News in Review

The CPI rate of inflation rose to 3.5% in April—above forecasts—driven by energy, services and air fares The £20,000 ISA limit is to remain but changes to the cash ISA component are under review The government is expected to expand eligibility for winter fuel payments in the Autumn Budget 

“April’s rise in inflation was widely expected” 

The latest inflation data from the Office for National Statistics (ONS) shows the Consumer Prices Index (CPI) rose by 3.5% in the 12 months to April 2025, a sharp increase from the 2.6% reading in the 12 months to March. This uptick was higher than expectations, with a Reuters poll of economists predicting 3.3% and the Bank of England (BoE) 3.4%. It marks the highest rate in over a year. 

During the month (April), CPI rose by 1.2%, compared with a rise of 0.3% the previous April. The pickup in the rate can be attributed to increases in household bills, with electricity, water and gas prices increasing on 1 April. Service price inflation also leapt 5.4% in the 12 months to April, outpacing expectations of between 4.8-5.0%. In April, service prices elevated 2.2%, representing the largest increase in 34 years. 

Air fares also contributed to the increase. ONS noted that the timing of the Easter holiday, which fell in April this year, likely contributed to the sharp rise in fares – up 27.5% from March – marking the second-largest monthly increase for April ever recorded. 

The BoE expects inflation to peak at 3.7% between July and September. 

Principal Economist at the CBI Martin Sartorius said, “April’s rise in inflation was widely expected, driven by a perfect storm of price pressures such as higher employer National Insurance contributions, the National Living Wage increase, and a hike in the Ofgem price cap. Looking ahead, the Bank of England expects that inflation will stay above 3% this year, as these pressures continue to impact household’s cost of living. This suggests that the Monetary Policy Committee is likely to hold rates in its next meeting, especially after May’s finely balanced decision to cut. Beyond then, the MPC will reduce borrowing costs at a gradual pace, as it assesses how price pressures are developing in the economy.” 

ISA allowance to be preserved 

Last week, Rachel Reeves confirmed the £20,000 annual limit on ISAs (Individual Savings Accounts) will not be reduced, as widely speculated. However, she did not directly rule out the idea of cutting the cash ISA allowance while retaining the overall limit. 

Some have speculated that the cash allowance could be cut to encourage people to invest instead and kickstart economic growth, one of the government’s primary objectives. The Chancellor commented, “I’m not going to reduce the limit of what people can put into an ISA, but I do want people to get better returns on their savings, whether that’s in a pension or in their day-to-day savings.” 

She continued, “At the moment, a lot of money is put into cash or bonds when it could be invested in equities, in stock markets, and earn a better return for people. But I absolutely want to preserve that £20,000 tax-free investment that people can make every year.” 

The Chancellor is expected to announce a consultation seeking views from across the City of London on potential reforms to the ISA market. The upcoming Mansion House speech in July is widely anticipated as the platform for launching the consultation. 

Winter fuel payment U-turn 

At the start of Prime Minister’s questions last week, Keir Starmer announced a U-turn on the winter fuel payment for pensioners. He said that more pensioners will be eligible for payments, adding that the government will make decisions based on affordability. Last year, the government made the benefit means-tested, which eliminated over nine million people from the payment (of up to £300). After the changes, only pensioners with annual incomes below £11,500 were eligible for the payment. The revised eligibility criteria are expected to be outlined in the Autumn Budget. Downing Street has not confirmed when the changes will be implemented.  

A spokesperson for the End Fuel Poverty Coalition commented, “Any U-turn is welcome, but what matters now is the detail, especially if Winter Fuel Payments are not restored to all pensioners. Any dilution of the proposals will mean fewer older people can be helped to reduce their energy use in a safe way. Pensioner fuel poverty is often hidden away behind closed doors and ultimately pensioners need warm, energy-efficient homes, not more sticking plasters.” 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (28 May 2025) 

Residential Property Review – May 2025

Knight Frank raises its UK house price growth forecast to 3.5% for 2025 amid rate cut optimism March saw a surge in transactions as buyers rushed to beat the Stamp Duty changes Buy-to-let investors increasingly target northern regions for affordability and rental yield advantages 

Improving rate outlook boosts UK forecasts 

Knight Frank has raised its house price forecasts amid signs of a more supportive interest rate environment.  
 
