

The UK’s gender gap in financial literacy is the second widest out of 30 OECD countries.

Financial education in schools

The UK is set to introduce financial education in schools as part of the national curriculum by 2028.

The Richmond Project said it is working with the Department for Education to help with the development of the new financial literacy curriculum for schools, in particular when it comes to understanding the ‘big three’ – inflation, compound interest and risk diversification.

Inheritance tax is a tricky topic. Taboos around speaking about money and the emotion that comes with thinking about death create a perfect storm for misunderstanding it. But with such complex rules around inheritance, it is a topic well worth talking about – and sooner rather than later.

Lisa Conway-Hughes, a certified financial adviser and founder of LCH Wealth, speaks to Kalpana Fitzpatrick on MoneyWeek Talks about how the inheritance tax regime is changing from April 2027. She reveals her biggest trick to help protect your pension. Tune in now on YouTube or on most podcast platforms.

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick and Andrew Van Sickle are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

Subscribe to the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence.

Elon Musk is an abrasive and frequently infuriating presence and is the focal point of loathing for the establishment. In the UK, members of the Labour cabinet view him as a threat to the administrative order. Yet he is a living example of the Great Man theory of history; “great” meaning a person of consequence, rather than good. The theory is that a single, determined will can move humanity more than the masses. The modern world would rather fiddle and legislate while Elon Musk seeks to act and solve civilisational challenges.

No number of committee meetings could conjure a Starship booster returning from the edge of orbit. This skyscraper-sized rocket fell through the sky only to be plucked to safety by mechanical chopsticks. A decade ago, this would have appeared only in science fiction, but today it is a reality. This is just one example of the way Musk's maniacal focus pushes the boundaries of the possible. Musk has many detractors, particularly in political circles. But politicians curate their personas to seek approval; people like Musk actually drive progress. History will record the man who caught the skyscraper-sized rocket long after his critics are forgotten.

Elon Musk is dedicated to human progress

Musk was already very rich by the age of 27 after netting $22 million from the sale of his first business, Zip2. The sale of PayPal a few years later made him another $180 million. He was barely 30 and possessed enough wealth to purchase a private island and vanish from public view. Instead, he chose to dedicate himself to “the mission” of human progress. He views wealth as fuel for missions rather than a reward for success.

He founded SpaceX and funded Tesla as attempts to solve humanity's challenges. He viewed the stagnation of aerospace and the slow development of electric cars as problems that required a focused, engineering-based response. By committing $100 million to rockets and $70 million to electric vehicles, he bet most of his wealth that he could solve the problems. He couldn't do this alone, but his willingness to bet big acted as a radical sorting mechanism for recruitment. Elite engineers joined because they recognised a founder willing to risk bankruptcy in the pursuit of a better future.

In 2008 the dream almost ended as both firms spiralled toward collapse. SpaceX had endured three launch failures and could afford one more failure before bankruptcy. Tesla was weeks away from exhausting its cash. Musk was borrowing money for rent while sleeping on factory floors to supervise production. Many would sacrifice one company to save the other, but he refused. Only a contract win from US space agency Nasa prevented liquidation. This helped create a culture in his companies that treats adversity as a mere stepping stone towards achieving the objective.

“Idiot Index”: the key to Elon Musk's success

The key to his success is to focus on what is possible, not what has been done before. Musk operates on the principle that “the only rules are the ones dictated by the laws of physics. Everything else is a recommendation”. His method is to strip a problem down to fundamental parts and then reason towards the goal. Most managers make incremental changes to existing models; Musk rejects precedent, believing the way things have always been done is irrelevant to the way they should be. He applies a metric known as the “Idiot Index” to maintain this discipline. This measures the ratio of a finished product's cost to the costs of its raw materials. A high ratio, such as is typical for space rockets, indicates an inefficient process. Musk expects his engineers to identify the best and worst parts of their systems through this lens at all times. This approach allowed Tesla to cut battery costs and manufacturing time by focusing on the component elements, not simply the price of the finished product.

He puts these principles into practice through five steps. First, question every step in the process and seek out flaws. Second, cut out any unnecessary part or process. Third, simplify or optimise, but only after part two is exhausted so as to avoid optimising a process that should not be there. Fourth, accelerate. Fifth and finally, automate. This sequence ensures engineers never waste effort on perfecting an irrelevance.

The Tesla Giga Press is an example. Traditionally, car manufacturers built underbodies by welding 70 or more separate parts together. Most accepted this complexity because they followed tradition. Musk looked at the simplicity of toy car manufacturing and wondered why full-sized vehicles were not cast as single pieces. He commissioned the creation of the largest casting machines in the world to produce a car underbody in one operation. This eliminated hundreds of robots from the production line and drastically improved structural rigidity. By scaling up the logic of a toy, he proved that a better, cheaper and stronger vehicle could be built more quickly and with fewer potential areas for failure.

Twitter layoffs illustrated Price's Law

The acquisition of Twitter (now called X) and the changes brought about there was an experiment in Price's Law. This states that in any productive domain, the square root of the total number of people involved produces 50% of the results. So in a firm of 10,000 people, 100 individuals would account for 50% of the total value. This suggests that most people in a large workforce are redundant. When Musk reduced the headcount at Twitter by 80%, critics predicted a collapse. They assume that productivity is a function of the number of hours worked by the average employee. Price's Law reveals that productivity is concentrated in a tiny elite.

Price's Law is a counter to Marxian economics, which assumes that the worth of a product derives from the labour time required to produce it, seeing progress as a collective process. Musk works on the idea that you should only employ the real talent. Even then, once an employee is no longer driving the mission forward, they are replaced by someone who will. In X, he maintained the output of the platform while shedding the bureaucratic weight that had stifled innovation. The results were a faster and more feature-rich platform.

The modern Western world is choked by layers of managers managing managers who contribute nothing useful. These individuals thrive on the belief that committees lead to better outcomes. In high-stakes engineering and innovation, however, the many are a burden on the few who actually build. This “special forces” model of management prioritises individual brilliance over collective averages. By identifying and motivating this core, Musk forces a level of productivity that bureaucracies can't replicate.

Elon Musk has achieved orbital hegemony

Musk is perhaps best known for his relationship with Donald Trump or his management of Tesla, but his most impressive achievement is SpaceX. SpaceX has achieved a global monopoly through sheer competence. By 2025, SpaceX was responsible for delivering about 90% of the total weight of usable cargo moved into space. Most of the rest was handled by China. Musk achieved this by refusing to accept the “aerospace welfare state” that had defined the industry. Since the 1960s, firms such as Boeing and Lockheed Martin operated under cost-plus contracts, a system that essentially rewarded inefficiency where the government reimburses all costs and adds a guaranteed fee for profit, ensuring that the longer a project overran, the more the contractor was paid.

Musk set SpaceX's engineers to build rockets that were not just functional, but also economically superior. The result was to go back to first principles on every conceivable part of a space rocket, from materials used, to complexity of design and, most notably, reusability. Before SpaceX, throwing away a multi-million-dollar rocket after a single flight was normal. Musk viewed this as an absurdity, akin to discarding a Boeing 747 after a one-way trip across the Atlantic. SpaceX pioneered the landing and reuse of boosters and has reduced the cost of access to space by an order of magnitude. The Pentagon estimates that this shift has already saved the US taxpayer more than $40 billion in procurement costs.

The difference between SpaceX's “special forces” engineering culture and Boeing's bureaucracy is clear when you compare their passenger spacecraft. Despite receiving billions more in funding, Boeing's programme was plagued by years of delays and emergency technical failures, while SpaceX's leaner team delivered a reliable service for 60% less cost per seat. This performance gap continues to widen. The introduction of the SpaceX Starship V3 is intended to enable full reusability. Each engine generates more thrust than a jumbo jet, while the system is designed to be flown, landed and relaunched with high frequency. Soon SpaceX might render traditional expendable rockets obsolete.

Elon Musk's superpower

Ten years ago, Elon Musk was influential but relatively uncontroversial; his alignment with Trump has since made him a more polarising figure. But this political foray too reflects an engineering mindset rather than a thirst for office. Musk views the US state as a legacy system suffering from bloat. He applied his management process to the federal bureaucracy with characteristic ruthlessness. An initial audit uncovered “zombie payments” worth hundreds of billions of dollars. These funds were being sent to individuals who were either deceased, or, according to government records, not born yet. This foray into public service was only ever temporary and he completed a 100-day contract. His reason for doing it was that he believed it was the right thing to do. He didn't care that alignment with Trump would draw fury.

Musk believes that one of his greatest powers is simply not caring what people think of him. This insulation stems from his neuro-atypicality. Musk, who has said he has Asperger syndrome, tends to prioritise data over social cues; ignoring consensus and focusing on physical constraints, often treating social norms as secondary to progress. In the UK, energy secretary Ed Miliband has branded Musk a “dangerous person” and told him to keep out of this country and its politics. The irony is that Miliband, a man who has spent his entire professional life in non-jobs and a zealous proponent of net-zero, is criticising the man who has done more for sustainable energy through Tesla and SolarCity (yet another of Musk's firms) than any person alive. British ministers talk about some better future, but it's people like Musk who are building it. Politicians can only legislate, they can't magic into existence space-based clean energy (another of Musk's missions).

Let history be the judge of Elon Musk

Musk is a difficult man. We should not expect him to be easy or agreeable, as such traits are rarely found in those who actually change the world. If it were not for people like him dreaming about what is over the next hill, humanity would still be a small group of cavemen huddled together in fear. History will judge Musk by the 250-tonne rocket he caught and the progress he forced, not by the social approval he never sought.

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.

Mental capacity can become increasingly fragile as we age, putting at risk our wishes to pass on an inheritance. But there are ways to protect you and your loved ones’ legacies – and avoid lengthy court battles.

A recent case in the High Court highlights the dangers of waiting too late to get our affairs in order, how useful it can be to write a will when we are fit and healthy, and the merits of a lasting power of attorney.

Michael Gwilliam died in 2022 at the age of 79. His daughters said he had always wished to die intestate – without a will – so they would automatically inherit his estate, worth between £750,000 and £1 million, the BBC reports.

But after his death his daughters found he had in fact made a late will – while experiencing late onset schizophrenia that caused delusions his daughters and others were acting against him.

Inheritance and mental capacity

Gwilliam wrote the will in 2014, the year he was sectioned under the Mental Health Act. The will saw a quarter of his estate left to his daughters with the rest to be split between his sister, former partner and three nephews.

Gwilliam’s four daughters challenged the will's validity on the basis their father lacked the mental capacity to write it. They were eventually successful, but said winning was an "unbelievable relief" after such a long and difficult case.

