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Your home may be one of the largest assets you have. With property wealth often inaccessible, you may be considering using equity release to unlock some of the money tied up in your home.

According to the Equity Release Council, the average new customer unlocking property wealth releases almost £60,000. So, using equity release could provide a significant financial boost in your later years.

However, it can have a long-lasting effect on your finances so it’s crucial you understand what equity release means and whether it’s the right option for you.

This guide explains:

  • How equity release works
  • The potential pros and cons of using equity release
  • Alternative options that you may want to consider.

Download your copy of “The guide to using equity release to unlock property wealth later in life” to learn more about equity release and some of the factors you may want to weigh up.

If you’re thinking about using equity release and have questions, please contact us. We’ll help you understand if it’s an option that could be right for you. 

Please note: This guide is for general information only and does not constitute advice. The information is aimed at retail clients only.

Think carefully before securing other debts against your home.

A lifetime mortgage is a loan secured against your home. To understand the features and risks, ask for a personalised illustration. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. Your home may be repossessed if you do not keep up repayments on your mortgage.

As inflation remains stubborn, and interest rates may have to remain higher for longer, recessionary concerns have grown around the world.

Read on to discover some of the factors that may have affected your investment portfolio in October 2023. 

When reviewing short-term market movements, remember to focus on your long-term investment goals.


After a slump in July, official data shows the UK economy grew by 0.2% in August with the Office for National Statistics (ONS) reporting that the service sector mostly drove this growth.

Despite this positive news, concerns remain that the UK is heading into recession. Official figures indicated that the unemployment rate rose to 4.2% between June and August, up from 4% in the March to May quarter.

In addition, UK business activity shrank for the third consecutive month in October. The S&P Global/Cips Flash UK composite purchasing managers’ output index marginally increased to 48.6 in October from 48.5 the previous month.

However, the reading remained below the 50 mark, indicating that a majority of businesses continued to report a contraction in their output.

Inflation remains stubborn, as the headline rate was unchanged at 6.7% in the year to September. Rising fuel costs offset the first monthly fall in food prices for two years to maintain pressure on households.

This means that interest rates may have to remain higher for longer, especially considering that Swati Dhingra, one of the Bank of England’s nine-strong Monetary Policy Committee, said that they felt most of the impact of 14 interest rate rises was yet to be felt.

While the FTSE All-Share Index rose by 1.9% in the third quarter of 2023, the market remains uncertain, and it had given up all of these gains by mid-October.


Fears of a recession also persist in the eurozone.

S&P Global said that eurozone business activity declined for the fifth consecutive month and, excluding the months affected by pandemic lockdowns, it was the heaviest fall for a decade.

Falling exports, a sharp drop in new business orders, and a surge in fuel prices all contributed to this decline.

In more positive news, annual inflation in the eurozone fell to 4.3% in the year to September – its lowest level since October 2021. This comes after the European Central Bank decided to increase interest rates to a record level in September, pegging its key rate at 4%.

This data masks sharp differences in inflation between nations. Spain and Italy both saw the inflation rate rise in September – to 3.2% and 5.7% respectively – while Croatia’s inflation rate of 7.3% was the eurozone’s highest. 

Contrast this with inflation in the Netherlands, which fell into the negative zone at -0.3%, meaning prices were lower than they were a year previously.

Overall, the MSCI Europe ex-UK index – an index covering 344 constituents in 14 developed markets across Europe – rose by 10% in the first nine months of 2023.


Over the last two decades, the US economy has grown at roughly double the pace of Europe and the UK. This looks set to continue in 2024.

The IMF has predicted that the US economy will power ahead in 2024, forecasting an expansion of 1.5% next year. This compares with IMF forecasts of 1.2% for the eurozone and 0.6% for the UK.

While this is partly due to soaring costs of energy in Europe after Russia’s invasion of Ukraine, more structural reasons – like the US’s booming technology sector – have also helped to maintain growth.