The revision follows the Bank of England’s recent rate cut to 4.25% and growing expectations of further reductions this year. Even if those cuts don’t materialise, Knight Frank says cheaper fixed-rate mortgages will underpin demand in the months ahead. The estate agent expects UK residential property prices to rise 3.5% in 2025, up from a previous estimate of 2.5%, with five-year growth projected at 22.8%. Greater London’s outlook has also been upgraded, reflecting stronger prospects as mortgage rates edge down. 

However, forecasts for prime Central London were downgraded, with prices expected to remain flat this year due to political uncertainty and the government’s decision to scrap the non-dom regime. While Central London prices fell 1.6% over the past year, outer London saw a 1.2% rise. Rental forecasts remain broadly unchanged. 

Stamp Duty deadline boosts March sales  

March saw the fifth highest number of transactions in any month of the last decade, according to Savill’s latest UK Market Update.  

UK housing market activity surged in March ahead of Stamp Duty changes, with HMRC recording over 164,000 transactions, 66% above the pre-pandemic average. However, demand has since cooled.  According to Nationwide, annual growth in house prices is expected to slow to 3.4%. The slowdown reflects a more cautious mood among buyers. A recent survey found 37% of buyers expect mortgage rates to rise, compared to just 16% anticipating a fall. 

Despite this, mortgage rates have dropped for many borrowers, with sub-4% deals returning for low loan-to-value purchases. The Bank of England’s latest rate cut has given lenders room to compete, while softened stress testing rules may boost borrowing power. Still, limited housing supply may keep prices elevated.  

Buy-to-let investors look north as cost pressures reshape the market 

Buy-to-let investors are currently favouring the midlands and north of England, as mortgage and Stamp Duty costs make the south less attractive.  

Hamptons research shows a record 39% of buy-to-let purchases took place in these regions from January to April 2025, up from 34% in 2022 and 24% in 2007. This comes despite a broader slowdown in landlord activity, with investors accounting for only 10% of home purchases nationwide so far this year. 

The north benefits from lower property prices and stronger rental yields. The average landlord with property in the midlands and north spent £150,480 on an investment property, saving nearly £142,000 compared with average purchases in the south. In North-East England, new buy-to-lets are delivering 9.3% gross yields, well above the national average of 7.1%. If current trends continue, most buy-to-let activity could shift north by 2033. However, this may hit tax receipts and worsen rental shortages in pricier southern regions. 

Limited company structures dominate landlord ownership  

The share of landlord-owned properties held in limited companies has reached 66%, up from just 36% in 2020, according from Pegasus Insight research for Foundation Home Loans.  

Among those landlords planning to buy in the next year, 60% intend to use a limited company. Landlords using corporate structures own an average of 14.6 properties, compared with 5.2 for those holding property personally. Diversification is also on the rise, with one in five landlords owning a property with multiple occupiers and 6% holding a holiday let. Larger landlords are far more likely to invest in these specialist types of property. 

Despite rising costs, 84% of landlords remain profitable and rental yields remain strong. Remortgage activity is expected to stay high, with many favouring fixed-rate deals for added stability. Regulatory reform, particularly around possession and energy efficiency, remains the sector’s top concern. 

All details are correct at the time of writing (21 May 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

Commercial Property Market Review – May 2025

Q1 2025 West End investments hit £1.71bn, driven by three major transactions despite fewer deals UK commercial property demand is rebounding, with offices and industrials gaining, while retail lags behind The Big Six cities, especially Manchester and Leeds, show strong office market recovery and occupier demand

West End investment rebounds  

London’s West End commercial property market saw a robust start to 2025, with Savills reporting £1.71bn in investment volumes across 24 transactions in Q1.  
 
Three large deals dominated, accounting for over £1.1bn. March saw nearly half the total, boosted by Norges Bank Investment Management’s £570m acquisition of a 25% stake in Shaftesbury Capital’s Covent Garden portfolio. Despite transaction numbers still falling short of long-term averages, Q1 turnover was 15% above the ten-year average and 40% above the five-year. 

Other significant March deals included GPE’s £56m purchase of One Chapel Place, JD.com’s acquisition of 20 Greycoat Place and a rapid private sale of 17 Albemarle Street for £15.1m. Domestic investors were the most active buyers, while UK sellers led disposals. Savills notes rising demand in areas with improving rents. Prime West End yields fell to 3.75%, suggesting a gradual recovery despite ongoing economic uncertainty, according to Savills. 

