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

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

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

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

Sheikh Tahnoon's race to global dominance with G42

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

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

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

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

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

What are tax havens?

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

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

Which British territories are tax havens?

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

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

How big is the offshore financial centres industry?

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

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

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

Is being an offshore tax haven sustainable?

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

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

Will Britain's tax havens survive?

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

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

How is Jersey as an offshore financial centre?

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

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

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

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

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

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

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

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

How HENRYs are being hit by high tax

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

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

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

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

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

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

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

HENRYs with young children are penalised even more

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

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

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

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

The structure of household income can make a difference.

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

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

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

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

What HENRYs can do to “become rich”

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

Increase your pension contributions

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

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

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

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

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

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

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

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

Know your tax-free allowances

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

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

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

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

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

Beware lifestyle creep

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

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

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

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

You have time on your hands

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How did people vote?

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

Here is how many votes each animal received:

Mammals

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

Birds

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

Amphibians, insects and fish

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

What other new banknotes have entered circulation in recent years?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The battery can be noisy and looks ugly

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

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

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

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

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

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

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

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

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

Barclays £600 switching bonus

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

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

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

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

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

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

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

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

Barclays £300 switching bonus

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

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

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

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

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

Is Barclays offering the best switching deal on the market?

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

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

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

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

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

Should you switch to Barclays?

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

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

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

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

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

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

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

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

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

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

What NS&I savings accounts have improved interest rates?

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

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

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

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

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

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

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

Source: NS&I

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How does the seven-year rule work?

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

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

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

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

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

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

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

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

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

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

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

Source: Gov.uk

How does the seven-year rule work in practice?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What self-employed savers need to consider

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

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

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

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

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

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

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

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

Who are the House of Liechtenstein?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How tax-free pension lump sums work

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

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

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

The risks of withdrawing your pension lump sum

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The triple lock conversation is overdue

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

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

Who would be affected by the adjusted triple lock?

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

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

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

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

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

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

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

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

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

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

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

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

Why do retirees find it hard to spend money?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How much do you need in retirement?

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

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

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

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

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

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

What does Starling’s easy-access saver offer?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: NS&I

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

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

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

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

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

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

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

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

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

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

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

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

What is equity release?

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

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

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

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

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

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

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

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

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

Should you use your property for retirement income?

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

But, there are pros and cons to consider.

Pros

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

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

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

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

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

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

Cons

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

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

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

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

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

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

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

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

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

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

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

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

What are the alternatives?

Downsizing

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

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

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

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

Retirement interest-only (RIO) mortgages

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

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

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

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

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

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

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

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

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

~ Cris Sholto Heaton

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

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

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

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

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

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

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

Do higher fees affect your pension returns?

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

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

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

Put simply, higher fees mean lower returns.

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

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

How to reduce fees on your pension

If you contribute to a workplace pension, you likely do not have the power to get your employer to move to a different provider with lower fees. However, if you contribute to a private pension, shop around for providers to find the best deal.

However, fees are not the only thing you should consider.

For example, while Vanguard’s fees are low, they only give access to Vanguard’s own funds so you have a more limited range of investments than provided by other platforms.

Below is a list of some popular SIPP providers and the fees they charge.

The state pension triple lock is set to be replaced with a double lock system in April 2030 to help fund a new free social care service, prime minister Andy Burnham has announced.

Burnham affirmed that he will stick to the 2024 Labour manifesto commitment to keep the triple lock in place for the rest of this parliament, but said he will “adjust” the promise if Labour win a second term in power.

“I won't pretend some of this won't be difficult. I accept I may pay a political price, but someone has to go through the pain barrier and rip the plaster off,” he said during his speech at the Labour Party conference.

Under the current triple lock system, the state pension increases every year by whatever is highest out of inflation, average earnings, or a flat 2.5%.

From April 2030, the first tax year after the next general election, Burnham said the state pension “will continue to rise every year, at least by prices, or 2.5%”.

Assuming Labour won the election so they could change the policy, this would effectively turn the triple lock into a ‘double lock’, protecting the state pension against inflation but ending the direct relationship between the state pension and annual average earnings.

Burnham said the state pension will also “hold its value relative to earnings over time, so that pensioners will always share in the rising prosperity of the nation”.

Kate Smith, head of pensions at Aegon, speculated that this link to earnings over time “could possibly involve an element of smoothing of earnings increases over a few years relative to the increases in prices and the 2.5% increase,” but said that it is currently unclear how this will work in practice.

Smith welcomed the change to the triple lock, saying that it is time for the country to have “serious conversation about how the state pension can remain affordable, sustainable, and fair across generations.”

She added: “It is important to remember that nothing changes for pensioners now. The government has reiterated that the triple lock remains in place until 2029. For millions of people, the state pension is the bedrock of retirement income and will continue to be so.”

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Now that the move from the triple lock to the double lock has been announced, the government must also provide savers with a stable tax environment and publish a five-year tax roadmap that sets out its plans on the important issues that influence how people plan for retirement such as tax-free cash and pensions tax relief."

Savings from triple lock removal will fund new social care system

Burnham said that scrapping the triple lock in its current form would “generate significant savings” that will be used to create a new ‘national care service’ if voters grant Labour a second term in office.

The proposed service would provide social care for the elderly and operate under NHS principles of being universal and free at the point of use, and would be at the heart of Labour’s next general election manifesto.

Burnham called the plan “a landmark policy as significant as the creation of the NHS itself, and utterly essential to securing its future. We will start laying the ground now for the National Care Service and introduce it in the next Parliament.”

He added: “So this is the deal: a state pension that rises every year, no care charges, and a high-quality national care service to give peace of mind in later life. Conference, I am going to go out and argue for a good deal for our pensioners and for older people in the 21st century.”

Residential adult social care costs an average of £54,000 a year

Implementing a free and universal social care system could save families hundreds of thousands of pounds on average on residential care.

Residential adult social care costs more than £54,000 a year on average in England, while nursing care costs over £71,000, according to a report by Laing Buisson in 2025.

Meanwhile, new data from investment platform AJ Bell suggests caring for a loved one yourself over 20 years can cost £1 million in lost salary and pension wealth.

Sarah Coles, head of personal finance at AJ Bell, said: “When we think about the cost of care, we tend to consider the expense of formal care, which is eye-watering. However, in 2023/24, an estimated 5.4 million people were informal carers, and for them, there’s every chance their responsibilities are costing them dear too.”

For years, cash had to apologise for itself. It was safe, certainly, but the return was miserable.

Cash can now look investors in the eye with a promise of return that beats inflation.

The best one-year savings accounts pay about 5%, with no stock market drama and no risk of waking up to find your investment has fallen sharply. It is a fair question to ask: are shares worth the risk at all, or is saving better than investing?

The answer starts with time. Cash is for money you may need soon and shares are for money you can leave invested for years, accepting short-term falls in pursuit of greater long-term growth.

What does the evidence show?

Some of the best-known historical evidence gives surprisingly different answers. Barclays Private Bank says UK shares beat cash in 91% of rolling 10-year periods since 1899, meaning every possible 10-year stretch, each starting a month or year apart.

Paul Lewis, presenter of BBC Radio 4's Money Box, found something very different in research published in 2016. Across rolling ten-year periods between 1995 and 2016, a FTSE 100 tracker beat the best savings accounts only half the time.

