News in Review

“I’m still not satisfied with the level of growth that our economy is achieving” 

The latest UK growth data from the Office for National Statistics (ONS) shows the economy grew by 0.1% in the fourth quarter of last year, exceeding expectations. A Reuters poll of economists had forecast that gross domestic product (GDP) would shrink by 0.1% in the period. 

The main contributor to GDP growth was the service sector, expanding by 0.4% in December, following growth of 0.2% the previous month. Production output grew by 0.5% in December 2024, while construction output fell by 0.2%. 

Despite the small uptick, the economy is still in challenging territory. Chancellor Rachel Reeves commented on the data, “The growth numbers have come in higher than many expected, but I’m still not satisfied with the level of growth that our economy is achieving.” She continued, “I am determined to go further and faster in delivering the economic growth and the improvements in living standards that our country deserves.” 

After the Bank of England reduced growth estimates for the year to just 0.75% from 1.5%, warnings are intensifying that the increase in employers’ National Insurance contributions, combined with the minimum wage increase announced during the Autumn Budget, are likely to result in many businesses cutting jobs and elevating prices. 

Mel Stride, the Shadow Chancellor, said the Autumn Budget is “killing growth” with businesses and working people “already paying for her choices.” 

It is widely anticipated that during the Spring Forecast on 26 March, the Office for Budget Responsibility (OBR) will also reveal downgrades to growth forecasts. 

A “positive near-term outlook” for housing sales 

Although the new UK Residential Survey from the Royal Institution of Chartered Surveyors (RICS) showed that growth in new buyer enquiries and agreed sales both weakened in January, survey respondents are optimistic about sales and house prices in the coming months. The RICS house price balance – which measures the difference between respondents reporting price increases and those noting falls – declined in January to +22 from +26 in December, despite a poll of economists having expected a reading of +27 in January. 

Looking at the regional data, house prices continue to rise across the UK. The North West of England and Northern Ireland are experiencing the most robust growth, while price strength is least robust in the South East, and Yorkshire and the Humber. 

RICS Head of Market Analytics, Tarrant Parsons, commented on the dataset, “Growth in buyer demand lost a bit of momentum through the early part of the year, with this flatter picture likely linked to the turbulence seen across money markets in the first half of January.”  

Looking ahead, Mr. Parsons said, “Respondents continue to envisage a slightly positive near-term outlook for sales activity. This should be further supported by the unwinding of some of the pressures around mortgage interest rates over the past couple of weeks.” 

Economists expect interest rate reductions and the increase in Stamp Duty from April will support the market.  

First-time buyers on the up 

Market analysis from Halifax has highlighted that in 2024 there was a 19% uptick in first-time buyers (FTBs), with 341,068 purchasing a home. The data shows, despite affordability challenges, FTBs make up the largest share of home purchases. Notably, those buying their first home made up over half (54%) of all home purchases made with a mortgage in 2024. The average FTB is aged 33, versus 31 ten years ago. The average deposit is £61,090.  

Wages continue to outpace inflation  

Average wages are continuing to outpace inflation according to official figures released by ONS on Tuesday. Without taking account of inflation, ONS said annual pay growth, excluding bonuses, was 5.9% from October to December 2024. Earnings growth for the private sector was 6.2%, while for the public sector it was 4.7%. 

When taking inflation into account, pay rose by 3.4% between October and December compared with the same period in 2023. 

The data release showed that the UK’s unemployment rate remained unchanged at 4.4%, although ONS has advised that its jobs figures should be treated with caution because of low response rates to its employment survey. 

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 (19 February 2025) 

Money – In other news

One in five UK adults have been scammed in the past year, causing debt and financial strain. 38% of Brits in their 30s and early 40s are relying on their parents’ assets for financial security. There are an estimated 2.8 million missing pension pots in the UK, fuelling demand for the Pension Tracing Service. 

