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.

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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 what your residential status will be: especially, will you live in your own home throughout your golden years, or spend your retirement renting?

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

While data from the Office for National Statistics (ONS) shows 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 research shows.

The high cost means those who plan to rent into their retirement will need to ensure their pension pots support that choice.

But ONS data shows the average pension wealth for someone aged 65 to 74 was just £145,900 in 2022 – much less than the rental costs over a 20 year retirement.

It means pensioners are at risk of not having enough to pay for their housing costs if they do not own a house and plan to rent when they retire.

Pete Cowell, head of annuities at Standard Life said: “For a growing number of people, housing costs could be the single biggest expense they face in later life, adding many thousands of pounds a year to the income needed to maintain a minimum standard of living.

“While support is available for those on the lowest incomes, many retirees will still need to plan for how ongoing housing costs will be met over the long term.”

Although it is expensive, more people are now renting in retirement. 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.

Cowell added: “As renting in later life becomes more common, planning how those costs will be met is likely to become one of the most important financial decisions people make.

“Whether through savings, guaranteed retirement income products or a combination of both, having a clear plan for meeting those costs can make a significant difference to long-term financial security.”

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.

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

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

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

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

Should you rent in retirement?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When will I receive the top-up?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do the savings accounts work?

Fixed rate cash ISAs

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

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

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

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

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

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

Fixed rate bonds

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

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

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

Are the boosted savings accounts worth it?

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

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

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

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

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

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

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

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

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

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

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

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

How families could be hit

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

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

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

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

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

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

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

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

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

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

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

Source: NFU Mutual

How to lower the impact from a potential triple tax blow

Gifting

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

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

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

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

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

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

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

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

Take your 25% tax-free lump sum earlier

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

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

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

Consider an annuity

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

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

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

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

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

Having sufficient savings is an important step towards financial independence.

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

Can you get full marks in our savings quiz? Test yourself below.

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

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

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

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

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

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

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

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

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

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

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

The risks of a pay rise

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

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

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

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

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

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

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

How to cut your income tax bill

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

The first recommendation is to increase pension contributions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

When you might owe capital gains tax cryptoassets

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

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

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

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

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

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

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

How to report and pay cryptoasset capital gains

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

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

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

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

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

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

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

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

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

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

When you might owe income tax on a cryptoasset

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

Mining

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

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

Staking

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

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

Airdrops

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

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

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

Employment income

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

Allowance for money earned through trading income and miscellaneous income

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

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

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

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

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

Where PensionBee comes into the picture

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

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

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

How PensionBee consolidates retirement pots

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

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

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

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

Profitability is in sight for PensionBee

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

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

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

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

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

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

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

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

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

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

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

Source: ONS

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

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

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

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

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

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

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

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

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

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

How much do you need for a comfortable retirement?

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

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

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

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

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

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

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

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

But what about if your state pension was reduced?

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

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

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

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

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

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

How to prepare for retirement without having to rely on the state pension

Increasing pension contributions

Contributing more to a workplace pension is a good place to start. The total minimum contribution for a UK workplace pension is 8%, made up of 3% from your employer and 5% from you, including some tax relief.

But you can contribute more and some employers will increase their contributions.

If you’re in your 30s, 40s and 50s, consolidating private or workplace pensions can make it easier to keep track of savings and save you money on fees. Be careful to check the features of the pension before you do this though.

Make sure you’re not consolidating one that comes with a guaranteed annuity rate, Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown said.

Guaranteed annuity rates pay out a guaranteed rate. They generally come from older plans and can pay out much more than more modern plans.

Morrissey added: “When looking to consolidate, check whether the [new] provider meets your needs – do they offer the investment choice you want, the educational resources or access to a helpdesk? These can prove extremely important.”

Consider building other investment pots

You can also add money into an ISA, alongside your pension, if you’re after more flexibility in how you can access your savings.

An approach like this can be beneficial for someone who is self-employed and may want to draw on money earlier due to a lack of work and a drop in income.

Morrissey said: “You can benefit from investment growth in a stocks and shares ISA and still access money if you need it – any income taken will also be tax-free. Using this alongside a pension means you still benefit from the tax relief of a pension with the flexibility of an ISA.”

Can you boost your savings?

Make sure you check how hard your savings are working too.

Recent research by savings app Spring revealed £227 billion was sitting in current accounts with over £10,000 in them earning no interest.

If you're starting saving, it's a good idea to put the money into a high-paying easy-access savings account and build up an emergency buffer, which you can use for unexpected expenses, such as a boiler breakdown or loss of a job.

Typically, you should have enough in this account to cover three to six months’ worth of essential outgoings such as your mortgage and bills.

Any spare money after this could be put into a savings account or you could invest it. Research has shown investing over the long-term tends to offer better returns than putting money into a savings account.

But remember, investing means the value of your money can go up or down at any time and there are risks attached. You should generally invest any money for at least five years to allow your investments time to ride out any dips in the market.

If you invest, make sure money held in a general investment account or stocks and shares ISA is actually invested, with not too much held in cash or money market funds.

Claire Trott, head of advice at wealth management firm St. James’s Place said: “Allowing it [money] just to sit in cash or cash-like funds can feel safe but they will have their buying power eroded over time by the increase in the cost of living and inflation.”

Suddenly, it seems, a member of the Tata family – Noel Tata – is back in the driving seat of the gigantic “salt to software” group, which owns Jaguar Land Rover, Air India and Tata Steel, and is India's largest private-sector employer. And not everyone is happy.

Tata Group, India's largest conglomerate has been consumed by boardroom drama for months. Now, though, matters have come to a head, says The Economist. Natarajan Chandrasekaran – chair of the $280 billion group's holding company Tata Sons – has announced he will step down after his term ends next February.

“This is very much the beginning of the Noel Tata era,” one investor told the Financial Times, and it began with a rout. Shares in Tata's listed companies – including its cash-cow IT outsourcer Tata Consultancy Services – dived as investors worried about what lies ahead.

Noel Tata, a half-brother of the group's legendary leader Ratan Tata, who died in 2024, is commonly described as lacking “the stature” of his sibling. Nonetheless, on Ratan's death, he acquired a key role in the 158-year-old conglomerate's firmament when he took over as chair of Tata Trusts – a collection of charitable trusts that majority-own the holding company. That set him on a collision course with Chandrasekaran.

The main cause of the boardroom feud that came to dominate business gossip in the country was over whether to list the Tata holding company – as demanded by India's central bank, which had classified it as “one of the country's largest shadow banks” in 2022, and was pushing for greater transparency.

Noel Tata was set against the move, arguing that staying private meant more freedom to make “long-term strategic bets” and conserve the company's “founding ethos and desire to serve India”.

His critics say his real motive was “to exert more control” so he could set up the eventual succession of the rising generation of Tatas – his 33-year-old son, Neville, and daughters Leah and Maya – before he exits the stage on his 70th birthday in November.

People close to the family dispute these alleged manoeuvres. Certainly, Noel Tata hardly comes across as an aggressively Machiavellian operator, says The Indian Express. Known for “his quiet demeanour, discretion and aversion to public attention”, he has “built his reputation not through flamboyance but steady performance” – making a successful fist of building Trent, the conglomerate's retail arm, and later serving as a director at its aircon arm Voltas and the Tata Investment Corporation.

Will Noel Tata win Tata Group's succession drama?

Some Indians of a more nationalist bent are wary of Noel Tata's international credentials. Although born in Mumbai, his mother Simone Tata hailed from Switzerland and he himself holds Irish citizenship – via his marriage to Aloo Mistry, a member of another prominent Indian business dynasty whose mother, Patsy, was born in Dublin. He also spent much of his early life abroad, including in Britain and France.

Still, after decades of being overlooked for the conglomerate's top jobs, some argue Noel Tata deserves his chance to steer the tanker. He lost out in 2011 when his brother-in-law, Cyrus Mistry, was announced as Ratan Tata's successor – and then again in 2016 “when Mistry was dramatically ousted from the chairmanship” and Chandrasekaran (the first real outsider to lead the group) was installed, says The Indian Express.

But the price paid for this, says Reuters Breakingviews, is yet more turmoil in a conglomerate renowned for its “abysmal record on managing succession” – at a critical time for many of its companies.

It's up in the air whether Noel Tata's family will eventually assume control; meanwhile, the group is rudderless. But “this was a long time coming”, one Mumbai-based investor told the FT. Neville Tata has been “groomed very carefully. I don't think these guys will let go of the opportunity.”

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Households will have a new energy-saving option that they can pickup in the supermarket from next week – plug-in solar panels.

The Iran conflict and cost of living crisis have pushed up energy bills in recent months with Ofgem's price cap remaining high.

Rooftop solar panels are often highlighted as one way of going green and potentially reducing your electricity bills.

But not everyone can afford the upfront cost and many don’t have the roof space or permission to install them.

There will be another option from 27 August though when government changes to energy power regulations go live and shops such as supermarkets and hardware stores including B&Q and Lidl will be allowed to sell plug-in solar panels.

These can be installed on balconies or in gardens to capture energy from the sun.

What is a plug-in solar panel?

A plug-in solar panel is a smaller and less powerful version than a rooftop one.

They are popular in Europe but couldn't be used in the UK until a change in regulations.

Rather than attaching to your roof, you can find a common sunny spot at your home such as a balcony or garden and connect it to your mains via a cable that plugs straight into a typical socket.

The idea is that people in flats or who can’t install panels on their roof such as renters or leaseholders can still try to reduce their energy bills and go solar.

Similar to a rooftop panel, electricity is generated from sunlight.

But there are differences as the plug-in panels can't store power (with the rooftop versions, you can store the power in a special home battery), meaning you need to be home to actually use it as it is being generated.

How much could you save with a plug-in solar panel?

The government estimates that the panels could save households between £70 and £110 on energy per year.

There are other costs though. You will need to purchase the kit, which is estimated to cost between £400 and £600. You will also need a professional tradesperson to install it.

It may therefore take a few years to breakeven.

The savings will ultimately depend on your own energy usage but anything plugged in will use energy from the panel first before drawing it from the National Grid and your main bill.

Is a plug-in solar panel worth it?

The cost of installing a rooftop solar panel starts from £6,000, according to the Energy Saving Trust so a plug-in panel is cheaper to start with.

But there is less capacity for energy savings.

The maximum power of the plug-in panels has been capped at 800 watts.

The website Money Saving Expert suggests that’s the equivalent of two kilowatt hours of electricity per day, while the average UK household uses 7.4kWh.

Another issue is that the panels don’t store energy, so it is best to make sure they are being used while you are at home so you can benefit from the power being generated.

Renters and leaseholders may also need to get permission to install a plug-in panel depending what their rental or leasehold agreements say.

Martyn Fowler, founder of green energy supplier Elite Renewables, said: “The value is highest when you use the electricity as it is being generated. If the system produces a unit of electricity and you consume that unit in the house, you have avoided buying one from your supplier.

“Homes with a steady daytime load will benefit most. Someone working from home is likely to use more of the generation than a property that sits empty all day.”

Orientation matters as well.

Fowler added: “A panel mounted vertically on a balcony will generate less over the year than the same panel at a good angle facing south.

“Plug-in solar is a useful entry point into solar. It will not transform your energy bill, but it can be a low-cost way to reduce grid use and start generating some of your own power.”

NS&I is raising its Premium Bonds prize fund rate from September, taking the total monthly prize pot close to £500 million.

The government-backed savings bank will increase the prize fund rate from 3.80% to 4.35% from the September draw.

NS&I says there will be more than 308,000 extra prizes up for grabs, including 12 additional £100,000 prizes, 27 more £50,000 prizes and an extra 51 £25,000 prizes.

There will also be over 2.3 million £100 prizes in total and the overall monthly pot will rise by £63 million to more than £497 million.

NS&I is also increasing the odds of winning from September, from 22,000 to one to 21,000 to one. The odds were also raised in July.

Caitlyn Eastell, personal finance analyst at data firm Moneyfactscompare, said: “[Premium Bonds] may be particularly appealing to savers who have already used their ISA allowance or are likely to breach their personal savings allowance.

“However, despite the improved odds, they are a game of chance and the 4.35% shouldn’t be mistaken for a headline rate.”

Eastell added: “The best easy access ISAs pay over 4.5% and returns could be even higher if [savers are] willing to lock away their cash.”

Source: NS&I

NS&I boosts rates on savings accounts

In addition to increasing the Premium Bonds prize fund rate and odds of winning, NS&I is also increasing interest rates on 10 savings accounts from today (18 August).

NS&I is boosting rates on its easy-access Direct Saver and Income Bonds savings accounts.

The Direct Saver’s rate is increasing from 3.45% gross/AER to 3.75% gross/AER while the Income Bonds savings account’s rate is rising from 3.4% gross/3.45% AER to 3.69% gross/3.75% AER.

Interest is paid yearly on the Direct Saver. You can hold a minimum of £1 and maximum of £2 million in the account.

Interest is paid monthly on the Income Bonds account. You need a larger £500 to open it and can hold a maximum of £1 million.

NS&I is also hiking rates on its one, two, three and five-year fixed-rate Guaranteed Growth and Guaranteed Income British Savings Bonds.

Rates are increasing by between 0.09 and 0.15 percentage points.

Source: NS&I

Are the savings accounts worth it?

If you like the idea of your money being 100% backed by the Treasury, the Direct Saver and Income Bonds could be more appealing now their rates have increased.

Money in most savings accounts is protected under the Financial Services Compensation Scheme (FSCS) in case your provider collapses, but only up to £120,000.

However, even with your money being backed by the Treasury through the Direct Saver and Income Bonds, you can get more competitive rates via other easy-access accounts on the market currently.

Santander’s Edge Saver account is paying 6% interest, if you open a Santander Edge or Santander Edge Explorer current account. The accounts come with respective monthly fees of £3 and £17.

