News in Review

“The economy contracted slightly in October, with services showing no growth overall and production and construction both falling” 

Key takeaways 

  • ONS figures showed that the UK economy contracted by 0.1% in October  
  • GfK’s Consumer Confidence Index edged up by one point in December to reach -17 
  • New buyer demand, new instructions and house prices were all up in November 

The UK economy contracted again in October, according to official figures released on Friday by the Office for National Statistics (ONS). The unexpected fall of 0.1% marked two consecutive months of negative growth for the first time since the onset of the pandemic in March and April 2020. 

Analysts pointed to the effects of the Budget weighing on confidence as a reason for poor growth. Prior to the release, economists had expected GDP to rise by 0.1% in October. Chancellor Rachel Reeves called the data “disappointing”. 

The poor showing resulted in part from weak performances from hospitality and manufacturing. According to ONS, hotels and food services slowed in October, along with arts and entertainment. Manufacturing was the biggest drag on overall production output, down 0.6%, while the construction industry fell by 0.4%. The services sector also dragged on the economy, providing no growth in October after returning similarly flat figures in September. Conversely, growth in transport, and science and technology rose in October. 

“It’s not possible to turn around more than a decade of poor economic growth and stagnant living standards in just a few months,” Ms Reeves said. “Growth is the number one mission of this government – economic growth that results in families feeling better off with more money in their pockets – and we’re driving that economic growth and we hope that those numbers will start to improve because of the policies that we’re pursuing in the months ahead” she added. 

Commenting on the release, Liz McKeown, ONS Director of Economic Statistics, said, “The economy contracted slightly in October, with services showing no growth overall, and production and construction both falling. Oil and gas extraction, pubs and restaurants and retail all had weak months, partially offset by growth in telecoms, logistics, and legal firms. However, the economy still grew a little over the last three months as a whole.” 

Consumer confidence edged up in December 

On the same day, separate data from GfK’s long-standing Consumer Confidence Index painted a rosier picture in the run-up to Christmas. Consumer confidence edged up by one point in December to reach a total of -17. Despite rising confidence, however, respondents remained cautious about making major purchases, with GfK’s major purchase index remaining at -16. 

Looking ahead, expectations for the general economic situation over the next year stayed at November’s level of -26. Meanwhile, the forecast for personal finances over the same period was up two points at +1, three points higher than this time last year. 
 
Neil Bellamy, Consumer Insights Director at NIQ GfK, commented, “Consumer confidence is still far from strong but there is some room for optimism with views on personal finances over the next 12 months up two points versus November and creeping back into positive territory. However, with the major purchase measure unchanged at -16 in December, consumers are still thinking twice about big-ticket purchases and whether they will bring Christmas cheer.” 

Buyer demand pushes UK house prices higher 

House price growth has gathered pace, according to the latest Residential Survey released last week by the Royal Institution of Chartered Surveyors (RICS). With new buyer demand, new instructions and house prices all on the up in November, sales and prices are also staying high as 2024 draws to a close. 

New buyer enquiries posted a headline net balance of +12% in November, a fifth consecutive positive reading, with a net balance of +1% for agreed sales. Commenting on the data, Tarrant Parsons, RICS    Senior Economist said, “Although the latest survey results continue to signal a steady improvement in buyer demand across the residential market, the broader macro environment is likely to pose additional headwinds moving forward.” 

Is Europe’s stuttering economy ready for Trump? 

Weeks away from the return of Donald Trump to the White House, the outlook for growth across Europe looks subdued, figures released by the European Central Bank (ECB) indicate. Last Thursday, the ECB cut interest rates for a third time in a row, citing falling inflation as justification. At the same time, however, the central bank dropped its forecast for Eurozone growth next year to 1.1%, down from the 1.3% it had expected in September. ECB President Christine Lagarde cautioned that Europe’s economic recovery depended on consumers spending more and businesses increasing their investments.  

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 (18 December 2024) 

Buy-to-let market update: Trends and insights 

The UK buy-to-let (BTL) market has seen notable changes recently. 

The number of new BTL mortgages granted has decreased sharply. This decline is largely due to higher interest rates and stricter taxation measures, which have served to cool investor enthusiasm. 

