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Data released by Scotland’s largest health board has highlighted the potential challenges families could face if a loved one doesn’t have a Power of Attorney in place.

According to a BBC report, in NHS Greater Glasgow and Clyde, a third of patients who are delayed getting out of hospital are stuck because they don’t have a Power of Attorney, the Scottish equivalent of the Lasting Power of Attorney (LPA) available to residents of England and Wales. This means there isn’t someone to make decisions on behalf of a patient if they no longer have the mental capacity to do so, which might mean they can’t be discharged.

An LPA is a legal way to give someone you trust the power to make decisions if you’re unable to make them yourself.

Without an LPA in place, loved ones will usually need to apply to the Court of Protection to be appointed your “deputy”. The process of becoming a deputy can be lengthy and may be costly.

In addition, the court may appoint someone as your deputy that you would not choose yourself or haven’t spoken to about your wishes.

Despite this, a March 2025 survey from the Phoenix Group found only 8% of people have an LPA/Power of Attorney in place, and just 13% said they knew a lot about the legal arrangement.

If you haven’t named an attorney by registering an LPA, essential decisions could be delayed.

You can name more than one person as an attorney and state whether they can make decisions separately or if they must make them together. It’s important to consider who you choose as an attorney – someone who understands your wishes and you can trust to act on your behalf.

There are two types of LPA, and both may be useful.

Health and welfare LPA

As the BBC report highlights, there are times when people cannot make health and welfare decisions themselves. It could mean you’re left in a vulnerable or uncomfortable position as your loved ones are unable to act if you don’t have an LPA in place.

In addition to managing care following a hospital stay, a health and welfare LPA might cover decisions like:

Your daily routine
Moving into a care home
Medical care, including life-sustaining treatment.

Naming a health and welfare LPA allows your family or other loved ones to make decisions that could support your wellbeing and quality of life.

Property and financial affairs LPA

If you cannot make decisions yourself, your financial affairs could quickly fall into disarray.

Think about all the financial decisions you make regularly. You might need to withdraw an income from your pension, move money into a separate account to pay for utility bills, or go grocery shopping.

A person named as your property and financial affairs attorney might make decisions about:

Paying your bills
Selling your home
Collecting your pension
Managing your bank account or other assets.

So, naming an attorney could keep your finances on track and ensure you remain financially stable, whether you live independently or move so you have greater support in your day-to-day life.

You can complete an online form to register an LPA

You can fill in the forms necessary to name an attorney online or a solicitor could help you. You must register your LPA with the Office of the Public Guardian for it to be valid, or your attorney will not be able to make decisions for you.

It usually costs £82 to register each LPA unless you benefit from a reduction or exemption.

You should note that it can take 10 weeks to make an LPA if there are no mistakes. So, if it’s a task you’ve been putting off, making it a priority could be worthwhile and offer you peace of mind.

Contact us to talk about your estate plan

It may be useful to consider naming an attorney as part of a wider estate plan, which might consider areas like funding care costs, passing on wealth during your lifetime, and writing a will.

If you’d like to review your estate plan, please get in touch. As well as talking about your options and how to manage your finances later in life, we could also help you speak to your loved ones so they understand your wishes should they need to make decisions on your behalf in the future.

Please note:

This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate Lasting Powers of Attorney or will writing.

Worrying about your finances in retirement could dampen your excitement as you start the next chapter of your life. As you’ll often be responsible for generating your own income once you give up work, it’s not surprising that a February 2025 report from Which? revealed half of over-55s are worried about running out of money.

Indeed, just 27% of those who have retired or are nearing the milestone said they weren’t concerned about draining their pension or other assets in retirement.

Some apprehension about your finances as you retire is normal.

Retirement is likely to represent a significant shift in how you create an income. No longer will you receive a regular wage for your work. Instead, you’ll often start depleting your assets, such as your pension, savings, or investments. As you can’t predict how long your assets need to last, it may be difficult to assess if the income you create is sustainable.

Here are five strategies that could give you confidence in your retirement finances, so you’re able to focus on what’s most important – enjoying this next stage of your life.

1. Consider inflation before you retire

A key obstacle when planning your finances in retirement is that inflation often means your outgoings will increase.

According to the Bank of England, between 2014 and 2024, average annual inflation was 3%. So, an income of £35,000 in 2014 would need to have grown to almost £47,000 to maintain your spending power in 2024.

As a result, if you planned to take a static income throughout retirement, you could face a growing income gap in your later years or deplete assets at a faster rate than you anticipated.