John Holdsworth, board director at The Association of Lifetime Lawyers and associate and chartered legal executive at law firm Coodes, said: “Having a loved one who has either lost or is losing capacity is deeply challenging.

“The best advice is to get hard conversations out of the way before it’s too late – to make sure families, loved ones and their last wishes are protected. However, we know that things can often change quite quickly.”

If you’re finding yourself in a situation where your loved one has already lost capacity, and they don’t have a lasting power of attorney (LPA) or a will in place, you may need to apply to the Court of Protection for authority to act on their behalf.

It’s a good idea to seek advice from regulated experts, such as accredited members of The Association of Lifetime Lawyers, who specialise in providing tailored legal advice for older people and those in vulnerable circumstances.

Holdsworth said there are at least six things to consider if your loved one is losing capacity where there is an estate to inherit.

Six ways to prepare for a loved one losing mental capacity

1. Have difficult conversations before it’s too late

Nobody likes to think about a parent, loved one or themselves getting older, becoming vulnerable or reaching the end of their life, but planning ahead is key to ensure both wellbeing and security, advises Holdsworth.

An important part of this is discussing what happens should you or your loved one lose capacity to make their own decisions in later life. It’s important to at the very least, have a lasting power of attorney and an up-to-date will in place.

2. Creating a lasting power of attorney

Having a lasting power of attorney in place allows you to appoint someone you trust to make decisions on your behalf if you are no longer able to.

There are two types of LPA, one of which concerns decisions about property and finance, the other, decisions about health and welfare.

“Both types of LPA are extremely powerful legal documents, allowing attorney(s) to make important decisions about the management of property, bank accounts, and bill payments, and choices around care plans, medical treatment, residence and end of life wishes,” said Holdsworth.

For decisions around property and financial affairs, an individual can activate their LPA before they lose capacity, so if your parent or loved one decides they no longer want to manage their own finances, despite being of sound mind still, they can seek the support of their attorney(s) immediately.

For decisions around health and welfare, an LPA is only activated once the individual is deemed to have lost capacity.

3. Having an up-to-date will in place

It can be helpful to think of a will as something that can bring great comfort to your family and to you. It outlines how you want your assets to be distributed after your death and appoint people you trust to put your wishes into action.

“If you or your loved one is starting to lose capacity, choosing an appropriate lawyer with training in mental health and capacity law to help you is something that could be really helpful,” said Holdsworth.

However, whilst making a will is usually recommended to ensure your wishes are carried out, it is not compulsory and there are rules in place to say what should happen if no will is made and you die “intestate”.

4. Have a capacity assessment completed

If someone might have capacity issues, you need to ensure that they are legally able to make a will. To demonstrate this, it is good practice to have a specific capacity assessment completed by a qualified person at the time they make their will so this capacity can be documented should a challenge come after the person’s death.

Capacity for making a will stems from a 19th century case where someone wanting to make a will needs to understand:

• what a will does
• have a general understanding of their assets and where they are (property, bank accounts, investments etc)
• understand who might reasonably expect to inherit from them
• and be free from any delusions that would affect their ability to make rational decisions about where their assets go after their death.

5. Apply for a statutory will

Additionally, if someone wants to make a will, but has lost the capacity to do it, you can apply to the Court of Protection for a statutory will.

The Court will take the views of the person and their family and friends if appropriate into account before a best interest’s decision is made on their behalf by the Court.

This route can also be used if you find out a will has been made in circumstances you think are suspicious and after the person has lost capacity.

6. Apply for deputyship

A deputy is a person appointed and authorised by the Court of Protection to make decisions about either the property and financial affairs or personal welfare of someone who cannot make decisions for themselves as they lack mental capacity.

This could be, for example, because they’ve had a serious brain injury or illness, they have dementia, or they have severe learning disabilities. A deputy can be a professional (like a lawyer) or a family member or friend (lay person).

To act as a deputy for your parent or loved one’s affairs, you must provide the Court of Protection with medical evidence of the loss of capacity, as well as lodging an extensive application and arranging the necessary insurance.

A qualified lawyer can help you to gather the required documents and complete the forms correctly and can also act as a deputy if you prefer not to take on this role yourself.

Becoming a centenarian used to be a rare occurrence, but joining the 100 club will become increasingly common in the future, data suggests.

A fifth (19.1%) of girls and a tenth of (12%) boys born in 2024 are expected to live past 99, according to the latest data from the Office for National Statistics (ONS).

This is expected to rise to 26.3% of girls and 18.3% of boys born in 2049. Meanwhile, a girl born in the UK in 2024 has a life expectancy of 90.2 years and boys 86.9, but by 2049 this is forecast to reach 92.4 and 89.6 years respectively.

Later life outcomes are rising for older people too. Women reaching 65 in 2024 can expect to live another 22.7 years while men of the same age will live for another 20 years on average. This is up from 20.4 for women and 17.6 for men turning 65 in 1999, the data from the ONS shows.

But with later life expectancy comes the burden of funding retirement for longer.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “For retirement, the great unknown is how long we can expect to live.”

In this guide, we look at how you can boost your retirement cash pot and cover care costs in later life.

How to future-proof your retirement and boost your pot

A good start is using the ONS’s life expectancy calculator, which gives you a rough estimate of what age you might live to based on your age and gender.

For example, under current forecasts, a 45-year-old woman is expected to live to 87, according to the calculator. A 55-year-old man is forecast to live to 84.

It’s also worth using a pension calculator to get a forecast of the likely pension income you’ll have in retirement.

MoneyHelper’s calculator asks you questions about your gender, age, current income and when you want to retire, as well as your current workplace and private pension contributions, to tell you if you’re on track to hit a desired yearly retirement income.

If you find you’re coming up short, there are steps you can take to boost your pot.

Increasing pension contributions

Increasing your pension contributions is one of the most effective ways to boost your retirement pot, especially if you start early, allowing for savings to compound.

You can add more to a private pension like a SIPP or contribute more to a workplace pension.

The current minimum contribution to a workplace pension under auto-enrolment rules is 8%, made up of 5% from your wages and 3% on top from your employer, but you can increase these contributions.

Money added to a pension will benefit from tax relief from the government too, extra money you would have paid in tax which is added to your pension instead.

Adam Cole, retirement specialist at wealth management firm Quilter, said: “The most effective step (for boosting pension pots) remains increasing pension contributions early, even modestly, as time and compound growth do most of the heavy lifting.

“Many people still anchor contributions to minimum (8%) auto-enrolment levels, which are unlikely to produce a large enough pot to support a comfortable retirement.”

You can also sign up to a pension salary sacrifice scheme with your employer, which could reduce your overall income tax and National Insurance burden.

Review default workplace pension funds

When you’re auto-enrolled into a workplace pension, you’ll be put into a default fund, meaning your contributions are invested and managed for you.

Nest, a major UK workplace pension provider, says 99% of its 14 million members are in a default fund.

However, if your default fund doesn’t match your risk appetite, you could move away from it and into another riskier fund with potential to offer better returns.

Do note, switching out of a default fund will mean you have to take on more of an active role in managing your pension, and your pot could end up worse off than if you’d left it in the default fund.

Make sure you’re set for a full state pension

You need 35 years worth of National Insurance contributions (NICs) to receive a full new state pension, worth £241.30 a week as of 2026/27. You need at least 10 years of NICs to receive any new state pension.

However, you may not have enough qualifying years to receive the state pension you want, for example if you took time out of work to look after children or to care for a loved one.

You can use the government’s tool to find out how much state pension you’re on track for. If you’re not set to get the amount you want, you might be able to claim free National Insurance credits or you can top up your NI record by paying for voluntary NICs.

Do note, the state pension age is rising from 66 to 67 between 2026 and 2028 and from 67 to 68 between 2044 and 2046 meaning you'll have to wait longer to claim it. It could rise further in the future due to rising life expectancies.

How to cover care costs in retirement

Care can be a significant outgoing later on in retirement, but there are ways to help fund it or cut costs. One of the main ways is an immediate needs annuity.

Immediate needs annuity

If you don’t qualify for any free help through the NHS, you could buy an immediate needs annuity to cover the cost of care.

You typically buy one through a lump-sum payment, with any income paid directly to the care provider tax-free.

Some plans will also increase the value of payments over time to keep up with inflation.

Emma Walker, director of retirement firm Just Group, said: “An immediate needs annuity can take away the risk of seeing nearly all the elderly person’s assets from being swallowed up by care costs if they do end up needing an extended period of care.

“There is no investment risk and securing a flow of sufficient income by paying the annuity premium can effectively protect the remaining value of the estate.”

You can also buy deferred needs care annuities, which start paying out months or years into the future when you might expect to be needing care.

Deferred needs care annuities can be cheaper than immediate needs annuities because you’re older when they're triggered.

Meanwhile, locking in a rate earlier can lead to higher payments if annuity rates drop later on.

We look at how you can use equity release to cover care costs in another article.

More than twice as many people say their financial situation is worse now than it was a year ago, research suggests, as the cost of living continues to bite. But wealth was thousands of pounds higher in households with a financial plan – regardless of income level.

Average UK household wealth fell by almost a fifth (17.5%) to £104,329 over the past 12 months, down from £126,482 in the previous period, a survey by wealth manager St James’s Place found.

Causes for the drop included the cost of food and essentials (57%) but also lack of a salary increase (19%) and increased tax bills (8%).

The findings – based on estimated average household wealth, which includes savings, investments and physical possessions but excludes property – are from St. James’s Place’s fifth Financial Health Report, conducted annually among 6,000 individuals across the UK.

Just over a third (34%) said their finances have worsened over the past 12 months compared to only 17% who said it had improved.

Everyday financial confidence is also slipping. Just 37% now describe themselves as financially comfortable, down from 42% last year.

Alexandra Loydon, group advice director at St. James’s Place, said: “Many households are feeling worse off, with living costs and heightened global uncertainty weighing on confidence and, understandably, affecting how people feel about their finances and the future.”

Financial plans linked to wealth

However one factor stood out as having a big impact on household wealth – those who had a financial plan were thousands of pounds better off, across every income level.

On average, households with a financial plan say they have £157,416 in wealth, compared with £70,610 for those without.

Among households earning under £20,000 a year, those with a financial plan are around £24,500 better off on average than those without. At the other end of the scale, the gap rises to nearly £200,000 for those earning over £80,000.

The benefits extend beyond wealth. Seven in 10 people (72%) say having a financial plan makes them feel more confident about their financial position.

Meanwhile half (51%) describe themselves as financially comfortable, compared with just 29% of those without a plan. Three quarters (76%) also say they feel financially resilient and able to cope with unexpected changes, compared to 52% of those without a plan.