The percentage of US adults in their prime working years participating in the labour force is now at its highest level in 20 years and, interestingly, labour force participation by Americans with a disability has soared.

As in the UK, US inflation remained steady over the 12 months to September, at 3.7%.

Overall, the S&P 500 index rose by around 4% in the six months to 24 October, while the Dow fell by around 1% over the same period. 


Diversifying your portfolio means investing in a range of different funds, companies, and geographical locations. Gains in one particular sector or world market can help to offset losses elsewhere.

Q3 of 2023 illustrates this well.

In the three months to the end of September, leading indices in the US, Europe, and “emerging markets” all fell in value. So, if you’d invested in just the US or Europe, you’d likely have seen a slight reduction in the overall value of your portfolio.

During the same period, the Japan TOPIX index rose by 2.5%. In the first nine months of 2023, the TOPIX index rose by 25.7%.

Diversifying your assets across regions means you can benefit from strong growth in certain parts of the world, even if other markets are uncertain.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

According to This Is Money, more than 2,700 people have built up an enviable £1 million in their ISA. Regular contributions and investing could be the secret to reaching this goal. Read on to find out why. 

An ISA is a tax-efficient way to save or invest. In the 2023/24 tax year, you can place up to £20,000 into an ISA. Interest or returns aren’t liable for Income Tax or Capital Gains Tax. So, compared to some alternatives, using an ISA could help to reduce your overall tax bill. 

The number of ISA millionaires has increased by 380% in five years

During the 2016/17 tax year, there were just 570 ISA millionaires. Five years later, in 2020/21 – the latest period for which data is available – there were 2,760.

ISAs were first introduced in 1999 to encourage more people to save. Government statistics suggest they’ve achieved that aim.

In 2021/22, around 11.8 million adult ISAs were subscribed to. During that tax year, ISA holders deposited around £66.9 billion. 

Using your ISA annual allowance is essential for becoming an ISA millionaire 

If you want to get the most out of your ISA, using your full ISA allowance each tax year could be essential – if you don’t use your annual allowance, you lose it. You cannot carry it forward to a new tax year. 

While a £1 million target may seem out of reach, regular deposits mean you’re making steady progress towards your goals. 

Remember, each person has an ISA allowance. So, if you’re planning with your partner, you could put away £40,000 between you each tax year by using both of your annual allowances.

If you want to create a nest egg for children, a Junior ISA (JISA) could also be a useful option. In the 2023/24 tax year, you can deposit up to £9,000 in a JISA and, like their adult counterparts, this can be held in cash or invested, and they are tax-efficient. 

Assuming the JISA annual allowance doesn’t change, if you deposited the maximum amount each tax year from birth until they are 18, your child could have £162,000 when they reach adulthood before interest or investment returns are considered – giving them a significant head start on reaching £1 million. 

Keep in mind, that money cannot usually be withdrawn from a JISA until the child reaches 18, at which point they will have control over how they use it. 

Using your ISA annual allowance alone isn’t enough to reach the £1 million milestone

Over the years, the ISA annual allowance has changed. Between 1999 and 2008, it was just £7,000 each tax year. It then increased over the years until it reached £20,000 in 2017/18.

Someone who opened an ISA account in 1999 and deposited the maximum amount each tax year would have added more than £291,000 to their account by 2023/24.

So, how have people reached the £1 million milestone?

How your money grows once you deposit it in an ISA is crucial. If you leave the interest or returns in your ISA, you benefit from compounding, which could help your money grow at a faster pace over the long term. 

However, people holding their money in Cash ISAs are unlikely to have generated enough interest to reach £1 million.

Over a long time frame, interest is typically lower than returns. In addition, a period of more than a decade where interest rates were historically low following the 2008 financial crisis may have harmed savings. 

Investing through a Stocks and Shares ISA might be the key to becoming an ISA millionaire.