As part of your retirement plan, a cashflow model could help you visualise how your income needs might change, and the effect this would have on the value of your assets. While the outcomes cannot be guaranteed, it could highlight where you might face potential shortfalls and allow you to take steps to improve your long-term financial security.

2. Keep an eye on retirement lifestyle creep

It’s not just inflation that could affect your outgoings. Lifestyle creep, where you spend more on luxuries, could have an effect too.

As you may be in control of how much you withdraw from your pension, it can be easy to slowly increase the amount so you can indulge in an exotic holiday, new car, or regular days out. Over time, these luxuries can become new necessities in your mind and part of your normal budget.

Spending more in retirement isn’t necessarily negative. However, increasing your spending without considering the long-term consequences might mean you face an unexpected shortfall in the future. Regular financial reviews during your retirement could help you keep an eye on lifestyle creep that may be harmful.

3. Assess if investing in retirement is right for you

In the past, it wasn’t uncommon for retirees to take their money out of investments to reduce exposure to market volatility. However, keeping some of your money, including what’s held in your pension, invested might make financial sense for you.

Retirements are getting longer. With the average life expectancy of a 65-year-old now in the 80s for both men and women, you could spend three decades or more in retirement. So, continuing to invest with a long-term time frame during retirement could help grow your wealth and mean you’re at less risk of running out of money.

It’s important to choose investments that are appropriate for you and recognise that investment returns cannot be guaranteed. If you’d like to talk about investing in retirement, please get in touch.

4. Be proactive about retirement tax planning

While you might no longer be working, you’re very likely to still pay Income Tax in retirement. Indeed, according to the Independent, in March 2025, retired baby boomers were paying more Income Tax than working people under 30.

If your total income exceeds the Personal Allowance, which is £12,570 in 2025/26, Income Tax will usually be due. With the full new State Pension providing an income of £11,973 in 2025/26, most retirees will pay some Income Tax even if they’re only taking small sums from their personal pension.

It’s not just Income Tax you might be liable for either. You might need to pay Capital Gains Tax if you sell assets and make a profit or Dividend Tax if you hold shares in dividend-paying companies.

An effective retirement plan could identify ways to reduce your tax bill, so you have more money to spend how you wish and are less likely to run out during your lifetime.

5. Maintain an emergency fund throughout retirement

During your working life, you may have had an emergency fund in case your income stopped or you faced an unexpected expense. In retirement, a financial safety net might still be important.

Having a fund you can fall back on in case you need to pay a large, unforeseen cost, like property repairs, could be essential for keeping your retirement finances on track.

In addition, it may be prudent to contemplate how you’d fund the cost of care if it were needed. According to an August 2024 report from the Joseph Rowntree Foundation, the number of older people unable to perform at least one instrumental activity of daily living without help will increase by 69% between 2015 and 2040.

This rise is partly linked to a growing population of elderly people and rising life expectancies leading to more people relying on informal care, such as family members, or formal care, like a nursing home.

Whether you need to pay for care will depend on a variety of factors, such as the value of your assets and where you live. However, in most cases, you’ll often need to pay for at least a portion of the costs if you require formal care.

So, considering care when you assess your emergency fund could be essential. Knowing you have the savings to pay for care could provide you with peace of mind and mean that should it be required, you have more options to explore, such as choosing a care home with facilities you’d enjoy or one that’s easily accessible for loved ones.

Get in touch to discuss your retirement finances

As your financial planner, we could work with you to build a retirement plan that reflects your circumstances and goals. Whether you’re worried about running out of money or you have other concerns, we’re here to listen and discuss your options. Please get in touch to arrange a meeting.

Please note:

This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients 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 value of your investments (and any income from them) 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.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate cashflow planning.

When people think about financial wellbeing, they often link it to frugality or building wealth. Yet, an effective financial plan isn’t always about that, sometimes, it might make sense to spend more.

It can be difficult to get your head around. After all, as a child, you’re often taught that being sensible with money means putting it in a savings account rather than spending it. Yet, this approach only focuses on growing your wealth, rather than using it in a way that helps you reach your goals.

So, here are three scenarios where your financial plan might involve increasing your outgoings.

Spending more could help you reach lifestyle goals

At the heart of your financial plan should be your lifestyle goals – how do you want to use your time and what makes you happy?

To reach these goals, you might need to spend more. Perhaps you enjoy getting creative and want to attend regular art classes, or maybe you love to attend gigs across the country so want to boost your disposable income to see more of your favourite bands.

Of course, simply increasing your spending could lead to a shortfall later in life. This is why making it part of an effective financial plan is important.

Working with a financial planner could help you assess how the decisions you make today, including spending more to reach your lifestyle goals, could affect your future income.