Yet fewer than four in 10 people (38%) have a financial plan in place, unchanged since the research began tracking the nation’s financial health in 2022.

Wealth and financial plans by region

When it comes to wealth and having a financial plan in place, London stands apart, with average household wealth of £171,455 and the highest proportion of people with a financial plan in place (46%).

By contrast, planning levels are lower in regions such as Wales (30%), Northern Ireland (33%), and Yorkshire and the Humber (35%) where average household wealth is also significantly lower at £86,847, £100,534, and £73,488 respectively.

Elsewhere, 40% of people in the North West have a financial plan, with average household wealth of £82,968, while in Scotland 37% of people are planning and average wealth stands at £96,918.

Loydon said: “Those who take a more structured approach to managing their money are better placed to build wealth, feel more confident and stay resilient, regardless of their income or circumstances.

“At a time when so much feels outside of our control, it becomes even more important to focus on the things we can influence. Having a clear plan for your money, and taking small, consistent steps to manage it, can make a meaningful difference – helping people feel more in control and better prepared for whatever comes next.”

Simple steps to help build a financial plan

1. Identify your financial goals

Start by being clear about what you want your money to do for you. From short-term goals, such as building an emergency fund or paying for a holiday, to longer-term goals, like buying a home or saving for retirement. Clear priorities can help shape better decisions and make planning more manageable.

2. Understand your current position

Take stock of your income, outgoings, savings, debts and assets. Understanding where your money is going can help identify areas to adjust and create opportunities to save or invest more consistently.

3. Build an emergency cash buffer

Building easy-access emergency savings for the short-term to cover unexpected costs or changes in income can provide greater financial confidence in uncertain times. Investing over the long term is also key when it comes to building financial resilience. Even small, regular contributions can build up over time.

4. Think about investing for the long term

Longer-term goals require a longer-term approach. Investing can help build wealth over time, especially when it is started early and maintained consistently. Ideally when you invest you should be prepared to tie your money up for at least five years.

5. Review your plan regularly

Financial circumstances change. Reviewing your financial plan as your situation evolves can help ensure it remains on track with your goals and priorities.

6. Consider seeking professional advice

Professional advice can help you gain a clear vision and structure for your saving and investing, particularly if your finances are more complex. People who seek advice are often better placed to work through tricky financial situations and build stronger wealth foundations.

Households will be able to enjoy children's meals in restaurants and certain days out for less today as temporary tax cuts across England, Wales, Scotland and Northern Ireland go live today (25 June).

VAT will be cut temporarily at theme parks and major leisure attractions to help reduce the cost of days out over the summer, with Alton Towers, The London Eye and LEGOLAND among the businesses taking part in the scheme.

Summer VAT cut

From 25 June to 1 September, a reduced 5% VAT rate (down from its regular 20%) will apply to certain services in England, Wales, Scotland and Northern Ireland including children’s meals served in restaurants, as well as children’s and family tickets for the cinema, the theatre, exhibitions, shows and concerts.

The cut will also be applied to admission tickets for both children and adults to a range of attractions, such as amusement parks, fairs, circuses, museums, zoos, adventure parks, soft play and observation attractions.

The Treasury confirmed to MoneyWeek that adults without children can still access the savings on attractions.

The idea is that people can get out and spend money in the economy at a cheaper rate, as long as businesses pass on the VAT savings.

If a business chooses to pass on the full VAT savings, a family of two adults and two children could get £9 off tickets to the circus, £17 off tickets to a wildlife park and £20 off tickets to a theme park, according to the Treasury.

At a roundtable last week at Chessington World of Adventure, Chancellor Rachel Reeves met with business leaders from Merlin Entertainments, Crealy Theme Park in Devon, Camel Creek Family Adventure Park in Cornwall, Gulliver’s Theme Park Resorts, Haven and Paultons Park, which all backed the VAT scheme.

Others taking part include Cineworld, Barleylands Farm Park in Essex and Nando’s.

Reeves said: “This comes on top of support we’ve already put in place including freezing fuel duty, taking off £117 off energy bills, and freezing prescriptions and rail fares – all to help families with the cost of living.”

Offering further savings for families, Adventure Attractions in Bournemouth has removed its historic toll to access the pier indefinitely to boost footfall, while Merlin Entertainments will be applying the VAT cut alongside an offer to visit two theme parks for the price of one. Merlin’s attractions include Alton Towers, Chessington, Thorpe Park, The London Eye and Peppa Pig theme parks among others.

Julie Dalton, managing director of Gulliver’s Theme Park Resorts, said on 17 June: “At Gulliver’s, we’ve already applied these savings to ticket prices across our four UK resorts – Gulliver’s Kingdom in Matlock Bath, Gulliver’s World in Warrington, Gulliver’s Land in Milton Keynes and Gulliver’s Valley in Rotherham – so combined with our latest summer ticket offer, the next few weeks are the perfect time for families to come and enjoy great value days out with us.”

The moves come as inflation remains high and is predicted to increase further due to the conflict in the Middle East.

Oil and wholesale energy prices have been rising since the Iran war began on 28 February, leading to a 17% hike in the average energy bill from July, and soaring petrol and diesel prices.

Free bus travel

Throughout August, all children aged five to 15 in England will be able to travel for free on any local bus service.

The Treasury said this will help more families access summer activities while reducing pressure on household budgets.

This is good news for people living outside London. Those in the capital can already get free travel on the London Underground using a five to 15-year-old zip card.

Price cuts for supermarket essentials

The prices of certain supermarket staples are set to fall this summer after the government announced it will cut some tariffs (taxes paid when importing goods) on more than 100 goods.

The tax cuts are expected to save consumers more than £150 million a year, according to figures from the Treasury as part of the Summer Savings initiative.

The package includes cuts to fruit, oils, avocados, bread, pizzas and olives.

Prices on some sweet treats will also be reduced, including chocolate, gingerbread, biscuits, marzipan and waffles.

A full list of the goods can be found below:

Will the cost of living measures help you?

Cheaper days out will be attractive to anyone.

But there is no requirement for businesses to pass on the full VAT savings so the actual benefit may depend on the attraction.

Similarly, it will be up to supermarkets to pass on the savings to customers of suspended food tariffs, which Reeves said she expects to be done in full.

Charlotte Kennedy, chartered financial planner at Rathbones, highlights that these measures are rightly aimed at limiting price rises in areas of inflation that are often unavoidable for many households, such as food and travel.

But she warned: “While any targeted support will be welcomed by many households, the impact of rising prices is unlikely to be felt evenly. Lower-income families and those already spending a larger share of their income on essentials may continue to face significant pressure on household budgets.

“It is also worth remembering that everyone experiences inflation differently, depending on their individual spending habits.

"As such, it remains important to keep a close eye on your finances to maintain financial resilience. This may include reviewing regular outgoings, prioritising high-interest debt repayments where possible, and building up a rainy-day fund – with three to six months’ worth of living expenses often considered a good rule of thumb.”

Some other cost of living relief measures are already in motion, with the Treasury extending the fuel duty freeze until the end of 2026. It was due to be phased out from September.

Meanwhile, Reeves has said she is looking at targeted support for households that will struggle to pay their energy bills.

Investment platforms are starting to stop paying interest on uninvested cash.

It comes ahead of the changes to ISA rules from April 2027.

Chancellor Rachel Reeves used her 2025 Autumn Budget to reveal new restrictions on cash ISAs in an attempt to encourage more people to invest rather than keeping their money in cash.

From April 2027, under-65s will only be able to put up to £12,000 into a cash ISA each tax year, down from the current £20,000 that can be used across the tax wrapper. They will still have the overall £20,000 annual ISA allowance, so if they put £12,000 into a cash ISA, the remaining £8,000 could go into a stocks and shares ISA.

Transfers from stocks and shares ISAs to cash ISAs will also be banned as part of the changes.

Plus, HMRC has said it will introduce a charge for those earning interest on cash within a stocks and shares ISA.

The aim is to disincentivise investors from keeping cash holdings in a stocks and shares ISA for a long time and instead encourage them to put the money back into the market.

For now, many of the major investment platforms are still paying interest on uninvested cash.

But J.P Morgan Personal Investing appears to be getting its investors ready for the changes now.

Cash pot changes

It may be tempting to keep money in cash while you decide where to invest, especially if you are earning some interest.

But the Treasury wants to get more people investing, ideally in UK stocks, so the new charge aims to provide a disincentive as it could outweigh any interest earned.

HMRC is due to consult on the changes.

While not explicitly linked to the reforms, J.P Morgan Personal Investing has unveiled plans to remove the interest paid on cash-only pots.

Currently, the robo-wealth manager pays the Bank of England base rate minus 2.5% on its cash-only pots.

This is money that investors can use to drip-feed funds into their portfolio or to protect your balance from market movements ahead of a withdrawal.

It is separate to cash held in the investment pot that goes towards management fees. Interest on this cash is currently paid at the base rate minus 0.75%.

But from 22 June, J.P Morgan said cash-only pots will no longer accrue interest.

Instead, cash‑only pots will remain available for holding cash and drip feeding money.

Any interest accrued up to but not including 22 June 2026 will be paid into your pot at the end of the current quarter.

Interest will still be paid on cash held in your investment pot.

Can you still earn interest on uninvested cash in a stocks and shares ISA?

Most other investment platforms are still paying interest on cash for now.

BestInvest pays a relatively decent 2.98% interest on cash holdings within any of your investment accounts.

Its managing director Jason Hollands said there are no plans yet to change the way cash is treated in its stocks and shares ISA, while HMRC has yet to firm up its plans.

In contrast, AJ Bell’s stocks and shares ISAs, lifetime ISAs, and junior ISAs pay 1.75% interest on all cash balances.

The interest paid can also depend on the amount being held.

For ISAs and junior ISAs, interactive investor now pays 1.11% on the first £20,000, 1.26% on the value between £20,000 and £50,000, 1.36% between £50,000 and £100,000, and 2.21% on the value above £100,000.

Hargreaves Lansdown users can earn 1.51% on cash balances between £0 and £19,999, 1.18% between £20,000 and £99,999, 2.02% between £100,000 and £999,999, and 2.38% on balances worth £1 million and higher.

MoneyWeek has asked the major platforms what there plans are once a charge is introduced.

Investment writers are always at risk of hyperbole, so it is always tempting to begin by saying that these are exceptionally uncertain times for growing and keeping wealth. Yet look back over the last century or so and one has to admit this is not true – there have been many eras that were far more perilous.