Additionally, the overall size of the BTL mortgage market has contracted. Investors are encountering more challenging lending conditions and increased costs, which have made new investments less appealing. 

Resilience remains 

However, despite these difficulties, the BTL sector demonstrates some resilience. Demand for rental properties remains strong, driven by a persistent affordable housing shortage and a reduced pool of available properties for rent. This ongoing demand suggests that while the market is shrinking, there are still opportunities for those who can effectively navigate the evolving conditions. 

James Tatch, Head of Analytics at UK Finance, commented, “Without more unexpected negative shocks, strong rental demand and strong lending standards could mean the buy-to-let sector emerges from last year’s downturn sooner than previously expected.” 

Contact us for expert buy-to-let advice  

If you’re considering a buy-to-let investment or need assistance with your current holdings, understanding these market trends is crucial. For personalised advice tailored to your needs, please get in touch. Expert guidance can help you make informed decisions and optimise your investment strategy in this shifting market. 

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

keep up mortgage repayments. 

Why should you care about correlation

If you want your investment portfolio to strike a good balance between risk and return, it’s worth knowing how correlation can impact your investments. 

If two different investments are perfectly correlated, their value will rise and fall by the same amount, at the same time. Investing in highly correlated assets can increase your losses, because when one investment falls in value (except for a reason peculiar to it), the others may well do likewise. 

Avoiding correlation is crucial for building a well-diversified portfolio. If all your investments move in the same direction, your portfolio is more vulnerable. Owning a variety of investments that move differently can help limit risk and protect your overall portfolio’s value. 

Is your portfolio more correlated than you think? 

You might be surprised at how closely correlated some of your investments are. This is because many large funds hold similar holdings, which can lead to increased correlation and reduced diversification benefits. Even if you own a globally diversified fund, you might not be as diversified as you think, as allocation to holdings can be closely aligned. 

This has become a concern recently, as the performance of the ‘Magnificent Seven’ technology stocks (Apple, Microsoft, Amazon, Alphabet (Google), Meta (Facebook), Nvidia and Tesla, has seen them dominate global portfolios. Should these companies all start to underperform, it could have a substantial impact on overall investment returns. 

So, for a truly diversified portfolio, owning a range of investments with low or no correlation, where one investment isn’t virtually certain to move in the same direction as another, is ideal. 

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

“Mark my words: with this Plan for Change, we will stick to it. Country first, party second” 

Key takeaways 

  • The Prime Minister delivered a speech on the government’s ‘Plan for Change’ 
  • The Scottish Budget included record NHS spending of £21bn for the next financial year 
  • Cash was used in shops for one in five transactions last year 

Prime Minister Sir Keir Starmer delivered a speech last Thursday at Pinewood Studios on the government’s ‘Plan for Change.’ In it, he set out “six milestones” to be completed before the next general election, with new targets on housebuilding, NHS waiting lists, policing and clean power. 

“Today, we publish new milestones, measurable milestones that will also give the British people the power to hold our feet to the fire,” Starmer said. The milestones are: putting more money in the pockets of working people; building 1.5 million homes and fast-tracking planning decisions on at least 150 major infrastructure projects; treating 92% of NHS patients within 18 weeks; recruiting 13,000 more police officers, special constables and PCSOs in neighbourhood roles; achieving 95% clean power by 2030 and making sure three-quarters of five-year-olds are school-ready. 

Three of these apply to England only, specifically the targets relating to housebuilding, NHS waiting lists and school-readiness. One encompasses England and Wales (policing), while clean power and raising household income are UK-wide efforts. 

The Prime Minister presented the six milestones as yardsticks against which to measure the five missions he previously set out in February 2023, which he framed at the time as the driving purpose for the government. The missions include building an NHS fit for the future and reforming the justice system. All these milestones and missions are to be built on three foundations, according to Starmer: economic stability, secure borders and national security. 

“Mark my words: with this Plan for Change, we will stick to it. Country first, party second,” he said, before adding that this is “a strategy that will give government and the nation, whether in calm or choppy waters, the stabilising certainty of the clear destination [and] guide us towards a decade of national renewal.” 