While investment returns cannot be guaranteed, investing in appropriate stocks and shares could help you reach your goals. 

When investing, it’s important to remember that all investments carry some risk. Understanding your risk profile could guide your decisions so you can assess which opportunities make sense for you. 

The government figures indicate that many people could be missing out on potentially higher returns due to holding money in cash – in 2021/22, around 6 in 10 ISAs were Cash ISAs.  

That being said, a Stocks and Shares ISA isn’t always the right choice.

Holding your money in cash may be appropriate if you’re saving for short-term goals or you need easy access, such as if it’s an emergency fund. 

Setting goals for your money may help you decide if saving or investing is right for you. 

Contact us to talk about how you could get more out of your savings 

If you’d like to learn how you could grow your savings more effectively with your goals in mind, please contact us. We can work with you to create a financial plan to get the most out of your money. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Eccentric Willy Wonka boasts a lot of enviable skills as a businessman – he’s innovative, understands his target audience, and inspires loyalty from his employees. But his skills at succession planning left a lot to be desired. 

Over the years many actors have taken up the role of Roald Dahl’s iconic chocolatier Willy Wonka. The character is getting a new lease of life in December when Wonka releases in cinemas.   

While the new movie looks at how Wonka became the owner of a successful business selling fantastical sweets, the original novel, Charlie and the Chocolate Factory, focuses on his succession plan.

With no children to leave his business to, Wonka hides five golden tickets in chocolate bars to win a tour of his world-famous chocolate factory. He plans to pass on his company to one of the lucky winners.

Despite the risky approach, the competition pays off when Charlie Bucket secures one of the golden tickets. 

While Wonka’s method might be perilous, research suggests some business owners could also be taking a risk when it comes to their firm’s future. 

According to a report in FTAdviser, more than a third of businesses have no succession plan in place, and a further 10% haven’t thought about it.

Yet, what will happen to their business is a concern for many business owners. 21% said they were most worried about seeing their business fail and 18% were concerned about their employees’ prospects. 

Without an effective succession plan, there’s a chance your business’s legacy doesn’t live up to your expectations or pass to the person you want to hand the reins to. 

Creating a succession plan can seem daunting and involve a lot of work. However, if it’s something you’ve been putting off, here are seven reasons to make it a priority. 

1. It provides a chance to think about your different options 

There’s more than one way to step away from your business when you’re ready. You might plan to pass it on to your children, or you may want to sell it to fund your retirement. 

Going through your preferences now provides an opportunity to explore the different options and consider which would be right for you. 

2. The process could help you identify potential leaders and skill gaps

Handing over his business to someone with no experience might work well for Wonka, but it’s not advised.

As part of your succession plan, you may review the skills and expertise of your current team to identify where there could be gaps in the future. You might then create a training development programme to upskill existing employees or seek to hire someone who fits your needs.

It’s a step that may improve the long-term security of your business and give you peace of mind. 

3. Preparing your business may be a lengthy process  

Depending on your plans, preparing your business to hand over could be a process that takes years. Perhaps you need to dedicate time to training existing employees to take over some of your tasks, or you might want to sell the business with an established customer base that you need to build.

Setting out your succession plan now could mean you have more options, reduce stress, and give you a chance to overcome potential obstacles. 

4. It could improve processes in your business now 

When creating a succession plan, you’ll often want to consider how the business would operate if you weren’t there and how to make processes as efficient as possible.

So, even if passing on your business is years away, a succession plan can be a useful exercise. You might find ways to increase productivity, cut costs, or help your team work more efficiently. It could improve your business now and mean it’s in a better position in the long term too. 

5. A succession plan could boost confidence in your business 

When Wonka announced he’d be handing over his business to an 11-year-old boy, we’re sure not everyone was thrilled about the decision or optimistic about the firm’s prospects. 

A lack of a succession plan could harm confidence in your business. For instance, customers might worry about whether you’ll be able to fulfil orders over the long term. A succession plan could also give your employees more confidence in their security. 