Lewis set shares a harder test than Barclays does. He used the actual returns from a FTSE 100 tracker after charges and compared them with the best one-year savings account available each year. Barclays uses three-month Treasury bills instead, partly because they provide a consistent measure of cash stretching back more than a century.

Using the best available savings rates, rather than Treasury bills, gives cash a stronger showing. Timing matters too. For investments starting on the first of any month from October 1999 to September 2001, cash beat the tracker over every holding period Lewis could measure, up to 15 or 16 years.

What happens with more recent data?

I applied a similarly demanding test over a different period. My own analysis starts in December 2000, as far back as the relevant MSCI sterling total-return data go. I compared the MSCI UK and MSCI World indices, after a 0.2% annual charge, with cash rolled into a new one-year fix each year. For cash, I used the Bank of England's average one-year fixed savings rate plus an allowance for best-buy accounts.

Over rolling ten-year periods to August 2026, UK shares beat cash 91% of the time. Global shares did so 90% of the time, so going global barely changed the odds.

The period contains only two non-overlapping decades, the same limitation as Lewis's data. The analysis confirms Barclays' result on fresh data rather than replacing it.

Why does time matter?

Ten years is only one horizon. Barclays found that UK shares beat cash in 70% of rolling two-year periods since 1899, rising to 91% over ten years. A 70% chance of beating cash is also a 30% chance of falling behind, which is exactly the risk that makes cash the safer home for money with a date on it.

Even ten years offered no guarantee. Cash still came out ahead in about one period in 11. The percentages are historical frequencies, not forecasts.

And cash has a time problem of its own.

In July 2008, the Bank of England's average one-year fixed savings rate was 6.06%. A one-year fix guarantees that rate for one year only. After that, you take whatever rate is available when you renew.

For money held over 15 or 20 years, that means renewing again and again at rates nobody can know in advance. The same Bank of England average stayed below 2% every month from January 2013 to August 2022. Best-buy savers did better, but faced the same broad decline.

Rates may rise as well as fall. Today's rate cannot be locked in for decades.

How much cash do you need?

When Lewis published his research in 2016, I was sceptical. Cash paid next to nothing then, and I saw little reason to hold more of it than necessary.

My view has shifted. My wife and I are very likely to move house within the next two years, probably to a more expensive area. We also want to travel much more than we have and already have several destinations in mind. Those are foreseeable calls on our money, even if we cannot put exact dates or amounts on them yet.

So I now keep more in cash, though most of my wealth remains invested in shares. This is not a retreat from equities so much as a clearer division of labour.

MoneyHelper, a UK government-backed financial guidance service, suggests three to six months' essential outgoings as a rule of thumb, while wealth manager Hargreaves Lansdown says money you may need within five years should generally be kept in savings rather than invested. Investing that money is a real risk: from December 2000, global shares fell 41% and did not regain their starting level until March 2006.

For retirees, Hargreaves Lansdown suggests keeping one to three years' essential spending in cash. These rules of thumb give you two useful buckets: money for emergencies, and money for foreseeable spending. The harder question is what to do with everything left over.

What is the cost of staying in cash?

In my test, £10,000 invested in a global tracker from December 2000 to August 2026 grew to about £67,600 after charges. Rolled through one-year fixes over the same period, including an allowance for best-buy rates, it reached about £25,000. The global tracker ended with more than two and a half times as much as cash.

A UK tracker reached about £41,800 – or around 1.7 times as much as cash despite no exposure to US shares. US strength helped widen the gap between the UK and global results, while sterling weakness also gave the global result a modest boost.

The lesson is not that cash is bad. It is that once your needs are covered, holding more of it has an opportunity cost that compounds.

Work out what you are likely to need soon and keep that in cash. For money you will not touch for many years, accept the short-term falls that come with shares.

Then look at what is left. If it is still sitting in cash, ask why. If the only answer is that today's rate feels reassuring, that is not enough.

The mistake is letting a one-year rate decide where long-term money belongs.

Back in 2016, French insurance giant Axa (Paris: CS) was known for its complexity. The majority of the company's earnings came from its life insurance and long-term savings business, the health of which was tied directly to interest rates. That began to change under CEO Thomas Buberl, who took over the group in 2016. Buberl's vision for the company was simple. The new boss wanted to turn Axa into a leading global insurer in the “short-tail”, relatively capital-light business of property and casualty insurance (P&C).

One of the main issues with life insurance is its “long tail” business – once the insurer has written the life insurance or annuity policy, it's stuck with the contract for decades, even if it becomes unprofitable. As a result, regulators tend to demand that these firms hold high levels of capital reserves to meet upcoming liabilities and unforeseen developments.

How Axa freed up billions in capital

One of Buberl's first moves was to carve off its US life-insurance arm, Axa Equitable, which freed up billions of dollars in capital for the group to go shopping. Almost as soon as the company announced the transaction, it launched an offer for XL Group, a leading global P&C insurer. Axa paid $15.3 billion for its peer and was instantly catapulted into the ranks of the world's largest P&C insurers. As part of its Vision 2020 growth plan, management continued to exit non-core businesses, de-risking the group's exposure to highly volatile and loss-making segments of the global insurance and reinsurance market and cutting costs.

As a result, the group's revenue mix has changed markedly since 2026. In 2016, before the transformation began, the group reported total revenue of €100 billion, with 50% coming from life and health insurance, and net income of €5.8 billion. By 2022, revenue had fallen 34% to €66.6 billion. However, net income fell just 13% to €5 billion.

Around this time, the group also started to benefit from the dramatic upswing in global insurance and reinsurance prices. Starting around 2019, a combination of inflation and losses has pushed insurers to raise insurance prices globally to offset the added cost of claims.

At the same time, higher interest rates have boosted the returns insurers can earn on the investment portfolios they hold to back up underwriting. Thanks to this double tailwind, insurers have reaped the benefits. Axa's combined ratio, a measure of underwriting profit, fell to just 90.6% in its 2025 financial year, from 99.5% in 2020. Anything below 100% signifies an underwriting profit while anything above signifies a loss. Thanks to this tailwind, Axa's net income rose to €9.8 billion in 2025, on a total revenue of €75 billion. Of that total, €58 billion comprised revenue from P&C underwriting.

The company's next move was to sell its asset-management business. Axa sold this division, Axa Investment Managers (Axa IM), to BNP Paribas for €5.4 billion – 15 times earnings at the time of the deal. The combination of Axa IM and BNP Paribas created an asset manager with total assets under management of €1.5 trillion, giving it the scale to compete in the increasingly competitive asset-management market. Axa immediately gave the bulk of the proceeds from this deal back to shareholders via a share buyback.

Axa's new plan for growth

Axa has changed completely since 2016 and, on 15 September, the group published its new plan for 2027-2029. The new plan builds on the work management has done over the past decade to get the business to where it is today, and the focus is earnings growth. Management wants Axa to reach earnings growth of 7% to 9% on a compound annual basis over the next three years, above the top end of the 6% to 8% target in the previous plan.

To do this, analysts believe the company will have to broaden its base in Europe, notably in the small and medium-sized enterprise sector, while seeking up to €7million a year in cost savings. Overall, analysts at investment bank Berenberg believe cost savings (mostly from AI) will add 1% a year in earnings across the group, a significant figure.

Management is also forecasting higher cash generation from the group's subsidiaries. The plan is to generate €25 billion of cumulative cash over the three-year period, up from €21 billion in the 2024-2026 period. A good chunk of this will flow straight back to investors. Berenberg has the group returning €5.4 billion in 2027 and €5.8 billion in 2028, with the stock trading at a 5.8% dividend yield. Buybacks between 2024 and 2028 could shrink the share count by more than 10%. The total shareholder yield, including dividends and buybacks, is pencilled in at 7.8% for 2027 and 8.4% for 2028.