If you don’t want to pay a monthly current account fee, you could also put your money in a cahoot Sunny Day Saver and get 5% on balances up to £3,000, or the Chase Saver has an interest rate of 4.5% on balances up to £3 million.

NS&I’s changes to their fixed-rate British Savings Bonds have made them best buys, correct at the time of writing.

Based on MoneyWeek analysis of Moneyfacts data, the one, two, three and five-year bonds are all in the top 10 for their respective terms, however, the top rates on the market are currently paying up to 5%.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “Given that this is the most popular term to fix your savings over, [NS&I is] clearly hoping to persuade rate-chasers to make a small compromise in order to secure a rate that’s 100% backed by the Treasury.

“There are better deals on offer elsewhere – especially if you are fixing for longer – so if the rate is the most important thing to you, you can find a more rewarding home for your money.

“However, getting so close to the most competitive deals could be enough to tempt some savers into the NS&I fold.”

Tax-free allowances let you shield some of your savings and investments from the taxman.

For instance, you can put £20,000 into tax-sheltered ISAs each tax year, and you won’t have to pay tax on any interest or investment returns earned on it.

Each allowance has its own rules, and they can be difficult to keep track of – but making the most of them each tax year can mean you keep more of your money.

Isabella Galliers-Pratt, senior investment director at Rathbones, said: “Once you’ve used ISA and pension allowances, the question becomes: where does my next pound go? The right route depends on time horizon, risk tolerance and personal tax circumstances.

“It’s important to balance the understandable desire to shelter investments from tax with the risks involved. Paying tax isn’t a bad thing – it typically means your investments have performed well.”

ISA allowances

An individual savings account (ISA) is a savings or investment account where you do not have to pay tax on the interest or returns you make.

All adults in the UK can put up to £20,000 a year into ISAs. There are four types, but the main two are the cash ISA and the stocks and shares ISA.

You don’t have to pay tax on the interest you earn in a cash ISA. This differs to traditional savings accounts where the interest can be taxed if it exceeds savings allowances.

Stocks and shares ISAs also differ from General Investment Accounts (GIA) as the investments you hold in an ISA are not liable for capital gains tax or dividend taxes.

This makes ISAs incredibly useful for people who want to reduce the amount of tax they pay on their savings and investments.

While you can put up to £20,000 into ISAs each tax year, the allowance operates on a “use it or lose it” basis, meaning the moment a new tax year starts, you can no longer use the previous year’s allowance.

That’s why it’s recommended you use as much of your ISA allowance as you can each tax year. This will protect your interest or returns from the taxman.

Savings allowance

While interest earned on savings not held in an ISA is taxable, you can earn some tax-free.

For instance, you can earn a certain amount of interest tax-free via the personal savings allowance (PSA). The threshold is £1,000 of interest for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers have no PSA.

You do not have to pay any tax on income, including from savings interest, that falls within your £12,570 tax-free personal allowance.

If you have an income of less than £17,570 a year, you also get an additional tax-free savings allowance known as the starting rate for savings.

This is worth a maximum of £5,000 and you lose £1 of it for every £1 you earn above the personal allowance.

Once the interest earned goes above the threshold for your tax band, you will start to pay tax on your savings.

You can do a rough calculation of how much interest you will get in one year by taking the interest rate of your account and working out what that is as a percentage of your savings.

If this ends up being higher than your savings allowance, consider ways to reduce your tax liability – potentially by moving your savings into an ISA or using another allowance.

If you’ve used up your savings allowances, you could consider Premium Bonds, a savings vehicle run by the government-owned National Investment and Savings (NS&I).

Unlike savings accounts, Premium Bonds do not pay a set level of interest. Instead, you could potentially win tax-free prizes, worth between £25 and £1 million, in the monthly prize draws.

Each £1 you hold in Premium Bonds gives you one entry into the draw, and you can save up to £50,000 in them. As the prize draw is random, prizes are not guaranteed, but the more you have saved in them, the more likely you are to win.

Pensions allowance

Most people can put a maximum of £60,000 into their pension each year while benefitting from tax relief from the government.

This is lowered to £10,000 if you start to take your pension in multiple lump sums (a one-off lump sum of up to 25% does not count), take an annual income from your pension, or take your entire pension in one go. This is known as the Money Purchase Annual Allowance (MPAA).

The annual tax-free total includes contributions made by you, your employer, and the tax relief from the government.

You can also make use of unused allowances from the previous three tax years, meaning if you haven’t put any money into your pension for the past three years, you could put up to £240,000 into your retirement pot in a given tax year.

Galliers-Pratt at Rathbones said: “If you’ve only maximised your ISA, it’s worth taking another look at your pension. The annual allowance is £60,000, and the three-year carry forward rule allows unused allowances from previous tax years to be topped up in one go. For higher earners, the associated tax relief can be particularly valuable.”

Capital gains tax allowance

Capital gains tax (CGT) is a tax you pay on the profit you make when selling assets. In terms of investments, you may need to pay some when you sell your stocks and shares held in a General Investment Account (GIA).

All UK adults have a tax-free CGT allowance of £3,000 regardless of their tax band.

It can be difficult to predict whether the gains you realise from your investments will breach this allowance as how much your investments will grow cannot be perfectly calculated.

To be on the safe side, consider transferring your investments into an ISA to ensure they are not taxed.

One way to do this is through a process called “Bed and ISA”, where you sell investments held in a GIA and buy them back immediately inside an ISA. Most major platforms are able to do this for you, but you can do it yourself if you wish.

You may have to pay some tax when transferring the investments as you are selling them and then buying them back, but they will be shielded from any further tax once they are inside the ISA.

If your ISA allowance is already used up, there are some things you can do. You only need to pay CGT at the point of sale, meaning if you are not in a rush to get the money, you can wait until the next tax year to sell your shares when the allowance refreshes.

Galliers-Pratt said: “GIAs offer flexibility, but income and gains are taxable. Making full use of annual capital gains and dividend allowances, and carefully timing realised gains, can help keep tax bills under control.”

Dividend allowance

UK adults also get a dividend allowance that allows you to be paid up to £500 in dividends before paying tax.

Dividends above this threshold are taxed at 10.75% for basic rate taxpayers, 35.75% for higher rate payers, and 39.35% for additional rate payers.

The exception to this is if any dividend income falls within your £12,570 personal allowance, which is not taxed.

You do not pay any tax on dividends paid from investments in your ISA, meaning if you are expecting more than £500 in dividends a year it may be a good idea to prioritise holding these investments in your ISA.

Transfer money to spouse

There are certain tax benefits available if you’re married or in a civil partnership and you share your finances.

Galliers-Pratt said: “Couples can effectively double their ISA, dividend and CGT allowances. Transfers between spouses are typically tax-free, making this a simple but often overlooked planning opportunity.”

Every UK adult gets the allowances listed above – they are given to an individual, not a family or household.

That means that if you share your finances you can effectively enjoy a £40,000 ISA allowance, meaning you can protect more of your savings or investments from the taxman.

As for capital gains tax or dividend tax, you can carefully plan who holds which investments to keep money within the tax-free allowance. The same principle can be applied for cash savings.

If you or your spouse have an income below the £12,570 personal allowance and the other is a basic rate taxpayer, you can also get up to £256 worth of tax relief a year through the marriage allowance. This allows one partner to transfer £1,260 of their personal allowance to the other, which can mean the couple reduces the amount of income tax they pay overall.

IHT gifting allowance

Each tax year, the ‘annual exemption’ means an individual can give away up to £3,000 worth of gifts without them being added to the value of their estate for inheritance tax purposes.

Any unused part of this allowance can be carried forward to the next tax year, but only for one year. That means if you did not give any gifts in the previous tax year, you could give £6,000 in gifts this year.

The small gift allowance allows you to give up to £250 per person each tax year as long as you have not used another allowance on them. Birthday and Christmas gifts given from your regular income are also exempt from inheritance tax.

You also get gift allowances for weddings and civil partnerships. It is £5,000 if the recipient is your child, £2,500 if they are your grandchild or great-grandchild, and £1,000 if they are anyone else. The wedding/civil partnership allowance can be used alongside the £3,000 annual exemption.

Regular payments to another person (for example to help with the living costs), are exempt from inheritance tax as long as you can afford the payments after your own living costs, and they are paid from your regular monthly income. This can be used along with any other allowance apart from the small gift allowance.

Any gifts beyond these allowances are subject to the ‘seven year rule’. This states that assets given away are still counted as part of your estate for inheritance tax purposes, and therefore potentially taxed, unless seven years have passed.

Children's ISA allowance

If you have children, you can pay into their Junior ISA (JISA) and it will be protected from tax.

You can put a maximum of £9,000 into a JISA each year, but be aware that the money held in a Junior ISA is legally your child’s.

Consider Venture Capital Trusts (VCTs)

If you have used up all of your available allowances and still want to invest in the most tax-efficient way possible, you could consider looking into Venture Capital Trusts (VCTs) or the Enterprise Investment Scheme (EIS).

Both these schemes are designed to encourage investment into early-stage companies in the UK by offering tax relief, but they can be complicated and riskier than traditional investments so it is important to know how they work before you invest in them.

In the 2026/27 tax year, you can get 20% tax relief on investments through VCTs (down from 30% in the 2025/26 tax year) and 30% relief on investments through the EIS.

Galliers-Pratt said: “VCTs and EIS continue to attract wealthier investors seeking tax advantaged exposure to UK growth companies. Risk, time horizon and complexity vary significantly, so suitability should drive decisions.”

Nationwide has increased interest rates on its fixed term savings accounts and ISAs, with customers now able to get up to 4.7% on their cash savings.

The higher rates are available if you lock your money away to grow for a fixed amount of time, with no withdrawals allowed.

For the ISA products, any interest earned during the term will be tax-free.

Richard Stocker, Nationwide’s head of savings, said: “We’re pleased to launch new higher rates on our fixed rate cash ISAs and bonds, while continuing to ensure customers can access the same rates whether they open their account online or in branch.

“With the UK’s largest branch network, backed by our Branch Promise, we’re committed to ensuring customers who prefer face-to-face service aren’t disadvantaged. Many of our branch-accessible products are among the highest-paying available from a major high street provider, reflecting our commitment to combining choice, value and support for savers.”

The improved interest rates make the accounts some of the most attractive among major high street savings providers, but they are not the highest available on the market.

What are the new rates?

Interest rates for Nationwide’s new fixed-term ISAs range from 4.4% to 4.7% depending on the amount of time you choose to lock your savings away for.

As the account is locked for a fixed-term you cannot access it whenever you like without paying a penalty.

If you make any withdrawals from the account, you will need to pay an early access charge equivalent to between 60 and 300 days’ interest depending on the term of your ISA. Your ISA will also be closed.

There is a 14-day grace period after opening the account where you can withdraw your cash without paying a penalty.

You must be a UK resident aged 18 or over to open one of these accounts. Any interest you earn from cash held in an ISA is entirely tax-free.

The table below shows the new fixed-rate ISAs and their interest rates:

Source: Nationwide, 14 August

The new interest rates for non-ISA accounts are slightly lower than the new rates for the ISA products.

These accounts can be opened by UK residents aged 16 and over and no withdrawals are allowed at all 14 days after opening the account.

A table showing a full list of the new rates can be found below:

Source: Nationwide, 14 August

Customers can access the exact same rates whether they open the accounts in-branch or online.

Are Nationwide’s new savings accounts any good?

Nationwide’s new, higher rates on fixed-term accounts are decent, but are still not the best on the market.

The top 4.7% rate on the five year fixed-rate ISA is just shy of the market-leading rate of 4.85% from Leek Building Society and Vida Savings.

This is the case for all of the new ISA accounts, which each offer a good interest rate, but none are the absolute best in the market.

As for the non-ISA savings accounts, there is a much bigger gap between Nationwide's rates and the market leaders.

The table below shows Nationwide’s new rates compared to the market leaders.

Source: Moneyfactscompare.co.uk, 14 August. Calculations based on £25,000 lump sum investment.

Nationwide customers may be happy to miss out on a slightly lower interest rate considering other perks offered by the building society – for example, the ability to visit bank branches.

Nationwide has promised not to close any more branches until at least the start of 2030, in contrast to the prevailing trend of branch closures.

Nationwide has also offered a £100 Fairer Share bonus to millions of eligible customers each year since 2023.

Rachel Springall, finance expert at Moneyfacts, said: “While they might not be market-leading rates overall, savers who would prefer to place their cash in a fixed account over the longer term, with a provider that offers an in-branch service, will find them competitively priced against other high street brands.

“Customers who flock to Nationwide can benefit from in-branch face-to-face support, which is ideal for those who may have accessibility issues, plus, its current account range is well worth considering due to the variety of cost-saving add-ons. When it comes to finding the best savings accounts, it’s always important to shop around and keep any nest egg as tax-efficient as possible, such as by using an ISA.”

Millions of households face further water bill rises to fund £3.4 billion worth of investment in the network.

The regulator Ofwat has provisionally approved a package of funding to increase capacity, provide cleaner drinking water and upgrade treatment sites.

However, it means bills are set to rise by up to £43 a year between 2027 and 2030 for many customers in England and Wales.

The hikes are not yet confirmed and are going through a consultation phase, before any final approval is made in December.

The rises come in addition to previously approved increases to upgrade the network between 2025 and 2030.

Helen Campbell, executive director for delivery at Ofwat, said: “We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.”

Which water firms are increasing bills?

Customers of the following five water firms are set to see their bills rise over the three-year period:

Source: Ofwat

Water firms say they need to increase customers’ bills to replace pipes and reduce leaks across the network, provide water to more people and businesses and because of heavier rainfall which can lead to more flooding and loss of water from storm overflows.

However, recent rises have been met with criticism from households and campaigners following water supply issues and pollution in rivers and seas.