6. A succession plan may be useful if the unexpected happens 

A succession plan isn’t just useful if everything goes according to plan, it might also be valuable if the unexpected happens.

If you fall ill, having processes and a leadership team in place that you can trust could make the difference between your business continuing to run smoothly or facing challenges. Knowing that your business is in safe hands might mean you’re able to focus on your recovery. 

A robust succession plan could also make it easier to step back from your business sooner than initially planned if you decide to. 

7. Your decision may influence your long-term plan

As a business owner, your firm is likely to affect your lifestyle and finances. 

Your business plans and when you hope to move on might influence areas like your pension or investments. So, understanding how and when you want to move on from your business could mean you’re able to make informed decisions about your personal life and assets.

Contact us to talk about your succession plan and what it means for your future 

If you’d like help with your succession plan, we may be able to offer support and could make your decisions part of your personal financial plan too.

Please contact us to arrange a meeting to talk about your aspirations. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Households are paying more in taxes, research suggests. At a time when high inflation may be affecting your outgoings, finding ways to reduce your tax bill could be valuable. If you’re married or in a civil partnership, planning with your partner could help you get more out of allowances. 

According to the Institute for Fiscal Studies, at the time of the last general election in 2019, UK tax revenues amounted to around 33% of the national income. By the time of the next general election in 2024, the figure is predicted to have increased to 37%.

Only during the immediate aftermath of the two world wars have government revenues grown by as much.

The think tank notes the response to the Covid-19 pandemic explains some of the increased tax burden. However, it adds higher government spending on things that pre-date the pandemic also plays a role. 

On average, the changes mean households are paying an extra £3,500 each year in tax. Yet, the tax rise isn’t shared equally and some families may have seen their tax bill rise much further. 

HMRC collected £19.8 billion more in tax between April and August 2023 than a year earlier 

Figures released by HMRC support the claim that taxes are rising. 

Between April and August 2023, HMRC receipts were £331.1 billion – £19.8 billion higher than the same period in the previous year. 

Some of the receipts in the HMRC data are paid by businesses, but others come from individuals. For example, the amount of Income Tax paid was £9.5 billion more than a year earlier. 

So, how could planning with your partner potentially reduce your tax burden?

Many of the tax allowances available are for individuals. As a result, passing assets to your husband, wife, or civil partner to utilise both of your allowances could be useful. 

Here are five allowances you might want to consider as part of your financial plan. 

1. Personal Allowance

The Personal Allowance is the amount you can earn before you’re liable for Income Tax. For 2023/24, it is £12,570. 

If your spouse or civil partner doesn’t earn above this threshold, they may be able to pass on some of their unused allowance to you under the Marriage Allowance.

£1,260 of the Personal Allowance can be transferred to the partner with the higher income, which could reduce your annual income Tax bill by up to £252 each year.

The higher-earner must be a basic-rate taxpayer to use the Marriage Allowance.

2. Personal Savings Allowance

The Personal Savings Allowance (PSA) is the amount you can earn in interest before it could become liable for Income Tax.

As interest rates have increased over 2022 and 2023, you might face an unexpected tax bill if you don’t review how much your savings are earning.

Crucially, your PSA depends on the rate of Income Tax you pay. Basic-rate taxpayers can earn up to £1,000 in interest before paying tax. The PSA falls to £500 for higher-rate taxpayers, and additional-rate taxpayers don’t benefit from a PSA at all. 

So, if you could exceed your PSA or you’re an additional-rate taxpayer, transferring savings to your partner may help you get more out of your money. 

3. ISA allowance

In addition to the PSA, the ISA allowance may be useful to avoid paying tax on your savings.

Each individual can contribute up to £20,000 in the 2023/24 tax year to ISAs. You can choose a Cash ISA, where the money would earn interest, or a Stocks and Shares ISA, where your money would be invested and potentially deliver returns. 