Based on the bank's estimate of future earnings growth, Axa shares are trading at a forward price-to-earnings (P/E) ratio of eight and a price-to-book ratio (P/B) of 1.59. That looks cheap compared with the group's earnings outlook and plans to return cash.

There is, of course, risk. A soft insurance market, where prices start to fall, could wipe out growth across the business, and a jump in losses could vaporise profit and force the group to postpone returning cash. All insurers face similar risks, which is why they generally carry a lower rating than the rest of the market.

In Axa's case, however, its rating seems too low. Indeed, because Axa's insurance policies are short-tail and reprice every year, the group could quickly adjust to a new environment. As one of the largest players in the global P&C and health-insurance market, Axa shares are worth a closer look at their current valuation.

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

Revolut co-founder and CEO, Nik Storonsky, has often boasted about his plans to take Revolut from a private tech start-up to a banking giant with technology so advanced, other banks would not be able to compete.

In just over a year after receiving its full banking license, Revolut has done just that. It has become the first UK bank to roll out biometric payments, allowing you to make payments at a store using facial recognition only.

I was invited to demo the system - Pay with Smile - at a nearby coffee shop in London. The face recognition technology requires a customer to simply look at a camera at the till point, smile, and 'kerching'. I was told you don’t have to smile if you’re not the smiley type, but you do have to be moving to ensure the camera is capturing a real person and not just a photo of one.

“And what if you have a twin?” I asked. Revolut said the technology is advanced enough to know the difference between them, recognising distinctive features in movement.

A Revolut colleague guided me through the system. He ordered a coffee, looked into a camera at the till, and in around 3 seconds his payment was made. There is no need to have a phone, card or wallet at hand – and in fact, your phone could be at home.

Alex Codina, general manager of merchant payments at Revolut Business, said: “By combining high-performance processing with facial recognition technology, we’ll replace outdated, fragmented tills with a hyper-efficient checkout experience designed to solve consumer and merchant pain points.”

Revolut claims merchants lose around £2,500 a year in technical glitches and that its advanced technology can help avoid losses caused by terminal outages.

For its banking customers, it claims it offers a speedy way to pay, and perfect for when you are out for a run perhaps and choose not to take your phone, forget it, or want a stress free way to pay without digging out your phone from your bag.

Revolut has started the roll out this week, but is yet to announce which retailers will be adopting this new technology.

Would you pay with facial recognition?

If you have a modern smartphone, then you are no stranger to facial recognition technology. But while you may happily use it to unlock your device and open apps, using your face to pay at stores may feel futuristic.

As you may expect, my first question to Revolut was over safety. Sharing biometrics over till points feels risky and could possibly leave you vulnerable to hackers, but Revolut assured me that no data is stored and staff at till points cannot access the information. It comes with high level banking security and similar technology used in Apple products.

I felt safe with this new advanced tech, but whether it is the future of payments is yet to be seen. Merchants would need to purchase a Revolut register, which is being offered at 0% processing fees. But, while it may feel attractive to small independent retailers like Kiss the Hippo, the coffee store where the biometric payments are available, the real game changer will be when the likes of Tesco or Sainsbury's adopt the system.

Who can use biometric payments?

If you have a Revolut account, you can use facial recognition payments where available.

You do not have to have a premium Revolut account, but you must opt in and scan a QR code at the store for first time use, after which you can be phone-less.

There are no costs to use it, but you may be limited to purchases of up to £200 and there will be times when you have a pin prompt, but you do this on the merchant’s screen and do not need your contactless device at hand.

While I was impressed with the tech, I'd like to hear what you think.

Most people expect that if they still have money left in their pension pots when they die, their spouse or children will inherit it.

While you can pass on a pension, you cannot do so solely through your will.

Instead, most people will need to tell their pension provider who to pay their pension to when they die through a form.

Why you can’t leave your pension in a will

Under current rules, you are not able to leave a pension in your will.

This is because pensions are not treated as part of your estate in the same way as your other assets and are therefore not included in the remit of your will.

That means if you mention your pension in your will, your provider is not legally bound by the request. Instead, you will need to fill out an ‘expression of wish’ or ‘nomination of beneficiary’ form with your provider to choose an inheritor.

Pensions will be treated as part of your estate for inheritance tax purposes from April 2027, but you will still not be able to leave it in your will.

That doesn’t mean you shouldn’t mention your pension in your will though.

It is still good practice to name who you want your pension to be inherited by in your will, as well as an expression of wish form, as your pension provider will likely take this into account despite not being legally required to.

How to pass on your pension

To pass on your pension, first and foremost you should check what the specific procedure used by your pension provider is, as some may have slightly different arrangements.

However, broadly speaking, pension providers will usually have a ‘nomination of beneficiary’ or ‘expression of wish’ form that you fill out to tell them who you want your remaining pension wealth to be inherited by.

Your beneficiary can be one person (for example, your spouse), multiple people (like your children or grandchildren), or even an organisation like a charity.

For a defined contribution pension, the beneficiaries will usually be given the choice of what to do with the money. Depending on your pension scheme, they may choose whether they take it as a lump sum or leave it invested and draw an income from it.

If you have a defined benefit pension, you will not have a pot of money left after you die. Instead your specific pension scheme will decide what is paid to your beneficiaries.

Sarah Pennells, consumer finance specialist at Royal London, warned that as pension beneficiaries are worked out from your nomination form, it can be easy to forget who your pension will be paid out to when you die.

“It's important to keep these forms up to date, especially after major life events such as marriage, divorce, having children or entering a new relationship. A form that you filled in 20 years ago may not reflect your current situation,” she said.

Note that this only applies to private or workplace pensions. Under most circumstances, you cannot pass on your state pension after you die.

What happens to an annuity after you die?

Some people choose to buy an annuity with their pension wealth to get guaranteed income in retirement.

If you have an annuity, you should be aware that there are different rules for what happens to it after you die – some annuities pay money out to beneficiaries while others do not.

Pennells said: "If you've already used your pension savings to buy an annuity, what can be passed on will depend on the type of annuity you chose.

“For example, a joint-life annuity can continue paying an income to a spouse or partner after your death, whereas income from a single-life annuity will normally stop when you die unless it includes features such as a guarantee period.”

To make sure you and your loved ones are prepared, you should check what your annuity’s policy on inheritance is and plan accordingly.

It could be useful to produce a short document containing useful information about your financial affairs, which your executor and heirs can easily find after you die.

Pension provider Royal London has put together a template document called “When I’m Gone”. You can include details about which pension provider(s) to contact, as well as the location of your will and your funeral wishes.

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

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

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

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

How inheritance tax thresholds work

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

The problem

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

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

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

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

How talking can reduce an inheritance tax bill

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

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

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

The bottom line: speak to your family about inheritance

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

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

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

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

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

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

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

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

What are the current rates of capital gains tax?

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

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

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

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

Is there support for a capital gains tax hike?

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

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

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

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

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

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

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

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

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

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

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

The trouble with passive investment and index-tracking funds

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

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

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

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

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

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

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

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

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

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

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

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

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

The big issue with wealth taxes

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

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

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

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

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

Why are wealth taxes so popular?