One in five targeted by financial scams 

Research by Citizens Advice reveals that around one in five1 (18%) people in the UK have fallen victim to financial scams, such as fake pensions or investment opportunities, over the past year, affecting an estimated nine million individuals. Among those scammed, 43% had to borrow or increase their debt, 24% turned to family or friends for help and 20% took on extra work. Citizens Advice’s Scams Awareness campaign aims to protect people by highlighting common scams, including fake debt advice, pension fraud, and QR code scams in car parks. 

Reliance on parents’ pensions 

Over a third (38%) of Brits in their 30s and early 40s plan to rely on their parents’ assets to secure their own financial future2. Over half expect an inheritance to be their main source of retirement income, with 19% banking on a boost to their finances when their parents pass away. Worryingly, 30% don’t think they will ever have enough to retire, leading some to anticipate working past retirement age. This reliance on parental financial support continues into adulthood for many. 

Hunt for lost pensions keeps growing 

Lost pensions are again in the spotlight, with new research3 revealing there are an estimated 2.8 million missing pension pots in the UK. As more people hunt for their lost pension money, demand for the Pension Tracing Service (PTS) continues to grow. In total, the PTS has received more than 276,000 calls since January 2019 – and 2024 looks set to be another record breaker, with 31,505 calls from January to May 2024. 

1Citizens Advice, 2Moneyfarm, 3Pensions Policy Institute, 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. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

Why financial procrastination can harm your health (and your finances)

Financial procrastination – delaying financial tasks – can negatively impact both your finances and health. Signs of financial procrastination include fear of mistakes, lack of confidence, and unclear financial goals. Combat procrastination by setting clear financial goals, seeking expert advice, and taking proactive action. 

We all know that putting things off is all too easy. As the new year rolls around, many will be making resolutions to get organised. Is ending financial procrastination one of your goals? 

What is financial procrastination? 

Broadly speaking, financial procrastination refers to a tendency to delay or avoid financial decisions or tasks. Its impacts range from paying bills late to avoiding getting started on retirement planning. 

In the busy modern world, it’s easy to overlook your financial to-do list. Other causes of financial procrastination include stress and confusion around managing money. Putting off financial tasks can impact more than your money: studies have linked procrastination to negative health outcomes such as depression and anxiety. 

Signs you’re a financial procrastinator  

The first step to fighting financial procrastination is to understand what it looks like. Do you fear making mistakes with money? Does a lack of confidence prevent you from taking control of your finances? Do you have low motivation or self-discipline with money? 

If you’re feeling overwhelmed or confused about your finances, have unclear goals and priorities, or experience strong negative emotions about money, you may be a financial procrastinator. 

Take control of your finances  

Thankfully, combatting financial procrastination can be relatively easy. The key remedy is to talk through your finances and develop a plan to take control. By establishing a series of financial goals and longer-term objectives and taking expert advice, you can make sure financial delays never hold you back again. 

Here to help 

We take an active approach to managing your finances – no procrastination here! Get in touch today for the support and strategy you need to achieve your financial goals – whatever they may be. 

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. 

News in Review

“Low and stable inflation is the foundation of a healthy economy” 

In their latest meeting on 6 February, the Monetary Policy Committee (MPC) voted by a 7 to 2 majority to cut Bank Rate by 0.25 percentage points to 4.5%, in a widely expected move. The two dissenting voices wished to reduce Bank Rate by 0.5 percentage points to 4.25%.  

For the seven members favouring the reduction to 4.5% – the lowest level since June 2023 – the justification was based on ‘progress on disinflation in domestic prices and wages,’ according to the meetings minutes. However, inflation is proving more stubborn than hoped, with higher global energy costs expected to elevate headline CPI inflation to 3.7% in the third quarter of the year, before falling back to around the 2% target towards the end of 2027 – six months later than previously anticipated. According to the Bank of England (BoE), a ‘gradual and careful approach to the further withdrawal of monetary policy restraint’ is appropriate, based on the MPC’s evolving view of the inflationary outlook. The central bank said the impact of potential US tariffs over the coming months was unclear, but higher global tariffs were likely to impact inflation and result in even slower growth. 