Instead, it is more probably accurate to say that conditions are becoming more uncertain after an extremely long spell in which the world became unusually safe in many respects. The 1980s marked the beginning of an unprecedently good patch for capitalism and financial markets. There were upsets along the way – the crash of 1987, the dotcom bust in 2000 – but these were blips within a long-term trend in which economics, politics and geopolitics kept us on an improving course.

This began to shift in the aftermath of the global financial crisis of 2008-2009, when the tensions that had been building up started to become apparent, but the lessons were not learned in time. From the middle of the 2010s onwards, conditions clearly began to shift. The pivotal year was 2016, with a series of global events – including Brexit, the election of Donald Trump as US president and Xi Jinping starting to consolidate power with a more aggressive vision for China’s role in the world.

Since then, turmoil has piled up, including a pandemic whose social impact is still being felt, rising concern about the impact of artificial intelligence, and wars in Ukraine and now the Middle East. So far, stockmarkets have continued to shrug all of this off and set new highs, but one cannot assume this state of affairs will continue. MoneyWeek’s long-standing view is that a more volatile world will sooner or later mean more volatile markets.

This is the backdrop to our wealth supplement, in which we focus on ideas and services to help readers who have built up wealth to maintain it and pass it on. We are grateful to all our contributors and interviewees for putting it together.

Highlights include: a look at how to mitigate the impact of recent inheritance tax changes; interviews with Caledonia Investments, Majedie Investments and RIT Capital Partners on how they look after wealth for future generations of their founding families; and some thoughts on the issue of passing on digital assets.

We hope you find it useful.

~ Cris Sholto Heaton

Chase is set to increase the cashback offered on its credit and debit cards but the criteria may make it harder to qualify for the perks.

The JP Morgan-owned bank has grown market share in recent years with a popular cashback card offer, although its criteria and rates have been scaled back in the past.

Last year, Chase announced that customers will only be able to earn 1% cashback on debit card spending across three categories: groceries, everyday transport and fuel.

The cashback was also restricted to purchases made in the UK and paid for in pounds sterling rather than worldwide.

But now the bank appears keen to attract more users with a higher cashback rate of 2%, but you will need to work harder to get it.

What is the new Chase cashback offer?

From 1 July, new and current Chase customers will be able to earn 2% cashback on spending.

Plus, a new restaurant and cafes category has been added, meaning you will earn money when paying for meals out as well as on groceries, fuel and everyday transport.

There are no monthly fees and the cashback can be earned using a Chase debit or credit card.

Is the Chase cashback offer any good?

The cashback terms are technically better than what customers currently get, especially with the extra restaurant category.

Cashback has been increased from 1% to 2% and the monthly amount you can earn will be capped at £20 rather than £15.

This means you could earn up to £240 per year from cashback with Chase instead of £180.

But, there is a catch. Currently, you only need to pay in a minimum of £1,500 into either your Chase current or savings account to qualify for the cashback.

But from July, customers will need to make 15 or more card transactions or direct debits each month and maintain a balance of £1,000 across their Chase saver accounts.

This means you can no longer just put £1,500 from your income into the account each month and will need a Chase savings account.

That requires a bit more work but Chase does currently offer a decent easy access savings account paying 4.5%.

You need to hold £1,000 in a Chase saver account for the whole month to qualify for 2% cashback the next month.

Customers can’t deposit £1,000 and then move it out but you can hold a combined total of £1,000 across any Chase saver accounts.

How does it compare to other cashback cards?

The annual amount of cashback you can earn with Chase is hard to beat.

But there are other cashback current accounts on the market that are more flexible.

The new Zopa Biscuit current account pays 4% cashback up to £80 per year on any direct debits paid from the account. Plus, customers can access a 7% regular saver account with £300 per month.

Alternatively, Santander Edge pays 1% cashback on bills paid through its account such as council tax, energy and broadband. This is capped at £10 per month and there is a £3 monthly fee. Santander is also offering a £180 switching bonus at the moment.

Another option is the American Express Cashback Everyday Credit Card.

It pays 5% cashback on spending for the first five months, up to a maximum of £125.

You can then earn 0.5% cashback on first £10,000 spend.

The government has laid out its design of the so-called mansion tax, which would see owners of homes in England worth £2 million or more slapped with an extra charge from April 2028.

Chancellor Rachel Reeves announced plans for the High Value Council Tax Surcharge (HVCTS) in her 2025 Autumn Budget, claiming it would make the council tax system fairer.

The Treasury proposals are now being consulted on.

Housing Secretary Steve Reed highlighted that under the current council tax system, residents of a band D property in Darlington or Blackpool worth around £400,000 today pay £2,400 to £2,600 annually.

In comparison, those living in a mansion in Mayfair valued at £10 million in Band H are charged around £2,100 per year.

He said: “Previous governments have known how unjust this is, but failed to act. Through the HVCTS, those who own the most valuable properties in the country will pay their fair share.”

The Treasury estimates that fewer than 1% of residential properties in England will attract the HVCTS, which will be paid alongside council tax bills.

Revenue raised through the HVCTS will be used to support funding for local government services.

How high value homes will be valued for the mansion tax

The Valuation Office (VO) will be conducting a targeted valuation exercise to identify properties in scope by using professional valuers and using industry standard automated valuation models that assess sales data and property attributes.

It will identify homes worth more than £2 million as of April 2026 and adjust for differences between properties include the sale price, property type, size, age, number of rooms and parking.

High value homes will then be placed in four bands.

These start at £2,500 for a property valued in the lowest £2 million to £2.5 million band and go up to £7,500 for a property valued in the highest band of £5 million or more, all uprated by CPI inflation each year.

Revaluations will be conducted by the VO every five years.

Properties built after implementation of the HVCTS but before the next scheduled revaluation will be valued and banded either on completion or from the day they are occupied.

Homes that have been significantly improved or changed after the implementation date, for example by adding a large extension, will be revalued and banded at the sooner of either the next revaluation or sale of the property, the consultation said.

Who will pay the mansion tax?

It will be the owners of a property rather than the occupiers who pay the HVCTS. This means a landlord rather than a tenant would pay the charge if a home worth more than £2 million was being rented out.

This also means leaseholders will be liable for the mansion tax in a high-value home.

Where a property is held in trust for a child, trustees will be liable.

Mansion tax exemptions

There will be some exemptions to the mansion tax such as for individuals who bought or inherited their home but who now have lower income, or those who experience a temporary change in circumstances such as job loss or ill health.

The government said it will make a deferral scheme available which permits payment of HVCTS to be delayed until a property is sold, where individuals meet specific eligibility criteria.

This will be targeted at those on lower incomes – with an income threshold of £35,000 – and not for second homes or to companies that own property.

Deferral will also be available in certain circumstances where the property is the main home of someone who is disabled or severely mentally impaired.

Mansion tax discounts

The government has proposed offering a discount or exemption to charities and also to properties such as halls of residences, property owned by the Ministry of Defence and by organisations predominantly for the accommodation of those seeking refuge from domestic violence.

There may also be discounts for people who own a property tied to their employment.

The consultation said: “In some sectors, particularly agriculture, business owners may need to live on the site where their business operates for practical reasons. For example, a farmer may need to own and live in a home located on their farm.

“Outside agriculture, it is less common for ownership and occupation to coincide. For example, accommodation used to house members of a religious institution is typically owned by the institution rather than those occupying it.”

When would you need to pay the mansion tax?

The HVCTS will be collected by councils at the same time as council tax.

Once the valuations are ready, local authorities will identify owners and send the first bills in March 2028.

You will be able to contact your local authority for information on deferral and discounts in advance of the first bill or at any time if circumstances change.

Can you challenge the mansion tax?

Homeowners will be able to challenge valuations, similar to how you can appeal council tax charges.

If you think you have been incorrectly billed or banded, you will be able to complain to the VO or the local authority.

Homeowners will be given longer than usual to challenge the new  High Value Council Tax Surcharge (HVCTS).

The government is providing an initial eight month period to challenge banding rather than the typical six month period for mainstream council tax.

As with council tax, where an individual submits a challenge or appeal they will be required to continue paying HVCTS.

Any overpayments will be refunded or liabilities adjusted if necessary.

Sarah Coles, head of personal finance at AJ Bell, said: “There will be plenty of people breaking out the world’s smallest violins for those in expensive homes. However, it could cause problems for people who are asset rich but cash poor. They may decide to bring forward any downsizing plans, and then struggle to sell before the charge kicks in.”

NS&I has laid out a timeline of when tens of thousands of bereaved families will be reunited with lost savings.

The government-backed savings bank acknowledged in March that an “operational failure” had led it to lose track of hundreds of millions of pounds’ worth of deceased customers’ money.

Now, it has shared further details of how affected families will be contacted about money being returned.

It was originally estimated around 37,500 bereavement claims totalling £476 million in value had been affected by the operational error.

However, NS&I has confirmed that, as of 19 May, it is in fact 34,000 estates who are missing out on £367 million. The savings bank said this number could reduce further.

Sir Jim Harra, interim chief executive of the NS&I, said: “This issue should not have happened and I want to repeat the apology NS&I made in March to everyone who has been affected by it. Beginning the process of repaying these funds is a key step in putting things right.

“Dealing with the death of a loved one is a difficult and upsetting time. We know we need to do all we can to make the process of accessing a deceased saver’s NS&I holdings as straightforward as possible for personal representatives and executors of estates.”

How will affected estates be contacted and when will payments be made?

NS&I said it will start sending out letters to executors and personal representatives of impacted estates with holdings of £10 or more from next week, with any payments following “soon after”.

Letters will be sent out in weekly batches, with payments to all affected estates expected to be made by midway through 2027.

The letters will say how much estates will be repaid, as well as how any legal costs or administrative fees incurred through the payments can be reclaimed.

A dedicated NS&I phone number will also be provided in the letter.

NS&I said where an estate can’t be contacted, it will continue to hold any funds which will continue to accrue interest until the estate gets in touch.

Will payments be taxed?

Torsten Bell, minister for pensions, confirmed to the House of Commons on 19 May no inheritance tax will be owed on any reimbursed holdings.

Executors of estates will also not be liable for income tax on any interest accrued before the death of a loved one.

NS&I introduces new search process following operational error

The error which led to the 34,000 estates’ money going missing occurred due to the search process used when handling a bereavement claim failing to identify all NS&I products.

NS&I said the issue had been resolved and a new process was introduced in January 2026, however, this new system has resulted in delays for current and new bereavement claims.

The typical wait time for NS&I to respond to bereavement claims is two weeks, but the current response time is eight weeks.

NS&I said it has brought in an extra 100 staff to improve the service which it expects to be back to normal by autumn 2026, with Sir Jim apologising for the delays.