Scottish Budget includes record NHS spending 

A day earlier, Scotland’s Finance Secretary Shona Robison unveiled her Budget for 2025/26, featuring significant announcements on health, local authorities and culture. 

Leading the billing was record spending on the Scottish NHS: a funding settlement of £21bn for the next financial year, an increase of £2bn. Robison told MSPs that the extra funding would mean nobody having to wait more than a year for a new outpatient appointment, inpatient treatment or day case treatment by March 2026. The money “will make it easier for people to access GP appointments, that will improve A&E and ensure more Scots get the care they need in good time,” Robison said. 

Other key measures included record funding for local councils, which will “take their total funding to over £15bn” and pay for wage increases agreed for teachers and social care workers, among others. Meanwhile, Income Tax rates were frozen until 2026 and the culture budget was boosted by an extra £34m. 

Cash continues comeback 

Cash was used in shops for one in five transactions last year, according to figures released last Thursday by the British Retail Consortium (BRC), a second consecutive annual increase for notes and coins following a decade of falling usage. 

A day earlier, a committee of MPs had heard from campaigners about the dangers a cashless society would pose to some groups. For example, women in abusive relationships, who often rely on cash to avoid having spending tracked by an abuser. Some older people and those with mental health issues are also more comfortable using cash, the committee heard. The BRC data also revealed that shoppers found cash helped them to budget better and that the amount spent per purchase dropped to £22.03 in 2023, down from £22.43 a year earlier. 

Uncertainty in France after Prime Minister ousted 

French President Emmanuel Macron addressed the nation last Thursday following a tumultuous week that saw a Prime Minister voted out by Parliament for the first time in more than 60 years. 

Under pressure from parties on the left and right, Macron vowed to stay in his post “until the end of the mandate” in 2027. The President, now tasked with appointing a new Prime Minister, held talks with leaders of the Socialist Party on Friday and suggested he would name a new Prime Minister “in the coming days”.  

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 (11 December 2024) 

A third of Gen X think they will never retire

Recently released research1 suggests a significant proportion of working age people are no longer planning a traditional ‘hard stop’ retirement, with 45 to 54-year-olds most likely to feel they will continue working beyond pensionable age. 

Work work work 

According to the survey, more than a fifth of working age adults think it unlikely they will ever completely retire, with those across the 25 to 54-year-old age bracket most likely to hold this view. This was particularly true for Gen X respondents, with almost a third of 45 to 54-year-olds saying they expect to carry on working. There was also a notable gender disparity, with only a third of women thinking they would completely retire compared to almost half of their male counterparts. 

Retirement uncertainty 

Financial considerations are inevitably a factor for many, particularly those in their 40s and 50s. The so-called sandwich generation can find themselves caring for both elderly parents and children, as well as having to provide for their own needs. 

Additionally, this group falls between the generations that benefitted from final salary pensions and younger ones reaping the full rewards of auto-enrolment. For Gen Xs, retirement can therefore appear close enough to consider yet too distant to have any certainty over. 

Control your future 

These findings undoubtedly highlight a shift in attitudes, with the concept of a ‘hard stop’ retirement increasingly being consigned to history. This could also partly reflect the fact that today’s workers can exert a higher degree of control over their retirement plans, with savers enjoying greater freedom over when and how to use pension savings, including the ability to set funds aside to help loved ones. So, if you want to take control of your financial future, get in touch and we’ll help you consider the full picture and plan a retirement that’s just right for you. 

1Aviva, 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. 

Many young mortgage holders do not have life cover

Research has found that 28% of young UK homeowners do not have life insurance1. 

It is estimated that 1.7 million adults aged 18-40 do not have appropriate cover in place, despite having a mortgage. This oversight puts their dependants in a precarious financial position in the event of their death. 

Why risk it? 

Of those homeowners who do not have life insurance, nearly a quarter (23%) said they do not believe it is a priority expense. Meanwhile, 22% said they never considered it and the same amount could not afford cover due to the cost-of-living crisis. 

Uncovered debt in the UK 

In 2023, there was thought to be over £433bn in uninsured mortgage debt in the UK. This concerning figure suggests that many people would be left unsupported if a loved one died, potentially making it difficult for them to stay living in their home. 

