The start of the new tax year is often a good time to take stock of your finances, to review what you already have and consider what you need to do next. And in today’s environment, where every penny counts, making full use of the tax allowances that are still available has never been more important.

The ever-popular Individual Savings Account, or ISA is a good place to start. Like a lot of our tax allowances, the ISA allowance has been frozen for many years, so for the 2026/27 tax year, the overall ISA allowance remains at £20,000, offering one of the simplest and most effective ways to protect your savings and investments from tax on interest, dividends, and capital gains.

However, there are changes coming for those who favour the cash element of an Individual Savings Account (ISA).

Cash ISA allowance to be cut

Cash ISAs regained their popularity over the last few years, as interest rates increased, which led to savers paying more tax than they had for over a decade when interest rates were at rock bottom. There is now some £458 billion stashed away in cash ISAs, almost a quarter of the total amount held in cash savings. But for savers under the age of 65, the current tax year is the last chance to make use of the full ISA allowance for cash only deposits.

From 6 April 2027, the rules are set to change. Whilst the overall ISA allowance will remain at £20,000, only £12,000 of that can be deposited into a cash ISA for those aged under 65. To use the full allowance, the remaining £8,000 will need to be invested in a stocks and shares ISA.

To add insult to injury, at the same time that the cash ISA allowance is to be cut, the tax on savings interest will be increasing by 2%. So, a basic rate taxpayer will pay 22% on any taxable interest, it’s 42% for higher rate taxpayers and 47% for additional rate taxpayers, making the cash ISA even more valuable.

The good news is that those aged 65 and over are not affected by this change. They will still be able to place the full £20,000 into cash if they wish, a welcome exemption for older savers. But it highlights a broader policy direction, encouraging younger savers towards investment. 

A nudge towards investing

Whilst the comfort of a cash ISA is understandable, particularly in volatile times, it’s important to be aware that inflation can quietly erode the value of savings, and even with improved interest rates, cash may struggle to deliver meaningful real returns over time if inflation is higher than the interest you are earning. So, it might be worth asking yourself whether a purely cash-based approach is the right strategy for the longer term.

This is where stocks and shares ISAs come into play. They are not without risk though as values can go down as well as up. But they offer the potential for growth that cash generally cannot match over the long term, as long as you are prepared to accept the inevitable bumps in the road. You can of course, choose investments that better reflect your own personal attitude to risk, which will help minimise any potential downs and ups.

These changes could therefore be viewed as a prompt to diversify if you don’t need access to your money for the longer term, so more than five years. Using some of your ISA allowance for investment could make a meaningful difference to your future financial health. 

Use it or lose it

Given the upcoming changes, this tax year (2026/27) is an opportunity not to be wasted. If you are under 65 and prefer cash, it may make sense to maximise your cash ISA contributions while you still can.

And due to the ongoing conflict in the Middle East, with the expectation that inflation and therefore the Bank of England base rate could rise, savings rates have been increasing recently. Good news for savers, especially those who don’t also have debts.  

So, if you have funds sitting in taxable accounts, now is the time to consider sheltering them, as once the tax year ends, you can’t carry it forward.

Don’t overlook the Lifetime ISA

Alongside the standard ISA options, there is also the valuable Lifetime ISA (LISA), which is available to those aged between 18 and 39. The LISA allows you to contribute up to £4,000 per tax year, which counts towards your overall £20,000 ISA allowance and the real attraction is the generous 25% government bonus. In simple terms, a £4,000 contribution is topped up to £5,000, an immediate and very attractive return, even before any interest of investment growth is added.

Traditionally, the LISA has served a dual purpose: helping people save for their first home or for retirement. However, it is currently under review, and there is growing speculation that the retirement element could be removed going forward, making it simply a product for first-time buyers.

In the meantime, for those eligible, it remains a compelling option, particularly if you are saving for your first home.  

ISAs for the next generation

It’s also worth remembering that children have their own ISA allowance through the Junior ISA (JISA).

With a current annual allowance of £9,000 per year, the Junior ISA allows parents, grandparents, and others to build a tax-free savings pot on behalf of a child. It can be held in cash or invested, depending on your preference and time horizon.

There is, however, an important point to bear in mind: there is no access to the money until the child turns 18, at which point they gain full control of the account, which could have grown to a really significant amount. The funds become theirs to use as they wish, whether that’s for university, a car, a house deposit, or, indeed, something less sensible.

Alternatively, the funds can be rolled over into an adult ISA, retaining the tax-free status and allowing the savings habit to continue into adulthood.

For those who save for their children, it makes sense to have open conversations with them as they grow older, so that hopefully they will do the right thing with this valuable gift. Financial education is just as important as the savings themselves.

Time to take action

The beginning of the tax year is a great time to make use of your ISA allowance, for a couple of reasons.  

First, during the ‘ISA season’ of which April is the pinnacle, cash savings providers tend to compete with each other, which pushes rates higher, providing plenty of choice.

Secondly, why leave your cash in a taxable account any longer than you need to. Although often the headline rates on taxable fixed rate bonds may look higher than the same term cash ISAs, once you deduct income tax, you can earn far more in the tax-free ISA, as the table below illustrates:

Now is also a good time to review your old ISAs, to see if you could be earning more by switching. The key rule is vital though - never withdraw the funds yourself. Instead, always use the official ISA transfer process provided by your new provider, who will liaise directly with your existing bank or building society. If you take the money out and attempt to redeposit it, it could lose its ISA “wrapper” which crucially means you would forfeit the tax-free status tied to those historic allowances. Given that ISA allowances cannot be reinstated once lost, this is an irreversible and often costly mistake.  