Kierra Box, water campaigner at environmental group Friends of the Earth, said: “Our rivers and seas are chock full of filthy sewage and chemicals, which have seen next to no improvement despite recent bill hikes.

“Now ordinary people are being asked to foot the bill once again to pay for decades of water company inaction on upgrading our crumbling water infrastructure. It’s daylight robbery.”

Customers with Anglian Water, Dŵr Cymru Welsh Water, Hafren Dyfrdwy, Northumbrian Water, South West Water, United Utilities, Yorkshire Water and SES Water will face no further bill rises between 2027 and 2030.

How you can cut your water bill

It’s worth regularly checking your water bill and comparing it to earlier bills to see if there has been a spike.

If there has been, you might have a water leak in your home that means you’re using a lot more than you usually do and will need to get fixed.

You could also switch to a water meter which charges you based on your actual usage rather than the rateable value of your home. Most homes can have a water meter installed for free.

However, a water meter can see your bill rise as well as fall. The Consumer Council for Water (CCW), which represents water and sewerage customers, has a calculator you can use to find out if you might save money with a meter.

Typically, single-person households or homes with a high rateable value tend to benefit the most.

You might also be eligible for the WaterSure scheme which caps your water bill.

You’ll need to have a water meter, be on certain benefits such as Universal Credit or Pension Credit and have a medical condition that means you have to use extra water or have a large number of people living in your household.

Plenty of water firms offer customers free or cheap water-saving gadgets such as leak-detecting strips and water-efficient shower heads too.

Advice website Save Water Save Money has a tool on its website where you can enter your postcode and find out what gadgets you’re eligible for.

There are smaller practical steps you can take to save water around your home, such as making sure your dishwasher is full when using it and taking shorter showers.

Stamp duty land tax is another cost to factor into the equation when buying property in England or Northern Ireland.

It is applied at different rates depending on the value of the property, if the home you’re buying costs more than £125,000. That threshold rises to £300,000 for first-time buyers purchasing a home worth £500,000 or less.

The average house price in England was £292,095 as of May 2026, according to the latest data from HM Land Registry, meaning the typical mover would pay around £4,604 in stamp duty.

A first-time buyer would not have to pay any stamp duty for the same transaction.

Regional house price variation means the average amount of stamp duty is drastically different depending on where in England you are moving to, with analysis of home buyer enquiries across England in the first half of 2026 by Zoopla showing a stark North-South divide.

Around half of all first-time buyers in London, the East of England, and South East England have to pay stamp duty, compared to just 10% in the north of England as property prices in these regions eclipse those in the north.

The story is not much different for home movers. While almost all of those buying their next home in England have to pay some stamp duty, the amount they pay on average is very different.

The amount you’ll pay in the north of England will typically be between £1,500 and £2,200, while in some parts of the south, stamp duty bills can rise to almost ten times this.

Richard Donnell, executive director at Zoopla, said: “For home movers, stamp duty is a near-certain cost wherever you live – and in Southern England it runs to five figures. Six in ten property purchases are made by existing homeowners.

“When the cost of moving becomes a meaningful friction, some of those moves don't happen, especially with lower levels of house price inflation in recent years across southern England.”

The analysis did not include the data for buyers in Northern Ireland.

Average stamp duty costs by region for first-time buyers

If you’re buying your first home and it’s worth £500,000 or less, you could benefit from first-time buyers' relief. This means you’d only pay stamp duty on any portion of the property value over £300,000, at a rate of 5%.

The difference in house prices across regions means many first-time buyers in certain parts of England may not need to pay any stamp duty on their first home, or pay relatively low amounts.

Only 2.1% of first-time buyers face a stamp duty bill in the North East, Zoopla said, and for those who do, the median stamp duty bill is £3,750.

In Yorkshire and the Humber, 3.8% of first-time buyers pay stamp duty. This rises to 6.2% of first-time buyers in the North West and 9.3% in the West Midlands. The median bill in all of these locations for first-time buyers is £2,500.

As average house prices in London, the East and South East of England are much higher than elsewhere in the country, first-time buyers’ relief is less generous. In each of these regions, over 50% of first-time buyers have to pay stamp duty.

This percentage peaks in London, where around 80% of all first-time buyers pay some stamp duty.

The average stamp duty bill for a first-time buyer in the capital is £8,750, while it’s £5,000 in the South East, and £4,500 in the East of England.

Average stamp duty costs by region for home movers

Almost all home movers will have to pay stamp duty when they buy their next house – but the amount they have to pay depends on property value.

The North East region has the fewest home movers paying stamp duty, though a majority still pay it (63%). The amount paid is relatively low, though, with an average bill of £1,500.

It reflects how the North East is the cheapest region in England for house prices, as the average house costs just £163,933, according to HM Land Registry, more than £100,000 less than the average for England.

Between 82% and 92% of home movers pay stamp duty in the other northern regions, the Midlands, and the South West.

The highest average stamp duty bill among these regions is the South West, where the typical home mover will pay £5,000.

These numbers steeply rise in London, the East and South East of England. The typical home mover will pay around £10,000 in stamp duty in the East of England, £11,250 in the South East, and an eye-watering £20,000 in London.

Almost all home movers pay stamp duty in these regions too.

How stamp duty is paid

Stamp duty is due in England when the price of the home you are purchasing is above the tax-free threshold.

Home movers have to pay stamp duty on properties worth over £125,000 and the amount you pay depends on the price of the property. The table below shows the rates at which it is levied.

If you already own a residential property and are buying a new one, you’ll usually have to pay 5% on top of these stamp duty rates, if it means you’ll own more than one home.

First-time buyers have a larger tax-free threshold of £300,000, and pay slightly different rates of stamp duty. These are shown in the table below.

You will have to pay the full stamp duty amount to HMRC within 14 days of buying your property.

After years of being told to spend our pensions last because they could be handed down free of inheritance tax, a new rule coming in from next April flips that guidance on its head. From 6 April, 2027, most unspent pensions passed on will be included in the estate for inheritance tax (IHT) purposes and could be taxed at 40%.

The move has triggered a big change in behaviour, with many over-55s (the earliest you can currently take your pension) withdrawing more of their money sooner rather than later, often to help out younger generations. Experts are cautioning about knee-jerk financial decisions, however.

Michelle Holgate, director and wealth manager at RBC Brewin Dolphin, said: "The inclusion of pensions in estate calculations for inheritance tax purposes from April 2027 is already reshaping how clients and advisers are approaching planning conversations.

“For some retirees, the instinct to act quickly by drawing down a pension and gifting the proceeds to children is understandable, but there are a number of important considerations.”

Record pension withdrawals

In the 2025/26 tax year, £22.4 billion in taxable payments was withdrawn from pensions flexibly – marking a new record, according to HMRC. This has increased by £3.8 billion in the previous financial year (2024/25). It is also up by £7.1 billion since 2023/24.

Much of this money is being given away to younger generations as gifts during their parents or grandparents’ lifetime. More than half of first-time buyers received financial help from family in 2025, for example, amounting to a total of £8.3 billion, according to research by estate agency Savills.

At the same time, just over two thirds (67%) of parents and grandparents already funding private school or university costs say the inheritance tax change is motivating them to provide further financial support during their lifetime, a separate survey of 1,010 people in May 2026 by Rathbones found.

“More clients are choosing to help children and grandchildren now – whether that’s supporting housing, education or other financial needs – rather than waiting for assets to pass on death,” said Ross Coombes, senior financial planning director at Rathbones.

“For many, the ability to see the impact of that support during their lifetime is a key motivation, alongside the tax considerations.”

Gifting – things to consider

1. Care costs

Before taking any action, experts said it is important to be realistic about your retirement needs and health so you can plan around how much money you are likely to need during your lifetime.

Giving away lump sums may cause issues further down the line if you need to rely on local authority support to meet care costs. The rules on ‘deliberate deprivation of capital’ may mean that the local authority may seek to recover their extra costs from you or those you have made the gift to.

Nick Clark, chartered financial planner at Lubbock Fine Wealth Management, said: “If you make large gifts or spend your tax-free lump sum too quickly, you cannot get that money back later in your retirement when you might need it most – and you may face undue tax liabilities during your lifetime.”

2. Income tax

Pulling large amounts from your pension to avoid your loved ones paying an IHT bill tomorrow could leave you with a big income tax bill today.

“While up to 25% of any withdrawal may be tax-free, the balance is added to your other income in that tax year. For some this may mean they pay 40% (or 45%) on some or all the taxable amounts [of the pension withdrawal],” said Sean McCann, chartered financial planner at NFU Mutual.

Becoming a 40% (or 45%) taxpayer has other knock-on consequences, such as a reduction in the tax-free savings allowance of £1,000 to £500 if you become a 40% taxpayer and complete loss if you move into the 45% band, he added.

Some of the other consequences of moving up a tax band include paying a higher tax rate on dividend income (if you have used your £500 a year dividend allowance) and the loss of the marriage allowance (if your spouse or civil partner claimed it) if you’re no longer a basic rate taxpayer.

If the taxable pension lump sum together with your other income means you breach £100,000 of taxable income per year, you begin to lose the tax-free personal allowance. “In which case, anything between £100,000 and £125,140 is effectively taxed at 60%’’, McCann said. This is known as the 60% tax trap.

Taking more than the 25% tax-free allowance will also trigger the Money Purchase Annual Allowance, restricting future gross annual contributions to a maximum of £10,000.

3. Inheritance tax

Inheritance tax is one of the most feared but least understood taxes. The rules can be tricky to navigate so it may be worth speaking to a professional financial adviser, but there are some key things to remember.

First up is the seven year rule. ‘’Lump sum gifts remain in the estate for seven years – they effectively ‘eat’ the £325,000 tax-free allowance first. The reduction if you die between years three and seven only applies if more than £325,000 gifted’’, said McCann. In some cases, earlier gifts also need to be reviewed. Ensuring the history of gift making is properly analysed is essential and easily overlooked.

Gifts from regular income, which don’t impact normal standard of living, are free of IHT immediately. McCann said many people are buying annuities and giving away excess income, “in the knowledge they can stop the regular gifts if their circumstances change’’. Keeping good records of the gifts are essential, though.

You can also give away up to £3,000 each tax year and carry forward any unused allowance for one year, via the annual exemption. Used consistently it can make a meaningful difference, provided clear records are kept, Tony Cockayne in the disputed wills and estates team at law firm Michelmores says.

Marriage and civil partnership gifts can be exempt, but only within set limits: £5,000 from each parent, £2,500 from each grandparent or great-grandparent, £2,500 between the couple, and £1,000 from anyone else.

The gift must be made before the ceremony and conditional on it taking place, so leaving it until afterwards risks losing the exemption, Cockayne warns.

Thousands of households living near new or upgraded electricity pylons and power lines are set to start receiving an energy bills discount worth £250 a year.

The government has revealed the first locations where outdated electricity infrastructure will be upgraded, with households living close to these projects eligible for money off their bills.

The scheme is due to start in the first half of 2027, with most eligible households getting an automatic discount on their electricity bill every six months via their electricity supplier.

It is understood up to 50p a year will be added to all energy bills to fund the initiative.

Michael Shanks, energy minister, said: “Upgrading Britain’s electricity grid is a vital part of how we deliver secure, homegrown energy and unlock economic growth across the country.

“It is a moment of national renewal – upgrading what was built largely in the 1960s for the modern age to bring down electricity bills for households across the country.

“It’s vital we build again as a country and we are determined those communities which host pylons should benefit, which is why we’re bringing down the energy bills of those hosting this vital national infrastructure.”

Who is eligible for the discount?

Households who live within 500 metres of the new or upgraded electricity infrastructure, such as pylons and power lines, will be eligible for the Bill Discount Scheme.

The government expects between 120,000 and 160,000 homes to receive a discount through the scheme over the next 10 years.

However, the locations where the updates will be carried out are being released in waves. The first 43 locations where these upgrades are planned to take place have now been released by the Department for Energy Security and Net Zero (DESNZ).

England

• Bramford to Twinstead – East Anglia
• Norwich to Tilbury – East Anglia, and East of England
• Eastern Green Link 3 - converter station – East of England
• Eastern Green Link 4 - converter station – East of England
• Sea Link - converter station – East Anglia
• Grimsby to Walpole – Yorkshire and the Humber, and East of England
• North Humber to High Marnham – Midlands
• Brinsworth to High Marnham – Yorkshire and the Humber, and the Midlands
• Chesterfield to Willington – Midlands
• North London Reinforcement – London/ South of England

Scotland

• Banniskirk Hub 400 kV substation and HVDC converter station – North Scotland
• Cambushinnie 400 kV substation – North, and central Scotland
• Fort Augustus Substation 400 kV Upgrade – North Scotland
• Spittal - Loch Buidhe - Beauly 400 kV overhead line – North and North West Scotland
• Beauly - Peterhead 400 kV overhead line – North, and North East Scotland
• Carnaig 400 kV substation – North Scotland
• Hurlie 400 kV Substation – North East Scotland
• Kintore - Tealing 400 kV overhead line – North East Scotland
• New Fanellan 400 kV substation and Converter Station – North Scotland
• Creag Dhubh – Dalmally 275 kV overhead line – West Scotland
• Edinbane substation – West Scotland
• Broadford substation – West Scotland
• Skye 132 kV overhead line reinforcement – West Scotland
• Netherton Hub – North East Scotland
• Tealing - Westfield 400 kV overhead line – Central, and East Scotland
• Bingally 400 kV Substation – North Scotland
• Greens (New Deer 2) 400 kV substation – North East Scotland
• Lewis Hub – West Scotland
• Emmock 400 kV Substation – North East Scotland
• Crarae 275 kV Substation – West Scotland
• Coalburn Substation – Central Scotland
• Mark Hill Substation– South West Scotland
• Stranoch OHL and Substation – South West Scotland
• Chirmorie – South West Scotland
• Branxton Substation – South East Scotland
• Sanquhar Substation- South Scotland
• Denny to Wishaw 400 kV Reinforcement (DWNO) – Central Scotland, and South Scotland
• Eastern Subsea HVDC Link from Westfield to South Humber (TGDC) (EGL4) – East of Scotland
• Kincardine North – Tealing 400 kV Substation (TKUP) – East of Scotland
• Kincardine North 400 kV Substation (LWUP) – East of Scotland
• Kincardine North – Wishaw 400 kV Reinforcement (DWUP) – Central Scotland and East of Scotland
• Gala North – Harker Area 400 kV (CMN4) – Scottish Borders

Wales

• Pentir to Trawsfynydd – North Wales

If you live within 500 metres of the above locations, you may start receiving a discount on your energy bills from early 2027.