Sarah Coles, head of personal finance at investment platform AJ Bell, commented: “Anyone who has had to deal with an estate is no stranger to delays.

“Executors have to stick to strict deadlines, and for estates where inheritance tax is due, money has to be handed over within six months of the end of the month in which the person died.

“It means any delays in the process can be expensive as well as frustrating. The extra six weeks’ wait from NS&I will come as yet another headache for anyone slogging through the process.”

Around 15 million people are under saving for retirement, even with auto-enrolment, a new report from the Pensions Commission has warned.

The Pensions Commission was revived by the government last year to identify the challenges to retirement saving and make recommendations on how to boost contributions.

Back in 2006, the first Pensions Commission led to the roll-out of auto-enrolment into pension saving.

But 20 years later, there are warnings that too many people are sticking to the minimum level of contributions, which may not be enough for a comfortable retirement.

The latest Pensions Commission report looked at the necessary income replacement rates for those who have retired, suggesting around two-thirds of pre-retirement earnings is required.

Using these metrics, around four in 10 (43%) of the working-age population (15 million people) are under-saving, according to the report.

This figure could even reach as high as 19 million without action, the report warns.

Those born between 1965 to 1980 - are projected to have the worst outcomes, with 46% falling below these targets.

Low and middle earners, the self‑employed and women are most at risk, the report warns, as the pensions system fails to evolve to meet modern working lives.

Pensions minister Torsten Bell said: “Britain has got back into the pension saving habit, but the job is only half done with tomorrow’s pensioners still on track to be poorer than today’s.

“The Pensions Commission sets out clearly the scale of the challenge: not enough people are saving for retirement, and many of those that are aren’t saving enough.

"The Commission warns that without action millions more people could be at risk of becoming reliant on state support in retirement.”

Here are the main problems with pension savings that the report identified.

People not saving enough into a pension - even with auto-enrolment

Automatic enrolment has been a major policy success, the report claims, particularity as it means most people in work will be saving for their retirement.

But the Pensions Commission highlights that a third of eligible private sector employees have contributions that only follow the minimum automatic enrolment contributions.

This means that currently 8% of earnings - 5% from the employee and 3% from the employer - between a lower threshold of £6,240 and a ceiling of £50,270 – and this rises to half of the lowest-paid eligible employees.

The median earner is contributing 1.7% of pay above automatic enrolment minimums, according to the report, and where there is additional saving, the evidence suggests that this is led by employer behaviour rather than individual initiative and is more likely to benefit higher earners.

The Commission said it will consider how the eligibility criteria, income thresholds, and minimum contribution rates for automatic enrolment will need to be adjusted in the future.

It isn’t just contribution rates that are an issue though.

The report highlights that the variance in investment returns is wider in the UK than in comparable countries and can greatly affect outcomes. It suggests that the Pension Schemes Act could help address this by boosting how money is invested.

People not saving into a pension

Almost half of working‑age people are not saving into a pension in a typical month, and almost half of those not saving are in paid work.

The report highlights that while opt-out rates for auto-enrolment are low, there are some groups who are excluded.

It highlights that 14% of employees – 4 million people – are not eligible due to automatic enrolment’s age limits and £10,000 earnings trigger.

Additionally, approximately 4 million self-employed workers in the UK don’t have access to auto-enrolment.

Only 17% of the self-employed currently save into a pension, which falls to just 4% for those who earn only from self-employment, the report warns.

The problem with pension freedoms

Savers can start making pension withdrawals from age 55 - rising to 57 from 2028.

The Pensions Commission warns this creates risks, particularly with pension freedom rules providing extra flexibility on how the money is taken.

On current trends around three in 10 private pension pots are accessed at the earliest possible opportunity with half of all pots taken out in full. Nearly half of these are spent on large expenses like a car, holiday or renovations.

The Pensions Commission said: “Managing pension pot access so it lasts over thirty years from age 57 to 87, for example, is no easy feat. Since these changes, we have seen high levels of full cash withdrawals, widespread early access of ‘tax-free lump sums’, and high withdrawal rates that risk running down savers’ pension wealth too quickly.”

What retirement reforms is the Pensions Commission recommending? 

The Pensions Commissions is due to make recommendations next year.

But its latest report does provide some indication of its thinking.

It suggests that for pensioners in 2050 and beyond to have adequate incomes in retirement, they will require higher rates of private pension saving and higher coverage too.

That could mean changes to automatic enrolment eligibility, earnings thresholds and the statutory minimum contributions.

The report said: “Low and middle earners are not saving sufficiently and the system does not work for the self‑employed.”

The report also suggestions there should be more protections for people accessing their pension pot.

Jon Greer, head of retirement policy at Quilter said closing the pension gap cannot rely on a single lever.

He suggests financial education has a role to play but structural change is needed, particularly for the self-employed.

He said: “More flexible savings solutions, alongside mechanisms that replicate the success of automatic enrolment in this group, will be essential if participation and adequacy are to improve together.”

But all of this is playing out against an increasingly uncertain policy backdrop, with changes to inheritance tax on pensions, salary sacrifice and the possibility of state pension reform.

Greer added: “When the rules of the system appear to be in flux, it becomes harder to make the long-term decisions that pension saving requires. Stability and clarity are critical if people are to commit more of their income over decades.”

The government is under growing pressure to reform the controversial triple lock on the state pension.

Set up under the Tory government in 2011, the triple lock is used to calculate how much the state pension should increase by each year.

Under the mechanism, the state pension increases annually by the highest out of average earnings, inflation or 2.5%.

It has become an expensive policy commitment though, sometimes rising above inflation due to high wage growth.

The Office for Budget Responsibility (OBR) has estimated that the triple lock will cost around £15.5 billion per year by 2029/30, which is three times more than originally forecast.

Critics warn that it creates a generational divide between pensioners and those still working, who do not benefit from increases of the same level.

Some groups, such as the Institute for Fiscal Studies, have even called for it to be scrapped.

Labour committed to maintaining the triple lock in its 2024 general election manifesto but the higher costs, ageing population and strained public finances mean there could be extra pressures to reform or scrap the policy.

Three separate reports in recent weeks, from the Tony Blair Institute for Global Change, the intergenerational foundation and the International Monetary Fund (IMF) have pushed for change, warning that the costs are becoming unsustainable.

Plenty of financial professionals agree that change is needed.

Martin Rayner, financial adviser at Compton Financial Services, said: “Welfare spending now exceeds income tax revenues and is still rising.

“At some point politicians have to decide whether they keep making promises or start dealing with reality.

“Reform is inevitable. Scrapping it outright would be politically toxic, but moving to a link based on earnings or inflation over a longer timeframe is far more likely.”

How could the state pension be reformed?

The government’s pension reforms may be more focused on getting people to save more for their retirement, but there is growing pressure to reform the state pension with lots of proposals raising alternatives to the triple lock.

The International Monetary Fund (IMF) this week warned the UK needs a “transparent public debate” on public spending and suggested reforms could include replacing the triple lock with a policy of indexing the state pension to the cost of living.

It comes as a report from the intergenerational foundation, Time to Unlock: Why it’s time to reform the triple lock on the State Pension, found that state pension spending has increased by almost 70% in real terms over the past two decades.

This year, the state pension is expected to cost around £146 billion, or around 5% of GDP, up from £86 billion in 2005/06, the report warns.

The think tank said its preferred reform would be to cap state pension increases at inflation until 2030/31 and then increase it by the average of inflation and earnings after that.

It said this would reduce the volatility associated with the triple lock while still preserving a link between pension increases and broader improvements in living standards.

This approach has also previously been recommended by the Organisation for Economic Co-operation and Development (OECD).

Perhaps the most extreme reform idea is from the Tony Blair Institute for Global Change, which has proposed totally replacing the current state pension with a new Lifespan Fund, which would effectively scrap the triple lock.

Instead of claiming the state pension once they've reached state pension age, people would build up credit in the fund through work and activities and can access it, for example if they need cashflow due to an unemployment spell of up to six months.

The think tank said this would only be permitted for those taking time out of work to “boost their future earnings potential or to engage in another socially useful activity”. This may include caring responsibilities.

Individuals would be able to choose when to retire and receive a personalised amount based on their age and life expectancy.

Its analysis suggests this could save the Treasury around £19 billion a year by 2035/36, rising to £38 billion a year by 2045/46. By the mid-2030s, that saving would be equivalent to almost £1,000 a year for every working household in Britain, according to the report.

Will the Labour government scrap the triple lock?

Scrapping the triple lock would be a pretty controversial decision, especially given Labour made a manifesto commitment to keep it.

But critics may argue that Labour also committed to not raising taxes, while some say it has scaled back commitments to leasehold reform.

There is a pretty big reason why Labour, or any government, won’t scrap the triple lock though.

Around a fifth of the population are of state pension age. That is a big part of the electorate to alienate if you reduce their future payments.

Research by AJ Bell shows that 38% of Brits believe the state pension triple lock should be made permanent, compared to just 6% who want it to be scrapped.

Unsurprisingly there is a significant generational divide, with more than two-thirds (68%) of ‘Baby Boomers’ angling for a permanent triple lock versus just 14% of Generation Z (aged 18-29) and 22% of Millennials (aged 30-45).

Tom Selby, director of public policy at AJ Bell, said: “The reason is almost certainly cold political calculus. A significant section of the public support the triple lock, particularly older voters, and any party indicating it will not pledge allegiance to the policy risks being annihilated at the general election.

“With inflation running hot, there may also be a feeling that the 2.5% underpin might not kick in for a while, meaning there are no guarantees ditching this element in favour of a ‘double-lock’ will actually save any money in the short term.”

Eamonn Prendergast, chartered financial adviser at Palantir Financial Planning, added: “It’s politically difficult to scrap — pensioners are a key voting group, but over the long term it becomes harder to justify in its current form. Reform is more likely than abolition, but any government that touches it risks a significant backlash.”

The government appears unlikely to budge for now.

Pensions minister Torsten Bell answered a parliamentary question at the end of April on state pension support where he reiterated the government’s commitment to the triple lock.

The bigger issue may be whether this government is able to make difficult decisions at all given potential leadership challenges.

Rayner, from Compton Financial Services, added: "Labour already appears politically paralysed, with every significant policy meeting backlash and a prompt U-turn. That makes meaningful reform harder, but delaying it simply means the eventual changes are likely to be far harsher."

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

A spokesperson for the Department for Work and Pensions said: "Supporting pensioners is a priority and our commitment to the triple lock for the rest of this Parliament means millions of pensioners will see their yearly state pension rise by up to £2,100.”