Reviewing your old ISAs whilst making the most of your new ISA allowance means that you can make your cash work as hard as possible, particularly important if we are to see inflation spiking upwards once again.

If you want to make your cash work harder, it is important to compare rates regularly and move money when better deals arise. In a market that is shifting and where relatively small rate differences can add up to hundreds of pounds over a year, staying informed is the best way to keep your savings working as hard as possible. Check our best buy tables for the most up to date savings rates. 

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Rates correct as at 07/04/2026. 

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.  

The Financial Conduct Authority (FCA) does not regulate cash flow planning. 

Inflation held steady at 3% in the 12 months to February, matching expectations and unchanged from January, though it continues to sit above the Bank of England’s 2% target.

It should be noted this figure was recorded prior to the outbreak of conflict in the Middle East, which has since driven up the cost of energy and fuel, meaning inflation is expected to rise in the coming months.  

Despite the sticky 3% rate of inflation, pensioners are set to receive higher state pension payments from Monday 6 April, during the first full week of the new tax year.

The main state pension rate is set to rise by 4.8% under the ‘triple lock’ system.

This established government policy ensures the state pension increases each year by the highest of inflation, average earnings growth, or 2.5%.

For this year’s adjustment, earnings growth was the deciding factor during the key reference period used to set the increase.

This means that pensioners are actually beating the rate of inflation for the start of the new tax year. And because the average earnings growth has now fallen below 4% according to ONS figures from November 2025 to January 2026, pensioners are also set to see a bigger increase than the workforce, since wages growth for the triple lock is calculated between May and July the previous year.  

What is inflation and how is it measured?

Inflation is a measure of how the prices of goods and services have increased over time. Goods are tangible items sold to customers, such as food, while services are tasks performed for the benefit of recipients, such as a haircut. Generally, this increase is measured by considering the cost of things today compared to how much they cost a year ago. The average increase between these prices is demonstrated in the inflation rate.  

Rising interest rates directly affects the cost of living. For example, if the price of a bottle of milk is £1, and inflation is increasing by 5%, then your bottle of milk will cost you 5p more. Or, in other words, the spending power of your money has decreased by 5%.  

Ideally, the Government wants to keep inflation low and stable. The general mandated target for the Bank of England is 2%. Anything significantly above or below this target is thought to cause issues for the economy.  

The cost of living surged in recent years, with inflation peaking at 11% in 2022 - way above the Bank of England's 2% target, partly due to the increase in energy prices following Russia's invasion of Ukraine.

While the rate has dropped significantly since then, falling inflation does not mean the goods and services are coming down in price overall, it is just that they are rising at a slower pace.

Our chartered advisers are unbiased, meaning that they can give whole of market advice, and so are best placed to give you a plan tailored exactly to your personal financial goals.  

If you’d like to know more, request a free non-committal initial consultation with one of our team or give us a call on 0333 323 9065 and get in touch. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

At the time of writing the Middle East conflict is in full flow. The Straits of Hormuz are effectively closed, and markets are swinging on a daily basis depending upon whether Donald Trump has got out of the left hand side or right hand side of his bed. In short, no one has got the faintest idea what’s happening and by the time this article goes to print, for all I know, the war will be over, and markets would have jumped 10% or, things will have escalated and markets will have fallen 10%.

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“Don’t panic Mr Mainwaring” blurted Corporal Jones, in virtually every episode of the classic BBC comedy, Dad’s Army. Of course, no one was panicking, except for Corporal Jones himself and in this state of blind panic, he was the least likely member of the platoon to be able to resolve the predicament they happened to be in. Panicking, generally, does not lead to sound decision making and certainly not sound financial decisions.

There are plenty of reasons to ‘panic’ in today’s world (financially and otherwise) but as Corporal Jones has shown us, panicking gets you nowhere. Life goes on, and the markets go on too and the worst thing investors can do is convince themselves that “this time it’s different”, that the end is nigh and that we all need to grow carrots and store drinking water in industrial quantities.

In their 2009 book “This Time is Different”, the economists Carmen Reinhart and Kenneth Rogoff argue that investors always fall for the trap of believing that the game is up and that capitalism is over and investing is no longer viable. There are always people who come out of the woodwork at these moments in time to endorse and bolster the naysayers, not because their views are valid but because the media is prepared to give them airtime. Funnily enough, we do not hear about them much when markets are doing well which, believe it or not, is most of the time.

The peace of mind a financial plan provides

I’m not pretending that the Iran war isn’t a threat to the world economies, far from it, but I wouldn’t like to bet on markets being lower in a year’s time to where they are now. They might be, of course, but if you want to safeguard yourself against inflation, history has taught us that market exposure is the best way to do it. Cash and bonds generally lose in real terms over the long term.  

Markets tend to recover from shocks, whatever they are, and economists call this antifragility, which is the general principle that markets are able to adapt to new conditions. As one source of enterprise closes down, another one opens up and markets always sniff them out, if not immediately, then in time.