The meeting minutes revealed that the BoE has reduced its 2025 growth forecast for the UK economy to just 0.75% from its previous estimate of 1.5%. However, the growth predictions for both 2026 and 2027 were elevated to 1.5%, from the 1.25% previously predicted. Keir Starmer commented on the reduced growth forecast, “We were never going to turn this around in six or seven months – that just spurs us on.” 

Andrew Bailey, Bank of England Governor, commented on the outcome of the meeting, saying, “We’ll be monitoring the UK economy and global developments very closely, and taking a gradual and careful approach to reducing rates further.” He continued, “Low and stable inflation is the foundation of a healthy economy and it’s the Bank of England’s job to ensure that.” 

Specifically on growth, the BoE Governor did say he felt the Autumn Budget had impacted, in particular the increase in employers National Insurance contributions from April, adding, “There’s no question that the increase in the cost of employment does have an effect,” feeding through into reduced confidence for both businesses and households.  

Rachel Reeves said the reduction to Bank Rate was “welcome news” before adding that she was still “not satisfied” with the level of growth. 

The next MPC meeting is scheduled for 20 March. 

National Minimum Wage and National Living Wage increases confirmed 

Last week the government confirmed legislation for a new National Living Wage of £12.21, and a new National Minimum Wage of £10.00 per hour from April 2025. The 6.7% in the National Living Wage provides a pay boost of £1,400 for eligible full-time workers. While the £1.40 per hour increase in the National Minimum Wage for 18-20-year-olds means eligible full-time younger workers will see their pay boosted by £2,500 a year.   

Employment Rights Minister, Justin Madders, welcomed the legislation, saying, “Economic growth only matters if working people are feeling the benefits. This will be a welcome pay bump for millions of workers who in turn will spend more in the real economy boosting our high streets.”  

Average house price hits record high  

The latest Halifax House Price Index showed that UK prices reached a record high in January, with the average property topping £299,138. Prices increased by 0.7% in the month, following a dip of -0.2% in December. Despite the annual growth figure easing slightly to 3.0%, down from 3.4% in December, Amanda Bryden, Head of Mortgages at Halifax, said the market was showing “noteworthy” resilience.  

Northern Ireland maintains the strongest UK annual house price growth, up 5.9% in January, averaging £205,473. In England, the North East has the most robust annual property price growth, up 5.2%, with properties averaging £178,696. As anticipated, London stays on the top spot with the UK’s highest average house price, at £548,288, up 2.8% year-on-year. 

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 (12 February 2025) 

Family tensions over money talks – time to break the taboo

Many wealthy individuals hesitate to discuss financial planning due to fears of family disagreements, with 10% avoiding the topic altogether and 27% finding it uncomfortable1. 

However, this reluctance to have a discussion could lead to future misunderstandings, as family members may have unrealistic expectations about their inheritance. Only 12% of wealthy individuals said they regularly discuss financial plans with their family and 23% want to but struggle to start the conversation. 

Generational differences add to the tension 

Nearly half of those under 35 said they expect to receive an inheritance, while 10% of those over 50 worry their family will be disappointed by their actual plans. Older generations are also more hesitant to talk about money, with 27% of those over 50 believing younger generations are more comfortable discussing financial matters. 

Regional variations in financial pressures 

It’s not just inheritance that causes people to stress about money. Another survey2 found the three main causes of financial pressure were: maintaining a certain lifestyle later in life, the value of investments and how much tax might be payable. Wealthy Londoners were found to be under the most financial pressure, with 88% experiencing financial stress. Of these, 20% worry about their finances constantly and nearly another 20% report worrying most of the time. The East of England followed a close second with 85% admitting persistent fear about the health of their finances. 