Pensioners are completely cashing in more than 100,000 more pensions today than they were seven years ago when records began, according to new analysis.

Data published annually by the Financial Conduct Authority (FCA) shows since the tax year 2018/19, the number of people cashing their pensions in full each year has increased 29% – or by 105,038.

Withdrawing a pension in full – rather than just taking the 25% tax-free lump sum and then sticking to the 4% rule or even the 6% rule – can seem attractive, but it can be costly.

For one thing it can trigger unexpectedly large income tax bills – the withdrawal is treated as income, so it can push savers into a higher tax bracket in a single year (and potentially fall foul of the 60% tax trap). This means a significant portion of their retirement pot may end up going straight to the taxman.

Georgie Edwards from TPT Retirement Solutions, a workplace pension provider that carried out the analysis, said the data “highlights the need for better guidance so retirees don’t erode their savings – or pay more tax than they need to”.

We look at ways to reduce your tax bill in retirement in a separate article.

Small pension problem

If more people are cashing their pensions in full, it suggests that increasingly the amount people have saved at the point of retirement simply isn’t big enough to offer meaningful income via pension drawdown.

By pot size, more than 300,000 pension pots withdrawn in full in 2024/25 were worth less than £10,000. A further 112,526 were worth between £10,000 and £29,000, the analysis found.

Looking across age brackets, there has been a 75% increase in 65 to 74-year-olds withdrawing their pensions in full between 2018 and 2025. For those aged 55 to 64, the rate of pensions being withdrawn in full rose by a lesser 15% over the same over this period.

Source: FCA

Edwards said: “The rise in people cashing in their pensions in full is a worrying signal about retirement adequacy in the UK. For many, it’s not a strategic choice but a sign their savings aren’t sufficient – and some may also be reluctant to consolidate pots, missing the chance to build a more sustainable income.”

Ad hoc withdrawals have also increased. The number of pension plans from which an ad hoc partial withdrawal was made in 2018/19 was 163,335. In 2024/25, this had reached 328,419 – marking a 101% increase. These types of withdrawals can also incur large tax bills.

“In some cases, savers are stuck in legacy products that don’t offer flexible options like phased drawdown or regular uncrystallised funds pension lump sum (UFPLS), effectively forcing higher withdrawals than they’d prefer and increasing their tax exposure,” Edwards added.

Source: FCA

Things to consider before withdrawing all of a pension

Withdrawing all of a pension in one go is a big decision. The money typically can’t be put back and there are often several tax implications. Ian Futcher, financial planner at Quilter, explains what you should consider before cashing in your retirement pot.

1. Higher income tax

As already mentioned, taking a whole pension pot may provide immediate access to cash, but many people underestimate the potential tax consequences. “Although 25% can usually be taken tax free, the remaining balance is taxed as income in the year it is withdrawn, which can unexpectedly push someone into a higher or additional rate tax band,” Futcher said.

2. Danger of running out of money

Pensions are designed to provide an income over what could be a retirement lasting 20 or 30 years. Fully withdrawing savings too early can leave people more financially exposed later in life, particularly as inflation and care costs remain ongoing concerns, Futcher pointed out.

3. Wealth taxes

“Money left within a pension continues to benefit from a tax-advantaged environment. Of course, some of those benefits can be retained if funds are moved into other wrappers such as ISAs. But, said Futcher, “large one-off withdrawals will often leave at least part of the money outside those protections and potentially exposed to income tax, dividend tax or capital gains tax over time”.

4. Managing inheritance tax

Pensions will fall within estates for inheritance tax purposes from 2027. However, that does not automatically mean emptying pension pots early is the right response, said Futcher: “Keeping funds within a pension can still offer valuable tax efficiency and long-term planning flexibility.” For example, those focused on passing on wealth can consider other options, such as gifting from surplus income.

The “vast majority” of pensioners will miss out on the government’s plans for an income tax exemption from next year, new research suggests.

In the 2025 Budget, chancellor Rachel Reeves announced pensioners whose sole income is the basic or new state pension would not need to pay the “small amounts” of tax via simple assessment if the state pension exceeds the tax-free personal allowance from 2027/28.

It was positioned as easing the “administrative burden” but the government has since clarified pensioners in this situation won’t have to pay income tax at all from 2027/28, if their pension exceeds the personal allowance from that point

It came as the chancellor announced the allowance would be frozen at £12,570 until at least April 2031. The threshold last increased in April 2021.

This proposed waiver is intended to stop pensioners solely reliant on the state pension (with no other taxable income or pension ‘increments’) having to pay tax on the payment.

Only around 5.5 million pensioners – or just one in 18 – will be eligible for the concessions, former pensions minister Sir Steve Webb, a partner at pensions consultancy LCP, said.

The full new state pension of £12,548 sits just £22 below the tax threshold and the government expects the rate from next April to rise above the threshold for the first time, given high inflation, wage growth and the triple lock.

The old state pension, by comparison, is much lower than the threshold and even with expected rises looks set to remain so, meaning people solely on the old state pension would not have to pay income tax anyway.

How will the government proposals affect different groups of pensioners?

Webb has called the disparity of treatment between groups of pensioners under the proposed scheme “bizarre”, as LCP’s research flags how few people will actually benefit from the move.

The firm’s new report, ‘The tax treatment of state pensioners’ highlights that anyone who reached pension age before 2016 – when the flat-rate, single tier system replaced the two-tier system of basic plus additional state pension (SERPS or S2P) – will not benefit.

LCP said based on current data for 2025/26, none of the 8.1 million pensioners in the old state pension system will qualify for the exemption. This is either because they are only receiving the old state pension, which at £9,614 a year currently falls below the income tax threshold anyway or – in the case of 6.5 million of them – because they also receive additional state pension (either under SERPS or state second pension) and therefore are receiving a pension “increment” on top of the basic payment.

Similarly, most of the five million people on the new state pension (anyone hitting retirement age after 2016) may also miss out.

The firm calculated that 290,000 are not based in the UK; one million receive pension ‘increments’ or protected payments; 1.1 million have a new state pension rate that will remain below the income tax threshold in the next three years; and 1.8 million have other taxable income, such as private pensions or investment income so they are not solely dependent on the state.

Using the Office for Budget Responsibility (OBR) outlook, LCP calculated the estimated tax levels due over the remaining tax years (under this Parliament), assuming the state pension will rise by 3.7% in April 2027 and then by at least 2.5% in April 2028 and 2029.

Webb said the outlook presents some potential “cliff edges”, pushing people with even £1 of other income into a very different tax position than those without.

He said: “Someone who qualifies for this tax break in 2027/28 does not have to pay tax but someone who just misses out because of £1 of other income… will have to pay income tax not just on the £1 but also on the income tax on their state pension – a further £88. Over time this cliff edge will increase, to £153 in 2028/29 to £220 in 2029/30.”

The table below shows how much income tax would be payable without the proposed concession, for someone solely dependent on the new state pension.

Source: LCP, calculations based on the OBR’s March 2026 Economic and Fiscal Outlook for April 2027/28, then assumes a minimum increase of 2.5%.

Webb gives the example of someone with a small pension pot under auto-enrolment who cashes it out at retirement, therefore taking some taxable income and no longer being classed as solely dependent on the state.

Speaking to MoneyWeek, he said the government’s reference to the old basic state pension might be perceived as an even-handed benefit, whereas it was more of a red herring.

He said: “Freezing tax thresholds for a year or two is manageable. Freezing them for nearly a decade creates more unintended consequences by making a structural shift to the tax system in a ‘back-door’ fashion that isn’t fully thought through.

“Instead, we need a fundamental ‘root-and-branch’ review of the system – why we have tax thresholds in the first place, whether we should have the same rates for pensioners as for working people and so on.”

What are some alternative ideas to the new tax concession for pensioners soley getting the state pension?

He said he appreciates this is being presented as a short-term fix to the end of the current Parliament and is suggesting two potentially ‘cleaner’ solutions.

One option, albeit more expensive than the current proposal, is a broad-brush increase in the tax allowance for all pensioners.

Webb added: “But this would come at a considerable cost because it would also benefit the eight-million-plus pensioners already paying tax. This would not be a targeted solution to the problem.”

He also suggested writing off all small tax bills for pensioners, which would be a cheaper, more targeted option focused on the group of most concern. It would also not discriminate between those on the old and new tax systems.

“But it would still be only a temporary fix and would still leave any future government with a headache as to how to tackle the growing cost of such a measure.”

Webb added that the government already has a line at which it writes off small tax bills but it’s just less well-documented.

“I'm pretty sure HMRC doesn’t send out self assessment demand letters for amounts of £4. It’s taxpayers’ money and why shouldn’t that be paid? We know they clearly have a line already, all I'm saying is just make it bigger.”

LCP also warns the policy presents potential problems for the next government as any write-offs get more expensive over time.

Webb said: “By 2029/30 it looks as though the pensioners who do benefit will have over £200 per year in income tax written off. If the policy continues into the next Parliament it will get more and more expensive with every passing year, but will be hard to switch off – a bit like the triple lock.”

A HM Treasury spokesperson said: “Pensioners whose only income is the basic or new state pension, without any increments, will not have to pay income tax over this Parliament. “

NS&I is boosting the prize fund rate on Premium Bonds, increasing the chances of winning a prize, and raising interest rates on four other savings accounts.

The government-backed savings bank will increase the prize fund rate from 3.3% to 3.8% and improve the odds of winning from 23,000 to one to 22,000 to one from the July draw.

NS&I said there will be an estimated 322,000 more prizes in the July draw, with the prize pot growing by £60 million.

The number of £25 prizes is falling, but there will be 12 more £100,000 payouts, as well as 24 more £50,000 prizes up for grabs.

From today (14 May), NS&I is also raising the interest rates on four savings accounts: its Direct Saver, Income Bonds, Direct ISA and Junior ISA.

What will the changes to Premium Bonds and the savings accounts be?

There will be over 6.2 million Premium Bonds prizes up for grabs from the July draw worth more than £436.8 million.

Here is what the number and value of Premium Bonds prizes will be:

Credit: NS&I

Meanwhile, this is what the old and new interest rates are on the four savings accounts:

Credit: NS&I

Do the changes to Premium Bonds make them worth it?

Greig Bingham, head of financial modelling at financial services consultancy Broadstone, said NS&I was “clearly looking to make Premium Bonds more attractive again” after it reduced the prize fund rate in April in response to a base rate cut in December.

He said alongside the rise in the prize fund rate and increased odds of winning, one big positive was the shift in the make-up of the prizes.

The £25 prizes currently make up 47% of all prizes, but this will drop to 37% from July, while the number of higher-value prizes will rise.