You might find that you’re in a position to boost your disposable income to spend more on the things you enjoy.

If spending more to reach lifestyle goals could affect your long-term security, a financial plan may help you assess where compromises might be made so you can strike the right balance between enjoying your life now and being secure in the future.

Higher outgoings now could boost your future income

There might be times when spending more money now could boost your finances in the long run.

For instance, if you’re thinking about returning to education to pursue a career change, you might need to fund the costs yourself. Or, if you’re an aspiring entrepreneur, you may choose to increase spending to get your idea off the ground.

In both of these scenarios, you might hope that the initial outgoing will lead to a higher income and greater financial security in the future.

Making this decision part of your financial plan could help you assess if it’s the right option for you and understand the potential short- and long-term implications it may have on your finances.

You want to create a legacy during your lifetime

Often, when people speak of a legacy, it’s what they’ll leave behind when they pass away, but it might also be something you do during your lifetime. Indeed, there could be benefits to creating a living legacy.

Your loved ones might have a greater need for financial support now than they will in the future. For example, a helping hand to purchase a home when they want to start a family could be more useful in terms of creating long-term financial security than an inheritance later in life.

Alternatively, you might want to leave a legacy to a charitable cause during your lifetime.

Again, a benefit is that you have the potential to see the impact your gift will have. You might choose to support the charity in other ways too, such as acting as a trustee or organising a fundraiser.

If your estate could be liable for Inheritance Tax (IHT), creating a living legacy might be one way to reduce the potential bill. As well as reducing the value of your estate through gifting, if you leave more than 10% of your entire estate to charitable causes on your death, the IHT rate your estate is liable for would fall from 40% to 36%.

When gifting to reduce IHT, it’s important to note that not all gifts are immediately outside of your estate for IHT purposes. Indeed, some may be included in calculations for up to seven years after they were gifted. If you’d like to discuss how to pass on wealth tax-efficiently, please get in touch.

Contact us to talk about your financial plan

If you’d like to create a financial plan that’s tailored to your goals and circumstances, please get in touch. We could help you balance short-term spending with long-term aspirations so you can have confidence in your future.

Please note:

This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate tax planning or estate planning.

Have you ever made a decision to continue with a course of action based on what you’ve already put into it? This bias, known as “sunk cost fallacy”, might mean you don’t make rational decisions and stick to a path that’s no longer right for you.

If you’ve been affected by the sunk cost fallacy, it doesn’t automatically mean you made a wrong decision. In fact, factors outside of your control could mean that what was once an excellent decision for you, no longer makes sense. However, by basing your next decision on what you’ve already done, you could hinder your ability to make the “right” choice now.

Feeling like you’ve already invested resources may mean you don’t want to turn away

The sunk cost fallacy refers to the resources you’ve lost and can’t get back. This loss might mean you’re less likely to assess alternative options, as you don’t want it to be in vain.

So, your past effort affects the decisions you’re making about the future.

The sunk cost fallacy is more likely to occur if you’ve already invested heavily in something. It doesn’t have to be a financial investment. The time you’ve poured into a project or the emotional energy you’ve dedicated to it could cloud your judgement too.

It’s often linked to other types of cognitive bias.

For example, loss aversion theory suggests you feel emotions connected with loss more keenly than those associated with winning. So, if you feel like you’ve lost resources, you might be more emotional, and less likely to focus on logic than you usually would.

Another bias sunk cost fallacy is often linked to is confirmation bias – where you seek out information that supports your preconceived idea. If you’ve already decided you want to proceed with a plan because you’ve invested in it already, you might start to prioritise data that suggests this is the right thing to do.

There are plenty of examples of the way sunk cost fallacy might affect you.

If you’re taking the lead on a project at work, you might be reluctant to change course, even if it’s clear it isn’t going to work as well as alternatives, because of the time you’ve already invested.

With your finances, you might refrain from selling an investment that no longer aligns with your financial plan because the share price has fallen recently so you feel like you’ll be “losing”.

4 useful steps that could help you avoid sunk costs affecting your decisions

1. Imagine it’s a new decision

While it’s difficult, try to look at the decision with a fresh perspective – if you hadn’t already sunk costs, how would you view the decision today?

Doing this could highlight where your past efforts might be influencing the decisions you’re making now.

2. Focus on the future

When you’re reassessing your decisions, look forward as well. For example, if you’re reviewing an investment, what are the expected returns and how much risk would you be taking? Looking forward, rather than back, could help focus your mind so you’re not dwelling on perceived losses.