Open and honest discussions 

Whatever your level of wealth, having open and honest discussions about money and inheritance could ease your financial stress, helping your family to avoid future disappointment and ensuring everyone understands the reasoning behind the financial decisions you make. While these conversations may be uncomfortable, they could help to reduce your financial stress in the long run as well as being essential for preventing shocks for your family. 

Break the taboo and have open conversations with your loved ones about your financial circumstances and inheritance plans, allowing you and your family to take control and make necessary financial arrangements now that will help to ensure that you’re in good stead for the future. We can help. 

1Rathbones, 2Arbuthnot Latham, 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. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

Don’t invest under the ‘finfluence’

People are increasingly seeking financial guidance on social media. While financial influencers – or ‘finfluencers’ – can be useful in raising awareness around financial matters, there is also a darker side to the growth of unregulated advisers. 

Social media age 

In the UK, more than one in four people use some combination of social media, community messaging apps and online forums for investment guidance, research1 shows. Of those who get their investment advice from social media, one in five cited ‘free access to financial experts’ as a reason. Meanwhile, one in four pointed to the fact it was ‘quick and easy to use’ as justification. 

Not all advice is equal  

Entrusting your financial decisions to social media, however, comes with risks. One significant danger is that many people are failing to carry out checks on the advice they see online. Specifically, the same study found that more than half of UK adults who use social media for investment guidance do not carry out checks to verify the reliability of ‘finfluencers’ and their content. Young people are especially vulnerable, with increasing numbers falling victim to scams, with finfluencers often involved. 

FCA crackdown 

The FCA has interviewed 20 finfluencers who may be illegally selling financial services products; the FCA has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions. In many instances, these influencers are not FCA-authorised and don’t have the qualifications to give financial advice. 

Despite the fact anyone can pose as an expert online, fewer than half of those using ‘finfluencers’ always check that the information comes from a reliable source. Social media has its advantages, but making sure the advice comes from an accredited professional is the best way to steer clear of unsuitable investment advice and scams. 

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. 

In the news – Home Finance

Significant gains for homeowners over 20 years 

Analysis reveals1 that UK homeowners who purchased their properties in the last 20 years have seen an average increase of £80,000 in value. In comparison, those who sold within the last year made an average gain of £65,000. Homes in high-value areas and commuter towns, including the Cotswolds and Richmond upon Thames, experienced the largest gains, with 80% of properties increasing by over £65,000. Outside London, the South East had the highest proportion (70%) of homes appreciating by this amount. 

One in five UK residents suffer storm damage 

Storms and flooding are having devastating effects on residents across the UK, with two in five homes impacted by some form of extreme weather in the past five years. New research2 shows that more than a fifth of UK homes suffered storm damage between 2020 and 2024. Some 12% experienced flooding in the same period. Faced with this growing threat, getting the right home insurance to protect your property and peace of mind is more crucial than ever. 

Equity Release continues growth trend 

Data from the Equity Release Council (ERC)3 has shown the sector had two consecutive growth quarters to September 2024. In Q3 alone, a total of £615m of property wealth was withdrawn by homeowners over the age of 50, representing a 6% increase quarter-on-quarter. A modest increase in typical loan size was noted, with new lump sum lifetime mortgage clients taking out £111,618 on average. Chair of the ERC, David Burrowes commented on the data, “Returning growth may have been modest to date, but it’s particularly encouraging to see the trend continue.” 

1Zoopla, 2Aviva, 3ERC, 2024 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. Equity released from your home will be secured against it. 

Don’t invest under the ‘finfluence’ 

People are increasingly seeking financial guidance on social media. While financial influencers – or ‘finfluencers’ – can be useful in raising awareness around financial matters, there is also a darker side to the growth of unregulated advisers. 