The interest or returns earned on money held in an ISA aren’t liable for Income Tax or Capital Gains Tax (CGT). Using both your and your partner’s ISA allowance could help you save or invest more efficiently. 

4. Dividend Allowance

Dividends may be a helpful way to boost your income. 

You might take dividends if you own a company or you could receive them through some investments. In 2023/24, you can receive up to £1,000 in dividends before tax is due.

If you might exceed this threshold, transferring dividend-paying assets to your partner could effectively double the amount you could tax-efficiently receive as a couple.

The rate of tax you pay on dividends above the allowance depends on your Income Tax band. So, if your partner pays a lower rate of Income Tax, transferring dividend-paying assets to them could also mean you benefit from a reduced tax bill. 

You should note that the Dividend Allowance will fall to £500 in the 2024/25 tax year. 

5. Capital Gains Tax annual exempt amount

CGT may be due when you dispose of certain assets, including investments that aren’t held in a tax-efficient wrapper, second properties, and some material items.

The annual exempt amount means that in 2023/24, you can make profits of up to £6,000 before CGT is due.

Similar to dividends, transferring assets to your partner could mean you’re able to use both of your annual exempt amounts and potentially benefit from a lower rate of CGT as your tax band affects the rate you pay.

In 2024/25, the annual exempt amount will fall to £3,000 for individuals. 

Arrange a meeting with us to discuss how you could potentially reduce your tax bill

If you want to make the most out of your money and reduce your tax bill, please get in touch. We could help you create a long-term financial plan that cuts how much tax you pay with your goals in mind. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning. 

Trusts may be a useful way to pass on wealth, but research suggests it’s an option some people are dismissing. 

You can place a variety of assets in a trust, from investment to property, for the benefit of another person, known as the “beneficiary”. The trust is then managed by one or more trustees according to the instructions you’ve set out.

There are many reasons why using a trust to pass on wealth to your loved ones could be right for you. Among them are:

  • Ensuring your assets are passed to the right person
  • Reducing a potential Inheritance Tax (IHT) bill
  • Passing on assets more efficiently 
  • Allowing you greater control over how the assets are used
  • Creating a legacy for future generations 
  • Decreasing the risk of assets leaving your family.

Yet, despite seeking advice, research suggests many people who could benefit from using a trust aren’t doing so. 

The majority of life insurance is not placed in a trust despite the advantages 

According to Royal London, families are frequently recommended trusts by financial planners. Yet, few are following the advice offered. 

For instance, just 3 in 10 people with a term life insurance policy have placed it in a trust. Life insurance would pay out a lump sum to your beneficiary if you passed away during the term.

Writing your life insurance in trust can ensure the payout goes to the right person. 

A life insurance payout that’s not placed in a trust could also be included in your estate for IHT purposes. So, it could inadvertently lead to an IHT bill that you’ve not considered. 

In addition, by placing a life insurance policy in a trust, the money paid out wouldn’t need to go through the probate process. As a result, your family could receive the money much quicker. This could be particularly important if your loved ones rely on your income to cover daily expenses.

In contrast, the survey found simpler alternatives are far more likely to be followed, which could suggest part of the reason families are overlooking trusts is because they don’t understand them. 

4 questions to answer if you’re thinking about setting up a trust

1. Why are you considering a trust? 

There are several different types of trust. Which option may be right for you will depend on your goals. 

A trust that holds assets for a grandchild until they’re an adult would be very different to a trust that’s designed to provide a regular income for future generations. So, setting out why you think a trust could be right for you is useful – it could help you identify which type of trust could be used and if there are any alternative solutions you may want to consider. 

2. Do you want to benefit from the assets held in the trust during your lifetime?

In some cases, you might want to benefit from the assets you place in a trust during your lifetime. For instance, you may receive an income from investments held in a trust, which will be inherited by your children when you pass away. 