Some of the 43 projects in this first wave have not yet received planning consent or are still going through an appeals process though. Households will only qualify for the Bill Discount Scheme after construction has started on them.

How will the discounts be applied?

Most qualifying households will automatically receive the discount.

Some households, such as those on commercial meters, may need to apply for the discount. The government or Ofgem will contact you if you need to take action.

Discounts will be applied to households’ electricity bills by their supplier every six months.

Why is the government updating the network?

The government wants to update the network as most of it was built in the 1960s.

The network is being upgraded to handle a higher capacity of energy, including from renewable energy produced by solar panels and wind farms.

The government also says upgrading the network will reduce the UK’s reliance on imported gas and lead to cheaper energy bills for consumers.

It comes as ministers look to tackle higher energy bills more broadly for households, including removing VAT on electricity bills from October which is expected to take £45 off the yearly price cap.

Inheritance tax (IHT) receipts are on the up and expected to rise further as more estates are dragged into HMRC’s net.

The government raked in £8.5 billion in inheritance tax receipts in 2025/26, with the Office for Budget Responsibility (OBR) forecasting the tax take will increase to almost £15 billion by 2030/31.

The watchdog says rising equity and house prices, frozen tax thresholds and the impact of policies announced in the 2024 Autumn Budget, namely unused pensions falling under the scope of IHT from April 2027, will, in part, cause the rise.

It means families may want to take steps to ensure their estate’s eventual IHT bill is as low as possible.

Unfortunately, many are still making six costly mistakes, says Clare Moffat, pensions and tax expert at retirement firm Royal London.

1. Not knowing the implications of cohabiting vs. marrying

Every person receives a £325,000 tax-free threshold, known as the nil-rate band. Any portion of the estate over this threshold could be subject to IHT.

For example, if you died and your estate was worth £300,000, there would be no IHT liability.

If you have a husband, wife or civil partner and you die, any unused nil-rate band is passed to them, taking their threshold up to a potential £650,000.

If a property is being passed to children or grandchildren, there is an additional residence nil-rate band of £175,000 which can be transferred as well, potentially taking someone’s IHT-free allowance to £1 million.

However, these bands can only be transferred if you’re married or in a civil partnership, rather than if you’re cohabiting with someone.

Moffat says: “For me, this tops the list of mistakes that people can make if they're in a long-term relationship.

“This means unmarried couples are potentially missing out on a total of £1 million in inheritance tax exemption.”

2. Not making the most of exemptions during your lifetime

There are a host of exemptions and allowances which mean you can gift money during your lifetime and it won’t fall into your estate for inheritance tax purposes.

For example, you get a £3,000 annual exemption each year. If you didn’t use it all in the previous tax year, you can carry the unused allowance forward to the next – but only for one tax year.

You can also donate £250 cash gifts to as many people as you want per tax year, unless you have used another allowance, like the annual exemption, on that person.

You can also gift an unlimited amount of money, so long as it is made out of ‘surplus income’ – that is money from pensions, rent or dividends – and it doesn’t reduce your standard of living.

Gifting money out of surplus income could become a useful way to reduce inheritance tax liabilities when unused pensions fall under the scope of IHT from April 2027.

Moffat says: “Gifting during life is not for everyone but for people who know that they will have more than enough to live on when they're retired, the benefits are that it can help family when they need it most, be stopped at any time and you don’t need to worry about the seven-year rule.”

The seven-year rule means you can give away as much of your estate as you like during your lifetime, and if you live for another seven years the gifts won’t be subject to IHT.

3. Not keeping records

Keeping detailed records of any gifting throughout your lifetime will make it easier for the executors of your will to evidence it when they have to pay the IHT bill.

A lot of people don’t do this. Research from financial firm Canada Life found 54% of over 55s who had given a financial gift in the previous seven years had kept no record of it.

Executors need to fill in the IHT400 form upon someone’s death to report the full value of their estate. The IHT403 form has to be filled in alongside it to disclose lifetime gifts.

Delays in this form-filling process can mean a longer wait for probate to be granted and can increase the risk of queries from HMRC, prolonging the closure of the estate.

4. Not having important conversations

IHT disputes among families are on the rise, so having honest conversations with loved ones has never been more important.

This can prevent legal costs racking up and delays in probate being granted, leaving you unable to deal with the estate.

Moffat says: “Having good, open conversations about gifts or what a person's wants and wishes are for what's to happen after their death could prevent costly legal action at what is a difficult and emotional time for family, friends and loved ones.”

5. Forgetting the £2 million taper

The residence nil-rate band starts to reduce by £1 for every £2 your estate is worth more than £2 million.

Once someone’s estate reaches £2.35 million, the £175,000 residence nil-rate band is lost completely. A surviving spouse completely loses their residence nil-rate band once their estate breaches £2.7 million.

Moffat says: “For people who might be close to this bracket it's important to know this as they'll need to keep an eye on how much their total estate will be worth.

“They could take steps to reduce it to below £2 million using some of the options to gift during their lifetime, meaning the residence nil-rate band is available again.”

6. Not considering where inheritance tax should be paid from

If you make a larger gift which is not covered in the gifting exemptions and exceeds your inheritance tax allowance, for example to a child or grandchild to buy a house, and then die within seven years, IHT could be owed on that gift.

The beneficiary of the gift may not be able to pay this bill if it comes unexpectedly, the gift is tied up in property or has already been spent.

To reduce the risk of this, the donor of the money could take out a ‘gift inter vivo’ life insurance policy. This would cover the cost of the eventual IHT bill for the beneficiary, should you die within seven years.

Typically, these policies pay out less over time, as taper relief is applied to the IHT liability depending on when a gift was made.

For example, if you make a larger gift and die less than three years later, it would be taxed at 40%, but if you die six to seven years later, the rate drops to 8% on the gift.

Younger people faced with historically high housing prices and ongoing cost of living pressures may be hoping an inheritance will help them out.

Nearly one in four (23%) Gen Z (born between 1997 and 2012) say they are not prioritising retirement saving because they expect to inherit money or property.

This view is also common among Millennials (born between 1981 and 1996), with one in five (20%) of this generation saying the same, according to a Standard Life survey of 6,000 people conducted in June 2026.

Grandparents who have benefited from house price increases and may be enjoying bumper pensions, and who are worried for their younger loved ones’ financial prospects, could feel pressure to give away their homes to grandkids now, in an attempt to reduce the risk of them paying inheritance tax later.

Experts have said it’s trickier than just handing over the keys, however.

How much can I give away free of inheritance tax?

To quickly recap on the key inheritance tax rules – every homeowner has two inheritance tax-free allowances.

You have a nil rate band of £325,000 and there is a residence nil rate band of up to £175,000 when a family home is passed to direct descendants, including grandchildren, though this second allowance is tapered for estates above £2 million.

Married couples and civil partners can inherit each other’s allowances, meaning up to £1 million may be passed on by them after death before IHT becomes due.

Also, most gifts a person makes during their lifetime are exempt from inheritance tax – but the person must survive for seven years after giving it (these are known as ‘potentially exempt transfers’).

A gift can be money, property or possessions – anything that has value. A gift must reduce the value of the estate and you must include any loss incurred as part of the gift. For example, if a person sells their house to a child for less than it’s worth, the difference in value counts as a gift.

An outright gift is where value is transferred to another individual without conditions.

Losing legal control

Many people assume giving away their home – often one of their most valuable assets – is a straightforward way of reducing inheritance tax. The reality is often far more complicated.

Legally there are a number of things to consider.

When the original owner gives their property away, they lose legal control over it. This is true whether the original owner remains living in the property or not – but several factors mean it can be especially tricky if they continue to reside there.

Laura Walkley, partner and head of the private client department at TWM Solicitors LLP, said: “Even where there is complete trust between family members, circumstances and relationships can change over time. In a worst-case scenario, the original owner could lose their home.”

Four key scenarios could put the person giving away the property at risk, Walkley pointed out; disputes, debt, divorce and death.

1. The donor and recipient could fall out, and the recipient may decide to evict the original owner or to sell the property.
2. The recipient might also need to borrow against it, exposing the property to claims by creditors.
3. If the recipient goes through a divorce, the property may be vulnerable to claims for financial provision by a former spouse.
4. If the recipient dies before the person who made the gift, unless suitable arrangements are put in place, the property will pass under the recipient’s will or intestacy, potentially ending up in the hands of people the donor never intended to benefit.

Inheritance tax property gifting rules

Giving your home away while continuing to live in it is also one of the biggest inheritance tax misconceptions – it doesn’t automatically mean your loved one avoids inheritance tax.

Shaun Moore, tax and financial planning expert at financial advice firm Quilter, said: “If you gift a property but still benefit from living there, HMRC will treat it as a 'gift with reservation of benefit'. This means the property would still be counted as part of your estate for inheritance tax purposes.”

To avoid this, you would typically need to pay a full market rent to the new owner, plus your share of the bills. This creates its own complications and could generate an income tax liability for the recipient, who would also need to declare that rent on their annual tax returns.

You do not have to pay rent to the new owners if you only give away part of your property and the new owners also live at the property.

There’s normally no inheritance tax to pay if you move out and live for another seven years.

Capital gains tax problem

Grandparents with more than one property who want to give one away to a grandchild could also find there may be capital gains tax implications if the property is not the giver’s main residence.

Only a person’s private residence is exempt from capital gains tax. “So, if I gifted a buy-to-let, for example, the gift is viewed as a disposal for CGT purposes that realises any gain made,” said Moore.

This triggers an immediate CGT bill. Even if you receive no money for the property, you must pay capital gains tax on the difference between what you originally paid for it and what it is worth on the day you gift it.

Care costs

Permanently giving away your home could also create headaches if you come to need care in later life. You won’t be able to sell your home or use equity release, for example, to unlock some of your housing wealth to pay for your care.

At the same time, under deprivation of assets rules, local authorities could scrutinise gifts made later in life if they believe assets have been transferred primarily to avoid care costs.

Consequently the council may be reluctant to pay for your needs or even demand money back from the grandchild you gave the property to.

Alternatives to grandparents giving away property

Before taking the huge step of giving away your home (or another property) to your grandchildren, it is important to establish whether gifting property before death is even necessary.

Tom Kimche, financial adviser at Netwealth, said: “Outside of property, there are several other ways to gift which could be a better fit during your lifetime.

“For example, beyond the annual £3,000 gifting exemption, gifts from surplus income can often fall outside the scope of IHT if properly structured and documented.

“Larger gifts can also leave your estate for IHT purposes if you survive for seven years after making them.”

Structure is another important consideration. Gifts can be made directly or through relatively simple structures such as bare trusts.

“If you would like greater control and asset protection, discretionary trusts or Family Investment Companies (FICs) may be worth considering, though they add cost, complexity and additional tax considerations,” said Kimche.

Insurer Admiral Group (LSE: ADM) is among several firms which earlier this year saw their share price slump because of fears that AI-powered rivals could capture most (or all) of their business. However, since then many of these stocks have bounced back, with investors deciding that such fears are overhyped.

Admiral Group's shares fell by 14% in January after US firm Lemonade, which uses AI to process claims, launched a cheap policy for self-driving cars. While the policy was aimed at US consumers, it fuelled fears about AI being used to undercut traditional insurers.

Investors also fretted that the better driving record of autonomous vehicles compared with those steered by people could reduce the need for car insurance. Some analysts, such as AJ Bell's Dan Coatsworth, wonder whether car insurance will eventually be purchased by car manufacturers rather than by individual drivers.

How Admiral Group is using AI to cut costs

Yet even if such fears come true in the very long run, it's worth noting that full self-driving for individual cars (as opposed to a relatively small number of taxis currently on the streets) is at least a decade away from mass adoption. In any case, Admiral Group has itself been using AI and digitisation to cut costs and give it an advantage over its main rivals.

Earlier this year, Admiral Group also bought Flock, a technology firm it had been working with. The purchase gives it full access to, and ownership of, Flock's technology, which uses AI and telemetry (the process of collecting data from remote sources and passing it to a receiving system) to judge how well people are driving.

Meanwhile, Admiral Group has been taking steps to diversify its business by branching out into household, travel and pet insurance. While these areas currently make up only a small proportion of overall profit, they are growing at an extremely rapid rate, which should improve the group's medium-term prospects.

Meanwhile, sales almost tripled between 2021 and 2025, and are forecast to keep growing over the next few years. While profits have been more volatile, they have increased since 2021. Admiral boasts strong margins, with a double-digit return on capital employed. This has allowed the group to raise dividends to record levels. The stock's valuation also looks attractive at 15 times expected 2027 earnings and a dividend yield of just under 5%.

Admiral Group's share price has plenty of momentum behind it, having beaten the overall UK market over the last one, three and six months. It is trading well above its 50- and 200-day moving averages, and has also been one of the best performers in the FTSE 100 over the last six months. I suggest that you go long at the current price of 3,772p at £1 per 1p. I would put the stop-loss at 2,800p, which would give you a total downside of £972.

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

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

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

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

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

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

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

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

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

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

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

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

What is changing?

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

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

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

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

What is staying the same?

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

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

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

Can you close your account?