Make cover a priority 

Living without the right protection could put unnecessary financial pressure on your loved ones at an already distressing time. Life cover should be a priority expense, even when you’re young. Speak to us now to get insured. 

1Beagle Street, 2024

Don’t just plan – protect your money

Are you confident you have all the relevant cover in place to protect your finances? Having a financial plan should go hand-in-hand with a conversation about insurance. 

The statistics 

We may not like to think about death, but the reality is it is inevitable; however, data has revealed that only 29% of UK adults have some form of life insurance1. Meanwhile, just 13% have critical illness cover2. Even fewer (6%) have income protection, despite one in 13 working people having a long-term sickness3. These figures highlight that a concerning number of Brits risk leaving themselves and their loved ones vulnerable during life’s toughest moments. 

Writing life insurance policies into trust 

Writing your life insurance policy into trust is a tax-efficient way of protecting and preserving your wealth for future generations. This arrangement makes your trustees the legal owners of your policy, so the proceeds will not be considered as part of your estate when you die. Not only does this mean that under current rules the payout will not be subject to Inheritance Tax, but your beneficiaries should receive the money swiftly as it will not have to go through probate. 

We can advise on the best cover for you and your circumstances. 

1FCA, 2023 

2Health Foundation, 2024 

3ONS, 2023 

News in Review

“Housing affordability has improved over the past year, thanks to stabilising property prices, strong wage growth, and easing interest rates” 

Buying a home is becoming more affordable relative to income, according to the latest Halifax           Affordability Review released last Thursday, as the house price to income ratio continues to fall. 

Strong wage growth combined with lower house price inflation has made housing more affordable than a year ago, the research revealed. Since 2023, house prices have risen by 3.8%, while at the same time annual earnings for full-time workers have climbed by 5%. As a result, the house price to income ratio has declined from 6.62 to 6.55. 

In summer 2022, with house prices soaring but incomes yet to rise significantly, the ratio reached a    record high of 7.24. The Bank of England (BoE) raised interest rates to a 15-year high of 5.25% in August 2023, checking house price growth. 

The release also highlighted major regional differences that persist in the house price to income ratio. Unsurprisingly, housing was least affordable in southeast England and in London, with new mortgages costing 39% and 36% of local salaries respectively. 

Commenting on the release, Amanda Bryden, Head of Halifax Mortgages, said, “Housing affordability has improved over the past year, thanks to stabilising property prices, strong wage growth, and easing interest rates. That’s great news for first-time buyers and existing homeowners looking to remortgage or move up the property ladder.” 

UK car production drops – with electric vehicles down by a third 

Car production fell sharply in the UK in October, according to figures released last Thursday by the Society of Motor Manufacturers and Traders (SMMT), with output of all cars down by more than 15% from a year earlier. 

To explain the drop, SMMT pointed to weak demand causing a fall in exports. Leading the decline was the production of electric and hybrid vehicles, which dropped by a third compared with last year. In contrast, sales of electric vehicles (EVs) in the UK have been increasing – in October, EVs made up one out of every five cars registered. 

Mike Hawes, SMMT’s Chief Executive, commented, “These are deeply concerning times for the automotive industry, with massive investments in plants and new zero emission products under intense pressure.” 

Retailer sentiment nosedives ahead of crucial holiday season 

Sentiment among retailers for the next three months declined at its fastest rate for two years, according to the latest quarterly Distributive Trades Survey from the Confederation of British Industry (CBI). 

Retailers judged sales to be ‘poor’ in the year to November, while also expressing concern that volumes will be below the seasonal average in December. The CBI indicated that weak consumer demand was a leading factor in the falling sentiment. Looking ahead, firms declared that they expected to scale back capital expenditure in the next year compared to the previous year. 

Confirming the trend, data from the British Retail Consortium (BRC) revealed that high street footfall had dropped by 3.7% in November. Similar results were observed for footfall in retail parks (down 1.1%) and shopping centres (down 6.1%). After a challenging few weeks, BRC noted the importance of the            upcoming festive season to return some optimism to UK retailers. 

Commenting on the data, Ben Jones, CBI Lead Economist, said, “Retailers continue to report                  disappointing sales, though trading conditions have shown some improvement since the middle of the year. Yet the last time retailers felt this gloomy was back in November 2022, at the peak of the inflation shock. This makes the sharp decline in sentiment this month all the more telling.” 