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

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

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

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

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

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

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

Policymakers need to heed the lessons of history

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Do you have to pay tax on other pension income?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How does Monzo’s Aura credit card compare?

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

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

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

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

You can also get 35% off Santander Travel Insurance.

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

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

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

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

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

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

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

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

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

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

Investment platforms offering low interest rates on cash balances

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

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

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

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

What ISA rules are changing?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Source: HMRC FOI (submitted by NFU Mutual)

How the seven year rule applies to gifts

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

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

Source: Gov.uk

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

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

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

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

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

How else to use gifting to lower an inheritance tax bill

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How much will the state pension rise by?

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

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

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

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

Will retirees have to pay tax on their state pension?

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

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

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

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

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

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

How to protect yourself from income tax

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do SIPP platform fees compare?

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

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

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

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

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

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

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

How to find the best SIPP for you

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

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

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

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

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

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

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

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

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

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

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

What are the costs of stopping pension contributions?

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

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

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

What can I do instead of pausing pension contributions?

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

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

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

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

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

How much do I need in my pension?

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

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

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

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

The’ rule of 300’ for retirement

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

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

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

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

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

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

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

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

Income tax on state, personal and workplace pensions

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

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

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

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

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

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

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

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

How to pay less income tax on your pensions

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

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

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

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

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

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

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

Capital gains tax

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

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

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

How to lower your capital gains tax bill

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

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

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

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

Source: HMRC

Income tax on savings

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

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

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

How to avoid paying tax on your savings

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

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

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

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

Inheritance tax

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

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

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

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

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

How to lower an inheritance tax bill

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Are you eligible for a FlexDirect account?

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

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

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

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

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

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

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

Tracking annuity rates

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

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

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

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

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

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

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

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

Across 25 years, that is 2.1% more income.

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

The cost of waiting to buy an annuity

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

Can you split your annuity pot?

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

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

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

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

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

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

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

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

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

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

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

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

Not keeping paperwork

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

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

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

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

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

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

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

Not making the most of employer matching

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

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

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

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

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

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

Not claiming tax relief on pensions

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

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

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

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

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

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

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

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

Transferring a defined benefit pension into a defined contribution pension

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

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

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

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

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

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

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

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

Adding too little into your pot and for not long enough

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

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

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

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

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

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

Assuming you will get a full state pension

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Other differences emerge when it comes to returns and charges.

Should you move a CTF into a Junior ISA?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How to transfer a CTF to a Junior ISA

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

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

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

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

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

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

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

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

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

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

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

Why should the government remove the triple lock?

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

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

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

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

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

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

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

He made no comment about replacing the triple lock.

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

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

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

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

Triple lock under pressure

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

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

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

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

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

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

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

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

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

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

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

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

15 years from retirement? The first steps

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

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

1. Prioritise pension saving

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

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

2. Salary sacrifice – use it before you lose it

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

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

“Not only will they get the tax benefits of salary sacrifice but those savings can still benefit from compounding effects over a period of 15 years, and more if the pot remains invested into retirement,” he added.

3. Inheritances can work harder in a pension

Increasingly, King is seeing people receive inheritances well into their fifties and sixties as parents live longer. If they’re funnelled into a pension at this critical stage, these lump sums can go a long way to securing a comfortable retirement.

“Anyone who comes into a lump sum can take advantage of the substantial annual allowance of £60,000 and even three years of carry forward to turbo-charge a pension pot,” said King.

You can’t pay more into a pension than you earn in the current tax year, though, so if that is limiting, a big lump sum could be drip-fed into a pot over a number of years.

Investment strategies to consider if you’re 15 years from retirement

Investment choices are a growing concern of pension holders in the private sector as the vast majority are now saving into defined contribution workplace schemes – where the saver bears all the investment risk.

“Many people automatically think they should reduce investment risk as retirement approaches. While that can feel more comfortable, 15 years is still a long enough period for a significant allocation to shares and other growth assets,” said Lisa Caplan, director of Charles Stanley direct advice and guidance.

Growth remains important because inflation steadily reduces spending power over time. A pound today will not buy the same amount in 15 years' time; the Bank of England inflation calculator shows £1 of goods and services in 2011 costs £1.52 today as inflation has compounded at an average of 2.8% since then.

With one eye on growing your pot and the other on protecting it, an investment approach that can work well is the ‘three bucket’ strategy, said Caplan.

1. The first bucket contains long-term investments that are intended to remain invested for many years and focus primarily on growth.
2. The second bucket holds investments that aim to provide a mix of income and modest growth. This can act as a bridge between your long-term investments and your spending needs.
3. The third bucket holds cash and cash-like investments that can be used to fund withdrawals to cover your regular spending.

“The biggest mistake I see is becoming too cautious too early,” Caplan said. “With 15 years to go, investors still have time to recover from market setbacks and benefit from long-term growth.”

Another common pitfall is reacting emotionally to market falls. “Investors often move into cash after markets decline but then struggle to decide when to invest again. As a result, they miss part of the recovery and risk seeing their money lose value in real terms because of inflation,” Caplan said.

15 years from retirement – fund and investment trust ideas

With a 15 year time horizon, equities and bonds will still form the basis of most savers’ portfolios. But those in workplace pensions should check they are in an appropriate fund.

For instance, “lifestyling funds” will gradually switch you almost entirely into lower-risk bonds from age 50 or 55 – which can be far too soon, and cause investors to miss out on substantial gains.

Rob Morgan, chief investment analyst at Charles Stanley Direct, said for those happy to maintain an adventurous approach, a good-sized proportion of global equity exposure “makes sense”.

His top picks are:

1. JOHCM Global Opportunities fund

This offers a balanced share portfolio focused on durable businesses with strong balance sheets and consistent cash generation, he said, “which makes it worth considering as a core holding”, said Morgan.

“It can work on its own for those leaning towards being a bit more conservative, or alongside a passive strategy such as a global tracker fund or ETF such as Fidelity Index World or iShares Core MSCI World UCITS ETF,” he added.

2. RIT Capital Partners investment trust

With this investment horizon, Morgan also said it’s worth considering a multi asset approach that spreads risk across various asset classes. “RIT Capital Partners investment trust offers a ‘one stop shop’ across a wide spectrum of assets including selected shares and specialist externally managed funds,” he said.

Troy Trojan fund

For those wanting to keep things more conservative, Troy Trojan fund takes a flexible approach to preserving the real value of wealth against the ravages of inflation, said Morgan.

“This involves blending solid and reliable global companies with diversifying assets such as inflation-linked bonds and gold. The strategy is also available in Personal Assets Investment Trust for those that would prefer to buy shares rather than fund units.”

Don’t forget the power of passive

For those who want a more hands off approach, passive index investing can offer a neat solution – and one that has been endorsed by one of the most famous names in the finance world.

In 2013 Warren Buffett instructed the trustee managing his wife’s inheritance to put 90% of the cash into a low-cost S&P 500 index fund and just 10% into short-term government bonds.

The allocation decision underscores a broader investing lesson that diversification, low fees and long-term market exposure can matter more for building and preserving wealth than complicated portfolios or attempts to repeatedly beat the market.

High earners can now get £500 when switching to one of NatWest’s premier current accounts, which are tailored to the wealthy.

While the offer is one of the best bank switching deals on the market, it is only open to high earners and those with large savings or investments with NatWest.

You need either a minimum income of £100,000 a year (or £120,000 for a joint account), savings and investments of at least £100,000, or a NatWest mortgage of at least £500,000 to qualify for the Premier account.