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

Do you dream of giving up the day job and enjoying the freedom that would bring? You’re not alone. But many don’t want to wait until retirement age winter years to kick back. Can the FIRE movement help?

FIRE - financial independence, retire early – is a personal finance strategy that involves extreme investing and frugality during your working life in order to enable early retirement and financial freedom. In theory.

The concept was first established in the US in the 1990s, and encourages a series of tactics that have the potential to allow someone to give up work in their 40s.

So, how does FIRE work and can it really help you stop work sooner and 'retire' comfortably?

What types of FIRE strategy are there?

There are number if ways you can approach a FIRE strategy. These include:

• ‘LeanFIRE’ requires strict frugality and living on a bare minimum budget to achieve your goals faster;
• ‘FatFIRE’ means putting significantly larger amounts away in the hope of a more luxurious retirement;
• ‘BaristaFIRE’ strives for an early retirement funded by a healthy income-generating investment pot, topped up with a part-time or low-stress job.

Katharine Photiou, managing director, workplace savings at Legal & General (L&G) says the approach that appeals to most people is likely the third, because it offers maximum choice for less sacrifice.

“We go from birth to nursery, into primary school, then secondary school, university or further education, then work... there’s all this structure and process. There’s no sense of freedom.”

She says the true benefit of FIRE-related movements is raising awareness of money matters.

“They shift the conversation from being one of ‘when can I retire’ to one of financial freedom. And anything that gets people thinking about their finances – especially encouraging youngsters to engage with their finances sooner – is positive.”

If FIRE taken to the letter feels extreme, she says thinking about the kind of life you want to live, what makes you happy or how much is enough are healthier conversations.

“At its heart, FIRE is about control, flexibility, choice and having options. Having a career break, reducing your hours, starting your own business or taking a sabbatical, these are all positive.”

What can the FIRE movement teach you?

Louise Matthews is an advertising copywriter who lives in North London. She stumbled upon the Rebel Finance School – which runs courses to help people better manage their money (and advocates the FIRE movement) – on Facebook.

“At first the group felt quite aspirational, and at times annoying,” she says. “People were talking about having a lot of money and it didn’t feel aligned to my situation. I almost left a couple of times. But since participating in the course, I’m finding it more helpful – plus a lot more people have joined who are just starting out and have debt questions.”

Matthews was self-employed for over a decade before taking a full-time job two years ago, seeking financial security as freelance life was looking more precarious.

“My partner started his own business about five years ago and hasn’t been able to contribute much to the household bills, so it’s pretty much all on my shoulders.

The couple doesn’t have a mortgage (they rent from a private landlord), nor any real savings besides a £3,000 nest egg set aside for their daughter. Matthews has around £50,000 saved into a pension.

“Finances-wise, we’re in quite a bit of debt, which was my impetus for doing the course. I have a personal loan with around £11,000 still outstanding (it was £25,000 so I’ve paid quite a bit off over the past two years), and another £14,000 on interest free credit cards.”

One lesson the course teaches is to try and put away £1,000 into an emergency fund before proactively paying off any debt.

Like many Brits, even though she’s only 42, she’s feeling the consequences of not starting sooner.

“I grew up with a mentality that money is fun money – ‘you only live once’ – that has made it hard to get out of debt. I used to say ‘yes’ to everything and worry about it later, hence having lots of interest-free credit cards,” she says.

Financial independence, or freedom, for Matthews isn’t about giving everything up to retire in her 40s, but about building better habits for a financially ‘freer’ future.

“What I’ve learnt is that [my lifestyle] isn’t sustainable. I don’t want to be in debt anymore. So my priority is to work hard to get out of it.”

Why investing earlier is so important

L&G’s Decades Ahead research estimates around nine million people aged 25-54 are currently not on track for an adequate retirement, taking into account basic needs, current income and housing costs.

Starting early and taking small steps beyond the bare minimum (like the 8% auto-enrolment through a workplace pension) has such a greater impact than thinking about saving huge amounts, says Photiou.

“A 27-year-old putting in just an extra £30 a month, at state pension age would have an additional £100,000. Just invest as early as you can, and stay invested.”

Alex King, founder of personal finance education platform Generation Money says it’s worth bearing in mind that, traditionally, the FIRE movement came from the US, so to beware guidance may be aimed at different audiences.

Done well, he says FIRE can deliver real freedom, but it relies on strong earnings, careful planning and navigating risks like inflation, market volatility and longevity.

Is FIRE for you?

There are limitations to such strategies.

Having a reliable income is a basic starting point. Being employed obviously helps, because of the employer contributions on offer.

It’s more challenging if you have dependants, be they children or elderly parents, says Photiou.

Anyone renting or paying off a mortgage has further outlay – especially high if they live in London or another major city.

“FIRE has clear appeal but works best for a specific group,” says King.

“In the UK, it favours higher earners who can save aggressively and benefit from higher pension tax relief, while keeping spending in check. At its core, it’s a simple mix of disciplined saving and smart use of tax wrappers like ISAs and pensions.”

So while the dream may be to kick back and relax for the next 40 years, the reality of ever achieving that looks quite different.

Recent years have thrown a series of cost-of-living challenges, with the majority of people undersaving and underinvesting.

Rules of thumb around optimal savings rates vary but assuming 8%-12% for a moderate retirement – based on a ‘normal’ retirement age, anyone hoping to retire sooner needs to do some serious budgeting.

In Australia, they suggest a 15% contribution rate, while in the US many suggest a ‘half your age’ savings rate (if you’re starting age 20, save 10% of your salary; if you’re starting at 30, 15%; those starting at 40 should save 20% and so on).

But these frameworks or ‘rules’ are blunt instruments, overlooking a multitude of factors.

Traditional retirement plans talk about a U-shaped expenditure path, with more outlay at the beginning, followed by a period of lower outgoings, which may pick up again if long-term care has to be factored in.

Photiou says: “The Australians call them the go-go years, the slow-go years and the no-go years.”

But if you’re looking at FIRE, you’ll likely be wanting more go-go, and less slow-go. So Photiou suggests a higher proportion of working life salary will be required.

Like the sound of FIRE?

L&G have kindly crunched some numbers for MoneyWeek using certain assumptions such as starting work age 22 and using the minimum, moderate and comfortable lifestyle costs as estimated by Pensions UK in its Retirement Living Standards.

Almost half of all adults in the UK struggle with financial literacy. Many do not understand the three key concepts – compounding returns, inflation, and risk.

Without understanding these concepts, building financial independence becomes harder. Indeed the rising levels of young people not in education, employment or training can be linked back to poor numeracy skills in schools.

A landmark report by former minister Alan Milburn found around one million young people (one in eight) are NEETs, and this number is rising.

That presents a “huge national challenge”, says Lizzie Gaisman, chief executive of The Richmond Project, a charity founded by former prime minister Rishi Sunak to champion numeracy.

One of the factors contributing to this rise is a lack of confidence with numeracy, Gaisman tells Kalpana Fitzpatrick, digital editor-in-chief, on the MoneyWeek Talks podcast.

“We all believe – and now hopefully our research underscores – that confidence with numbers and what that means in terms of people’s daily life and finances, is an absolutely critical driver of social mobility for people.

“Without it, it’s really hard to find opportunities, to make the most of opportunities, and the downside risk is also really strong for those who don’t have that core conceptual understanding [of finance].”

Gaisman says issues like the rising number of NEETs in the country are always complex with many different root causes, but adds: “I do feel very strongly – and I wouldn’t be in this job if I didn’t – that numeracy and financial literacy are sitting really at the heart of that web for our young people.”

Why do Brits have poor financial literacy?

There are major disparities between the financial literacy of different groups in the UK. Research by The Richmond Project shows there are large socioeconomic, age, and gender gaps that are leaving people without the financial education they need.

Gaisman says: “We’ve got quite a big challenge in front of us as a country, and that’s particularly acute for groups who have already got quite a lot to contend with.”

There can be many reasons people do not have the financial education they need. Gaisman notes that a lack of confidence in maths plays a key role.

“Our research shows if you’ve got poor financial literacy, you are four times as likely to say maths was your least favourite subject at school. There is an element of what we know to be quite a negative emotional association with maths or with your confidence around maths that’s playing a role here.”

She adds that for things to change, there needs to be a cultural shift to make people more comfortable with basic numerical concepts to boost financial confidence and literacy.

There is also an inter-generational challenge. “We know that if your parents don’t feel that they have the tools that they need to manage their financial life, it is really hard for you as a child to absorb those skills in your home life because you're not seeing the role-modelling.”

One way to help bridge this gap is by introducing more financial education in schools. The Richmond Project has already partnered with the Department for Education to help children learn more about these concepts in their classrooms.

“The big three things [compounding returns, inflation, and risk diversification] are transformational for people to learn and we’ll be testing the curriculum because it’s not only the ‘what’, it’s also the ‘how’ you’re taught as a child that makes a big difference.”

For more on why Britain needs higher levels of financial literacy and more, listen to the full episode of MoneyWeek Talks with Lizzie Gaisman on YouTube or wherever you get your podcasts. You can also catch up with our previous podcast episode with Rishi Sunak, talking about how his charity wants to help change financial education.

About the podcast

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

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

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

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

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

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

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

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

Who can open Santander’s new fixed ISAs?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The table below shows the breakdown of prizes in August:

Credit: NS&I

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

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

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

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

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

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

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

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

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

Indigo Point, Great Camanoe, British Virgin Islands

A modern estate with three properties surrounded by landscaped gardens. There are no corporate or personal income taxes, or capital gains or inheritance taxes to pay. 2-bedroom main villa, 1-bedroom owner’s cottage, 1-bedroom guest cottage, pool, 2 boat slips, 4.4 acres.

Price: $5.5m Hamptons 020-8618 4551

Bolivia Mount, The Dhoor, Lezayre, Isle of Man

A distinctive property built in 1820 and surrounded by formal gardens and woodland. The Isle of Man operates a low-tax regime with low fixed income-tax rates and no capital gains, inheritance or wealth taxes. 6 bedrooms, 3 bathrooms, 3 receptions, 42.3 acres.

Price: £6.95m Knight Frank 020-7861 1065

Seaside Drive, Guana Cay, Abaco, Bahamas

An ocean-side residence featuring bright interiors with vaulted beamed ceilings, wood floors, floor-to -ceiling windows and an open-plan living area. The Bahamas operates a zero-tax jurisdiction with no personal or corporate income taxes, capital gains, wealth or inheritance taxes. 3 bedrooms, 3 bathrooms, gardens, tennis court, 2.1 acres.

Price: $4.8m Bahamas Sotheby’s International Realty +1 242 367 5046

Courtil Brock, St Peter Port, Guernsey

A fine Regency villa built in 1810, surrounded by landscaped gardens that include an English oak planted by the first owner in 1812. It has 12-foot high ceilings, grand fireplaces, shuttered sash windows, panelled walls and French doors leading onto the south-facing terrace. Guernsey levies a flat 20% personal income tax, and there are no corporate, capital gains, inheritance or wealth taxes to pay. 5 bedrooms, 6 bathrooms, 3 receptions, library, cinema.

Price: £4.9m Savills 01481-713463

Ordino, Andorra

A mountain home in Ordino in the Pyrenees. Although not strictly a tax haven, there are no wealth, inheritance or capital gains taxes to pay. The house has beamed ceilings and a partly covered terrace for outdoor dining. 4 bedrooms, 4 bathrooms, wine cellar.

Price: €3.15m Lucas Fox +376 775 077

Derry Farm, La Route Du Francfief, St Brelade, Jersey

A restored country house with modern bright interiors that retain original features, including marble fireplaces. The gardens include a stream and a swimming pool. Jersey imposes no capital gains, inheritance or corporate taxes, and has a fixed income-tax rate of 20%. 4 bedrooms, 3 bathrooms, 2 receptions, library, 2-bedroom self-contained cottage, 1-bedroom flat.

Price: £7.75m Knight Frank 01534-877977

Shoreview Point, West Bay, Cayman Islands

A renovated home in a gated community, with its own dock on a canal leading out to the ocean. The interiors have marble floors, large picture windows and French doors leading onto the garden and pool. The Cayman Islands has a “tax neutral” status and levies no corporate, income, capital gains or property taxes. 4 bedrooms, 4 bathrooms, reception.

Price: $3.75m Savills 020-7016 3740

Lorne House, Castletown, Isle of Man

A grand Georgian estate, which was originally the official residence of the island’s lieutenant governor. The property has landscaped gardens, orchards and paddocks and a restored walled garden overlooking Castle Rushen, a medieval coastal castle. The Isle of Man operates a low-tax regime with low fixed income-tax rates and no capital gains, inheritance or wealth taxes. 8 bedrooms, 5 bathrooms, 4 receptions, 6.5 acres.

Price: £6.85m The London Broker 020-7193 9969

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Inheritance tax (IHT) has long been dubbed Britain’s most-hated tax, despite only affecting a small chunk of the population. That’s changing though – more people are on track to be hit by the 40% levy in coming years.

Rising house prices and frozen inheritance tax thresholds mean more families have and will be brought into the IHT net each year, known as fiscal drag.

The issue is set to worsen when pensions are included in the estate for inheritance tax from April 2027.

In the tax year 2023/24, 4.72% of UK deaths resulted in an inheritance tax charge, acording to latest HMRC data – an increase of 0.10 percentage points to the previous year. The proportion of estates paying inheritance tax is now the highest it has been since 2006 to 2007, when it was 5.96%.

A total of 30,400 deaths in the UK led to an IHT charge, with the average bill for IHT-paying estates standing at £231,000. Inheritance tax receipts in that period reached £7 billion, up 5% compared to the previous year.

Inheritance tax raised £8.4 billion in 2024/25 for the taxman, the Office for Budget Responsibility (OBR) said. It expects this to increase to £14.7 billion in 2030/21 due to factors such as the fiscal drag, the £2.5 million cap on 100% agricultural property relief and business property relief which came in in April 2026, and making pensions as part of an estate.