Signs of recovery in UK commercial property  

UK commercial property is showing early signs of recovery, according to the latest Royal Institution of Chartered Surveyors’ (RICS) survey, although broader sentiment remains cautious.  

Modest gains in office and industrial demand helped push overall occupier demand into marginally positive territory in Q1 2025, although retail continues to underperform. Prime offices and industrial spaces should see rental and capital value growth this year, while weaker outlooks persist for secondary retail and office stock. Data centres, multifamily housing and life sciences assets are expected to outperform. 

However, rising National Insurance costs are adding pressure on occupiers and uncertainty from US tariffs has weighed on market confidence. Central London is forecast to lead on prime office rents, while Scotland and Northern Ireland could see the strongest gains in prime industrial. RICS cautions that while sentiment is improving in places, domestic and international policy challenges make the longer-term outlook uncertain. 

Big Six regional office markets buoyed by strong demand 

Investor confidence in UK regional office markets remains high, with strong demand focused on city centre assets in the Big Six cities.  

According to Colliers’ Regional Offices Snapshot, occupier appetite and rental growth are driving activity, with business parks and older stock being targeted for redevelopment. Manchester led the way, accounting for 35% of Big Six take-up over the past year. Transactions totalled nearly 320,000 sq. ft in the first quarter, 14% above the ten-year average. City centre availability has declined for five consecutive quarters, with Grade A vacancy falling to 2.2%. 

Leeds started the year strongly, with deal volumes up 53% on Q4 2024. Although Grade A take-up was slightly below average, key lettings at Aire Park supported strong absorption. Encouragingly, demand from financial, tech and media sectors rebounded. Bristol had a slower Q1, with city centre take-up 27% below last year and 40% below the five-year Q1 average. 

Occupier demand surges in Scottish commercial property market 

Scottish commercial property demand is rising at its fastest pace in three years, according to the latest RICS Commercial Property Monitor.  
 
In Q1 2025, 21% of surveyors reported an increase in demand, up from 10% at the end of 2024. Growth was recorded across offices, industrial sites and retail units. Industrial space led the way, with 37% of respondents reporting stronger occupier demand. Offices and retail space also rose, continuing last year’s trend. Over the next 12 months, 42% of surveyors expect rents to increase across all sectors, with the industrial sector singled out for likely rental growth. 

Enquiries for office and industrial space has improved significantly, though retail remained flat. Capital value expectations are up for offices and industrials, but still falling in retail. Longer-term, surveyors remain upbeat despite concerns around build costs, inflation and development constraints voiced by professionals in Glasgow and Edinburgh. 

All details are correct at the time of writing (21 May 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

The UK economy grew 0.7% in Q1 2025, exceeding forecasts and signalling potential recovery momentum A new UK-EU deal includes border easing, a youth mobility scheme and renewed defence cooperation The FCA reveals 13 million have low financial resilience, with widespread savings shortfalls and mental stress 

“The economy is beginning to turn a corner” 

The latest data from the Office for National Statistics (ONS) shows the UK economy grew faster than expected in Q1, recording a 0.7% uptick in GDP. A Reuters poll of economists had predicted growth of 0.6% in the quarter, aligned with Bank of England estimates. This growth marks a sharp increase from the 0.1% recorded in Q4 2024. 

Increases in consumer spending and production supported growth in Q1, with the services sector also dominating. Business investment also saw strong growth, expanding by 5.9% from Q4, the largest increase in two years. On a monthly basis, the ONS data shows the economy grew by 0.2% in March, outperforming analysts’ expectations of zero growth.  

Rachel Reeves reacted to the data, saying the growth was “very encouraging” before adding, “we still have to do more. I absolutely understand that the cost of living crisis is still real for many families, but the numbers today do show that the economy is beginning to turn a corner.” 

The latest data captures growth just before US tariff announcements and employer National Insurance increases, with analysts cautioning the strong growth rate is unlikely to continue. 

Economics Director at the Institute of Chartered Accountants in England and Wales (ICAEW), Suren Thiru believes the Q1 pick up in growth is likely to prove short-lived as businesses rushed to satisfy orders prior to US tariffs, commenting, “This robust quarterly reading is probably the pinnacle for economic growth this year, with activity likely to slow sharply going forward as tax and tariff rises and global uncertainty bite.” 