It is all well and good to say "don’t panic," but that is much easier to achieve if you actually have a plan in place. The major benefit of having a plan that you regularly revisit is the emotional peace of mind it provides. It moves you away from making knee-jerk reactions based on the morning's headlines and back towards a structured approach. If your personal circumstances change, or the government decides to shift the goalposts on taxes, a quick review of the plan will tell you exactly what needs to be adjusted. By keeping a close eye on your financial roadmap, you can ignore the noise of the markets, knowing that while the path might get a bit bumpy, you are still heading in the right direction.

What we already know

In addition to the “unknowns” (such as the Iran war), we also have the “known” events of future tax changes which are much favoured by the current Labour Government. On going stealth taxes, announced in 2021 as a short-term measure post Covid but now expected to continue until at least 2031. Dividend Tax increase and VCT relief reduction (April 2026); IHT on pensions (April 2027); Mansion Tax (2028) and Salary Sacrifice capping (2029).  

In previous articles I have highlighted the dangers of not investing. Just to remind you, in the 20 years from 1st January 2004, $10,000 invested in the S&P 500 would have grown to $66,637 (an annualised growth rate of 9.7%). Had you missed the best 10 days during that 10 years the final sum would have been $29,154 (5.5% annualised growth rate). Take away the best 20 days and it’s $17,494 (2.8%). The message is, of course, stay invested and don’t try to call the markets.

As always, the key is to ensure that you have sufficient liquidity to ride out market volatility. For clients who are nearing retirement, they enter into the ‘decumulation’  - or ‘drawing down’ - phase of their investing life. That is, the scary moment when assets accumulated over decades must now step up to the plate and start delivering actual money to ensure a comfortable retirement. If you don’t plan this properly, you become exposed to what is known as “sequence risk”. This represents a significant threat to portfolios if investments are encashed to meet ongoing expenditure during a market downturn. Risk management planning is vital in retirement to ensure you avoid this pitfall. Investment portfolios need to remain invested, to protect them from long term real value erosion, but for decumulators, the higher risk elements must still be viewed as long term and kept invested for many years, if need be, to await a recovery if the downturn is severe. That’s why the cash buffer is important!

In January 2026, markets were looking bullish, economies were generally on the up and most market commentators were positive about the prospects of equity markets continuing to do well. So, what do we do? Keep calm and carry on investing, or, to quote another Dad’s Army character, hold our heads in our hands and say “we’re doomed!”.

But whatever you decide, the best approach is to have your own personal plan in place, review it with your professional advisers and above all, don’t panic!

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, will writing, tax or trust advice.

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.

Past performance is not a reliable indicator of future performance.

Kensington & Chelsea tops the list as the UK’s most expensive inheritance tax hotspot, with an estimated £343,924 due on the average property in this area, rising to an estimated £405,211 including pensions. With property prices continuing to drive estate values above tax-free thresholds, homeowners in the London boroughs dominate the rankings. Still, high-value areas outside the capital are also pushing many families into six-figure tax bills.

New analysis reveals the regional impact of bringing pensions into inheritance tax calculations

UK inheritance tax receipts reached £8.25 billion in 2024/25, with projections exceeding £9 billion by 2026/27. This surge is driven by frozen tax-free thresholds (£325,000 until 2030/31) and rising asset and property values. Geography plays a key role, as families in southern England are far more likely to face IHT than those in northern or coastal regions, even with similar lifestyles.

By analysing land registry data for average property values* across 372 local authorities in the UK and combining this with predicted pension pot values based on median salaries in these areas, The Private Office has identified the areas of the UK where more people will face the highest estimated inheritance tax liabilities.

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The locations predicted to be hit by IHT when pensions are no longer exempt 

From 6 April 2027, most unused pension funds and death benefits will be included in an individual’s estate for inheritance tax purposes, meaning they are no longer exempt. If the total estate, including pensions, exceeds the £325,000 threshold (or up to £500,000 including a main residence if left to direct descendants), amounts above this limit will be liable for 40% IHT.

Historically, pensions sat outside IHT calculations, so this proposed change could significantly reshape estate planning and impact people very differently depending on their location. New analysis combining local property values with typical pension pots based on median earnings highlights which parts of the UK are most exposed once pensions are included.

Research shows that 152 local authorities, previously below IHT thresholds, could fall into scope due to pensions no longer being exempt. This brings a total of 288 local authorities where average property prices and pension pots could see high levels of inheritance tax payments due. 

London and the South East remain most exposed

The highest potential inheritance tax bills remain concentrated in prime London boroughs and most affluent southern areas. Kensington and Chelsea could see average estate values exceed £1.3 million, with estimated IHT liabilities above £400,000 once pensions are included. Camden, Richmond upon Thames, Elmbridge, and Hammersmith & Fulham all show projected tax bills comfortably above £200,000. Wider commuter-belt locations such as Guildford, St Albans, Windsor & Maidenhead, and Wokingham also remain firmly within taxable territory.

For those in these regions, including pensions in the estate calculation may materially increase eventual tax exposure, reinforcing the importance of proactive planning.

Note: These calculations do not take into account the Residence Nil Rate Band (RNRB) which is an extra £175,000 per person if a main residence is left to direct descendants. This is because not everyone is eligible for this additional allowance.

Mid-priced regions: where pensions could tip estates into inheritance tax

Mid-priced regions across the West Midlands, East Midlands, South West, East of England, and South Wales may experience the most meaningful shift from the 2027 reform. Average property values in these areas have historically fallen just below IHT thresholds, leaving estates untaxed. Once moderate pension savings are added, combined estate values can exceed the tax-free allowance, creating a modest but material liability.