The new switching offer runs from 2 September and has no fixed end date, but NatWest says it can be pulled at any time.

Tamara van den Ban, managing director of NatWest Premier Banking, said: “We’re here to help our customers feel confident about their money, so they can make the most of the lives they’ve worked hard to build – whether that’s planning for the future, protecting what matters most or experiencing more from life today.

“Our £500 welcome bonus is an invitation for new customers to experience the help and support we can provide.”

What is the NatWest Premier account?

There are three tiers of Premier accounts. The £500 bonus applies when an eligible person switches to any of them.

Customers on all tiers get access to a support service from NatWest’s financial experts who can provide guidance on managing your finances, including on starting investing, tax planning, and mortgages. You may need to pay additional fees for specialist and targeted guidance.

The lowest, free tier is Premier Select. It gives access to 24/7 support from NatWest, fee-free transactions in foreign currencies, and you pay no interest on the first £500 of an arranged overdraft.

The middle-tier Premier Reward account costs £2 a month and gives all the benefits above, along with some extras.

You can get £9 a month in rewards if you pay at least two direct debits per month of at least £4.50 each. You can also earn £1 a month when you log into the NatWest mobile app, and at least 1% cashback at selected retailers when using your NatWest debit card.

The highest and most expensive tier is the Premier Reward Black account.

It costs £36 a month and gives you the benefits of all the previous tiers as well as access to airport lounges, travel insurance, mobile phone insurance, breakdown cover, 25% cashback on tickets to concerts and shows, and discounts at cinemas, and more.

From 1 October, the monthly fee for this account will increase to £39 per month.

Who is eligible for the NatWest £500 welcome bonus?

To be eligible for NatWest’s switching offer, you must meet the following criteria:

• You must have an income of at least £100,000 (£120,000 for joint accounts), or at least £100,000 in savings/investments, or at least a £500,000 mortgage with NatWest
• You must not currently have a NatWest current account as of 2 September
• You must not have already redeemed a different NatWest switching offer
• You must complete a full switch using the Current Account Switch Service (CASS)
• You must pay at least £15,000 into your NatWest Premier account within 90 days of opening the account. This can be done in any number of payments and each payment must stay in your account for at least 24 hours.

If you have met the above criteria, your £500 bonus will be paid within 30 calendar days.

Should you switch to NatWest Premier?

Just because you are wealthy enough to qualify for the NatWest Premier account, it doesn’t mean it is necessarily the best option for you.

Consider which, if any, tier of Premier fits your needs and whether the benefits justify the monthly fee. You could also look at alternative packaged accounts from other banks and compare their benefits.

For example, HSBC is also offering a £500 welcome bonus to switchers who open a Premier Account. This account includes benefits like free travel insurance, preferential rates on loans, digital GP appointments, and more for no monthly fee.

Caitlyn Eastell, personal finance analyst at Moneyfacts said: “NatWest’s new £500 premier switching incentive is a significant move in the battle for affluent current account customers. The headline bonus puts NatWest firmly alongside the most generous premier switching offers.

“For consumers who qualify, the offer makes switching considerably more attractive, particularly because NatWest also bundles in dedicated premier support and financial planning.”

However, Eastell warned the welcome bonus “should be viewed as a sweetener rather than the main reason to switch. Customers should compare the ongoing benefits, eligibility requirements and any fees against their existing bank.”

Santander has launched a new bank switching bonus which is currently the highest-paying deal on the market.

The high-street lender is offering new and existing customers £240 to move banks, but you will need to open both a current account and a regular saver with the bank to qualify.

There are currently six bank switching deals on the market, and Santander’s offer is the highest-paying for non-Premier accounts.

Santander’s switching deal – what’s on offer?

Santander’s £240 bonus is available to new and existing customers. To be eligible, you must do the following:

• Request to switch your account before 7 October using the Current Account Switch Service.
• Pay in at least £1,500, which can be done through one or more payments, within 60 days of requesting the switch.
• Set up at least two qualifying household direct debits.
• Fund a Santander Regular Saver with at least £200. You can either open a new account or fund an existing one, if you have one.

You must do this within 60 days of the initial switch request. You are not eligible if you held a Santander current account on 1 January 2026.

If you qualify, you will receive the cash bonus within 90 days of requesting the switch.

Is Santander’s switching deal worth it?

Rachel Springall, finance expert at Moneyfactscompare.co.uk, says: “Santander’s new current account switching offer of £240 could be an enticing choice for customers who might need a financial boost after the summer holidays. It is one of the highest free cash payments available on a fee-free account, ideal for those who want a simple, straightforward account for their everyday banking.”

Currently, there are six bank switching deals on the market.

HSBC’s switch offer pays £500 and another £290 in cashback, but it is only available for higher earners (£100,000+ salary) or those with at least £100,000 in savings or investments. This means Santander offers the best deal for most customers.

Santander’s regular saver pays the most on the market, a top rate of 8% that comes with a fixed 5% bonus for 12 months. You can save up to £200 each month, and the rate is variable. Springall adds: “Unlike some other regular savers on the market that revert to a flexible saver earning a much poorer return, Santander’s account will continue for another year, paying 3% AER.”

You can also access Santander’s inflation-beating fixed-rate ISAs and its new cashback credit card that returns 3% on eligible everyday spending in the first year.

Santander has also promised to keep its Santander and TSB bank branches open for at least two years, following a significant round of closures which took place earlier this year.

If your local branch is affected, another option is Nationwide Building Society, which is currently paying £175 to customers. While that doesn’t make it a market-leading deal, the building society has pledged not to close any more of its branches until 2030.

Plus, Nationwide ranks as one of the best current account providers in the country, and is well-known for its £100 Fairer Share Payment that it has offered for four consecutive years.

Ultimately, you should pick a bank account that offers you more than just a switching bonus and can actually meet your current account needs.

A Premium Bonds holder has won a £1 million jackpot prize with a bond bought just nine months ago.

The saver, from London, bought the winning bond in January 2026 and has a total holding of £45,500. The winning bond number is 659VC982054.

The second jackpot winner is from Norwich and bagged the £1 million with a bond bought in January 2022. Their winning bond number is 484QT130447 and they hold the maximum total of £50,000 in Premium Bonds.

How many prizes will be issued in September’s Premium Bonds draw?

As well as the two £1 million jackpot payout, almost 100 Premium Bonds prizes worth £100,000 will be handed out in the September draw by NS&I. There will also be 192 £50,000 prizes and 381 £25,000 prizes.

More than 6.5 million prizes worth £497 million will be distributed in the September draw.

A total of 858 million prizes worth £42.8 billion have been awarded since the first Premium Bonds draw in 1957.

Here is the breakdown of all the prizes that will be shared out this month:

Source: NS&I

How to check if you've won in September’s prize draw

The two £1 million winners are notified in person by NS&I’s Agent Million each month.

Winners of the £100,000 and lower Premium Bonds prizes can check if they have won the day after the first working day of each month. For September 2026, that date is 2 September.

You can do this by using the Premium Bonds prize checker app, visiting the NS&I website or via Amazon Alexa.

The prize checker app and website will show you prizes you’ve won that month, anything you’ve won in the previous six draws and any older prizes you haven’t claimed yet.

Make sure you have your bond number or NS&I number so you can access your account.

There is no time limit to claim a Premium Bonds prize so you should check if you’ve won anything before and didn’t realise, even if you bought the Premium Bonds years ago.