Social media age 

In the UK, more than one in four people use some combination of social media, community messaging apps and online forums for investment guidance, research1 shows. Of those who get their investment advice from social media, one in five cited ‘free access to financial experts’ as a reason. Meanwhile, one in four pointed to the fact it was ‘quick and easy to use’ as justification. 

Not all advice is equal  

Entrusting your financial decisions to social media, however, comes with risks. One significant danger is that many people are failing to carry out checks on the advice they see online. Specifically, the same study found that more than half of UK adults who use social media for investment guidance do not carry out checks to verify the reliability of ‘finfluencers’ and their content. Young people are especially vulnerable, with increasing numbers falling victim to scams, with finfluencers often involved. 

FCA crackdown 

The FCA has interviewed 20 finfluencers who may be illegally selling financial services products; the FCA has also issued 38 alerts against social media accounts operated by finfluencers which may contain unlawful promotions. In many instances, these influencers are not FCA-authorised and don’t have the qualifications to give financial advice. 

Despite the fact anyone can pose as an expert online, fewer than half of those using ‘finfluencers’ always check that the information comes from a reliable source. Social media has its advantages, but making sure the advice comes from an accredited professional is the best way to steer clear of unsuitable investment advice and scams. 

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. 

News in Review

“Low growth is not our destiny… but growth will not come without a fight” 

Chancellor Rachel Reeves made a series of major announcements in a highly anticipated speech last Wednesday at Siemens Healthineers in Oxfordshire. Setting out more plans to boost growth, Ms Reeves unveiled fresh promises for infrastructure and redevelopment projects. “We can do so much better,” Ms Reeves remarked. “Low growth is not our destiny… but growth will not come without a fight.” 

Leading up to the speech, headlines were dominated by whether the government would back plans to build a third runway at Heathrow Airport. Ms Reeves duly confirmed her support, arguing that the development could create 100,000 jobs. The long-touted expansion at Heathrow received parliamentary approval in June 2018; now, with Ms Reeves’ go-ahead, the airport will submit expansion plans by the end of the summer. 

Other significant announcements include: 

  • An upcoming decision on whether Luton Airport can be expanded and whether an emergency runway at Gatwick Airport can be built. “There are two live decisions on Luton and Gatwick which will be made by the Transport Secretary shortly” Ms Reeves said 
  • A commitment to build “Europe’s Silicon Valley” between Oxford and Cambridge. Ms Reeves laid out some policies aimed at boosting the region’s growth, including improved transport links and better water infrastructure. “We are going further and faster to unlock the potential of the Oxford-Cambridge Growth Corridor,” she said, adding that doing so could add £78bn to the UK economy in the next 10 years 
  • Approval for £7.9bn in investment for water companies to build nine new reservoirs 
  • Support for Andy Burnham, Mayor of Greater Manchester, in the redevelopment of Old Trafford football stadium, with the promise of creating new housing and commercial development 
  • Upcoming trade trips hosted by various ministers, including Business Secretary Jonathan Reynolds travelling to India next month 
  • Plans to invest in two green energy projects through the National Wealth Fund, with £65m pledged to electric vehicle charging company Connected Kerb and £28m to be invested in Cornish Metals, which provides the raw material for solar panels, wind turbines and electric vehicles. 

ECB cuts rates again 

The European Central Bank (ECB) cut its key interest rate to 2.75% last Thursday, as uncertainty continues to weigh on the continent’s economic outlook. The quarter-point percentage drop to 2.75% was in line with analysts’ expectations and follows a series of rate cuts in 2024. With inflation near 2% and growth still weak, the decision was unanimous. 

Stability in the UK mortgage market 

Mortgage borrowing in the UK increased in the latest Money and Credit Report from the Bank of England (BoE) released last week. In December 2024, net debt rose to £3.6bn, up £1bn from the previous month, with the annual growth rate rising to 1.5%. Gross lending reached £21.3bn, up from £20.8bn in November.  