Counties such as Warwickshire, Worcestershire, Staffordshire, Leicestershire, Derbyshire, Gloucestershire, Somerset, Norfolk, Suffolk, and parts of South Wales could face estimated IHT bills between £10,000 and £60,000. While far lower than in prime London, this represents many families’ first exposure to inheritance tax, highlighting the growing importance of location-aware estate planning.
 

Note: These calculations do not take into account the Residence Nil Rate Band (RNRB) which is an extra £175,000 per person if a main residence is left to direct descendants. This is because not everyone is eligible for this additional allowance.

This shift is significant not because of the scale of tax involved, but because it represents the first entry into the inheritance tax system for many families. Even relatively modest tax liabilities can reduce the value of intergenerational transfers, create liquidity pressures for beneficiaries, or force the sale of assets that were expected to remain within the family. As pensions move inside estate calculations, understanding true exposure and aligning retirement, gifting and estate-planning decisions accordingly becomes increasingly important. Early, location-aware planning will therefore play a key role in helping households in mid-priced regions use available allowances efficiently and protect long-term family outcomes.

Northern and Coastal Regions largely remain below the threshold

When taking pensions into account. Many northern, Scottish, Welsh, and coastal areas continue to sit below inheritance tax thresholds, even when estimated pension wealth is factored in. Locations such as Burnley, Hartlepool, Blackpool, County Durham, Inverclyde, and Merthyr Tydfil illustrate this trend, showing that estates in these regions are less likely to face immediate IHT liability. However, despite the lower current exposure, factors such as growing property values, increasing estate complexity, and potential future policy changes mean that careful planning remains important across the UK.

Inheritance tax is increasingly becoming a property tax by default. Many people don’t consider themselves wealthy, yet long-term house price growth – particularly in London and the South East – means their estates can face substantial tax bills. Without proper planning, beneficiaries may be forced to sell assets simply to settle the liability. Early advice and structured estate planning can significantly reduce the eventual tax burden.

Pensions have long sat outside inheritance tax calculations, so bringing them into scope has a major regional impact. In high-property-value areas, the effect is dramatic, but even in more affordable regions, families who previously expected no inheritance tax may now face a bill. Planning early will be crucial.

Marriage, Tax thresholds and changing demographics

Currently, married couples or civil partners can combine their inheritance tax allowances, meaning they benefit from higher thresholds. For instance, the individual nil-rate band is £325,000, plus there is the residence nil rate band of £175,000 (RNRB) if you are passing your main residence onto direct descendants such as children or grandchildren. But if you are married, you can pass your allowances to a surviving spouse to gift on their death, IHT free, which could mean gifting up to £1 million, as long as the overall estate is less than £2 million.

However, declining marriage rates and an increase in couples choosing to remain unmarried could leave more families exposed. Unmarried partners cannot combine allowances, so each person is subject to the thresholds individually. This means that even if they are leaving their estate to their long-term partner, IHT will be due on anything above £325,000. As a result, even households with moderate property and pension wealth may now fall into the 40% IHT bracket if they are not legally married.

In other words, while marriage can still provide a buffer against inheritance tax, the trend toward fewer legal unions means more couples could be caught by the 2027 reforms than in previous generations.

Why planning matters more than ever

For people in London, the Home Counties, and even mid-priced regions, inheritance tax is no longer an issue reserved for the ultra-wealthy. Long-term homeowners, particularly those who have benefited from significant property appreciation or built moderate pension savings, may now find their estates subject to substantial tax bills. The 2027 change to include pensions in estate calculations has the potential to push households that previously expected no liability into the inheritance tax net. While this may sound scary, according to HMRC, only 1 in 20 estates in the UK pays inheritance tax. There is normally no tax to be paid if:

• The value of your estate is below the £325,000 threshold known as the nil rate band
• You leave everything above the threshold to your spouse or civil partner, or
• You leave everything above the threshold to an exempt beneficiary, such as a charity or a community amateur sports club, or
• If you give away your main residence to your direct descendants, your threshold can increase to £500,000.

If you are at risk of falling into the threshold, effective planning strategies are now crucial and can include: 

• Lifetime gifting strategies: Regularly transferring assets during your lifetime, within allowance limits, can reduce the size of your estate and minimise future tax exposure. These can include gifts to children, grandchildren, or charities.
• Trust structures: Establishing trusts can help manage how and when beneficiaries receive assets while potentially providing relief from inheritance tax. Trusts can also protect assets in complex family situations or blended families.
• Pension planning: Reviewing how pension wealth fits into your broader estate plan is vital. Strategies may involve carefully timing withdrawals, considering joint spousal planning, and understanding the implications of death benefits.
• Business Relief-qualifying investments: For business owners, structuring investments to qualify for Business Relief can reduce IHT liability on certain shares and assets.
• Reviewing ownership structures between spouses: Ensuring that assets are owned in the most tax-efficient way between spouses can maximise allowances and reduce the overall estate exposure.

In short, the new rules mean that inheritance tax planning is no longer optional but a necessary part of financial management, even for households that previously believed they were unaffected. Acting early allows families to make informed, strategic choices that safeguard their estate and support the smooth transfer of wealth to future generations.

If you would like to discuss your personal financial situation, why not get in touch for a free initial conversation to see how we can help.