NS&I says over 99% of prizes have been paid to winners since draws began in 1957, but there are still 2.8 million left unclaimed.

Does a fresh lick of paint in the kitchen increase the value of the house? Or a heated towel rail in the bathroom? Or an attractive water feature at the back of the garden?

We learned this week that the government is planning to appoint teams of inspectors to visit people's homes, and decide whether the owner has to pay the new “mansion tax”.

An extra levy will be imposed on homes worth more than £2 million, on a sliding scale going up to beyond £5 million.

It is meant to come into force in April 2028, but it is already proving a lot trickier than ministers seem to have realised.

Earlier this year, HMRC said it was hiring hundreds of inspectors to help with the valuation of everyone's home.

They will all have powers to enter a property to assess what it might be worth.

We can see what the authorities are getting at. If you simply rely on previous sale prices, it takes no account of how a house might have been improved, and lots of homes may well slip through the net.

There is a catch, however. It illustrates that while a mansion tax might appeal to the class warriors on the Labour backbenches, it is going to be very difficult to implement in practice.

There are three big problems. Firstly, going through a large house and trying to figure out how much each “improvement” or “feature” has added to its value is a huge task, and one that will take several years, at a minimum, of training before the “value police” are ready to start work.

It is a huge undertaking, from a state machine that can't build a new railway, or reservoir, or any extra houses. It is hard to believe it is all actually going to happen, and even if it does there will be years of delays as there is with every other government project.

A mansion tax could create a legal quagmire

Next, many of the valuations, quite rightly, will be taken to court.

The Office for Budget Responsibility (OBR) gave us a glimpse into the legal train wreck heading towards us earlier this year with a forecast that 20% of valuations would be challenged in court and that 40% of the legal cases would be successful.

The courts are going to be clogged up for years deciding how much individual homes are worth, creating huge backlogs and crowding out time that should be spent on far more serious issues.

Even worse, the top end of the British housing market is now in freefall, in part because of the looming mansion tax.

In Westminster, prices are down by 25%; in Kensington and Chelsea, 15%. Those falls are starting to ripple out into other boroughs and into the leafy commuter suburbs as well.

With those kinds of price declines, homes are going to drop below the £2 million threshold in huge numbers. The inspectors will have to change valuations constantly, and some owners are going to be heading back to court every year to try and get the tax removed.

Finally, the tax will only raise tiny sums anyway. The OBR has already downgraded its forecasts for the amount of revenue it will raise from £400 million in its first year, rising to £435 million by 2030-2031.

But it also warned that revenue would fall by £370 million before April 2028 because of reduced stamp duty, capital gains tax and inheritance tax receipts as households sold or downsized.

In other words, once all the costs are taken into account, the mansion tax may not end up raising any money at all.

All those expensive inspectors, with generous holiday allowances and gold-plated public-sector pensions that will stay on the government's books forever, will have been employed for absolutely nothing.

Those are just the practical details. The government still needs to deal with the moral issues.

What will it do about elderly homeowners, for example, who might not be able to sell a big house, but also can't afford to pay the extra tax on it?

Will it be able to face down the inevitable political backlash?

And given that the top 10% of earners already pay 60% of all the income tax collected in Britain, how can it justify yet more taxes on people who are already paying for most of what the state does?

And if the tax does cost more to implement than it raises in revenues, as it almost certainly will, how can it justify the drain on public finances at a time when the deficit is already soaring out of control?

The tax has not come into force yet. But it is already turning into a disaster.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

What's the current situation with adult social care?

A few years ago a parliamentary committee memorably summed up the adult social care system in England as “unfair, confusing, demeaning and frightening” – and that remains a good summary.

A central problem is the “care lottery” involved in a complicated patchwork of funding rules, means-testing, local-authority decisions and private providers – with families taking up the slack.

Whereas a patient with cancer receives free state-funded treatment on the NHS, someone with dementia must fund long-term care costs themselves if they have assets worth more than £23,250 – so even modestly wealthy individuals can be forced to sell their homes to fund residential-care costs, which can easily top £100,000, or indeed multiples of that for the most unfortunate.

Addressing that unfairness in a way that's acceptable to taxpayers, those requiring care and those eager to protect hard-gained assets is a problem that has so far proved unsolvable.

What about quality of adult social care?

The squeeze on funding for local authorities, which provide social care, has led to a “fragile and fragmented market of providers”, says the Financial Times– leading to even lower pay levels, problems in recruiting and retaining staff and huge variations in quality.

As the population ages, demand is growing – at present only 42% of requests for help can be met. But it's not just about age: half of council care budgets go toward care for working-age adults, whose care needs can last much longer.

Overall, two million people have unmet care needs because they can't afford help, while more than 30,000 died last year while waiting for a social-care package, such as residential care, to be provided.

Under this badly functioning system, unpaid family carers absorb enormous personal costs, while delayed discharges owing to gaps in social care account for almost one in ten hospital beds, adding costs and stress onto the NHS.

What has Andy Burnham announced?

Andy Burnham has reconfirmed Labour's pledge to reform and rebuild adult social care in England via the creation of a National Care Service.

So far, though, that is very much an aspiration, with no fixed plan on how to achieve it – nor a clear picture of what that service will look like.

Burnham has also begun cross-party talks, and last month launched a “big conversation” with the public to get buy-in for whatever funding model is ultimately proposed.

And he has asked Louise Casey, a cross-bench peer, to bring forward delivery of her Independent Commission, begun under Starmer, to the summer of 2027.

Haven't we been here before?

Many times. Ominously, even Andy Burnham himself has been here before. As health secretary in 2009, Burnham floated a national-care scheme to revitalise and fund social care in England.

The Conservatives promptly branded the funding model – a levy on estates – a “death tax”, a label that stuck. But even so, Labour went into the 2010 election with a very familiar sounding policy – the creation of a National Care Service implemented in phased stages.

Under the Conservatives, a series of white papers were promised, but successive PMs failed to take action, with Theresa May's attempt at the 2017 election backfiring spectacularly with voters.

Labour accused her of planning a “dementia tax”; in fact she'd proposed a rather promising state-sponsored equity-release scheme that protected assets up to £100,000.

What are the funding options?

The phrase “National Care Service” suggests a universal NHS-style service free at the point of use and paid for out of general taxation. But the Health Foundation estimates the costs at £18.5 billion a year – and the UK's delicate fiscal position, demographics and low-growth economy make such a scenario highly unlikely.

More money will be needed, either via some form of hypothecated tax, or some form of compulsory social insurance that caps liabilities and pools risks – a model that works well in Germany and Japan. Here, civil servants have produced a model where workers over 34 pay an extra 1.8% income tax (above a £6,240) threshold to fund a national Later Life Care Fund.

Separately, Burnham has mooted scrapping inheritance tax and introducing a 10% levy on all estates, not just the largest 5% or so. Such a system would be simple and potentially raise large sums, but it's a tough sell politically and open to the “death tax” accusation.

So what's the solution?

Britain can't afford a “blank cheque” National Care Service that pours resources into a “taxpayer money hole”, says Eamonn Butler on CapX. But it urgently needs a “targeted safety net against genuine catastrophe”.

The first stage of any resolution will surely draw on the 2011 Dilnot report, says the FT: impose a lifetime cap on individuals' contribution to care costs and raise the assets threshold for making them pay. Such a cap would remove the threat of crushing expense that would overwhelm all but the very wealthy. And it would “create an insurable risk against which consumers could take out private insurance, avoiding having to sell their homes in their lifetime”.