3. Set goals

One effective way of avoiding the sunk cost fallacy is to set goals from the start. If you have a clear idea about what you want to achieve, you’re more likely to be able to evaluate whether sticking to a plan continues to be the right decision.

Taking an objective-based approach means you’re less likely to focus on the emotional side of decision-making, and, instead, pay attention to the expected outcomes. Understanding how decisions might support long-term goals could mean you feel more confident when the evidence suggests a different course of action could be better suited to you.

4. Get an outside view

Sometimes it’s impossible to look at a decision you’ve made objectively, as you may be emotionally attached to it. This is where an outside perspective could be useful.

A person who isn’t thinking about the “losses” could help you see why you’re holding on to a decision that might no longer be right for you.

As a financial planner, we could act as an alternative perspective when you’re assessing financial decisions. If you’d like to talk to us, please get in touch.

Please note:

This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

After Rachel Reeves’ impactful first Budget in autumn 2024, you might have been concerned about the announcements that would be included in her Spring Statement on 26 March 2025.

Reassuringly, the major headline from this year’s springtime fiscal event is that Reeves made few announcements that are likely to affect you and your personal finances directly. Although, it did reveal that none of the changes made in the Autumn Budget would be overturned. However, one significant change has been made to the High Income Child Benefit Charge, which could affect you or your family.

The chancellor did announce that, due to global uncertainty and after the economy declined in January, the Office for Budget Responsibility (OBR) has downgraded its 2025 forecast for UK growth from 2% in October 2024 to 1% as of March 2025. She also noted the OBR’s long-term forecast, indicating that growth would increase for each year remaining in this parliament.

In addition to growth figures, the chancellor’s Statement introduced a range of measures designed to increase economic activity in the UK, as well as cost-saving initiatives, predominantly at state level, to reduce government debt.

Read on for your summary of the chancellor’s 2025 Spring Statement.

Personal tax thresholds and allowances are set to remain unchanged

Those who were concerned the chancellor would announce sweeping changes that might affect their personal finances will be breathing a sigh of relief as many worries didn’t materialise.

Personal tax

Reeves stuck to a pre-Spring Statement commitment to not increase personal taxes.

So, Income Tax thresholds and rates will remain unchanged, and thresholds are frozen until April 2028. As a result, your Income Tax liability is likely to rise in real terms.

Similarly, the rates and thresholds for paying Capital Gains Tax (CGT) and Dividend Tax will remain the same.

Individual Savings Accounts (ISAs)

Before the Spring Statement, the government was reportedly considering reducing the amount you can tax-efficiently place in a Cash ISA each tax year to £4,000 in a bid to encourage greater investment.

The good news is the ISA subscription limit will remain at the current level (£20,000) in the 2025/26 tax year. The ISA subscription limit is frozen until 2030.

The Junior ISA (JISA) allowance will remain at £9,000 in 2025/26.

However, the government did note it will continue reviewing ISA reform options to improve the balance between cash and equities to earn better returns for savers, boost the culture of retail investment, and support its growth mission.

Pensions

Last year, the government announced a new Pension Schemes Bill, which will legislate several areas of pension policy. However, further reforms weren’t announced in the Spring Statement.

The Annual Allowance will remain at £60,000 in 2025/26. Your Annual Allowance may be lower if your income exceeds certain thresholds or you have already flexibly accessed your pension.

As usual, there was also speculation that the amount you could withdraw from your pension tax-free would be reduced, but this has remained unchanged. So, when you reach the normal minimum pension age (55, rising to 57 in 2028), you may withdraw up to 25% of your pension (up to a maximum of £268,275) before paying Income Tax.

State Pension

As expected, there were no announcements relating to the State Pension or the triple lock, which guarantees the State Pension will increase every tax year by either the rate of inflation, average earnings growth, or 2.5%, whichever is higher.

As a result, the full new State Pension will pay a weekly income of £230.25 in 2025/26.

High Income Child Benefit Charge reforms will come into place this summer

Although the chancellor did not explicitly announce the change, the Spring Statement document revealed that those who pay the High Income Child Benefit Charge will be able to do so through PAYE from summer 2025.

As it stands, those who pay the charge need to register for self-assessment to do so, even if they do not otherwise need to self-assess. But this year, the government is making it easier for families to pay the charge without needing to submit a tax return.

Inflation is forecast to meet the Bank of England’s 2% target by 2027

After reaching a 40-year high of 11.1% in October 2022, inflation, as measured by the Consumer Prices Index (CPI), has gradually fallen, bringing it closer to the Bank of England’s (BoE) target of 2%.