* Figures are based on average property prices (November 2025) by local authority. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The information contained within this article is based on our understanding of legislation, whether proposed or in force, and market practice at the time of writing. Levels, bases and reliefs from taxation may be subject to change. 

The value of your investments can go down as well as up, so you could get back less than you invested.

The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice. 

Rachel Reeves delivered her Spring Forecast this afternoon, which had been overshadowed before it even started by events in the Middle East.

As expected, the Spring Forecast (rather than Spring Statement as it has been referred to in previous years) did not include any fiscal changes, with Reeves previously committing to only holding one fiscal event each year, in the Autumn Budget.

By way of updates, Reeves announced that the Office for Budget Responsibility (OBR) had ‘adjusted the profile of GDP’ resulting in it downgrading its UK Growth projection for 2026 from 1.4% (as forecast in November 2025) to 1.1%, but the OBR increased its forecasts for 2027 (1.5% to 1.6%) and 2028 (again 1.5% to 1.6%).  Reeves also heralded the interest rate cuts seen in recent months, but events in the Middle East have significantly reduced the chance of a further cut in March, given the inflationary oil and gas price rises seen since the weekend.

Therefore, the most important upcoming tax changes are those we already knew about, specifically:

• A 2% increase in dividend tax taking effect on 6 April 2026.
• VCT tax relief being cut from 30% to 20% on 6 April 2026.
• Business and Agricultural Relief limited to £2.5m per individual, with effect from 6 April 2026 – this importantly increased from the previously proposed £1m and can be passed between spouses if not used on first death.
• A 2% increase in savings and property taxes taking effect on 6 April 2027.
• A cap in Cash ISA contributions of £12,000 for under 65s with effect from 6 April 2027.
• Pensions forming part of estates for inheritance tax purposes from 6 April 2027.
• A Mansion Tax being introduced in April 2028.
• Salary Sacrifice pension contributions benefiting from National Insurance Contribution savings limited to £2,000 with effect from 6 April 2029.
• Income Tax thresholds frozen until April 2031.

If you would like to discuss the impact of the above on your personal financial situation, why not get in touch for a free initial conversation to see how we can help.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions

The Financial Conduct Authority (FCA) does not regulate estate planning or tax advice.

The tax return deadline for the 2024/25 UK tax year is fast approaching and must be met by 31 January 2026 for online submissions, so now really is the time to focus on getting Self Assessments filed and any tax owed to HM Revenue and Customs (HMRC) paid.  

Those that fail to file their tax return in time face an immediate £100 late filing penalty with daily penalties kicking in after three months and potentially further charges the longer it goes unpaid.

It is worth taking time over the preparation rather than panicking in the face of the upcoming deadline because mistakes or omissions can lead to overpaying your tax or having to go through corrections and potential appeals later on. If someone overpays once their return is processed, HMRC may pay a refund, but the interest they pay on their own late repayments is generally much lower than the interest they charge on your late payments.  

From early January 2026 the late payment interest rate charged on overdue tax was set at 7.75%, which is 4% above the Bank of England base rate, while the repayment interest rate paid by HMRC on refunds is 2.75%, substantially less than the charge on unpaid tax.  

The bottom line is that taxpayers should get their tax return ready well in advance of the end of January if possible. Check carefully that you are not paying more tax than necessary and settle any tax due on time.

What is Self-Assessment?

Self-Assessment is the process you go through each year where you complete a tax return and declare your income, capital gains and any other income during that tax year to HMRC, outside of income tax that is normally deducted from your wage or pension.  

Although most commonly done by those who are self-employed, anyone who has other income outside what is normally deducted from your wages and pension, need to complete a self-assessment form – which can be paper based or digital.  

Irrespective of employment status, if you have received any untaxed income before the deadline of that tax year, you may need to complete a tax return. Even if that income comes from eBay, Etsy or similar ‘side hustle’ enterprises.

When you need to submit a tax return

This tax year (2025/26) ends on 5 April 2026 and all tax returns for this year will need to be completed by 31st January 2027.

Most importantly, you must tell HMRC by 5 October if you need to complete a tax return and have not sent one before. Then there are different deadlines for different types of tax returns.

If you’re doing a paper tax return, you needed to submit it by midnight 31 October 2026. HMRC must receive a paper tax return by 31 January 2027 if you’re a trustee of a registered pension scheme or a non-resident company.  

If you’re doing an online tax return, you must submit it by midnight 31 January 2027, and if you want HMRC to automatically collect the tax you owe from your wages and pension, then you needed to submit your online tax return by 30 December 2026.

In all cases you need to pay the tax you owe by midnight 31 January 2027.  

If you’re interested in finding out more about how we can help you build a tax efficient portfolio, making best use of allowances available to you whilst ensuring your money is working hard, Why not give us a call on 0333 323 9065 or book a free non-committal initial consultation with a member of our team.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.  

The Financial Conduct Authority (FCA) does not regulate tax or trust advice.

In the Autumn 2025 Budget, Chancellor Rachel Reeves confirmed that the freeze on income tax thresholds and allowances will now continue until at least 2031. What was announcement in 2021 as a short-term measure to stabilise public finances post-COVID, will become a 10-year freeze, one of the most significant, and often unnoticed, tax policies in a generation.