Doing this could reduce a future IHT bill, but there are other benefits too. It could provide security in the future if you were unable to manage your assets or finances, as the trustee would be responsible for doing this according to the terms of the trust.  

It’s important to be clear if you want to continue using the assets as it may affect the type of trust that’s right for you and how it’s set up.

3. Who will be your beneficiaries? 

Setting out who would be the beneficiary of the trust may be important when you’re deciding which assets you’d like to pass on.

Your beneficiaries may also affect the terms of the trust. For some people, you may be happy for them to access the assets, while for others you may want the trust to provide a regular income instead. 

4. Who will act as trustee? 

Trustees are responsible for managing the trust in line with your instructions. 

You can choose someone you know personally, such as a close friend or family member, or a professional trustee, like a solicitor, which would come with a cost. 

If you decide to ask a relative or friend to act as a trustee, it’s a good idea to speak to them first. Ensuring they understand what their duties would entail and your wishes can help them decide if it’s a responsibility they want. 

Seeking professional help is often advisable if you want to set up a trust

Once a trust is set up and assets are transferred, it can be difficult, and, in some cases, impossible, to reverse the decision. So, seeking professional support is often advisable.

As financial planners, we can help you understand which assets to place in trust to meet your goals and the effect it could have on your wealth. It can give you confidence in the steps you’re taking.

Legal advice may also be valuable. Depending on your needs, setting up a trust can be complicated and a solicitor could help you avoid potentially costly mistakes.

Contact us to discuss if a trust could help you pass on your wealth

Trusts can be useful in a variety of scenarios but it can be difficult to understand if they’re right for you and the steps you need to take to use them effectively. We can provide advice tailored to your circumstances to help you create an estate plan that aligns with your wishes, including setting up a trust if it’s appropriate. 

Please get in touch to arrange a meeting to discuss your estate plan. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate trusts, estate planning, tax planning, or legal services. 

Regular financial reviews may help keep you on track to meet your goals and give you confidence in the steps you’re taking. As well as reviewing your assets, you might also want to make changes to your plan.

Last month, you read about why you shouldn’t skip your financial reviews and how they could help you reach your goals. Now, read on to discover two reasons why you might want to make changes to your financial plan during a review. 

Updating your plan in response to short-term movements could harm your goals

While there are times when it’s appropriate to update your financial plan, you should be aware of the risks of responding to short-term movements or bias.

Stock market volatility can be nerve-wracking. If you’ve read about the value of shares falling, it can be tempting to withdraw money from the market to preserve your wealth. However, it could have a negative effect on your progress towards your long-term goals.

Historically, markets have delivered returns over the long term, and investors who weather the ups and downs have benefited in the long run. By taking money out of investments during a downturn, you turn paper losses into actual ones.

Of course, investment returns cannot be guaranteed and do carry risks. Understanding which investments align with your circumstances and objectives may help you take an appropriate level of risk.

Similarly, after speaking to a friend about how they’re investing in a certain asset that’s going to deliver “great returns”, you might want to follow suit. Behavioural biases, like following the crowd, could lead to you making unnecessary changes to your plan, which could harm the projected outcomes. 

Remember, your goals and circumstances should be at the centre of your financial plan. If changes are tempting, taking a step back to calculate what’s driving the decisions could be useful. 

So, following a financial review, why might you make changes? There are several reasons why it may be appropriate, including these two.

1. Your goals or circumstances have changed

Your financial plan should be built around your goals and circumstances. Over time, these may change, and altering your plan may ensure it continues to reflect your lifestyle.

Perhaps you want to bring forward your retirement date, so you increase pension contributions as a result to provide you with financial security? Or becoming a parent might mean taking out life insurance would provide peace of mind, or you’d like to build a nest egg for your child. 

A financial review is a chance to let your financial planner know about changes in your life.

It means they can offer advice that’s suitable for you and your aspirations. In some cases, it could mean altering your plan so that it continues to align with your life. 