Wealth gap shrinking but still substantial 

The average wealth gap between thirty-somethings and sixty-somethings has fallen by £86,000 in five years, according to research by the Resolution Foundation. 

Following severe interest rate rises and house price growth slowdown in recent years, the typical household wealth of someone in their 60s in 2018-20 has fallen by 16% over the past five years. Meanwhile, the typical wealth of someone in their 30s in 2018-20 has risen by 17% in the same period.  

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 (4 December 2024) 

Economic Review November 2024

Interest rates set to fall more gradually 

Last month, the Bank of England (BoE) cut interest rates for only the second time since 2020 but also warned future reductions were likely to be more gradual due to the prospect of inflation creeping higher next year.  

Following its latest meeting, which concluded on 6 November, the BoE’s nine-member Monetary Policy Committee (MPC) voted by an 8-1 majority to reduce rates by 0.25 percentage points. This took Bank Rate down to 4.75%.  

Commenting after announcing the news, BoE Governor Andrew Bailey suggested rates were likely to “continue to fall gradually from here” although he did caution that they would not be reduced “too quickly or by too much.” Mr Bailey was also at pains to emphasise the word “gradual” and added that the reason for such an approach was that “there are a lot of risks out there in the world at large and also domestically.” 

Alongside the rate announcement, the Governor unveiled the BoE’s latest economic forecast which takes account of the Chancellor’s Budget measures. The updated projections suggest the policies announced in the Budget are likely to boost the headline rate of inflation by almost half a percentage point at its peak in just over two years’ time and result in it taking a year longer for inflation to return to the Bank’s 2% target level. 

The latest inflation data, which was published by the Office for National Statistics (ONS) two weeks after the MPC announcement, revealed that the annual headline rate jumped from 1.7% in September to 2.3% in October. While this sharp increase was largely driven by October’s energy price hike, the figure did come in slightly ahead of analysts’ expectations. This overshoot, combined with the Governor’s comments, has undoubtedly increased the prospect of interest rates remaining unchanged following the MPC’s final meeting of the year on 19 December. 

UK economy losing momentum 

Gross domestic product (GDP) statistics released last month by ONS showed the economy barely grew between July and September, while more recent survey evidence points to a further loss of economic momentum. 

The latest GDP figures revealed that UK economic output rose by just 0.1% across the whole of the third quarter. This figure was weaker than economists had expected and represents a sharp slowdown from the 0.5% growth rate recorded during the second quarter of the year. 

A monthly breakdown of the data also showed the economy actually contracted by 0.1% during September alone, with ONS reporting a significant drop in manufacturing output while the services sector flatlined. A number of economists blamed September’s weakness on Budget uncertainty which was felt to have impacted the behaviour of both firms and households. 

Data from a recently released economic survey also suggests business optimism continued to slide in the weeks following October’s Budget. Indeed, the flash headline growth indicator from the S&P Global/CIPS UK Purchasing Managers’ Index (PMI) fell to 49.9 in November from 51.8 in October, the first time in 13 months the figure had dipped below the 50 threshold, denoting a contraction in private sector output. 

S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The first survey on the health of the economy after the Budget makes for gloomy reading. Although only marginal, the downturn in output represents a marked contrast to the robust growth rates seen back in the summer and are accompanied by deepening concern about prospects for the year ahead.”  

Last month also saw the BoE publish revised economic growth projections. While the Bank did trim this year’s forecast from 1.25% to 1.0%, it is now predicting a stronger 2025, with next year’s projected growth figure upped to 1.5% from a previous forecast of 1.0%.   

Markets (Data compiled by TOMD) 

At the end of November, investors closely monitored the threat of possible US tariffs and the ongoing political turmoil in France. On the last trading day of the month, European markets closed slightly higher as inflation estimates met expectations, while the FTSE 100 was flat. Meanwhile, across the Atlantic, US stocks tempered from record highs reached earlier in the week.  