This long-term freeze is what’s known as a “stealth tax” or “fiscal drag”. Instead of raising the rates you pay, the government simply keeps tax bands and allowances frozen. And as your income, pension, or savings grow with inflation, you end up paying more tax without any changes to the rules themselves. Worse still, while your income may rise with inflation, savings often don’t always keep pace, so the real value of your cash will likely be falling, making a bad situation worse.

It’s a quiet but powerful way of increasing the tax take, and it's starting to catch out more and more people, especially those who are retired or trying to grow their wealth. Although it’s reasonable to expect to pay a fair amount of tax, stealth taxes could be pushing some people over that tipping point.  

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More pensioners paying higher tax

Over the past few years, there’s been a sharp rise in the number of retirees now paying income tax, especially at higher rates.

Back in 2021, around 494,000 pensioners paid tax at the 40% or 45% rates. Fast forward to today, and that number has more than doubled to over 1.2 million, according to figures from HMRC.

And it’s not just those in the top brackets. The total number of pensioners paying any income tax has jumped from 6.7 million to over 9 million in just four years. This isn’t because tax rates have changed, it’s because pensions have gone up while tax-free allowance has stayed the same.

From April 2026, the full state pension will rise to £12,547.60, just shy of the personal tax-free allowance of £12,570. Add even a modest private or workplace pension on top, and many retirees now find themselves paying tax, often for the first time.

Why it matters for savers and investors

Being pushed into a higher tax bracket doesn’t just mean you pay more on your income, it can also reduce or remove other valuable tax allowances. For example:

• The personal savings allowance drops from £1,000 to £500 if you’re a higher-rate taxpayer, and to £0 if you’re in the top band.
• Dividend allowance has shrunk dramatically, now just £500, down from £2,000 in 2022.
• Capital Gains Tax exemption has fallen over the years to £3,000 for individuals and £1,500 for trusts

And in the 2025 Budget, the Chancellor also announced higher tax rates on savings income from April 2027, a rise to 22% for basic-rate taxpayers and 42% for higher-rate taxpayers with additional rate paying 47%.

Added to this, from April 2026, the dividend tax rates themselves are set to rise:

• For basic-rate taxpayers, the rate will increase from 8.75% to 10%
• For higher-rate taxpayers, from 33.75% to 35%
• And for additional-rate taxpayers, from 39.35% to 39.6%

These changes mean investors could face higher tax bills even on modest dividend income, especially as the tax-free allowance continues to shrink. 

The 60% tax trap

If you earn between £100,000 and £125,140, the tax system becomes especially punishing. In this band, your personal allowance is gradually taken away, so for every £2 you earn over £100,000, you lose £1 of your personal allowance.

This creates an effective tax rate of 60%, and once you factor in National Insurance, that jumps to 62% for many.

This hidden trap hasn’t been adjusted since 2010 and rising wages have brought many professionals into its grip. If you're approaching this income range or in it, planning is key as there are solutions to minimise or even mitigate against it.

Inheritance Tax: catching more estates

Inheritance Tax (IHT) is another area where frozen thresholds are bringing in more families each year.

The main threshold of £325,000 hasn’t changed since 2009, despite rising property prices. With the Residence Nil Rate Band (£175,000), for those passing down their main residence to direct descendants, a couple can pass on up to £1 million tax-free. However, this will depend on the value of the property and the overall value of the estate, larger estates may see a reduction or loss of the Residence Nil Rate Band. If the total estate is worth more than £2 million, the Residence Nil Rate Band is reduced by £1 for every £2 over the £2 million threshold. Anything above the available thresholds may face a 40% inheritance tax bill.

In 2024/25, IHT receipts hit a record £8.2 billion. With no reforms announced in the 2025 Budget and the freeze extended to at least 2031, this number is only expected to rise.

What can you do to mitigate stealth taxes?

While you can’t control tax thresholds or government policy, you can take action to protect your income and your legacy.

Here are a few of the strategies that could help:

• Use ISAs to shelter savings and investments from tax
• Structure pension withdrawals carefully to avoid unnecessary tax
• Make use of salary sacrifice where possible to reduce income and NI
• Gift assets tax-efficiently as part of longer-term estate planning
• Review your total income regularly to avoid tipping into higher brackets

These are just a few possible strategies, but a personalised, bigger financial plan should ensure your wealth is working for you and your family.

The bottom line

A decade of frozen allowances will reshape the tax landscape. For many, it’s no longer enough just to “stay under the limit”, the limits themselves are working against you.

That’s where strategic, personalised financial planning comes in. By looking at your whole financial picture, we can help you protect your wealth and plan with confidence for the future.
Get in touch with one of our financial advisers to see how we can help you navigate the years ahead with a plan that works for you. 

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions. 

The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice. 

A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless the plan has a protected pension age). The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.

Investment returns are not guaranteed, and you may get back less than you originally invested. Past performance is not a guide to future returns.

With the 31 January deadline fast approaching, around 5.65 million people are still yet to file their self-assessment tax return, HM Revenue & Customs (HMRC) has warned.

Anyone who misses the cut-off could be hit with an initial £100 late filing penalty, with additional charges possible after that.

According to data from HMRC, 6.36 million individuals submitted their return at least a month ahead of the deadline. Many even chose to complete theirs over the festive period with 37,435 customers filing their Self Assessment tax returns between Christmas Eve and Boxing Day, with our very own Marketing Director being one of those who did theirs on Boxing Day!  