2. Government changes will affect your plans

Sometimes government announcements will affect what’s suitable for you. Changes to allowances, tax hikes, and more could mean adjusting your financial plan would help you get more out of your assets. 

The recent announcement that the government will abolish the pension Lifetime Allowance is a good example.

From 2024, there’s expected to be no limit on how much you can save into your pension over your lifetime. It might mean it’s appropriate to increase your pension contributions or it could alter your retirement date. 

Keeping on top of the latest news and then understanding what it means for you can be difficult.

Your financial reviews provide an opportunity for your financial planner to explain what announcements mean for you. Tailored advice can help you identify potential risks or opportunities that may lead to changes in your long-term plan. 

Contact us to discuss your financial plan

If you have any questions about your financial plan or would like to understand how we could support you, please get in touch.

Next month, read our blog to find out why financial reviews may help you reduce impulsive financial decisions and focus on your long-term aims. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Economies around the world continue to struggle with high inflation and weakening demand affecting GDP. Read on to discover some of the factors that may have affected your investment portfolio in September 2023. 

When reviewing short-term market movements, remember to focus on your long-term investment goals.


Official data shows the UK economy contracted by 0.5% in July. The Office for National Statistics (ONS) attributed the poor performance to strike action and poor weather. 

However, there was some good GDP data. The ONS said the UK economy reached pre-pandemic levels earlier than thought in the final quarter of 2021. The revision is good news as economists previously believed the UK was lagging behind other countries. 

Inflation is falling but remains above the Bank of England’s (BoE) 2% target. In the 12 months to August 2023, it was 6.7%.

Despite high inflation, the BoE’s Monetary Policy Committee voted to hold its base interest rate of 5.25%. The Bank’s governor, Andrew Bailey, said he believes inflation will fall “quite markedly” by the end of the year. However, he added, it would be premature to cut interest rates now. 

Quarterly data from the central bank shows the public is dissatisfied with the strategy for controlling inflation. Public satisfaction was at its lowest since records began in 1999. 

While interest rates didn’t rise in September, households are struggling.

The Resolution Foundation warned average working household incomes are on course to be 4% lower in 2024/25 in real terms when compared to 2019/20 thanks to high interest rates, steep tax rises, and a stagnant economy. 

The number of mortgages in arrears also demonstrates the pressure some families are facing. According to the BoE, the number of mortgages in arrears hit the highest level in almost seven years. 

Businesses are feeling the strain from rising interest rates too. Think tank Cebr predicts that 7,000 businesses will fail every quarter in 2024.

Statistics from the Insolvency Service indicate some businesses are already struggling to balance costs.

Company insolvencies jumped by almost a fifth in England and Wales in August when compared to a year earlier. However, it’s important to note that insolvencies were at a historic low during the pandemic as businesses benefited from government support. 

Despite some negative statistics, the FTSE 100 recorded its best day of 2023 so far – the index gained 1.95% on 14 September. 


GDP data for the eurozone was revised downwards. Statistics show GDP expanded by only by 0.3% in the second quarter of 2023, which has led to concerns that the bloc could fall into a recession in the second half of the year. 

Inflation in the eurozone fell to 5.2% in the 12 months to August. However, there’s a big difference between economies across the bloc. Hungary had the highest rate of inflation at 14.2%, while Spain and Belgium saw prices increase by 2.4% when compared to a year earlier. 

In response, the European Central Bank raised its three key interest rates by 25 basis points. 

PMI data indicated that business output is still contracting as new orders fell and firms were forced to pay more for raw materials and other costs. Germany and Austria were among the worst-performing nations in the eurozone. 

As the largest economy in the eurozone, Germany is often used as a barometer for the economic area.

Unfortunately, signs suggest Germany’s economy could be faltering. The European Commission said it expects the country’s GDP to fall by 0.4% this year as energy price shocks due to the war in Ukraine hit the country hard.