In the UK, the FTSE 100 index closed the month on 8,287.30, a gain of 2.18%, while the FTSE 250 closed November 1.88% higher on 20,771.57. The FTSE AIM closed on 732.49, a loss of 0.63% in the month. The Euro Stoxx 50 closed November on 4,804.40, down 0.48%. In Japan, the Nikkei 225 closed the month on 38,208.03, a monthly loss of 2.23%. 

In the US, President-elect Donald Trump has outlined plans to place levies on imports from Canada, Mexico and China, with concerns that his plans could extend to other regions. The Dow Jones closed November up 7.54% on 44,910.65, while the tech-orientated NASDAQ closed the month up 6.21% on 19,218.17. 

On the foreign exchanges, the euro closed the month at €1.20 against sterling. The US dollar closed at $1.26 against sterling and at $1.05 against the euro.  

Brent crude closed November trading at around $68 a barrel, a loss over the month of 5.40%. Oil prices fluctuated at month end as speculation over OPEC+’s production plans heightened in advance of their December meeting. Gold closed the month trading at around $2,683 a troy ounce, a monthly loss of 1.84%.  

Unemployment rate rises 

Official figures published last month revealed a rise in the rate of unemployment, although ONS has warned that the data should be treated with some caution due to smaller survey sample sizes increasing data volatility. 

The latest ONS labour market release showed the unemployment rate stood at 4.3% between July to September 2024; this compares to 4.0% for the previous three-month period. The data also revealed that the number of payrolled employees decreased by 9,000 in the three months to September, with early estimates suggesting the figure dropped by a further 5,000 in October. 

Job vacancies also fell again, with 35,000 fewer reported in the August–October period compared to the previous three months. Overall, the statistics agency said that the latest batch of data points to a ‘continued easing of the labour market.’ 

ONS is currently in the process of overhauling the statistical methodology used to calculate its labour market figures – research released last month by the Resolution Foundation highlighted the current problems surrounding data reliability. According to the think tank’s analysis of tax office, self-employment and new population data, the official statistics may currently be failing to count as many as a million people who are believed to be in work. 

Retail sales fall by more than expected 

The latest official retail sales figures showed sales volumes declined ahead of October’s Budget, while more recent survey data points to ‘disappointing’ sales in November too. 

Figures released last month by ONS revealed that retail sales volumes fell by 0.7% in October, following a period of growth across the previous three months. While analysts had predicted a sales dip, October’s decline was larger than expected. ONS said the fall was driven by a ‘notably poor month for clothing stores’ but also noted that retailers across the board reported consumers holding back spending ahead of the Budget. 

Data from GfK’s latest consumer confidence index did offer the retail sector some cheer, though, with the long-running survey reporting less pessimism post-Budget. November’s headline figure rose to its highest level since August, with growth recorded across all five components of the survey, suggesting consumers may have more appetite for spending in the run-up to Christmas.  

November’s CBI Distributive Trades Survey, however, found retailers expect trading conditions to remain tough. While the survey did acknowledge ‘some improvement’ in the retail environment since the middle of the year, it also reported ‘disappointing sales’ in November with volumes expected to remain below seasonal norms in December too. 

All details are correct at the time of writing (2 December 2024) 

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. 

Self-employed? Remember your pension

Over one million individuals have entered self-employment since 20201, so it is important to ensure you are still planning for retirement by making regular pension contributions. 

A growing sector 

In 2023, there were 4.2 million people in the UK’s solo self-employed sector – 3% higher than the previous year. Overall, the solo self-employed contributed £331bn to the UK economy, up from £278bn in 2022. But, concerningly, 45% of freelancers are not saving into a pension2. 

Make it a priority 

We know it can be easy to forget about your pension, seeing as employed people are auto-enrolled into a pension scheme by their workplace, but if you are freelance it is your responsibility. 

The sooner you start saving for retirement, the more you can grow your investment and benefit from tax relief on contributions (within limits). Putting it off only means that you will need to save more in a shorter amount of time if you want a comfortable retirement. 

Contribute regularly 

Decide on a minimum monthly contribution that feels manageable for you. Your income may fluctuate from month to month – that’s why you can put more money into your pot when you’re doing well. 

Seek advice 

One benefit of being self-employed is that you have more freedom when it comes to choosing your pension. We can help you plan ahead. 

1IPSE, 2024 

2IPSE, 2023 

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.