“That means a greater share of the prize fund is being directed towards higher-value prizes, which could make the product feel more rewarding for savers fortunate enough to win,” Bingham said.

The other perk to Premium Bonds is that any winnings are tax-free, meaning they can be a useful addition to your wealth portfolio after you’ve maxed out your ISA allowance and personal savings allowance. Your savings are also 100% secure with NS&I.

However, the odds of winning a Premium Bonds prize are relatively low – around 62% of people who have Premium Bonds have never won a prize in the monthly draw, according to research by Vanguard.

You also don’t receive guaranteed interest on any Premium Bonds held, meaning, if you don’t win any prizes, your deposit erodes in value due to inflation.

Are the four savings accounts worth it after the increase in interest rates?

Rachel Springall, finance expert at data firm Moneyfactscompare, said: “Savers who prefer to keep their pots with NS&I will be delighted to see rates increase, but it is worth noting that the top rates on the market are over 4% on easy-access accounts, with some top fixed accounts paying well over 4.5%.”

NS&I’s Direct Saver, a taxable easy-access savings account, is now paying a 3.45% gross/AER interest rate on a minimum £1 deposit. Interest is paid yearly.

However, savers can get a 4.2% interest rate with Yorkshire Building Society’s Triple Access eSaver.

Savers can also get a 4.5% AER interest rate, including a boosted 2.25% AER rate for the first 12 months, with Chase’s easy-access savings account.

The Income Bonds, another easy-access savings account but with interest paid monthly instead of yearly, is now paying a 3.4% gross/3.45% AER interest rate on a minimum £500 deposit.

But, OakNorth Bank’s Easy Access Tracker pays 4.14% AER interest, with interest paid monthly, and you can open an account with just £1.

NS&I’s Direct ISA, an easy-access tax-free account, is now paying 3.8% AER interest on minimum deposits of £1.

However, Trading 212’s Cash ISA pays 4.51% AER, including a 0.91% bonus rate for the first 12 months.

The NS&I Junior (cash) ISA is paying 3.7% AER interest and is offering a competitive rate. As of 14 May, it’s in the top 10 for cash Junior ISAs on the Moneyfactscompare website.

However, you can get a higher 3.8% rate with Skipton Building Society’s Junior Cash ISA.

All of the above savings accounts are from providers that are FSCS-protected meaning your savings are protected up to the value of £120,000 per person, per authorised firm.

More Londoners have come forward to HMRC to admit they have paid the wrong tax and to correct their records than in any other areas of the UK, new data shows.

A total of 3,296 individuals living in London admitted they had paid the wrong tax in the year to 31 March 2025, according to a Freedom of Information (FOI) request. This is more than the rest of the nine biggest UK cities combined.

The data is related to the number of disclosures made by those "who have not declared the right amount of income tax, capital gains tax, National Insurance contributions, or corporation tax”. They have then sought to make HMRC aware of the error.

Simple mistakes can lead to paying the incorrect amount of tax. But the punishment for paying the wrong tax can still be heavy fines and in cases of deliberate evasion, which is a criminal offence, imprisonment.

Far fewer people made voluntary disclosures to HMRC in Manchester (241 people admitting they had underpaid tax), Birmingham (394) and Leeds (150) compared to London in the year to 31 March 2025.

The lower number of voluntary disclosures in other UK cities highlights the concentration of cases in the capital and its most affluent postcodes.

South West London dominates the table of the top 10 postcodes areas for the number of people approaching HMRC to confess the underpayment of tax, with the number of people coming forward to the HMRC reaching 492.

Graham Caddock, tax director at accountancy firm Lubbock Fine, which submitted the FOI, said anyone who has underpaid tax deliberately or accidently should come forward to the HMRC as soon as possible.

Caddock said: “HMRC’s sophisticated approach to detecting tax errors using systems such as their Connect database, is targeting tax evasion more effectively than ever before.”

Voluntary disclosures submitted to HMRC per postcode for the tax year 2024/2025

Source: HMRC via an FOI request

How to avoid a fine for paying the wrong tax

Disclosing mistakes to HMRC as early as possible is the best way to avoid or reduce hefty fines for paying the wrong amount of tax.

Caddock said: “Taxpayers who have purposely or accidentally avoided their tax obligations are starting to realise it is more likely than ever that they will be caught.

“For anyone who has accidentally or deliberately underpaid their taxes, it is more important than ever to disclose and admit tax errors early rather than wait for them to be discovered.”

Common tax mistakes

Some of the common reasons why people underreport their tax obligations include:

• Undeclared rental income, such as letting out a property or room through platforms like Airbnb
• Income from side businesses, cryptocurrency trading, or offshore accounts, which can be difficult to track and report accurately
• Other self-employed income streams including freelance work, social media influencing, and brand collaborations, which may also go unreported

Caddock said: “With income from side businesses, property or offshore investments becoming more common and visible to HMRC, the risk of discovery is highly likely.

“Voluntary disclosures to HMRC are the best way to correct these errors before they become bigger problems leading to hefty tax penalties. In many cases HMRC can go back up to 20 years to collect unpaid taxes.”

How much are HMRC tax penalties?

Deliberate income tax evasion can lead to six months in prison or a fine of up to £5,000. In serious cases, penalties may be seven years’ imprisonment or more and unlimited fines.

When it comes to self-assessment, you’ll get a penalty if you need to complete a tax return and you send your return late, or pay your tax bill late.

If you register for self-assessment late – after 5 October and do not pay all of your tax bill by 31 January – you may get a ‘failure to notify’ penalty. This penalty is based on the amount still left to pay and you’ll receive it within 12 months after HMRC receives your self-assessment tax return.

If you send your tax return late you’ll get the following late filing penalties:

• an initial £100 penalty
• after three months, additional daily penalties of £10 per day, up to a maximum of £900
• after six months, a further penalty of 5% of the tax due or £300, whichever is greater
• after 12 months, another 5% or £300 charge, whichever is greater

If you pay your tax late you’ll get penalties of 5% of the tax unpaid at:

• 30 days
• six months
• 12 months

You’ll also be charged interest on the amount owed.

MoneyWeek has approached HMRC for comment.

In February, major US brokers such as Marsh & McLennan , Willis Towers Watson, Aon and Arthur J. Gallagher & Co. declined by 8%-11% in a single day on news that OpenAI, the owner of ChatGPT, had approved the first insurance-focused AI app designed by US intermediary Insurify. OpenAI's tool arrived a week after Claude, the model developed by Anthropic, also released a new plug-in to automate sales, legal and financial analytical functions.

As well as this risk of obsolescence, investors have had to try to factor in the growing challenges of a so-called “soft” insurance market. Since 2017, the insurance market has been in a “hard” phase, where prices have been rising, and profits have jumped. However, two years ago, prices started to flatten and then fall as the market turned from hard to soft. The hard market was very good to Marsh & McLennan (NYSE: MRSH). Between 2017 and the beginning of 2024, shares in the broker and global-intelligence company rose more than 200%, but since topping out in the first half of 2025, they have fallen by around 28%.

This decline was needed. Insurance is a highly cyclical business and, coming into the soft cycle, Marsh was trading at about 22 times forward earnings, a multiple that left little, if any, room for error. After the re-rating, the shares are now trading at just 16.8 times forward earnings, according to UBS. That is still a bit high for this stage of the market cycle, but there's a good argument that you should start buying the shares at this level.

Marsh & McLennan plays an important role in the insurance market

Marsh & McLennan is the parent firm of Marsh Inc, one of the world's largest risk-management and insurance-services firms. The group also owns Guy Carpenter, a risk-management and reinsurance specialist; management consultancies Mercer, plus Oliver Wyman and Jardine Lloyd Thompson Group (JLT), an insurance, reinsurance and employee-benefits broker based in London.

The group's largest division is Marsh Risk, which generated $14.4 billion in revenue in 2025. The second largest is Mercer, with revenue of $6.2 billion, and Marsh Management Consulting, at $3.6 billion. The total consulting business turns over $9.8 billion a year. The risk-management and insurance businesses (including Marsh Risk) generated $17.3 billion in revenue.

Marsh Risk plays an important role in the insurance market. Large, complex risks are often underwritten by pools of insurers and reinsurers bought together by brokers. The insurers like it because they're not overly exposed to a single risk, and the buyer of insurance likes the security of multiple parties underpinning the contract. Marsh Risk helps navigate this process. The company also manages the claims process, which most large insurers and reinsurers don't have the capacity to handle, as it can be costly and time-consuming.

For example, Marsh has helped set up a clean hydrogen insurance facility, where developers pay an insurance premium, and Marsh negotiates insurance coverage with insurers to transfer the risk from the project owners' balance sheets. Investors (in this case, the insurers) provide capital investment for the projects, with their risk exposure mitigated by tailored insurance coverage. In the event of insured incidents, Marsh manages the claims process. The single platform helps lower costs for all involved.

It's hard to imagine a world where AI disrupts this process. It will certainly help streamline the paperwork, but the human touch of the Marsh brokers will always be required to navigate deals among key stakeholders. This business is highly profitable and cash-generative. The insurance arm booked an adjusted operating margin of 32% last year, compared with 21.1% for consulting. Of the $7.3 billion in adjusted operating income, $5.3 billion fell to the bottom line as operating cash flow. The company's return on invested capital, a measure of profit for every £1 invested in the business, is 25%.

How Marsh is embracing AI

The real AI threat is to Marsh's consulting arm, but even here, the company claims it is addressing the potential risk. In the company's first-quarter results, it said Oliver Wyman's AI Quotient, which helps firms deploy and scale AI tools, has advised on upwards of $50 billionin AI investment. This helped the consulting arm outperform in the first quarter, with Oliver Wyman recording revenue growth of 6%, ahead of group top-line growth of 4%.

Management is deploying these tools internally to help reduce costs. It's targeting a total of $400 million in savings over three years and has logged a 20% improvement in efficiency through AI-powered document processing. Other tools have saved an estimated one million hours of the team's time in the first year. UBS estimates this could help drive Marsh's return on invested capital to near 30% by the end of the decade.

So while the market frets about the risk AI poses, the company is quietly leveraging the technology to enhance its own services. This suggests that, if anything, the firm is an AI play.

Marsh's most important assets are its people and technology, and while it spends heavily on both, overall capital spending requirements are low. As a result, most of the cash generated from operations converts to free cash flow. Management has set out to return as much cash as possible to investors. At the end of last year, management authorised a $6 billion share buyback, with $750 million deployed in the first three months of the year. While the market was selling, Marsh was buying its own shares.