Sentix’s index for the eurozone also suggests Germany’s performance is leading to pessimism among investors. 

While many countries are struggling to manage soaring inflation, Turkey’s is among the highest. In the 12 months to September 2023, inflation was 61.5% and its base interest rate was 25% in September.


Inflation in the US is lower than in some other developed economies. However, at 3.7% in the 12 months to August 2023, the figure is higher than it was a month earlier. 

Similar to countries in Europe, PMI data suggests business productivity flatlined in September. S&P Global said the service sector lost momentum in August, while manufacturers reported a drop in sales. 

Towards the end of the month, there was a risk that the US government could partially shut down. A group of Republican members of the House of Representatives refused to compromise with their own party’s leadership. 

Credit rating agency Moody’s warned a shutdown could threaten the US’s triple-A rating and cause market volatility. 

It would follow Fitch downgrading the US government’s credit rating in August due to a “deterioration of standards”. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

High inflation over the last year has collectively cost savers billions of pounds in real terms, according to an Independent report. Have you considered the effect the rising cost of living could have on your wealth?

While inflation may not reduce how much you have in your savings account, in real terms, the value may fall. 

As the cost of goods and services rises, what you could purchase with your savings falls. Usually, this happens at a gradual pace. However, as inflation has been higher than the Bank of England’s (BoE) 2% target for two years, the effect has been more noticeable. 

If the interest rate your savings earn doesn’t keep pace with inflation, the value of your money decreases.

Inflation could reduce the value of your savings in real terms, but cash may still be useful

The BoE calculations suggest £10,000 in 2021 would have to have grown to £11,774 in August 2023 just to have the same spending power. So, your savings would need to have earned £1,774 in interest during that time.

Even though interest rates have started to rise as the BoE has increased its base rate to tackle high inflation, it’s unlikely your savings have grown at the same pace. 

The analysis published in the Independent suggests up to £113 billion has been wiped off the value of savings in the last year in real terms. 

While the value of your money may fall in real terms in a savings or current account, there are still times when they might be the right option for you, including these three:

  • Handling your day-to-day finances: If you’re using money held in your account to pay for utility bills or other regular expenses, inflation will have little effect. 
  • Saving for short-term goals: Investing could make sense when you’re saving for a long-term goal. However, if you’ll be saving over a shorter period, volatility might mean investing isn’t the right option. So, when you’re saving for a holiday next year or home improvements for example, a cash account could be right for you. 
  • Creating an emergency fund: While you may not want to access your emergency fund now, you want to be able to easily make a withdrawal if the unexpected happens. As a result, a cash savings account could make sense. 

So, it’s important to set out what you want to use your money for. It can help you select an appropriate place for your wealth that aligns with your goals. 

Inflation is starting to fall, which could ease the burden for some savers. However, the value of the money held in a savings account could still fall in real terms. Meanwhile, investing might provide a way to grow your wealth. 

Investment returns may outstrip inflation 

It’s impossible to guarantee investment returns. Yet, investing does present an opportunity to potentially grow your wealth in real terms. 

Historically, markets have delivered returns over long time frames. If you’re saving for a goal that’s more than five years away, from buying a property to retiring, investing might be an option you want to consider. 

Market volatility is a normal part of investing. The value of your investments will rise and fall at different points. So, it’s often not appropriate if you’re investing with a short-term time frame, as a dip in the market could mean you lose money.

If you want to invest, considering risk is important.

All investments carry some risk. However, investment risk varies significantly and you can choose options that are appropriate for you.

There are many factors you may want to weigh up when deciding how much investment risk to take, including the reason you’re investing and the other assets you hold. We can help you create a risk profile and an investment portfolio that reflects your wider financial plan. 

Get in touch to talk about how to make the most of your money

Getting the most out of your money is about understanding your goals and how to use your assets to reach them. If you’d like to talk about your tailored financial plan, including whether investing is right for you, please contact us. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.