The second plank, says Bloomberg, should be to “make more private provision workable”, for example by more stringent regulation that facilitates transparency and comparability, and by ensuring no one is penalised insuring themselves. “New financial instruments – from auto-enrolment pensions with a social-care component to annuities attached to home equity – could play a role if carefully regulated.”

In terms of funding, there “will be fights over thresholds, taxes and who gets what. So be it. The option Burnham can't afford is the one governments have been choosing for decades: pretending the bill disappears if nobody opens it.”

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The number of individuals liable for dividend tax is estimated to have reached 3.2 million in 2025/26, up from 3.14 million in 2024/25, according to new Freedom of Information (FOI) figures.

The number of people having to pay dividend tax has almost doubled in the six years since 2020, when 1.81 million were liable to pay it.

The spike comes after successive cuts to the dividend tax allowance. The allowance was lowered from £2,000 to £1,000 in April 2023, then halved again to £500 in April 2024.

Around 630,000 individuals were brought into paying dividend tax when the allowance was cut from £2,000 to £1,000, according to the FOI figures obtained from HMRC by wealth management firm Quilter shared exclusively with MoneyWeek.

A further 480,000 were dragged into paying dividend tax when the allowance was cut from £1,000 to £500.

Rachael Griffin, tax and financial planning expert at Quilter, said: “These figures show how dramatically the dividend tax net has expanded in a relatively short period.

“While much attention is given to frozen income tax thresholds, the sharp reduction in the dividend allowance has quietly pulled hundreds of thousands of people into paying tax on investment income for the first time.

"The government has repeatedly said it wants to encourage greater participation in investing, but reducing the tax-free allowance has moved in the opposite direction by increasing both the tax burden and administrative complexity faced by ordinary investors,” Griffin added.

Source: Quilter

How does dividend tax work?

Dividends are paid to you if you own shares in a company. You don’t pay income tax on any dividends if your income is less than the £12,570 personal allowance.

You also receive a dividend allowance which means if you do pay income tax you can earn up to a certain amount before owing income tax on dividends. For the 2026/27 year, the dividend allowance is £500.

The tax rate you pay depends on your income tax band:

• Basic rate - 10.75%
• Higher rate - 35.75%
• Additional rate - 39.35%

As an example, if you received £3,000 in dividends and earned £29,570 in wages in the 2026/27 year, your total income would be £32,570.

Taking your personal allowance of £12,570 off this figure would leave you with a taxable income of £20,000.

As you are in the basic rate income tax band, you would pay 20% tax on £17,000 of wages, no tax on £500 of dividends because of the dividend allowance and 10.75% tax on £2,500 of dividends.

How to protect your dividends from the taxman

You can’t do much about falling dividend tax allowances, but there are ways to lower your dividend tax bill with HMRC.

Use a stocks and shares ISA

Dividends paid on investments held in stocks and shares ISAs are free from tax and don’t take up any of your £500 dividend allowance.

You can put up to £20,000 into a stocks and shares ISA each tax year.

Griffin, from Quilter, said: “Making full use of ISAs remains one of the most valuable planning opportunities available, particularly as the dividend allowance is now just £500.”

Do a ‘Bed and ISA’

If you have investments held outside a tax-wrapper, for example in a General Investment Account (GIA), you could consider transferring them across to an ISA.

The process is known as ‘Bed and ISA’, and involves selling investments in a taxable investment account and immediately buying them back inside a tax-wrapped account.

Investments transferred into an ISA will benefit from tax-free growth.

Transferring assets between spouses

You can transfer shares to a spouse or civil partner who either pays income tax at a lower rate or hasn’t utilised some or any of their dividend allowance.

By doing this, you’re effectively making the most of two sets of allowances.

Ade Babatunde, senior financial planning director at wealth manager Rathbones, said: “Sharing ownership of company shares between spouses or civil partners can allow both parties to utilise their allowances and lower-rate tax bands before higher dividend tax rates begin to apply.”

Consider alternative investments

If you’ve got the risk appetite, you could invest your money in a Venture Capital Trust (VCT).

VCTs are set up to fund younger businesses with high growth potential, and dividends and capital gains on ordinary shares aren’t taxed.

You also receive 20% income tax relief on up to £200,000 held in shares in a VCT, so long as those shares are held for at least five years.

One major drawback to VCTs is that because they invest in early-stage companies, there is a greater risk they could fail and your investments drop in value. For that reason, they can be a good option if you have maxed out your ISA and pension allowances for the financial year.

When you’re planning your retirement, one of the key decisions you’ll need to make is whether you will live in your own home, or spend your golden years renting.

The latter is not a cheap option. Renting in retirement will cost an average of £419,000 as rents are expected to more than double in the next 20 years, according to research from retirement specialist Standard Life.

Data from the Office for National Statistics (ONS) shows that while rents are an average of £1,160 today, this could climb to £2,350 by 2046 if they continue to grow by an average of 3.8% a year.

The high cost means those who plan to rent during their retirement will need to ensure their pension pots support that choice. Despite this, over six million people who expect to pay housing costs in retirement don't know how they'll afford them, according to data from Royal London.

The data showed those who expect to pay housing costs in retirement have an average pension pot of just £34,948, a figure far lower than needed to cover rental costs during a 20 year retirement, let alone pay for other essentials.

Those who describe themselves as being in financial crisis are particularly affected. Nearly six in ten of this cohort say they expect to pay rent or mortgage costs in retirement, compared to just 11% of those who say they are financially comfortable.

Is renting in retirement on the rise?

Despite it being expensive, more people are now renting in retirement as higher housing costs mean buying a home is not possible for some.

Data from the government’s Pensions Commission shows the proportion of households renting privately in retirement has more than doubled in the last 20 years.

Sarah Pennells, consumer finance specialist at Royal London, said: "For generations, reaching retirement often meant reaching the point where housing costs were behind you. But for millions of today's retirees and future retirees, that simply isn't the reality.

"What's particularly worrying is that over six million people who expect to pay rent or mortgage costs in retirement don't know how they'll cover those payments. If you're heading towards retirement and expect to have housing costs, it's important to factor these into your retirement planning as early as possible.”

The true cost of renting in retirement where you are

If you are planning to rent during your retirement, you will need to take a careful look at your pension pot and work out if you can afford to do so where you are as prices vary wildly across the UK.

The most expensive place to rent as a pensioner is London, where the average price of a year’s rent is £28,520.

That works out to £859,000 when over the course of a standard 20-year retirement, factoring in rental price growth.

The region with the second-highest expected renting cost is the South East, where the average for a year is £17,610 or £531,000 over 20 years – much lower than the price in the capital, but still far more than in cheaper regions of the UK.

Royal London’s data shows people in London, the South East and the South of England are also among the most likely to expect to pay housing costs in retirement, with 34% saying they expect to still be paying rent or a mortgage after they retire.

As with house prices, there is a large North-South divide in rental costs as the North of England and the devolved nations are much cheaper than the South of England.

The cheapest region to rent in retirement is the North East of England, where a year’s rent costs an average of £9,670. This amounts to £291,000 over 20 years.

Meanwhile, the second-cheapest region is Yorkshire and the Humber, where the average rent for a year is £10,650 – or £321,000 over a 20 year retirement.

The interactive map below shows the projected cost of renting during a 20-year retirement.

Should you rent in retirement?