Between 11am and 12pm on New Year’s Eve was the most popular time to file, with 3,927 returns submitted during that hour. Meanwhile, 19,789 people swapped the usual New Year’s Day walk or TV marathon for sorting their tax return instead.

In total, 54,053 taxpayers submitted their 2024/2025 return on 31 December and 1 January, including 342 people who filed in the final hour of 2025.

Myrtle Lloyd, HMRC’s chief customer officer, said: “New Year is a great time to start afresh. What better way than to ensure your tax affairs are in order for another year than completing your tax return.”

“If you have yet to start, the clock is ticking, go to GOV.UK and start today.”

HMRC is urging anyone who will struggle to meet the deadline to get in touch before 31 January. Those with a reasonable excuse will be treated fairly, it said.

What is Self-Assessment?

Self-Assessment is the process you go through each year where you complete a tax return and declare your income, capital gains and any other income during that tax year to HMRC, outside of income tax that is normally deducted from your wage or pension.  

Although most commonly done by those who are self-employed, anyone who has other income outside what is normally deducted from your wages and pension, need to complete a self-assessment form – which can be paper based or digital. Although you will need a HMRC Gateway account to file your tax return digitally – so do allow time to set that up 

Irrespective of employment status, if you have received any untaxed income before the deadline of that tax year, you may need to complete a tax return. Even if that income comes from eBay, Etsy or similar enterprises.

When you need to submit a tax return

This current tax year ends on 5 April 2026 and all tax returns for this year will need to be completed by 31st January 2027.

Normally, you must tell HMRC by 5 October if you need to complete a tax return and have not sent one before. Then there are different deadlines for different types of tax returns.

If you’re doing a paper tax return, you needed to submit it by midnight 31 October 2026. HMRC must receive a paper tax return by 31 January if you’re a trustee of a registered pension scheme or a non-resident company.  

If you’re doing an online tax return, you must submit it by midnight 31 January 2027, and if you want HMRC to automatically collect the tax you owe from your wages and pension, then you needed to submit your online tax return by 30 December 2026.

In all cases you need to pay the tax you owe by midnight 31 January 2027.  

If you’re interested in finding out more about how we can help you build a tax efficient portfolio, making best use of allowances available to you whilst ensuring your money is working hard, Why not give us a call on 0333 323 9065 or book a free non-committal initial consultation with a member of our team.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.  

The Financial Conduct Authority (FCA) does not regulate tax or trust advice.  

The first Budget of my professional career was the 1988 Nigel Lawson “Giveaway” Budget. As an office junior, my job was to head into the city and queue up (with dozens of other fresh faced office juniors) to receive the printed full Budget from the Government’s press offices. I dutifully returned to work, clutching it in my sweaty palms, so that the senior advisers could pore over it. No internet, no leaks, just a bundle of white pages hastily stapled together.

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Since that March day (it always used to be in the Spring) Budgets have come and gone but they all have one thing in common. Namely, the fear and rumour that ferments in the days and weeks beforehand. I have to say that the media are one of the major guilty parties and, more than ever, are responsible for whipping up a frenzy of bitterness and resentment, even before the Chancellor, whoever they happen to be, has stepped up to the dispatch box.

I don’t think I’m wrong in saying that I’ve never witnessed quite so much ‘bracing’ in fear and anticipation as this Budget. The nation became paralysed in apocalyptic fear as if the end of the world were approaching.

So, I thought it was time to take stock and look at the Budget in the clear light of day and also in the context of historical Budgets.

The fear and rumour mill

Ever since that dreary March day in 1988, I can say that one fear has pervaded every single Budget. Namely, the fear that higher rate tax relief will be removed from pension contributions. This Budget was, of course, no exception and the fear spread even further than that. About sometime in September this year, a rumour started (I don’t know from where) that tax free cash (now technically known as the Pension Commencement Lump Sum, or PCLS) would be reduced from £268,275 to £40,000. Personally, I thought it was unlikely and wasn’t afraid to say so. Not only would it not result in higher tax take for the Treasury (who in their right mind would now willingly withdraw £286,275, subjecting themselves to income tax on £246,275?) but it would also have made Rachel and Labour, even more unpopular than they are already.

Nevertheless, a huge number of people acted and withdrew their tax free cash and are now sitting on it in a taxable environment.

But pensions were definitely going to take a bullet somehow. After all, they are still highly efficient methods of saving, something which seems to have been lost on some of the general public, based on a tsunami of negative press, again, which doesn’t always help. Animal Farm springs to mind when the animals, having taking over the farm, come up with the tenets of animal life. “Four legs good, two legs bad”. And so, the media has a similar chant “non pensions good, pensions bad”. But are they? If I were to tell you that you could invest in a pension and get 41.6% tax free cash from it, would you be interested? If you are a higher rate taxpayer, this is exactly what you get! For every £100 put in, you only pay £60 (20% tax relief at source and a further 20% back in your tax returns). So, tax free cash at 25% means 25% of £60 which equals 41.6%. When you retire, if you’re a basic rate taxpayer, you are only paying 20% on the £75 whenever you draw on it. By the way, if you make pension contributions and your earnings are between £100,000 and £125,140, because this income reduces your personal allowance, the equivalent tax relief is not 40%, it is 60% so the effective tax free cash rate is a whopping 62.5%.