With more people facing inheritance tax in the future, here's how can you plan ahead now.

Can you make use of gifting allowances?

The standard inheritance tax threshold is £325,000, and this can be raised to £500,000 if you give your home to your children or grandchildren – provided your estate is worth less than £2 million. There are ways to reduce an inheritance tax bill though, such as through lifetime gifting.

Giving gifts can reduce inheritance tax liabilities as, if done right, they won’t be included in the estate. There are a number of allowances, such as the annual exemption, which lets you give a total of £3,000 of gifts each year without them being added to the value of your estate. You can give the whole £3,000 to one person, or divide it among different people. If this allowance wasn’t used in the tax year, it can be carried forward to the next – but only for one tax year. There are also gift allowances for weddings and civil partnerships.

Significantly larger gifts given during your lifetime could also potentially be exempt from inheritance tax. Known as the seven year rule, if you live for seven years after giving a gift, no IHT is due on it – unless the gift is part of a trust. The inheritance tax rate tapers off after three years – so even if you die within those seven years, the rate your loved one has to pay on the gift could be less than full whack (40%). The problem with the seven year rule is you likely won’t know your life expectancy, nor how much money you will need in the future, for example to pay for care.

You can also give away £250 per year to as many people as you like, known as the small gifts exemption, as long as the recipient hasn’t already benefited from the annual exemption that year.

Other gifting allowances also apply – you can give as much away as you’d like in regular payments to another person as long as you do not leave yourself short and the money is from monthly income.

If you can afford to, gifting during your lifetime could mean less of your money is subject to inheritance tax in the future. Plus, it could mean you get to see how your hard-earned money makes a difference to your loved one’s life. Though, it could be worth getting advice, as there are nuances to rules to be careful about.

Don’t avoid the inheritance conversation

Avoid talking about money, politics and religion at the dinner table, that’s how the unwritten rule goes. Conversations about inheritance may feel uncomfortable, but having these discussions are crucial.

Speaking about your plans for your estate while you’re alive means you can communicate your wishes to loved ones directly and address any concerns.

You can prepare a side letter explaining how you have arranged your will, which could help avoid disappointment or disputes after your death. It can reduce the risk of any nasty financial surprises while they’re grieving, and give them the opportunity to understand your decisions.

Make sure you keep the paperwork

Keeping a paper trail is important when it comes to inheritance tax.

If you’re in the position to give away your money, then make sure you keep a record – and put it in a safe place. Planning ahead is all well and good, but if HMRC comes knocking, your loved ones may need to show evidence.

At the same time, keeping a record of financial and personal details for after you’re gone could be incredibly useful for your loved ones after you die. Royal London has put together a “when I’m gone list” which covers where friends or family can find important documents, as well as your funeral wishes. Make sure you let your loved ones know it exists and where you keep it.

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

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

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

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

What are the new rates?

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

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

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

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

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

Source: NS&I, 31 July

Are NS&I British Savings Bonds any good?

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

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

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

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

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

Source: Moneyfacts, NS&I, 31 July

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

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

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

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

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

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

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

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

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

Why is the number of UK millionaires falling?

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

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

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

A range of factors have pushed this figure down.

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

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

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

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

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

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

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

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

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

How can you protect your wealth?

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

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

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

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

Lionel Messi may have failed to win a second World Cup, but his legend seems destined to endure. He'll go down as a global star in the tradition of Pelé, Maradona and Ronaldo, but also as an Argentinian national icon. He's also done very well financially from the sport.

Argentina's football fan culture is especially famous for its “creative chants that evolve from one tournament to the next”, the Spanish magazine Hola informed its readers halfway through the World Cup. This year's La Cuarta Estrella (The Fourth Star) included the rousing line Por Malvinas, por el Diego, por la última de Leo – referencing the Falklands, the country's footballing patron saint Maradona, and Lionel Messi's last World Cup. The anthem gained “global traction” when the team was filmed “passionately singing it in the dressing room during their tournament run”, says the Buenos Aires Herald.

When Messi was 13, his father signed a contract with FC Barcelona on a napkin, says the Financial Times. It covered the family's move from Rosario in Argentina to Spain. The Messis, who were joining the diaspora fleeing Argentina's long economic decline, “wept in the taxi to the airport”.

Lionel Messi, now 39, has never lived in his country since: after 20 years in Barcelona, he now plays for Inter Miami. “Yet this émigré has become the face of Argentina.” It may be because, like many émigrés, “he identifies with the place he left”. Spain wooed him to play for youth teams, but “the kid with the flowerpot haircut” only wanted to play for Argentina. He was raised in Spain by Argentinians – eventually marrying a girl he knew from childhood.

Always something of an outsider, Messi is “a taciturn introvert” who lacks the “wild poetry” that Maradona had off the field, but has nonetheless gained an emotional hold on his homeland. “Crucially for his legend, he has learnt to express emotion” – often crying on the field out of joy or disappointment.

The key point, though, is that “his brilliance was unmissable”. He was what Argentines call a “pibe” – a natural dribbler whose “preternatural anticipation and short steps allowed him to change direction faster than opponents”. Messi sees everything. “He spends almost the entire game walking and scanning. When he breaks into a run, his teammates know he has seen an opening. They play to serve him.”

What is Lionel Messi's net worth?

Over the years, the hero worship has translated into big profits, says Forbes. Now a billionaire, Messi is one of just four athletes to have joined “the three-comma club” while still active in their sport. Much of Messi's estimated $1.1 billion net worth stems from “cash accumulation and appreciation” of earnings throughout his career – in his last years with Barcelona, he had a four-year contract worth $675 million. He earned “a massive salary” at Paris Saint-Germain (PSG) and now reportedly pulls in an estimated $70 million-$80 million annually with Inter Miami – “plus an option to acquire an equity stake” in the club when he retires.

Off the pitch, Lionel Messi has made more than $600 million from corporate sponsorships. His most notable deal is a lifetime contract with Adidas (signed in 2017), along with longstanding partnerships with brands such as Mastercard, Michelob Ultra and Lay's.

A measure of Messi's legend is the prices commanded by his memorabilia. In 2023, a set of six shirts he wore during Argentina's winning World Cup run in 2022 fetched $7.8 million at a Sotheby's auction – making them “the second most valuable football jerseys ever auctioned”.

Things haven't always gone smoothly for Messi, says Sky Sports. In 2016, he was found guilty, along with his father Jorge, of defrauding the Spanish government of €4.2 million between 2007 and 2009 over income earned from image rights. But resilience and patience are his watchwords, noted The Profile in 2021. For Messi, who has been playing football every single day since he was five years old, “the overnight success story” is a myth. “I start early and I stay late, day after day, year after year,” he once observed. “It took me 17 years and 114 days to be an overnight success.”

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What is a land value tax?

A land value tax is an annual levy paid on the value of the land upon which a property – or no property – sits, rather than a tax on the property itself. The basic idea is that land gets its value from location, rather than the calibre of the development that sits on it. And what gives a location value is what is going on around it. Is it close to the centre of a city? Is it in an area with great transport links, good schools, beautiful parks, hospitals and so on? Generations of taxpayers paid for all that civic infrastructure and a land value tax is a fair and efficient way of taxing what economists have called the “unearned betterment” part of the value of a property – that is, the rise in value that has nothing to do with the owner's efforts and everything to do with the state and community.

Is a land value tax a new idea?

Not at all. Land value taxes have their roots in the ancient principle that people enclosing common land for agricultural use had a duty to share some of the resulting crops. In Anglo-Saxon England, the unit of land measurement called the hide (around 120 acres) was used to assess people's liabilities and obligations for such things as the maintenance and repair of bridges, fortifications and manpower for the army. A thousand years later, in The Wealth of Nations (Book V, chapter 2), Adam Smith argued in favour of a land tax on the grounds that it would fall on the owner of the land and not harm other economic activity. “Nothing could be more reasonable,” he concluded. David Ricardo, too, was a strong advocate. More recently, the most famous proponent of a land value tax was the late 19th-century US journalist and free-trade campaigner Henry George. Winston Churchill was a big fan, too.

Why is a land value tax so popular?

It's one of those interesting ideas (such as universal basic income or congestion pricing) that attracts support from a strikingly broad range of voices. Left-wingers are attracted to land value taxes because they capture unearned rents and reduce inequality from land ownership. Free-market liberals are keen because land value taxes are seen as highly efficient and tax a fixed resource without discouraging work or investment. The key point in favour is that such a tax “allows us to raise more money from the unproductive rich without disincentivising the productive rich”, says David Goodhart on Substack. Andy Burnham, during his first bid for the Labour leadership in 2010, backed the policy as “aspirational socialism”. Milton Friedman – guru of the “neoliberalism” so disdained by the new PM – also supported it as the “least bad tax”.

Why did Milton Friedman call it the 'least bad tax'?

Because if states must tax – and they must – then it's best that they do as little damage as possible to incentives that promote growth and enterprise. Income taxes disincentivise employment. Taxes on profits make businesses invest and trade less. But the supply of land is fixed: no tax increase will result in there being less of it. And “even the most tax-shy landlords cannot take their acres offshore or dodge the tax with legal jiggery-pokery”, says Edward Lucas in The Times. Moreover, a land value tax “stimulates growth by penalising inactivity. Landlords pay the tax anyway, so they had better make use of their land, or sell it, dropping the price if necessary” – and selling to more productive owners. Land value tax, in other words, helps tackle “grey belt” decay and discourages land hoarding and speculation, smoothing out booms and busts.

How high should the land value tax be?

Another proponent is Dan Neidle, the City lawyer turned tax reform campaigner. He supports scrapping stamp duty (which harms growth and labour flexibility by discouraging people from moving house); council tax (out of date, unfair and under-taxes the very rich); and business rates (arbitrary, stifle growth and stoke perverse incentives). To replace the £100 billion these three dreadfully designed property taxes bring in, Neidle's Tax Policy Associates think tank proposes a land value tax set at around 1.3%. Other groups have proposed models at between 0.48% and 1%. Stamp duty and council tax between them account for roughly £57 billion. At the 1.3% rate, at least 63% of people would be better off immediately (compared with council-tax payments), and in the long run the boost to the economy would make it a win-win for all.

What would a land value tax mean for homeowners?

In the short run, millions of homeowners in southern England would be looking at gigantic new annual tax bills. And that's not the only reason why land value taxes are a tough sell, politically. Initial implementation is tough, since the scope for disputes and legal challenges against a levy on a hypothetical value is clear. And opponents worry the tax would be unfair on asset-rich but low-income homeowners, especially the elderly. Without some kind of lengthy phasing in, a land value tax would constitute a one-off windfall tax on the current generation of land owners, since once they are introduced, land values would fall to reflect future tax liabilities. And letting cash-poor pensioners pay the land value tax from their estates risks turning it into a disguised inheritance tax.

Will Britain get a land value tax?

This week Andy Burnham appeared to back away from a far milder form of tax reform that he espoused as recently as last week – a big rise in the personal allowance to take more low earners out of income tax. So it's highly unlikely he would have the political capital – or mandate – to push through such a radical move this side of a general election. But it may be an idea whose time has come. An early attempt at a land value tax in Britain – under Lloyd George's Liberals – collapsed under the weight of the administrative burden involved and trenchant opposition from landowners. But today's technologies mean the task is not insurmountable, given the political will. Versions of a land value tax have been introduced in jurisdictions including Australia, Canada, Denmark, Estonia, Singapore and Taiwan. “Burnham has been right about this for 16 years,” says Neidle in The Sunday Times. “The question is whether he's willing to be right today.”

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Inheritance tax planning is becoming increasingly important as pensions will fall into estates for inheritance tax (IHT) purposes from April 2027.

As the government looks to cut off a typical avenue for transferring wealth, an estate planning tactic could boost your loved one’s pension pot while reducing inheritance tax liabilities.

You could make use of several gifting allowances, but gifts of any size made to someone through “surplus income” are also exempt from IHT, even if you die within seven years of making them.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “If you’re taking an income from a pension, regular income payments, including those from annuities or drawdown arrangements, are generally considered income, so can be given away under this rule.”

This means you could withdraw money from your pension and regularly gift money to your child or another loved one to add into their pension.

The added bonus is that the person receiving the money can then claim pension tax relief when putting it into their pension pot.

You may have to pay income tax on the pension withdrawals, but it could save your loved ones from a larger inheritance tax bill, and possibly income tax, down the line, particularly when pensions fall into an estate for inheritance tax purposes from April 2027.

Financial adviser Lisa Conway-Hughes said this is a way of building a family inheritance tax plan and “moving the pension down the generations”.

What gifting out of ‘surplus income’ is – and how to get it right

You have to meet three conditions for a gift to be classed as having come out of surplus income:

• The gifts must be part of normal expenditure (you need to establish a clear, regular pattern of gifts)
• You have to be able to maintain a normal standard of living after making the gift (and avoid dipping into savings or investments to pay for it)
• The gift has to come from “normal” income. This includes pension, rental and dividend income.

Coles said you may not even need to have gifted regularly to qualify for the surplus income exemption.

She explained: “As long as your intention to give this money regularly is clear, and you’re giving it to the same people, for the same purpose, you don’t need to have established a long history of frequent, regular gifts.”

In any case, it’s worth keeping detailed records of any gifts you’ve made, including those out of surplus income, to make it easier for the executors of your will, also known as personal representatives, to administer your estate.

Coles said: “It’s useful to complete HMRC’s IHT403 form as you go, so your personal representative dealing with your estate has the information they need.”

When giving away money from your pension, bear in mind the gifts out of surplus income exemption will only apply to money from regular income, such as regular pension withdrawals.

Ian Dyall, head of estate planning at wealth manager Evelyn Partners, said: “The funds must come out of regular pension withdrawals – and not, for instance, from taking 25% tax-free cash as a lump sum.”