While renting in retirement is expensive, there are also some positive sides to renting rather than owning your own home.

“If you decide to rent, then you have the flexibility to move around without the burden of having to sell a home,” said Helen Morrissey, head of retirement analysis at wealth manager Hargreaves Lansdown.

This may mean you can be closer to your loved ones, or you may choose to move to a cheaper part of the country or one that fits your lifestyle better.

Certain maintenance problems with the home you rent will also be the responsibility of the landlord, meaning you will not need to fork to fix a leaky roof, for example.

Additionally, if you do not expect to pay off your mortgage before the end of your retirement, renting can be a more flexible solution and potentially a cheaper option depending on where you live.

There are of course drawbacks, the main one being that the home you rent is owned by your landlord, so you do not have the final say on what happens to the property.

In the worst-case scenario, you may be evicted from your home, though the new Renters’ Rights Act means this is much more difficult for landlords.

If you own your home instead, you will not need to worry about being evicted or getting approval to make changes to your property. Once you have paid off your mortgage, you will have far lower monthly costs too, meaning you will have more money in your pocket each month.

“Going into retirement owning your own home means your day-to-day expenses will likely be lower,” said Morrissey. “You can also use your home to release money either through equity release, or downsizing, should you need it.”

Ultimately, whether you should rent in retirement is dependent on your lifestyle, whether you already own a house, and whether you can afford it with your pension.

Around a million workers are being urged to look out for letters landing on their doorstep in the next few weeks telling them they’re entitled to money from the government.

HMRC is kickstarting a campaign this month to offer top-ups to people who didn’t receive pension tax relief because of the way their workplace pension scheme was administered.

Workers whose occupational pension schemes issue tax relief through a net pay arrangement (NPA) could be entitled to the top-up.

A NPA is when pension contributions are taken out of your monthly pay before tax is calculated. It means you receive tax relief there and then.

Typically, people earning £10,000 or more a year are automatically enrolled into workplace pension schemes, but under an NPA method, those earning between this amount and £12,570, and therefore not paying income tax, aren’t eligible for pension tax relief.

If these same people were in a workplace pension scheme using the relief at source (RAF) method, the employer automatically would claim tax relief from the government to add to their pension and they would benefit from pension tax relief.

Employees have no choice in whether they are signed up to a workplace scheme that uses the NPA or RAF method.

The government is seeking to compensate these lower earners who have been in NPA occupational schemes from 2024/25 onwards and estimates that around one million people are affected, of which 75% are women who may have earned less due to working part time or taking a career break.

The top-ups are worth £70 on average and will be paid by bank transfer.

When will I receive the top-up?

From this month, HMRC will start contacting the one million eligible people via letters in the post or through their personal tax account.

HMRC said these letters or notes on personal tax accounts will explain what people need to do to accept payments, which are expected to start being claimed over the "coming months”.

The letters will be rolled out gradually and into early 2027, HMRC said.

“Real risk” low earners won’t claim free money

Steve Webb, former pensions minister and now partner at pension consultants LCP, warned that people unexpectedly receiving these letters offering them money may think they're a scam and not claim what they’re entitled to.

Webb said: “The process of getting these payments to the right people is going to be incredibly painful and there is a real risk of huge non take-up.

“Most people will not have a clue about this issue and may be suspicious of a letter out of the blue from HMRC offering them free money.”

Webb is urging people to check their post in the coming weeks to make sure they do not miss out.

An HMRC spokesperson said: "We know some people may be cautious about unexpected contact, which is why we provide clear information about what to expect and how to verify the contact is genuine.

“Customers can check a letter is genuine on gov.uk and should only respond via official HMRC channels. We’ll never ask for passwords, PINs or money to be transferred to claim a payment.”

Will I be entitled to a top-up in future years?

The process set up by HMRC is offering top-ups to people who may have missed out on pension tax relief in 2024/25.

Once registered, these low earners are expected to receive the top-ups through a more automated system for future years, if they’re still eligible, Webb said.

HMRC will assess eligibility each tax year and so you may qualify for a payment this year but not future payments.

Nationwide has boosted rates on some of its savings accounts, offering customers an interest rate of up to 4.55% on their cash.

The building society’s one and two-year fixed rate cash ISAs are now paying respective rates of 4.5% and 4.55% AER, up from 4.4% and 4.5% earlier this month.

Its one and two-year taxable fixed rate bonds now have interest rates of 4.5% and 4.55%, respectively, a rise from 4.25% and 4.3%.

It’s the second time this month Nationwide has bumped up rates on its fixed rate bonds and ISAs.

How do the savings accounts work?

Fixed rate cash ISAs

You can open one of the ISAs if you’re 18 or over, a UK resident and you haven’t maxed out your £20,000 annual ISA allowance this tax year.

People under 65 face a £12,000 per year limit on cash ISA contributions from April 2027. The overall £20,000 annual ISA allowance will remain.

If you are a new Nationwide customer, you have to apply for the ISA in a Nationwide branch. You can find your nearest branch using the building society’s search tool.

You have to fund the ISA during the application and can’t open it then top it up later. You can fund one of the accounts through an ISA transfer or via another Nationwide account.

You can withdraw money from one of the fixed-rate ISAs before the end of the term, but would have to pay an early access charge.

At the end of the term, the money from the account is moved to an instant access cash ISA with a lower interest rate.

Fixed rate bonds

Nationwide’s fixed rate bonds can be opened in branch or online if you’re 16 or over and a UK resident with an email address.

Once the fixed rate accounts are open, you can’t access your money until the end of the term. You can save up to £5 million in the accounts – although the Financial Services Compensation Scheme (FSCS) only protects up to £120,000 per person, per banking licence.

Money must be paid into the bond within 14 days of opening it. At the end of the term, your savings are moved to an instant access savings account paying a lower interest rate.

Are the boosted savings accounts worth it?

The headline interest rates on both the one and two-year fixed-rate cash ISAs can be beaten by other savings accounts on the market, based on the latest data from Moneyfactscompare as of 27 August.

AlRayan Bank’s one-year fixed-rate cash ISA pays 4.72% while Vida Savings has a two-year fixed-rate cash ISA paying 4.77%.

You’ll also find better headline rates on one and two-year fixed-rate bonds – AlRayan Bank’s one-year fixed-term bond is paying 4.87% interest while Investec Save’s two-year fixed-rate saver is paying 4.95%.

However, if you want to bank with an established name, Nationwide’s bumper rates on its one and two-year fixed-rate ISAs could be a good choice.

The two cash ISAs are paying higher rates for these types of accounts than the ‘Big Four’ banks – NatWest, Barclays, Lloyds and HSBC.

Nationwide’s one-year fixed-rate bond is much less competitive compared to other options on the market, but still offers the best rate out of the Big Four.

The two-year fixed-rate bond is also not as competitive and you can get a better rate with NatWest which is offering a two-year fixed term savings account paying 4.75%.

Rachel Springall, finance expert at Moneyfactscompare, said Nationwide customers can get in-person support at branches too, something a lot of digital banks don’t provide.

“Customers who find digital banking difficult, such as for accessibility reasons, will need to look beyond top rates to find a brand that can cater to their personal needs,” Springall said.

She added: “The fixed-rate cash ISAs from Nationwide are accessible for savers with either small or larger pots, with its minimum investment limit set at just £1, plus transfers in from both cash and stocks and shares ISAs are [currently] accepted. Those who do find they need their money sooner can even access the ISA funds early, subject to a set penalty.”