The chancellor announced in her Statement that in the 12 months to February 2025, inflation rose by 2.8%, down from 3% in January. Now that inflation is better under control, the BoE has cut its base rate three times since the general election, bringing the rate down from 5.25% to 4.5%. These cuts mean borrowers will likely pay less while savers may see their interest payments fall.

It was then announced that, according to the OBR’s forecast, inflation will average:

3.2% in 2025
2.1% in 2026
2% in 2027, 2028, and 2029 – the BoE’s target rate.

The key fiscal announcements from the 2025 Spring Statement

The chancellor’s speech largely revolved around changes to government spending and investment. Some of the key measures and announcements included in the Statement were to:

Increase defence spending to 2.5% of GDP by 2027, including providing an additional £2.2 billion to the Ministry of Defence next year
Rebalance payment levels in Universal Credit to incentivise people into work, and review the assessment for Personal Independence Payments, with the OBR stating these changes will save £4.8 billion from the welfare budget in 2029/30
Crack down on promoters of tax avoidance schemes, as initially announced in the Autumn Budget in October 2024
Invest £2 billion in social and affordable housing, so housebuilding reaches a 40-year high that helps put the government on track to reach its target of building 1.5 million homes by the end of this parliament
Introduce a £3.25 billion Transformation Fund to streamline public services using technology and Artificial Intelligence, making the government “leaner and more efficient”. Additionally, government departments will reduce their administrative budgets by 15% by the end of the decade.

2024 Autumn Budget changes remain intact

In October 2024, the chancellor announced a series of tax-raising measures during the Autumn Budget, some of which could have affected your personal finances. These included:

Inheritance Tax (IHT) will be levied on unused pension benefits from April 2027.
Agricultural Property Relief and Business Property Relief will be reduced from April 2026.
CGT rates for non-property gains were raised in line with property rates with immediate effect, and Business Asset Disposal Relief and Investors’ Relief were both reduced.
Employer National Insurance contributions (NICs) will rise from April 2025, from 13.8% to 15%, and the threshold at which employers start paying NICs will also fall.
Income Tax thresholds will remain frozen until 2028.
The IHT nil-rate bands will remain fixed for a further two years, until 2030.
VAT was levied on fee-paying schools, effective from 1 January 2025.
The non-dom tax regime is set to be abolished from April 2025.
The Stamp Duty Land Tax surcharge on second home purchases rose from 3% to 5% from 31 October 2024.
Corporation Tax is now capped at 25% for the duration of the parliament.

While many hoped the chancellor would row back on some or all of these measures, all remain intact.

Please note

All information is from the Spring Statement documents on this page.

The content of this Spring Statement summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

While we believe this interpretation to be correct, it cannot be guaranteed and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.

Reaching the minimum pension age and being able to access your retirement savings might mean new possibilities opening up. You may start thinking about giving up work, withdrawing a lump sum to pursue a goal, or using your pension to boost your regular income.

It’s an exciting time, but it’s also important to evaluate your decisions and consider how they could affect your long-term plans. Indeed, spending too much too soon could lead to a shortfall later in life.

Usually, you can access your pension from age 55 (rising to 57 in 2028). For many people, this milestone will come before their planned retirement date.

Yet, January 2025 research from Legal & General suggests 1 in 5 people access their pension at 55.

32% of those withdrawing from their pension at 55 said it was to cover essential expenses. However, 46% simply said they did so “because they could”.

Worryingly, 27% of UK adults aged over 50 make decisions about their pension without seeking any advice or guidance. It could mean a significant proportion of those accessing their pension as soon as possible don’t fully understand the long-term implications it could have.

If you’re thinking about withdrawing money from your pension, here are three potential risks to consider first.

1. It could increase your risk of running out of money later in life

Pensions are often among the largest assets people own. So, it’s not surprising that some look at the value and believe they have enough to splurge.

Yet, it’s important to consider why you’ve saved into a pension – to create financial security once you give up work.

If you start accessing your pension at 55, you could be at greater risk of facing a shortfall later in life as it’s likely to need to last several decades. Indeed, according to the Office for National Statistics, the average 55-year-old woman will live until they’re 87. For a man of the same age, life expectancy is 84.

Even if you don’t plan to take a regular income from your pension straightaway, withdrawing a lump sum can have a significant effect on the value of your retirement savings.

Your pension is normally invested with the aim of delivering long-term growth. Taking a lump sum could mean investment returns are lower than expected, which, in turn, may lead to a lower income when you retire.

That’s not to say you shouldn’t access your pension at 55, whether you want to use the money to travel or start reducing your working hours. However, understanding the potential long-term implications of doing so and how it might affect your retirement lifestyle is important.