Meanwhile, net mortgage approvals for house purchases also edged higher to reach 66,500 in December. On the flip side, remortgage approvals fell for a second consecutive month to 30,500. 

House price growth softens in January 

Annual house price growth slowed to 4.1% in January, according to Nationwide’s latest House Price Index. On a monthly basis, this represented a change of 0.1%, following a sizeable 0.7% boost in December. 

The release also showed that the overall rate of home ownership in recent years has remained mostly unchanged, despite increasingly acute affordability pressures. “The price of a typical UK home rose by 4.1% year on year in January, a modest slowing in the annual pace of growth compared with December,” said Robert Gardner, Nationwide’s Chief Economist, adding that “the housing market continues to show resilience despite ongoing affordability pressures.” 

Trump trade wars intensify 

In a busy week for international trade relations, US President Donald Trump suspended the hefty tariffs on Mexico and Canada that he threatened after last-minute negotiations with the two US neighbours. China has announced retaliatory tariffs on some American goods, as US tariffs on all Chinese goods came into force on Tuesday. 

Overnight on Sunday, Mr. Trump then gave his clearest indication yet that the EU could be his next target for tariffs. “I wouldn’t say there’s a timeline, but it’s going to be pretty soon,” he warned. The UK, on the other hand, seems to have evaded tariffs for now, “The UK is out of line,” the President said, “but I’m sure that one, I think that one, can be worked out.” 

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 (5 February 2025) 

In the news 

17 out of 21 sectors raised dividend payments in Q3 

On a headline basis, total UK dividends in Q3 2024 fell to £25.6bn, an 8.1% decline, led by cuts in the mining sector (£2.6bn reduction in payouts)1. Stronger sterling, the impact of share buybacks and lower one-off special dividends also contributed to the reduction. Mining sector dividend declines masked better growth from most other sectors, with 17 out of 21 sectors raising payouts in the period and three quarters of companies increasing or maintaining their dividends. Excluding the mining sector, Q3 underlying growth came in at 2.6%, with pharmaceutical companies making the most positive contribution, followed by industrials. For 2024 as a whole, headline dividends are expected to come in at £92.3bn, a 2% uptick year-on-year. 

Numbers withdrawing from their pension before seeking advice increasing 

The latest retirement market data from the Financial Conduct Authority (FCA)2 has shown an increase in the number of people withdrawing from their pension before taking advice – a worrying trend. Of the 885,445 pensions accessed for the first time in 2023-24, 60% of people took no regulated advice or guidance before doing so. This is a risky approach, as unadvised pension withdrawals can result in some poor choices, leaving individuals exposed by drawing too much, taking too much risk, incurring tax charges, falling victim to scammers, and the list goes on. Accessing your pension for the first time? It’s important to carefully consider the long-term sustainability of your withdrawals and potential tax implications. 

1Computershare UK Dividend Monitor, 2FCA, 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. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning. 

‘Freshen-uppers’ the most desirable property type

Are you looking to move house in 2025? If so, a recent study1 has found that the most desirable property type for 49% of people is a ‘freshen-upper,’ with prospective buyers keen to personalise their new home with small scale improvements. 

The days of the full ‘fixer-upper’ property are fading, as time-poor purchasers increasing look to ‘freshen-upper’ and turnkey options, with only 16% of buyers favouring an extensive renovation project. Meanwhile, almost a quarter (22%) of prospective buyers are looking for a turnkey option, a property move-in-ready, one of the key motivators being energy efficiency. This highlights how energy-efficient homes are increasingly regarded as a decisive factor in a property purchase for many people, rather than a ‘nice to have.’ 

With busy lives to lead, 27% of respondents to the survey indicated they don’t have time to arrange significant home improvements or renovations. Of those keen to purchase a fixer-upper, almost a quarter (24%) said they would choose an extensive property project to preserve the original historical or character features. 

Whatever your property preference, we can support you to achieve your property dreams in 2025! 

1Jackson-Stops, 2024 

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