Cash flow is the firm's most attractive quality. While the shares might not look too cheap on a price-earnings basis, according to UBS, the shares are trading at a forward free cash-flow yield of 6.2% for 2026, 6.7% for 2027 and 8.1% for 2030.

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Handbags are useful things. Not only can you put your stuff in them, but they can also, to a certain extent, insulate you from the skittishness of investors. Sales of luxury goods maker Hermès' ready-to-wear range were flat in the last quarter, but the French label's leather-goods division, which includes the coveted Birkin and Kelly handbags, actually grew 9.4%. Still, “the halo effect of the Birkin doesn't make Hermès completely immune from a slowdown, it just buys the company more time than its rivals”, says Carol Ryan in The Wall Street Journal. But the premium that Birkins and Kellys command on the secondary market has come under pressure.

That raises questions “as to whether Hermès's allure is waning amid a slew of new products from rivals, most notably Chanel, but also LVMH's Dior”, says Andrea Felsted on Bloomberg. The volume of Birkin and Kelly handbags on the secondary market in the US is three times bigger than in 2020, according to analysts at Swiss bank UBS, which suggests demand has slumped. That said, the bags still command a premium over their store-bought counterparts, even if rival Chanel isn't exactly helping. Chanel has “caused a frenzy with handbags designed by its new creative director, Matthieu Blazy,” says Felsted. “Resale values for Hermès bags have moderated… Notably, the premium at which Hermès Birkin, Kelly, Mini Kelly and Kelly Pochette change hands in the secondary market compared with retail prices has fallen from its peak in 2022”. That doesn't make them a bad investment. A recent study by vintage handbag shop FashioNica found that while the US benchmark S&P 500 stock index returned 43% between 2022 and now (ie, a full market cycle, according to the authors), the Hermès Mini Kelly II bag did even better, gaining 302%. Good things do come in small sizes.

For a long time, the Birkin and Kelly 25s (so called because the base of the bags measures 25cm across) were considered mini bags. Then, in 2019, Hermès released the Birkin 20 – in particular the Birkin 20 Faubourg, modelled on the Hermès' flagship shop front in Paris. In the years since, says Aurelie Vassy for Sotheby's, “the Birkin 20 has evolved from a conceptual design into one of the most sought-after mini handbags in the collector market”. “While Hermès has not officially released a standard leather version [of the Birkin 20], collectors anticipate one based on the success of the Mini Kelly II,” says Vassy. “If introduced, it would probably become one of the most in-demand bags in the Hermès line-up.”

What to look for in a mini bag

Hermès mini bags hold their value particularly well on the secondary market. Several Mini Kellys in exotic skins and rare finishes appeared at Heritage Auctions' spring sale last month, including one Matte Vert D'eau Alligator, which sold for $41,250, including the buyer's premium. The features that determine a bag's value are the material, the colour, vintage, rarity, whether it is a limited edition, which styles are currently in fashion and the overall condition of the bag.

Mini bags made from exotic skins, such as Niloticus Crocodile or Matte Alligator, are sought after by collectors. Sotheby's has a Beton Matte Mississippiensis Alligator Birkin 25 with gold hardware from 2023 to buy now for $98,000. The secondary market also places large premiums on new seasonal colours within the first year after release, says Aurelie Vassy for Sotheby's. If offered the opportunity to buy a new mini bag, it can make sense to sell into the resale market during the period when “demand is high and supply remains limited”. That's doubly true if the style is bold and the bag has attracted the attention of other collectors. Such limited editions can command hefty premiums. In March 2025, a limited edition Day Faubourg Birkin fetched $152,400 with Sotheby's in New York, which was slightly above its high pre-sale estimate.

The mark of a good collection isn't how big it is, but how well curated. So, don't be afraid to sell some of your collection if it means you can acquire bags that are a better fit. “As collectors [also] become more experienced, many begin to focus less on what is newly available and more on what is increasingly difficult to find,” says Vassy. “This is often the point at which a Birkin collection shifts from boutique buying to true collecting.”

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Dumbleton Hall, Cotswolds

The historic Grade II-listed Dumbleton Hall, situated in the north Cotswolds, has recently reopened following a two-year restoration, which has returned the property to its former glory as an elegant country manor. The tranquil 16-acre estate includes a lake and walled gardens, making this a quintessential countryside escape, located minutes from the picturesque villages of Broadway and Winchcombe. Dumbleton Hall's history – having hosted literary and historical figures, including Charles Dickens and the Mitford sisters – is reflected across its 34 individually designed bedrooms and grand public spaces, blending Belle Époque refinement with 1920s glamour and William Morris prints.

On the culinary front, executive chef Dean Westcar champions seasonal, locally sourced Cotswolds produce at the hotel's main Cedar 1905 restaurant, while the Orangerie will offer intimate fine dining from August. To work up an appetite, various walking trails are within easy reach, as are the towns of Stratford-upon-Avon and Cheltenham for a night out.

From £380 a night, on a B&B basis for two people, dumbletonhall.co.uk

Pine Trees Hotel, Scottish Highlands

Pine Trees Hotel is tucked away in ten acres of woodland on the edge of Pitlochry in the Scottish Highlands. It is, in other words, a quiet retreat near the Cairngorms. The boutique property has recently undergone an extensive refurbishment, blending Victorian architecture with contemporary design across 32 individually styled rooms and suites. Guests are invited to unwind in the tranquil surroundings by embracing the local concept of coorie, meaning “to get cosy” in Scots.

At the hotel's restaurant, Fauna, executive chef Tom Scade celebrates seasonal Scottish produce, while at the stylish Flora bar an extensive whisky selection is offered, along with the popular Pine Trees Margarita cocktail.

This summer, Pine Trees Hotel is launching a new “Woodland Wellness” concept, which includes access to an Estonian Iglucraft igloo-shaped sauna, plunge pool, and wood-fired hot tub. Later in the season, the property will also unveil East Haugh House, a new 11-bedroom exclusive-use residence perfect for larger groups.

From £358 a night, pinetreeshotel.co.uk

Four Seasons Hotel London at Park Lane

The iconic Four Seasons Hotel London at Park Lane recently unveiled 14 newly renovated suites. London-based studio Interiors with Art lent a hand in designing the interiors, fusing the hotel's subtle Art Deco features with contemporary style. The team drew inspiration from the nearby Hyde Park for the sycamore wood panelling, for example, along with the brushed metal finishes, Murano glass lighting and warm autumnal palette.

On the fifth floor, sweeping views of the park can be had from the spacious Presidential Suite. It has a formal dining room with a butler's pantry, bespoke marble accents and a fireplace. The Royal Terrace Suite has its own vast garden terrace, making it ideal for entertaining or relaxing in nature despite being in the heart of Mayfair, while the Garden Suite overlooks the hotel's own private garden, blending indoor and outdoor living with bronze-accented interiors and a spacious landscaped terrace.

From £4,700 a night in the suites, fourseasons.com/london

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Inheritance tax (IHT) is often described as the “most hated” tax out there, but a significant number of people know very little about how it works.

Around 71% of UK adults do not understand inheritance tax, a survey by investment manager Schroders found, and it’s not hard to see why.

The tax has a number of different allowances, caveats, and thresholds that can make it an incredibly complex topic – but sooner or later most of us will have to contend with it.

As tax-free thresholds remain frozen and house prices rise, plus new rules about inheritance tax on unused pensions loom, more people face being affected by the levy.

How much do you know about inheritance tax? Test yourself in our quiz.

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• Six IHT myths debunked
• How you could cut your inheritance tax bill by £37,000
• What is the 7 year inheritance tax rule and how does it help cut your bill?

A think tank led by former UK prime minister Tony Blair has called for the current state pension to be ditched and replaced with a new flexible fund from 2030.

The Tony Blair Institute for Global Change has proposed introducing a “Lifespan Fund” from the end of the decade. The suggested reform would see the triple lock, used to uprate the UK state pension at a great cost to the government, scrapped.

It comes as the number of people aged over state pension age is set to rise from 12.6 million in 2026 to over 18 million by 2070, taking the cost of the state pension from 5% of GDP now to 7.7% by 2070, according to the Office for Budget Responsibility (OBR).

State pension reform: What is the Tony Blair Institute for Global Change proposing?

Under the think tank’s proposals, individuals would build up credit through work and other activities. They would have the option of drawing on it during their working life, for example if they need cashflow due to an unemployment spell of up to six months, or if they have had to take on caring responsibilities.

The report says this would only be permitted for those taking time out of work to “boost their future earnings potential or to engage in another socially useful activity”.

Individuals would be able to pay a higher contribution rate after returning to work to ensure their eventual entitlement was enough to live on.

The report also suggests scrapping the state pension age and replacing it with a system where individuals could choose when to retire and receive a personalised amount based on their age and life expectancy.

That said, access to funds would only be possible if an individual had built up enough credit to ensure their pot would last at least 10 years.

The think tank says this would mean those with shorter life expectancies, often on low incomes, could draw on the income from their fund sooner.

The proposals also put forward the idea of getting rid of the triple lock and uprating payments in line with average earnings.

Calculations by the Tony Blair Institute for Global Change suggest the Lifespan Fund would significantly lower the burden on the public purse.

They estimate the new fund would cost 5.31% as a share of GDP by 2073/74 compared to 7.65% if the current state pension system stayed in place.

New Lifespan Fund would be a ‘huge backward step’

Steve Webb, former pensions minister and now partner at pension firm LCP, has raised concerns over the proposals.

He said: “We have just created a new state pension system which is relatively simple and standardised, and which forms a firm basis for retirement planning.

“It would be a huge backward step to replace it with something fiendishly complex and highly intrusive, and which would take many decades to implement in full.”

Webb, who was pensions minister when the triple lock was introduced in 2011, added the idea of linking state pension payments to individual health records and life expectancy was “deeply troubling”.

“Leaving aside issues of confidentiality and data quality, it is very hard to make a precise leap from health records to life expectancy,” he said.

“The report says that they would not want to pay higher pensions to those who had poorer health because of lifestyle choices such as smoking, but it is very hard to see how they would exclude the impact of smoking on someone's overall health.”

Tom Selby, director of public policy at investment platform AJ Bell, echoed Webb’s comments, saying an overhaul of the state pension “could create even more uncertainty as well as complexity”.

“The most radical ideas, like setting incomes based on personalised life expectancy and health data, will surely never get off the ground,” he said.

However, Selby said the report could be “a decent guide to future policy thinking”, including that the triple lock needed to be scrapped.

He said moving to uprating payments in line with earnings “feels a reasonable compromise”, while allowing people to take state pension income at a younger age “isn’t completely inconceivable".

We look at the alternatives to the triple lock in another article.