2. You may face an unexpected tax bill

You can usually withdraw up to 25% of your pension without facing a tax bill, either as a lump sum or spread across multiple withdrawals.

However, if you exceed the 25% tax-free portion, your pension withdrawals may become liable for Income Tax. According to the Legal & General study, around a third of those accessing their pension at 55 are withdrawing more than 25%.

The withdrawal above the tax-free amount would be added to your other sources of income when calculating your Income Tax liability. So, you might want to consider whether it would push you into a higher tax bracket and increase your overall tax bill.

It’s also worth noting that if you receive means-tested benefits, taking a lump sum or income from your pension could affect your entitlement – something a quarter of people didn’t realise.

3. It could limit how much you can tax-efficiently save in your pension

Accessing your pension might reduce how much you can tax-efficiently contribute to your pension each tax year.

In 2024/25, the pension Annual Allowance is £60,000. This is the amount you can personally contribute while retaining tax relief benefits. However, you can only claim tax relief on up to 100% of your annual earnings.

You can normally withdraw your tax-free lump sum from your pension without affecting the Annual Allowance, but if you take a flexible income, you might trigger the Money Purchase Annual Allowance (MPAA).

The MPAA is just £10,000 in 2024/25. As a result, it can significantly reduce how much you’re able to tax-efficiently add to your pension and it might negatively affect your retirement income.

Financial planning could help you understand the effect of accessing your pension at 55

One of the challenges of understanding whether accessing your pension sooner is the right decision for you is that you often need to consider the long-term effects.

Financial planning could help you see how accessing your pension at 55 might affect your long-term finances and review other options as part of a wider financial plan. If you withdraw some of your pension now, it could help you feel more confident, or you might decide an alternative option makes more sense for you.

If you’d like to access your pension, we’re here to help you calculate the potential long-term consequences and more. Please get in touch to arrange a meeting.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

The Murdoch family’s messy dispute over who will retain control of Rupert Murdoch’s media empire when he passes away has been grabbing headlines. While your affairs might not be in the spotlight, the case offers some useful insight into how to avoid family disputes.

Following his second divorce in 1999, Rupert Murdoch established a trust foundation to hold the family’s stake in News Corp. While the Murdoch family holds a 14% stake, it controls 41% of the company votes. The trust set out that when Rupert dies, control of the company would be split between his four oldest children.

A dispute arose when Rupert sought to change the terms of the trust so that his oldest son, Lachlan, would retain control and remove the voting power of his other three children.

The ensuing court case generated media attention and, ultimately, the court ruled that the family trust could not be changed.

So, what can you learn from the case when handling your estate plan and potential disputes?

1. Effective communication with loved ones is important

When setting out your estate plan or making changes to it, effective communication can make all the difference.

Rupert has stated that he believes the change to the trust was necessary to ensure the long-term profitability of News Corp. However, his three children who were set to lose their voting rights were reportedly blindsided by the news.

When someone is surprised, they might be more likely to act based on the emotions they’re feeling and it could lead to disputes escalating.

So, being clear about your wishes and setting aside some time to talk to your beneficiaries could help you understand each other’s perspective and get everyone on the same page.

2. Disputes aren’t always about monetary value

Your estate covers all of your assets, from investments to material items. When you think about which ones will be the most important to your beneficiaries, you may believe it’s the assets with the highest monetary value, but this isn’t always the case.

Indeed, emotional attachment could lead to disputes too.

In the Murdoch case, modifying the trust wouldn’t have affected the financial inheritance of the beneficiaries, only their voting rights in News Corp. Yet, they felt strongly enough about it to go to court to block the changes.

While you might not be passing on a multi-billion-pound company, your estate is likely to hold assets that are valuable to your loved ones. Even if they don’t have a high financial value it could lead to bitter disputes.

Again, speaking to your loved ones could help you form a clearer idea about what’s important to them and where issues might occur. You may find they value a particular piece of jewellery for sentimental reasons, or they’d like to inherit a painting that reminds them of a childhood home.

When you’re writing your will, you might choose to name specific items you’d like to go to a particular beneficiary.

3. Consider your family dynamics

While passing on assets that will be equally split or controlled by your children might seem like a fair way to distribute your estate, family dynamics can be complex.

For some families, sharing assets or working together to manage them can be effective.

However, if your children have very different views on how to manage wealth, it could lead to conflicts arising. For example, if your children jointly inherited your home, would there be potential conflicts around what to do with the property and who would take responsibility for different tasks?

In some cases, passing on separate assets to each beneficiary could make more sense.

An estate plan could help you understand your assets and how you might pass them on in a way that aligns with your wishes and family dynamic.