New UK/EU deal struck 

This week, Keir Stamer hosted a summit with senior leaders from the bloc, including Ursula von der Leyen, European Commission President, where he signed a deal with the EU, in a bid to reset relations.  

Key elements of the deal include a 12-year agreement on EU fishing boats accessing UK waters, a reduction in checks on food exports to the EU, UK travellers to Europe will be permitted to use e-gates at borders, a new defence and security pact, and a youth mobility scheme allowing young people from the EU and UK the right to live and work in each other’s countries for a limited period. 

The Prime Minister said, “It’s time to look forward… to find common sense practical solutions which get the best for the British people. We’re ready to work with partners if it means we can improve people’s lives here at home.” 

“Finances are stretched for many” 

The latest Financial Lives survey from the Financial Conduct Authority (FCA) has highlighted that a quarter of the population (13 million people) have low financial resilience, meaning they have low savings, are missing a series of bill payments and are struggling with debt. Alarmingly, 10% have no cash savings, while another 21% have under £1,000 in savings. The findings, released on Friday, underscore the financial vulnerability of millions and the far-reaching impact on their mental health – with almost 12 million people feeling stressed or overwhelmed handling financial matters. 

Executive Director of Consumers and Competition at the FCA, Sarah Pritchard commented, “Our data shows that finances are stretched for many – with some unable to save for a rainy day. And we know that some do not have the confidence to invest… but there are improvements – more people with current accounts and less digital exclusion.” 

As part of a new strategy, the FCA is working to improve people’s access to help, guidance and advice so that everyone can access the support they need, at an affordable price, enabling them to make informed financial decisions. 

Other key findings from the bi-annual survey include: 

  • The median amount people hold in savings is £5,000 to £6,000 
  • A fifth of people hold savings of at least £25,000, with 10% holding savings exceeding £50,000 
  • Just over 60% of people who hold over £10,000 in investible assets such as money in savings accounts and cash ISAs, are holding at least three quarters of these assets in cash as opposed to investments 
  • 3.8 million retirees are concerned they don’t have enough money to last throughout their retirement. 

The FCA wants to see more people holding mainstream investments, in order to improve long-term returns. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (21 May 2025) 

Navigating uncertainty together 

Economic and political uncertainty can lead to impulsive financial decisions—long-term planning is key Media headlines create noise, but financial plans should be tailored to personal goals, not speculation. A strong financial strategy is built to adapt—seek expert advice to stay on track 

Over the past five years, we’ve experienced a global pandemic, geopolitical conflicts, political upheaval and economic uncertainty. Constant media coverage over what feel like daily developments, whether that be on the international stage as Donald Trump’s second term impacts or on home shores, where the government’s changes to policy and taxation naturally result in feelings of uncertainty. This can lead many to make knee-jerk financial decisions without fully understanding the consequences. 

Now, more than ever, it’s essential to take a step back and take advice before making any financial moves. Headlines create noise, but your financial plan should be tailored to your specific circumstances – not dictated by market noise or speculation. Investing is about the long term – not reacting to daily events. 

We work hard to build a well-structured, long-term strategy. Take comfort from the fact that a solid plan can flex as different challenges present. You don’t need to navigate this alone – stay disciplined and take advice to ensure your financial future remains on track. We’re here to support and guide you. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Surging demand for protection insurance – are you covered?

Income protection demand is expected to grow, with 51% of financial advisers predicting an increase in 2025 44% of advisers anticipate rising demand for life insurance, as more people seek financial security  With economic uncertainty, more individuals are prioritising private health insurance and income protection 

The demand for health insurance, income protection and life insurance is expected to rise significantly in 2025, according to a recent survey1. The study, which gathered insights from 250 UK financial advisers, highlights a growing awareness amongst clients of the need for comprehensive protection cover. 

Income protection is set to see the most substantial growth, with 51% of advisers predicting increased demand, while 31% expect it to remain steady and only 18% foresee a decline. Similarly, life insurance demand is anticipated to rise, with 44% of advisers forecasting growth, 37% expecting no change and 19% predicting a drop. Private health insurance also follows this trend, with 40% of advisers anticipating an increase, 32% expecting stability, and 28% forecasting a decline. 