It may be worth speaking to a financial adviser about estate planning strategies.

They will be able to help you calculate what you can afford to give away without leaving you short in the future and whether the tax savings are worth it.

Coles warned: “You need to take care not to withdraw too much from your pension, too soon, in order to make gifts: there’s no point beating inheritance tax and then running out of money in retirement.”

How an annuity could lower your inheritance tax bill

Another way to lower the value of your estate from April 2027 is to buy an annuity with part of your pension and use it to fund a whole of life policy written in trust, which can cover the cost of the IHT bill upon your death.

Dyall, from Evelyn Partners, said: “The annuity payments are liable to income tax, but after age 75 income tax on the pension is pretty much inevitable, it’s just whether you pay it or the beneficiaries.

“The life assurance premiums are usually immediately exempt from IHT due to the normal expenditure exemption.

“The criticism of annuities is that if you die young the money is wasted, but here if you die young, although the annuity is in some sense ‘wasted’, the life assurance pays out after only a few premiums, so you effectively win either way.”

Andy Burnham, the UK’s new prime minister, is never going to be popular with everyone – but this may well be his hardest lesson.

It’s clear he wants to be a superhero prime minister – the hero of UK politics who speaks without a lectern (signifying no barriers) and someone who wants to give power to local authorities rather than just the Number 10 powerhouse. In his words, he “wants to bring back hope” as he attempts to fix the broken political system and the UK economy.

And as such, welfare appears to be at the core of what Burnham wants to achieve by putting an end to rough sleeping, introducing more council homes, and providing more help for young people to end the growing NEET (Not in Employment, Education or Training) crisis. In recognising the cost of living pressures, he pledged breathing space, which has included axing the 5% VAT from electricity bills from October and capping bus fares outside the capital at £2. He’s also announced a 20% cut in business rates for pubs, clubs and music venues from April, though not all hospitality venues are included.

But are his moves bold enough? Removing VAT on electricity bills is estimated to save families around £45 a year, but amounts to a 12p saving per day. The reality is most people will not feel the benefit, especially as average household energy bills are around £2,000 per year.

The bus fare cap is useful for regular bus users, saving around a third off single journeys for many. But households that rely on their own transport are still subject to high prices at the pumps – petrol prices have shot up from around 133p at the start of this year to 151p on average now, the RAC Foundation shows. In the meantime, there is uproar over the £26.2 billion in profits made by energy companies since the start of 2026, according to the End Fuel Poverty Coalition.

You’d be forgiven for calling these measures tokenism, and perhaps that’s all it really is as he figures out how to tackle the bigger problem of reducing government debt, improving the economy and making Britain a great place for investors once again.

But what can we expect to see, and can he, alongside his new chancellor John Healey, deliver on the big issues?

What can Burnham do to boost the UK economy?

Tackling labour productivity would be key. UK productivity has been at a low since 2008, but it is the foundation of economic growth and can improve living standards as it promotes stronger wage growth, too.

Hear more about the UK's growth problem as economist Julian Jessop talks to MoneyWeek’s Andrew Van Sickle about the UK's productivity problem in our latest podcast.

Related to productivity and growth is the burgeoning NEETs issue. We cannot afford to let the young generation become a lost generation. Financial advice and wealth management firm St James’s Place estimates that youth unemployment costs the government £125 billion. It is an area Burnham must absolutely focus on. Plus, let’s not forget, without young people in the work system, there is no one funding future state pension payments – today's workers pay for today's pensions.

Speaking of pensions, there are also heavy calls for Burnham to scrap the changes to salary sacrifice pension rules. As of next year, only the first £2,000 of salary sacrifice contributions per employee will be exempt from National Insurance contributions.

That, plus changes to inheritance tax (IHT) rules which will bring pensions into an estate for IHT purposes from April 6, 2027, do little to encourage pension saving.

Age UK claims 1.9 million pensions live in relative poverty and is estimated to cost the government around £10-£15 billion, according to Pensions UK. Simplifying pensions and encouraging savings will be vital, rather than adding barriers that undermine retirement savings.

Care should also be on his mind as an ageing population is also looming and quite possibly the next big crisis to face the UK.

Taxes

While Burnham has ruled against making any changes to the frozen tax allowance, which has stood at £12,570 since 2021, there are calls for the new chancellor to address this in the Autumn Budget.

A £500 increase in the personal allowance would cut income tax bills by £100 for basic rate taxpayers, and could cost the government £5 billion, AJ Bell estimates. Resoring it to £16,000, which is where it could be without the freeze, would cost the government around £35 billion, the investment platform says.

Could a cut to the National Insurance rate be a better alternative to take the pressure off household finances? Employees currently pay 8% in National Insurance on earnings between £12,570 and £50,270 (the rate is 6% for self-employed profits) and the rate is 2% above the upper earnings limit.

AJ Bell says that cutting each main rate by 1% would cost the government £5.8 billion, but would give workers more breathing space and it would certainly not be seen as just a token gesture; someone earning £35,000 a year could save around £225, compared with a £100 tax saving from a £500 increase in the personal allowance.

Backing British

Former chancellor Rachel Reeves was incredibly keen to get investors backing British companies, so much so, she reduced the cash ISA allowance to £12,000 for under 65s in a bid to shift savers into investing instead. This limit, taking effect in April 2027, will only apply to cash ISAs – and the overall £20,000 ISA allowance remains. Reeves even decided that cash holdings of any kind, such as money market funds, could not be part of a stocks and shares ISA. If any cash is parked in a stocks and shares ISA, interest earned will be taxed.

While in government in the past, the Conservatives proposed a British ISA, an idea that never truly came to fruition.

I don’t think either of these policies would encourage savers to suddenly invest more and in British companies specifically. So, what will Burnham do? Can he save the UK stock market?

I think policies that undermine saving, instead of encouraging it, are bound for failure.

Addressing speculation about hikes to capital gains tax is needed if he is to encourage investors, and if he can also restore political stability, there is a chance the UK stock market could thrive. But to do this, he will have to find a fine balance between public spending and fiscal policies.

Can he do it? It is early days as we wait to see his final 10 year plan. That and Healey’s Autumn Budget will be ones to watch closely as this could really be Labour’s final opportunity to show it can change fortunes, fix politics and bring back stability to the UK.

High street banks and building societies have been battling it out with challenger banks such as Monzo and Starling, but Nationwide is fighting back by leveraging traditional roots with more presence on the high street as it pledges to open more branches with customer facing services.

Plus, its attractive Fairer Share scheme, which has consistently paid a £100 bonus to loyal customers for four years and shares profits with members, is popular.

You’ve more than likely seen the Nationwide adverts of Dominic West playing the pompous and out-of-touch chief executive of A.N.Y. Bank.

But behind the light-hearted campaign, Nationwide is winning the hearts of current account holders, bagging 65,000 new customers in the first quarter of this year, according to the latest available figures from the Current Account Switch Service.

In comparison, Barclays, which plans to close 166 branches in 2026 and 2027, bagged 18,500 new customers. Lloyds netted just 12,000 new customers; it has closed 397 branches since March 2022.

At its annual general meeting earlier this month, Dame Debbie Crosbie, chief executive officer of Nationwide, said the building society was “thinking carefully about whether there are any spots where it would make sense for us to open new branches”.

“I can say that it's currently under review, and there may be a few locations that we identify the need for a new branch,” she said.

Tom Riley, group director of retail products at Nationwide added that customers were deciding to switch because “they can see the difference a large-scale mutual is making”.

Nationwide’s £175 switching sweetener, paid to eligible new customers when they move current accounts, has also helped the bank gain new customers.

Nationwide’s pledge to keep bank branches open

Banks have justified closures saying customers are increasingly carrying out transactions online, but charities have warned they risk leaving the elderly and those living in rural communities in danger of financial exclusion.

Nationwide is bucking this trend and through its “Branch Promise” has pledged to not close any more branches until 2030 at the earliest.

The building society had initially committed to keeping its nearly 700 branches open until 2028, but extended the pledge in November 2025.

Martyn James, personal finance and consumer rights expert, said Nationwide’s commitment to the high street was an “astute move”.

He said: “Vast numbers of people need an actual branch to go into, including the millions of carers for vulnerable people, small businesses that take cash, people with specific needs or vulnerabilities and people who just don't like online services.”

How other building societies and banks are pledging to keep branches open

Other building societies are also following Nationwide’s ambitions.

Newcastle Building Society is growing its branch network, opening a new site in Guisborough, North Yorkshire, in April.

The building society says it has invested more than £12 million to grow and improve its network of branches since 2015.

In July, Cumberland Building Society pledged to keep all its 31 branches open as it looks to prevent the decline in the high street.

Andrew Gall, head of savings, consumer and insight at the Building Society Association, said: “Building society branches continue to play an important role because they offer something many customers still value: trusted, face-to-face support alongside digital and telephone services.”

In recent months, major banks have also made pledges to keep bank branches open and invest in their existing branch networks, recognising that customers possibly value it more than previously thought.

In July, Santander, which owns TSB, announced it would not close any more of its 480 branches before 2028 at the earliest.

In December 2025, HSBC promised to keep all its remaining sites open until at least 2027.

Fairer Share payment

Nationwide paid over four million customers a £100 “Fairer Share” payment in June this year – the fourth consecutive year it had made the payment since 2023.

When the building society launched it for the first time four years ago, Crosbie said it was “part of our enduring commitment to rewarding our members”.

Vicky Reynal, financial psychotherapist and recent guest on the MoneyWeek Talks Podcast, said the appeal behind the Fairer Share payment was the surprise element, but also that it makes customers feel like they are part of something bigger in an “increasingly lonely and disconnected world”.

Reynal said: “The financial services industry has often suffered a perception from customers that their interests are with shareholders rather than account holders, so this handout feels to customers like a different positioning, like a bank that cares about its account holders.”

Families are facing a major shake-up to the inheritance tax regime from April 2027 when unused pensions will form part of estates for inheritance tax (IHT) purposes.

Historically, many pension pots have fallen outside the IHT net, making them a useful vehicle to transfer wealth through generations. But under new rules, announced in the 2024 Autumn Budget by then chancellor Rachel Reeves, unused pension funds will no longer be able to be passed down without facing an IHT liability from 6 April 2027. The change is expected to drag over 10,000 extra estates into the IHT net in 2027/28.

Gary Smith, senior client partner at wealth manager Evelyn Partners, said the rule change will have major impacts on how people spend their pensions in retirement as well as making wills and estate planning far more complex.

But while the headline would suggest all pensions will fall under the scope of IHT, the rules are more nuanced than this.

Here's everything that is expected to change and how to prepare.

How will inheritance tax be applied to pensions from April 2027?

From April 2027, most unused pension funds and pension death benefits will be liable for an IHT bill, should it tip the value of an estate over the nil-rate band of £325,000.

Specifically, this is what will be included for IHT purposes:

• Personal (private) or occupational defined contribution (money purchase) pension funds
• Any inherited pension funds that remain in drawdown
• Pension funds that are paid into a trust on death
• Guaranteed payment period income or value protection lump sums paid from an annuity
• Defined benefit (final salary) lump sum death benefits

When inheritance tax won’t be owed from April 2027

There are some circumstances when IHT won’t be owed after the new rules come into force. These include:

Death in service benefits

Death in service benefits linked to either a defined contribution or defined benefit pension will not be liable for IHT. Death in service benefits are payments made to the beneficiary of a pension owner who dies while working for a company.

Clare Moffat, pensions and tax expert at pensions and investment firm Royal London, said it’s worth updating paperwork to ensure your death in service benefit goes to the person you want it to.

“Many people fill in an expression of wish form when they start a job – one for their pension and one for the death in service scheme,” Moffat said. “Keeping both up to date is important. If you die while still working, it allows the scheme administrator to know who you’d like to receive the death benefits.”

Dependants’ scheme pensions

A dependants' scheme pension, which pays a regular income to a “dependant” on the pension holder’s death, will not be subject to IHT under the new changes. The government defines a “dependant” as a surviving spouse, civil partner, child or anyone else who is financially dependent on you.

Trivial commutation

This is a lump sum payment, instead of a regular monthly one, made from an inherited dependants' scheme and will also be exempt. The lump sum has to be under £30,000 to qualify for trivial commutation.

Joint-life annuities

No IHT will be owed on joint-life annuities, which pay out to another person on your death.

Joint-life annuities usually pay out to surviving spouses, civil partners or to people who are financially dependent on you.

Death benefits paid to spouses, civil partners or charity

Death benefits transferred to a spouse or civil partner won’t be subject to IHT, if they are UK long-term UK residents. The same rule applies if pension death benefits are paid to charity.

The state pension

The state pension will not fall within the scope of inheritance tax from April 2027 and will apply only to personal and workplace pension schemes.

Why the majority of estates won’t owe inheritance tax after the changes

The government estimates that of the roughly 213,000 estates with inheritable pension wealth in 2027/28, around 10,500 will have an IHT liability where they wouldn’t have before.

Moffatt, from Royal London, said: “Many people are concerned about pensions being subject to inheritance tax, however, even with pensions being included, the majority of estates won’t have to pay it.

“Most people will need their pensions in retirement and if they don’t use the whole pot, it will pass to a husband, wife, or civil partner inheritance tax-free.”

That said, those who are wealthier will obviously be at greater risk of being dragged into paying IHT, or paying a higher amount than they would have before, from April 2027.

Anyone in this position should consider how gifting can reduce an eventual IHT bill while providing financial support to a loved one.

“I hate losing money more than anything. Losing money is what kills you. It is not the actual loss. It's the fact that it messes up your psychology,” Michael Platt of BlueCrest Capital Management observed in 2012.

So, just imagine how angry he is at losing a high-stakes £200 million battle with HMRC over the employment status of some of his traders, says The Times. The Supreme Court has thrown out BlueCrest's appeal, ruling that payments to some of BlueCrest's “partners” were effectively “disguised salary” and should be taxed accordingly.