4. Consider potential conflicts when making an estate plan

Being proactive may help you avoid conflicts in the future. Considering where disputes might occur could allow you to have important conversations with loved ones or take steps to minimise the chance of them occurring before they arise.

So, when making your estate plan, you might want to consider questions like how a relationship breaking down could affect how your assets are distributed. For instance, you may take steps to ensure wealth would remain within your family if your child divorced their current partner.

5. Carefully consider your goals before establishing a trust

A trust can be a useful tool if you want to pass on assets in a way that allows you to retain some control.

When creating a trust, you’ll name a trustee to manage the trust on behalf of the beneficiaries, and you can set out conditions. The conditions you can apply depends on the type of trust you set up. So, if you want to create a nest egg for your grandchild, you might state the assets can only be used to cover educational costs during their childhood and they’ll receive full control of the trust when they turn 25.

As Rupert Murdoch has discovered, changing the terms of a trust once it’s established can be very difficult or, in some cases, impossible. Similarly, once you’ve placed assets in a trust, you may not be able to remove them.

So, if you think a trust could be right for you, take your time to assess your options.

Seeking professional advice when establishing a trust could be valuable. A financial planner might help you assess which assets to use and how transferring them may affect your financial security. In addition, a solicitor can offer advice on the different types of trusts and minimise the risk of mistakes or contradictions occurring when writing a trust deed.

6. Carry out regular estate plan reviews

As the Murdoch case has highlighted, your wishes might change over time. So, regular reviews of your estate plan could help ensure it continues to reflect your circumstances and goals.

It’s often advised that you review your estate plan following major life events or every five years.

Contact us to talk about your estate plan

Whether you need to create an estate plan or would like to review an existing one, we can help. We could work with you to understand your long-term goals, ensure your financial security later in life, and consider how you might pass on wealth during your lifetime or when you pass away.

Please get in touch to arrange a meeting.

The Financial Conduct Authority does not regulate estate planning, trusts, or will writing.

At the start of February 2025, the Bank of England (BoE) cut the interest base rate. If you have a variable- or tracker-rate mortgage, it could mean your repayments will go down. While that’s likely to be welcome news, you might want to consider overpaying your mortgage – it could save you thousands of pounds over the full mortgage term.

As well as saving money, overpaying your mortgage could mean the debt is paid off sooner. For many families, being mortgage-free is a milestone they’re looking forward to that could provide greater financial freedom and take a weight off their shoulders.

So, read on to find out why you might want to consider overpaying your mortgage.

Overpayments reduce the balance of your mortgage

If you have a repayment mortgage, your regular monthly repayments will cover the interest accrued and a portion will be used to reduce the debt.

As a result, a large proportion of your repayments could be going towards the interest, especially if you have a long mortgage term.

For example, if you borrow £150,000 through a repayment mortgage with a 25-year term and an interest rate of 4.5%, your monthly repayment would be £833 and you’d pay £9,996 over a year.

Yet, during the first year of your mortgage, your mortgage debt would reduce by just £3,325 because most of your repayment is covering the accrued interest.

As your outstanding mortgage balance falls, the amount of interest added slowly declines and a larger portion of your repayments will go towards reducing the debt.

In contrast, when you make a mortgage overpayment, this will reduce the outstanding balance. So, it can be an effective way to reduce your mortgage term and means that less interest is accrued.

Even small regular mortgage overpayments could save you thousands of pounds

According to Santander calculations from January 2025, overpaying your mortgage by the equivalent cost of just a few pints a week could save you thousands of pounds.

With the average pint of larger now costing £4.81, just three pints a week can add up to £57 a month.

The research shows that if you had a 25-year repayment mortgage of £200,000 with an interest rate of 4.5%, and you overpaid by £57 each month, you’d save £12,983 in interest alone. What’s more, you’d be mortgage-free two years and one month earlier than planned.

If you increase the regular amount you were overpaying, the benefits are even larger. In the same scenario, if you overpaid by £144 a month, the cost of around 30 pints, you’d save more than £28,000 and take four years and eight months off your mortgage term.

So, even small but regular overpayments have the potential to save you thousands of pounds when you look at the effect of them over the long term.

As well as making regular overpayments, you might choose to pay off a lump sum too.

Let’s say you have a £150,000 repayment mortgage and 15 years left on the term with a 4.5% interest rate. If you used a £15,000 lump sum as an overpayment, you’d save more than £13,000 in interest alone over the full mortgage term. You’d also be mortgage-free two years earlier than expected.

So, next time you receive a bonus or you’re deciding where to save a lump sum, you might want to consider using it to overpay your mortgage.