A busy year 

These figures, as well as our own experience of what clients are asking about, indicate that this year is shaping up to be a busy one for protection insurance, as more people recognise the importance of safeguarding their financial future. With economic uncertainties and evolving healthcare needs, individuals and families are increasingly looking for ways to secure their income and wellbeing. 

If you’re considering protection insurance or want to review your existing cover to make sure it meets your current needs, now is the time to explore your options. We’re here to help with all your protection needs – get in touch to find the right cover for you and your family. 

1The Exeter, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. 

One in six plan to move in 2025

30% of Brits moved home in the past three years, motivated by lifestyle changes and space One in six homeowners plan to relocate this year, with garages and gardens top priorities Renters face affordability challenges, with many needing family support to buy their first home. 

After a busy period in the housing market, there seems to be plenty of appetite left among homeowners and renters for seeking pastures new, research1 suggests. 

Keep on moving 

Some 30% of Brits have moved home in the past three years. The main motivations for doing so have included lifestyle improvements (17%), a desire to be closer to family and friends (17%) and finding a bigger home (15%). 

There is no sign that the moving frenzy is over: one in six existing homeowners intend to relocate this year. In 2025, top priorities for prospective buyers are garages or driveways (40%), which came out narrowly ahead of gardens (39%) and functional spaces like pantries or utility rooms (32%). 

A foot on the ladder 

Among renters, one in five think that home ownership is within their reach during the next five years. Yet, affordability concerns remain at the forefront for many: property prices (40%) and the amount needed for a deposit (37%) are respondents’ two biggest barriers to home ownership. Besides, six in 10 renters believe it would be impossible to buy a home without support from a family member. 

Staying put 

For homeowners who are staying put, many are focused on sprucing up instead: some 43% are considering renovating or redecorating. Meanwhile, a quarter plan to update their property to boost energy efficiency. 

1Barclays, 2025 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. 

News in Review

The UK secured a trade deal with US, cutting car tariffs and protecting key industries and jobs A UK-India trade deal slashes tariffs and is expected to add £25bn in annual trade by 2040 The Bank of England cut Bank Rate to 4.25% amid easing inflation and global trade uncertainty 

“This historic deal delivers for British business and British workers”  

The UK secured what both leaders called a “historic” trade deal with the US, becoming the first country to reach an agreement with Washington since Donald Trump imposed sweeping new tariffs in April. 

Under the agreement, duties on UK car exports to the US will fall to 10% for up to 100,000 vehicles a year, roughly matching last year’s export total. The deal offers a lifeline to key British industries, especially carmakers, which faced the threat of punishing 27.5% tariffs.  

Prime Minister Keir Starmer, speaking from a Jaguar Land Rover factory, called the deal a “fantastic platform” that would protect thousands of British jobs. Business Secretary Jonathan Reynolds said the breakthrough came just in time to prevent major job losses. 

Starmer added, “This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors… My government has put Britain at the front of the queue because we want to work constructively with allies for mutual benefit rather than turning our back on the world.” 

The US will reinstate previous quotas on UK steel and aluminium, easing earlier tariff hikes, while both countries agreed to open up access to beef markets. The US will now be able to export up to 13,000 tonnes of beef to the UK, up from just 1,000 tonnes previously, while UK producers gain similar access in return. 

Trump hailed the agreement as “a great deal” which would be expanded further. US officials claim it could unlock $5bn in export opportunities, including hundreds of millions in ethanol and agricultural products. 

While the announcement lacked the formal signatures and detailed terms of a full trade agreement, both governments presented it as a significant step. However, analysts were cautious, suggesting the changes largely restored previous trading conditions rather than setting new ground.  

UK and India strike landmark trade deal  

The UK and India have signed a long-awaited trade agreement that promises to open up new opportunities for exporters and lower prices for consumers. The UK government estimates it could boost trade between the two countries by more than £25bn a year by 2040. 

The deal, which took three years to negotiate, will cut tariffs on a wide range of goods, from British whisky and cars to Indian textiles and jewellery.  

Keir Starmer said the agreement would help grow the economy and support jobs, while India’s Prime Minister Narendra Modi called it a mutually beneficial milestone. India, already the world’s fifth largest economy, is on track to become the third largest within a few years, making it a key trade partner. 