Given how generous tax relief is, I think that the slight knock pensions took (future reductions in salary sacrifice) is really getting away with it.

The hammer blow came last year

Of course, last year’s Budget delivered a hammerblow to pensions in that, from April 2027, Inheritance Tax (IHT) will apply. For ten years, since George Osborne announced pensions ‘freedom’ many have earmarked their pension funds for Estate Planning purposes, since so this recent news was very unwelcome. In effect, this now puts pensions in roughly the same position as they were before 2015. Before 1995, remember, people were forced to buy annuities with their pension funds so, in spite of goal post moving, pensions are still the best tax planning vehicles around, so let’s not throw the baby out with the bath water.

Overall, it has to be said that the Budget was probably a slight relief. Many, myself included, had expected increases in Capital Gains Tax and even Income Tax and none of these came to pass. Instead, we saw a continued freezing of allowances. Stealth taxes. The death of wealth by a thousand cuts. Each one painless, but in five years’ time, we’re all significantly worse off without immediately feeling the pain. 

Stealth taxes are at the heart of the Budget

There were a few other ‘tampering's’ such as the reduction in cash ISA contributions from £20,000 to £12,000 for under 65s, and an increase to the tax rate on savings interest, both from April 2027, but this is mostly tinkering around the edges and irritants for some, at worst. There was an innovation in the introduction of ‘Mansion tax’ for houses worth over £2m but, again, this was kicked into the future and will not apply until 2028. But the stealth taxes, freezing of allowances, are at the heart of this budget.

I sometimes think of the 1988 “giveaway” Budget with fondness. Lawson reduced higher rate income tax from 60% to 40% and basic rate from 27% to 25%. All of this was possible due to the fact that the economy had been overheating (remember that?) but was now under control and the predicted Budget surplus allowed for such cuts. What luxury! There was uproar in the house and the Speaker had to suspend proceedings due to “grave disorder”. A lesser known MP called Alex Salmond exclaimed that it was an “obscenity” and was duly suspended for breaching Parliamentary convention.

The world has changed though, and the UK doesn’t have the room for manoeuvre afforded by those halcyon days. Nigel Lawson didn’t have the fallout of QE, Brexit, Covid and the Ukraine invasion to hamper him and I doubt if any modern day Chancellor from any persuasion would make us all happy, given the state of the economy. The only one who tried, and failed, was Kwasi Kwarteng who, in cahoots with Liz Truss, grabbed the Treasury money bag and started running down Whitehall throwing £20 notes in the air before being rugby tackled by the bond markets. I sadly, don’t expect too much from any Chancellor, from whichever party, over the next few years at least.

On the plus side, bond markets (the ultimate bellwether of economic prudence) have reacted well to the Budget. Gone are the days when a Labour Government would react to fiscal shortfall by applying for a payday loan!

So, in the final analysis, maybe the 2025 Budget was a bit of a non-event. But fear and loathing were the lasting memories of the days leading up to it, which probably explains why the UK economy reported a contraction in October. Meanwhile, back at Animal Farm, I’d like to paraphrase another animal tenet. “All Budgets are equal, but some are more equal than others”.

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This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The opinions shared in this article are solely those of the individual and they do not necessarily reflect those of The Private Office. 

The Financial Conduct Authority (FCA) does not regulate cash flow planning, estate planning, tax or trust advice. 

UK inflation dropped more than expected in November to reach an eight-month low of 3.2%. Inflation, measured by the consumer prices index (CPI), fell to an annual rate of 3.2% in November, from 3.6% in October, according to the Office for National Statistics (ONS). The figure was below the 3.5% forecast from analysts surveyed by Reuters and marked a notable decline month on month.  

According to the ONS, the fall in inflation was driven by lower prices for food, drink and clothing. 

The unexpected drop only adds more weight to the argument for the Bank of England to lower interest rates on Thursday, 18th of December in an effort to support the economy.  

Bank of England governor Andrew Bailey has indicated he would back another quarter-point cut to 3.75% at this week’s Monetary Policy Committee meeting, provided official data continues to point to a slowdown in inflation. 

What is inflation and how is it measured?

Inflation is a measure of how the prices of goods and services have increased over time. Goods are tangible items sold to customers, such as food, while services are tasks performed for the benefit of recipients, such as a haircut. Generally, this increase is measured by considering the cost of things today compared to how much they cost a year ago. The average increase between these prices is demonstrated in the inflation rate.  

Rising interest rates directly affects the cost of living. For example, if the price of a bottle of milk is £1, and inflation is increasing by 5%, then your bottle of milk will cost you 5p more. Or, in other words, the spending power of your money has decreased by 5%.  

Ideally, the Government wants to keep inflation low and stable. The general mandated target for the Bank of England is 2%. Anything significantly above or below this target is thought to cause issues for the economy.  

The cost of living surged in recent years, with inflation peaking at 11% in 2022 - way above the Bank of England's 2% target, partly due to the increase in energy prices following Russia's invasion of Ukraine.

While the rate has dropped, falling inflation does not mean the goods and services are coming down in price overall, it is just that they are rising at a slower pace. 

Our chartered advisers are unbiased, meaning that they can give whole of market advice, and so are best placed to give you a plan tailored exactly to your personal financial goals.  

If you’d like to know more, request a free non-committal initial consultation with one of our team or give us a call on 0333 323 9065 and get in touch.

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This article is for information only and does not constitute individual advice.