Platt was so livid he launched a broadside, declaring that the UK is “no longer a serious contender as a place to do business” because of the taxman's propensity to shift guidance rules and move goalposts. It was a rare loss of composure in public from the publicity-shy financier from Preston, Lancashire, who has flown “under the radar” to build one of the world's leading hedge funds – now more properly described as his multi-billion-dollar private family office.

The ruling has implications for limited liability partnerships across the financial-services industry. Still, the consensus among City lawyers and industry peers is that BlueCrest had devised a “particularly aggressive” remuneration structure, says the Financial Times. That's no surprise given Platt's history of pushing the envelope in all matters financial.

But the judgment has brought “unwanted publicity” to a man who has spent “the best part of two decades cultivating a reputation as one of the industry's most private figures”, with only the occasional lapse. In 2019, he was filmed bragging about his wealth in the back of a New York taxi: “I'm the highest-earning person in the world of finance”.

What is Michael Platt's net worth?

Platt's success has certainly been extraordinary. Forbes puts his private worth at $20.9 billion, placing him among Britain's wealthiest, although he has long since decamped to more tax-friendly climes. In 2010, he moved the group's headquarters to Guernsey, days before the UK government's new top rate of income tax took effect.

“Platt's empire, built on mathematical precision and unrelenting secrecy, is a study in controlled opacity,” says The Capital Review in Singapore – one of several BlueCrest international outposts, including New York and Dubai. Platt himself stopped trading publicly after 2010, but has remained “deeply involved” in strategy, risk allocation and personnel decisions.

The firm's “signature” is his “obsession with data and asymmetry – the idea that small mispricings could yield outsized returns if traded with precision”. Former colleagues describe him as “analytical, detached and surgical – a man who reads numbers like prose”.

How Michael Platt built his fortune

In Platt's own account, it was his grandmother who set him on the road to hedge-fund wizardry. Born in 1968, his background was academic yet practical: his father was a lecturer in civil engineering, his mother worked in administration. But it was his grandmother who gave him shares as a teenager and taught him the basics of investing. After graduating, he joined JPMorgan where he became a managing director of proprietary trading, notes The Telegraph, before founding BlueCrest in 2000.

The early years were “explosive”, says The Capital Review. By the mid-2000s, BlueCrest was managing more than $10 billion and went on profitably to surf the volatility of the 2008-2009 financial crisis. The firm's success was partly down to Platt's trading acuity – he had a knack for “quantifying instincts” – and also sheer drive.

The upshot was a hard-charging culture where traders were ranked, rewarded and ruthlessly replaced; insiders called it a “meritocracy of terror”. How galling for a man who hates to lose, says the FT, that the “one opponent his firm has struggled to beat” is HMRC.

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 common perception of elite level, world class boxers is that they ooze confidence. While confidence is important, there is a clear line between being confident and reckless.

When I was trading punches under the bright lights in fights around the world, there were moments where my mind would release a surge of confidence. That confidence, when mentally mishandled, occasionally transpired into shots being thrown harder than necessary, drifting into hope rather than discipline in search of a knockout blow.

I would tend to hear the guiding voice from the corner of the ring: "Relax, Delicious, Relax – You got time”.

At the highest level of boxing, loading a big punch is dangerous. When you put too much into a shot, it becomes telegraphed. A smart fighter only has to wait for a small opening to hit you on the button. One moment of impatience or idleness guided by emotion and the fight goes against you.

When it comes to money and pension planning – investing can seem like a fight.

Fighting for the long-term

Parents and grandparents know too well that for the younger generation, the temptation to swing big is real. Housing costs, inflation and everyday expenses have made building wealth feel like a distant dream for most of Gen Z and HENRYs (high net-worth, not rich yet), housing is the clearest sign of the squeeze. The average house price in the UK is around £300,000, while average full-time earnings were around £39,300, meaning the average home cost roughly 7.6 times annual earnings. Compare that with the late 1990s, when house prices were closer to three to four times earnings in many areas. That gap doesn't just mean working harder, it breeds the kind of pressure that makes discipline harder to hold onto.

When pressure becomes overwhelming, desperation or resignation takes control. It makes people act from emotion, searching for an escape rather than a solution, the financial equivalent of loading everything into one punch and hoping it lands. We saw this during the 2021 meme stock frenzy and the cryptocurrency explosion, where many people chased life-changing returns overnight. Most retail investors who trade this way end up losing money, whether they're in and out within days or holding for years.

It's tempting, under that same pressure, to write off the long game altogether, to assume that saving for a retirement decades away is pointless when the cost of living is squeezing you right now. But that instinct works against you. According to the Pension Policy Institute, only 46% of Gen Z believe the state pension will still exist by the time they retire. If anything, that uncertainty makes building your own retirement pot more urgent, not less.

Research and history consistently tell us that building wealth is less exciting but much more effective than chasing a knockout. US-based research from The Millionaire Next Door by Thomas Stanley and William Danko found that most self-made millionaires are ordinary people who live below their means and understand the consistent game of investing.

In the UK, household wealth is dominated by housing and pensions. This is ‘asset-based’ forms of wealth, where growth comes mainly from price appreciation and compounding over time rather than wages alone. Pensions are one of the simplest ways to step onto that asset ladder. The younger you are, the more it feels like you're strapped to a jetpack as you climb it, because time turns those small steps up the ladder into leaps eventually.

Small, consistent actions repeated over time beats risky bets. This is where the power of compounding comes in, famously described as "the eighth wonder of the world" by Albert Einstein.

I like to think of compounding as my sparring partner. While there was always noise outside about how good I was as a fighter or how I performed in my last fight, we were working quietly behind closed doors. No headlines, no opinions. Just hard work every day, improving and building strength.

Why are we not talking about pensions and compounding?

Making the most of your age and increasing your pension contributions where possible fits naturally into the picture. When I was boxing, nobody mentioned pensions, retirement felt like something that only happens to other people. Then I came across a statistic that changed everything for me.

Assuming 7% annual growth, if you invest £200 a month from age 20 to 30 and then stop, you'll have put in £24,000 and by age 65, that pot grows to around £370,000. Now take a mate who starts investing at 30 and keeps going all the way to 65, let’s call him Steve. Despite contributing £60,000 more than you overall, Steve ends up with about £360,000, slightly less than your pot, even though you stopped contributing 35 years earlier. That's before factoring in the government top-ups your contributions attract along the way.

With the state pension slowly becoming something we are not banking on, this is exactly the kind of number that should change how urgently you treat your own pot. The power of compounding hits harder than a clean uppercut.

Win on points

The smartest boxers don't chase knockouts. They win through consistency, wearing their opponent down like water wears away stone.

Investing is the same. Stop chasing the knockout. Go the full 12 and win on points.

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

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

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

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

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

Frozen thresholds are dragging more Brits into higher tax bands

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

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

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

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

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

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

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

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

How to lower your tax bill

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

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

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

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

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

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

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

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

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

Why are more pensioners paying tax?

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

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

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

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

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

What are the government plans to help pensioners?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Treasury has been asked for comment.

How to prepare for state pension age changes?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

League table for workplace pensions

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

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

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

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

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

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

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

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

Creation of pension ‘megafunds’

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

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

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

‘Guided Retirement’ to provide better outcomes for savers

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

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

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

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

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

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

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

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

What is the bank surcharge tax?

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

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

Reforming the bank surcharge tax

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Should banks help fund a social tariff?

A higher bank surcharge could ultimately mean reduced bonuses.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Why people are being investigated over their capital gains

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

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

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

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

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

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

How to avoid being investigated over your capital gains

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

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

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

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

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

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

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

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

Heatwave after heatwave have made for a brutal British summer so far.

In June, the record for the hottest June day ever recorded was beaten three days in a row, and 26 June marked the sixth-hottest day in the UK since records began.

Average temperatures in Britain are already around 1.2°C higher than pre-industrial levels, and heatwaves are set to become more frequent and longer because of climate change.

As the UK has been a cooler country for much of its existence, we have very little infrastructure to deal with such high temperatures. But there are reasons why Britain needs air conditioning now.

With higher temperatures seemingly here to stay, many will be considering whether they should invest in air conditioning (AC). It can be a life-saver in heatwaves, but can also be expensive to install.

However, a government grant may be able to bring down the costs for some.

Are there air conditioning grants in the UK?

Eligible households in the UK can get a grant to help with the cost of installing certain air conditioners that both heat and cool your home.

The grant is part of the government’s boiler upgrade scheme (BUS) which helps with the cost of replacing fossil fuel heating systems with environmentally-friendly ones.

A maximum £2,500 discount is currently available to households to help them install an air-to-air heat pump – commonly called an air conditioner.

Air-to-air heat pumps operate using the same principle as air or ground source heat pumps whereby they extract heat from outside to heat your home. However, unlike air or ground source heat pumps, they are able to cool your home as well as heat it.

These types of heat pump were previously exempt from the BUS, but the government announced in late 2025 they will be included in it, meaning you can now get help from the government when installing air conditioning.

It is important to note that the BUS is only available for households who are upgrading their fossil fuel heating system to something more environmentally friendly. That means that you will not be able to get the grant if you intend to use the air-to-air heat pump exclusively for cooling while keeping your current heating system in place.

What is an air-to-air heat pump?

When used as an air conditioner in the summer, an air-to-air heat pump works by drawing in warm air in your home, cooling it down, and then disposing of the heat outside.

The air is drawn in through fans, then refrigerant is used to cool the air down before it is returned to your room and the heat is disposed of. The whole process is powered by electricity.

Meanwhile, in cooler months the air-to-air heat pump can effectively do the same process in reverse to deliver heat to your home.

The reason the government is encouraging people to install these is because they are better for the environment than traditional heating methods. The fact they also work to cool the air down in summer is a bonus.

How can you get an air-to-air heat pump grant?

To get the grant, you will have to purchase an air-to-air heat pump through an MCS certified installer. They will apply for the grant on your behalf.

It is important to note the grant is only available when you get the heat pump installed by an MCS registered firm. If you go with a firm that does not have the certification you will not be eligible for the grant.

However, though the grant is now available, there is still work being done to get it offered by more MCS suppliers. That means that it may still be a little longer before you can get the discount.

If you want to use the BUS to get an air-to-air heat pump installed, you should contact an MCS certified installer and ask them about when the grant will become available to you.

How much does an air-to-air heat pump cost?

The cost of installing an air-to-air heat pump will vary depending on where you live, the state of your home, the specific model you want to install, and much more.

Supply and installation costs around £3,000 on average, with a typical lifespan of 15 to 20 years, according to checkatrade.

Once the £2,500 government grant is subtracted from these costs, the price looks more manageable, though you should note that you may not necessarily get the maximum amount.

When your air-to-air heat pump is installed, it will cost you money to run and the amount you pay will vary. It depends on many factors including how long you keep it running, the temperature you are trying to achieve, the size of your room and the current level of the price cap.

That makes it difficult to calculate an average cost, but you can work out how much it would cost you if you multiply the power of your model in kilowatts (kW) by how much you pay for a kilowatt hour (kWh) of energy.

Using the July price cap as an example, it would cost you £0.86 to run a 3.5 kW air-to-air heat pump for an hour, though this figure will vary by model and change when the price cap rises or falls.

Insurance company Hiscox is benefiting from a volatile global backdrop that means firms want to make sure that their assets – from their factories to the goods and services they sell – are properly insured. Meanwhile, the rise of the digital economy has created new types of insurance, such as protection against cyberattacks.

It may not be glamorous, but some of the best investment opportunities are in industries that may seem dowdy, but are solid, profitable and crucial to the global economy.

Hiscox (LSE: HSX) focuses on three areas. It provides large-scale insurance through its membership of Lloyd's of London, the main insurance market in the world. It also offers reinsurance, whereby it takes on a portion (or all) of the risks in policies originally written by other insurance companies.

Both of those businesses have been successful, with Hiscox boasting a strong record of striking a balance between risk and return in its investments, which has allowed it to generate consistent profits. However, the most interesting part of Hiscox is its growing retail division, which offers insurance policies to small companies in the UK, US and Europe.

Hiscox's growth strategy is working

Thanks to advertising and a strong reputation for customer satisfaction, Hiscox has been able to burnish its brand and grow the retail part of the company faster than the other two segments: the retail side now accounts for around half of sales. The market is competitive, but Hiscox seems to have a sensible plan for maintaining this growth, including new products; striking deals and partnerships; and acquisitions to expand its presence outside the UK.

Hiscox's revenue grew by around 50% between 2020 and 2025, with earnings per share more than tripling between 2021 and 2025.

Both sales and profits are set to keep growing. Hiscox has also been able to increase its pricing power: operating margins more than doubled to 15%. This has enabled it to grow its dividend consistently since 2022. The stock nonetheless remains very reasonably valued, trading at only 12.8 times projected 2027 earnings, and offering a solid dividend yield.

This combination of strong profits and low valuations has started to attract interest from potential buyers. In May it was reported that Canada's Intact Financial had been exploring a potential bid for Hiscox. While nothing has been formally announced, Zurich Insurance Group agreed in March to purchase rival Beazley, demonstrating that the UK insurance sector is on global companies' radars.

In any case, Hiscox's share price seems to have plenty of momentum behind it. Hiscox has been the eighth best-performing share in the FTSE 100 over the past six months, gaining a third. It is also trading above its 50-day and 200-day moving averages. I would therefore go long at the current price of 1.861p at £1.50 per 1p. In that case I would put the stop loss at 1,261p, which gives you a downside of £900.

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.

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

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

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

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

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

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

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

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

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

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

MoneyWeek asked Andy Burnham’s office for comment.

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

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

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

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

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

How to protect against capital gains tax

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

Maximise the use of ISAs

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

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

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

Use interspousal transfers

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

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

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

Use your annual allowance rather than letting gains build

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

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