British exporters of gin, whisky, aerospace and medical devices stand to benefit from lower Indian tariffs, with duties on whisky halving to 75% and falling further over time. Luxury carmakers will also see tariffs slashed from 100% to 10%, although exports will be subject to quotas. Meanwhile, Indian goods such as clothing, seafood and gems will become cheaper in the UK. 

Observers say the deal could be transformational, given India’s size and the historically high barriers to accessing its market. Jonathan Reynolds described the benefits as “massive” for both firms and consumers. 

Bank of England cuts Bank Rate 

The Bank of England (BoE) cut Bank Rate from 4.5% to 4.25% at its May meeting last week. The decision, made ahead of confirmation of the new UK-US trade deal, reflected concerns that higher tariffs would slow UK growth and bring inflation down. The BoE’s Monetary Policy Committee was split, with two members pushing for a deeper cut to 4% and two favouring no change at all. Five members supported the quarter-point reduction. 

Although the BoE stopped short of predicting a recession, it warned the global trade environment was adding to economic uncertainty. Governor Andrew Bailey said the rate cut was possible because inflation had continued to ease, but he said future rate decisions would be gradual and data-driven. Markets expect further rate cuts in the coming months, but uncertainty remains over how aggressive the BoE will be. 

The BoE predicts UK gross domestic product (GDP) to grow 1% this year, up from 0.75%, largely due to a stronger-than-expected first quarter. However, underlying growth remains subdued at just 0.1% per quarter. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

             All details are correct at time of writing (14 May 2025) 

Closing the investing gap

13 million UK adults are sitting on £430bn in cash, potentially missing out on higher long-term investment returns Many savers find investing too complex—74% need guidance on choosing the right investments  Holding cash is useful for short-term needs, but long-term investing can offer greater wealth-building potential 

A recent report1 estimates 13 million UK adults are sitting on £430bn of cash savings. The report, titled ‘Empowering retail savers to engage with investing’ suggests savers are “missing out” on earning better returns over the long term. 

The research highlights three reasons why savers are reluctant to invest: 

  • Too many options: 

One in five (21%) people with savings don’t think they have the knowledge to choose what to invest in, while 24% think investing is too complicated 

  • Not confident with comparing investments: 

Nearly three quarters (74%) need help to determine which type of investment is suitable for them, while two-thirds (63%) want assistance in comparing investment products 

  • Too worried about risk: 

Almost half (43%) of savers think investing is too risky and could mean they “lose all their money.” 

What is the long-term cost of saving instead of investing? 

Financial software firm Oxford Risk believes choosing saving over investing carries a high cost, with savers missing out on up to 5% a year in lost returns. The firm is also concerned that a growing number of UK adults are choosing to ‘sit on the sidelines’ by keeping their money in cash. 

What can be done to close the investing gap? 

The Financial Conduct Authority (FCA) has made addressing cash holdings a strategic priority and Oxford Risk has urged, ‘More needs to be done beyond just raising awareness of the issue to drive the vital change in investor behaviour.’ 

Holding a proportion of your wealth in cash is worthwhile for liquidity, emergencies and short-term needs. However, history has shown that over the long term, investing yields higher returns than holding cash, although not guaranteed. The key is balance: keep enough cash for security but invest the rest to build wealth over time. Diversification to spread the risk is important. 

1Barclays, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse. 

IHT receipts continue their ascent

IHT receipts topped £6.3bn in the eight months to December, a £600m increase on the same period the previous year OBR predicts IHT receipts will continue their ascent, forecasting total receipts of £9.7bn a year by 2028/29 Factors including a rise in asset values and frozen thresholds are contributing to rising receipts 

HM Revenue and Customs (HMRC) data shows IHT receipts topped £6.3bn in the eight months to December 2024, a £600m increase on the same period the previous year.  

This significant 11% year-on-year increase places the 2024/25 fiscal year firmly on course to be the fourth consecutive year of record IHT receipts for the Treasury.  

Meanwhile, the Office for Budget Responsibility (OBR) has predicted that IHT receipts will continue their ascent, forecasting total receipts of £9.7bn a year by 2028/29.  

HMRC said that higher receipts can be attributed to a combination of factors, including a rise in asset values, an increase in wealth transfers following IHT-liable deaths and frozen IHT tax thresholds.  

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.