You might also choose to combine regular and lump sum overpayments to reduce your mortgage debt as quickly as you can.

Check if you could face an early repayment charge

Before you make regular or one-off mortgage overpayments, be sure to check your mortgage agreement.

If you have a mortgage deal in place, you could face an early repayment charge (ERC). Usually, you can pay up to 10% of the outstanding mortgage balance as an overpayment each year without an ERC applying. However, this isn’t always the case, so checking your mortgage terms could help you avoid an unexpected fee.

Contact our team to talk about your mortgage

As well as overpaying, taking out a new mortgage with a more competitive interest rate could also help save you money in the short and long term. If you’d like to talk to our team about your mortgage options, please get in touch.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Those who have retired or are nearing the milestone are consistently overlooking the risk of financial shocks when compared to other generations, a survey published in PensionsAge in December 2024 suggests.

According to the report, 43% of over-50s had thought about financial shocks but not included the risks in their retirement plan. A further 32% haven’t considered risks at all.

Later in life, you might feel more financially secure than you did when you were younger, and if you no longer work, you don’t need to consider the risk of losing your job or being unable to carry out your role due to illness. So, it’s easy to see why weighing up financial shocks may become less of a priority in your later years.

However, financial shocks still have the potential to have a significant effect on your financial security and lifestyle. Read on to discover three shocks you may want to consider when you review your retirement plan.

1. An illness could affect your short- and long-term finances

During your working life, illness may have been a financial shock you incorporated into your financial plan as it could limit your ability to work. While an illness may not affect your income in retirement, it could still derail your finances.

For example, your outgoings could rise significantly. If you’re ill, you might need to factor in the cost of travelling to appointments and increased heating bills, or you might even choose to pay for private medical care. In some cases, a long-term diagnosis could lead to other large costs, such as needing to adapt your home or pay for a carer to provide support in your daily life.

If you haven’t budgeted for these outgoings or don’t have an emergency fund you can use, the cost of being ill could mean you deplete your pension and other assets quicker than you expect. This might leave you in a financially vulnerable position later in life.

Despite this, illness is something only 19% of over-50s considered when setting out their retirement plan. Similarly, just 17% had thought about the possibility of going into care.

2. A partner passing away may leave an income gap

The death of your partner can be difficult to think about. Indeed, it’s something only 18% of over-50s have fully planned for and almost a third have avoided the topic completely.

Yet, it may be an important part of creating long-term financial security for both you and your loved one. If one of you passed away, how would it affect the surviving partner’s finances in the short- and long-term?

For instance, if just one of you has an annuity that pays a regular income throughout retirement, this would stop when the person passes away, potentially leaving an income gap for the surviving partner. To mitigate this risk, you might select a joint annuity instead, which would continue to pay an income to the surviving partner for the rest of their life.

So, while these types of conversations can be emotional and challenging, having them and adjusting your retirement plan, if necessary, could offer peace of mind that you or your partner will be financially secure if the other passes away.

3. You might want to support other family members

If your child, grandchild, or other loved ones faced a financial emergency, would you want to offer them support?

Many people will answer “yes” to this question. Yet, only a small proportion of over-50s have considered how they’d lend a helping hand in retirement. As part of their retirement plan, 16% of parents have included a provision in case their children need urgent financial support and 7% have thought about how they may need to support their parents.

If you haven’t thought about how you’d lend support, it could mean you’re unsure how to respond if a loved one approaches you for help. It may lead to a decision that’s not right for you and could affect your long-term finances.

For instance, if you were to withdraw a lump sum from your pension to gift to your child, you could be faced with a larger tax bill than you expect, and it might have an impact on the long-term investment returns of your pension. Instead, depending on your circumstances, depleting other assets, like savings, could be more efficient.

Making this type of financial shock part of your retirement plan could mean you’re able to feel confident in the support you provide.

While you’re weighing up how to support your loved ones, you may want to review your wider estate plan, which includes setting out how you’d like your assets to be distributed. For some, this will involve writing a will that will state how assets are to be divided when you die. You may also consider gifting during your lifetime.

If you’d like support when reviewing your estate plan, please get in touch.

Considering financial shocks could boost your confidence in retirement

While weighing up the risk of financial shocks might seem like a daunting task, it may lead to you feeling more confident about your retirement. Knowing you’ve taken steps to improve your financial security, even if something unexpected happens, could allow you to focus on enjoying the next chapter of your life.

Get in touch with our team to talk about which steps may mitigate the effect of financial shocks during your retirement.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The Financial Conduct Authority does not regulate tax planning or estate planning.