How to fund social care has once more moved into the political spotlight. It is the turn of the year. The health secretary of the relatively new Labour government announces a commission to review the financing for long-term care of the elderly. Can you name the year? Sadly, there are two correct answers: 1997: in December of this year, Frank Dobson, the Health Secretary in Tony Blair’s new government, fired the starting gun for a Royal Commission report with the grand title o

The latest Budget move to count pensions as part of your estate for inheritance tax (IHT) is a major change, with potentially significant consequences. At present, most pension benefits payable on death, whether lump sums or other income, are outside the scope of IHT because they are not considered part of the deceased’s estate. However, there is an income tax charge on the beneficiaries if death occurs on or after age 75 or in certain limited cases before then. The Budget’s

The Budget brought inheritance tax (IHT) into the news headlines, but its impact is not well understood. Mark and Hannah have an estate valued at £1.25 million, including their jointly owned home worth £400,000. Like many couples, their wills leave everything to the survivor on first death and to their children on second death. What proportion of their estate would disappear in IHT under current rules once that second death occurs? A. 8% B. 20% C. 24% D. 40%

As 2025 gets under way, it is once again the time of year to start considering your tax year-end planning. The early months of the year are the time to undertake year-end tax planning. Unsurprisingly, the traditional drivers have been the tax year-end (Saturday 5 April 2025) and the Spring Budget. On this occasion, after last October’s blockbuster, there is no Spring Budget, although Rachel Reeves will deliver a Spring Forecast in late March. In the wake of that Autumn Budget

A recent survey has raised questions about retirement readiness. One of the world’s largest investment managers, BlackRock, recently published its latest review of the UK’s retirement landscape. The work was based on a survey of 1,000 savers in defined contribution (DC) pension arrangements. This is the type which now dominates private sector retirement provision, mainly through automatic enrolment workplace schemes. BlackRock’s four main findings were: 1. Generational di

National Savings & Investments (NS&I) has been busy reducing its interest rates in recent months. NS&I has roots going back to 1861, when Gladstone, then Chancellor of the Exchequer, launched the Post Office Savings Bank. NS&I’s latest quarterly results show that on 30 September 2024, it held £233.9 billion on behalf of investors. That might seem like a lot of money, but it’s a relatively small amount when considering the vast budgetary hole the current government is trying t

The global market outlook showed an improvement for 2024 with the US achieving more than 20% returns for a second consecutive year. A quick look at a table comparing changes across key global indices puts the UK, as represented by the FTSE 100, in a relatively poor light. Figures suggest that the government has its work cut out persuading pension funds to divert more of their capital to UK companies, rather than the locomotive that is the US stock market. However, there are n

There are now over three million ‘lost’ pensions worth over £31 billion. We all lose things, be it the proverbial change down the back of the sofa or TV remote. But how do you lose a pension? The answer is very easy as suggested by recent research from the Pensions Policy Institute (PPI). The PPI counts a pension as ‘lost’ if the pension’s administrator is unable to contact the pension owner. While the definition of uncontactable varies between administrators, it will general

A third deadline for topping up State Pension entitlement is now coming into view. “Don't it always seem to go, That you don't know what you got 'til it's gone?” The words of Joni Mitchell’s Big Yellow Taxi, recorded over half a century ago, always come to mind when deadlines loom. Whether it is filing tax returns or a supermarket limited time offer, there is a slice of the UK population that will always wait until the last moment to act. Sometimes, even a deadline is not eno

Not every interest rate moves in the same direction Source: Bank of England, Investing.com If you are approaching the end of your five-year fixed rate mortgage and currently enjoying an interest rate of around 2%, you have probably been watching the fluctuations of interest rates with some trepidation. The November 0.25% cut from the Bank of England has not fed through to your prospective re-mortgage interest rate and some lenders are even going in the opposite direction of t

New statistics show that cash ISAs remain a popular investment. Every autumn HMRC publishes a set of annual savings statistics, setting out detailed information about individual savings accounts (ISAs), lifetime individual savings accounts (LISAs), child trust funds (CTFs) and Help to Save. Unsurprisingly, ISAs dominate, with by far the largest amounts, both in terms of subscriptions and the overall value invested. Unfortunately, the data is usually about 18 months out of da

HMRC is uncharacteristically keen to give money away, reminding young adults again that they may be due unclaimed child trust funds (CTFs). The amount still to be paid out comes to just under £1.4 billion. As the UK settles under its first Labour government in 14 years, there is a certain irony that one of the policies of the last Labour government is still playing out, despite being scrapped by the Conservative/Liberal Democrat coalition government in 2010. CTFs were launche

Chancellor Rachel Reeves’ first Budget was a significant one in all senses. “…this Budget delivers a large, sustained increase in spending, taxation, and borrowing.” So said the Office for Budget Responsibility (OBR) in the first paragraph of its overview of the Autumn Budget. The numbers are indeed large: spending is up by almost £70 billion a year over the next five years; taxation will rise by £36 billion a year; and borrowing will still be above £70 billion a year in 2029

Investors in cryptocurrencies like bitcoin should not forget the tax consequences of their digital wallets, says HMRC. HMRC regularly boosts tax receipts by nudging taxpayers who are suspected of filling out their tax returns incorrectly or failing to submit a return when one is due. The warning, sent as a ‘nudge’ letter, often stems from investigations HMRC have undertaken, using their extensive powers to demand information from institutions and companies. Nudge letters are

The pension challenges facing western governments are also confronting the world’s second most populous country. At what age should the state start to pay a pension? The question is a challenge to all governments, whether democratic or otherwise. There are two main drivers, at opposite ends of life: Life expectancy. Unless state pension ages increase in line with life expectancy, the state spends more on pensions and a rising proportion of life is spent in retirement. The eco

Financial Conduct Authority (FCA) publishes a review of the cash savings market following evidence of some dubious tactics at work. Table 1: Average easy access deposit interest rates and base rates at quarter end 31 July 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Average rate 1.66% 1.96% 2.03% 2.12% 2.11% Base rate 5% 5.25% 5.25% 5.25% 5.25% Source: Financial Conduct Authority While the use of paper cash is declining as a means of payment, the need to retain a cash reserve remai

We now have a clear understanding of how much the main State Pension will increase next April. That the State Pension triple lock was not going to change was a consistent commitment in the election manifestos of all major political parties – Labour, Conservative and Liberal Democrats. In truth, once one party had nailed its colours to the mast, the others had no choice but to follow suit, given the size of the voting constituency represented by State pensioners. As a reminder

With a ‘black hole’ of £22 billion to fill, there are plenty of groups giving Rachel Reeves advice. The Fabian Society published a report on taxation on August Bank Holiday Monday. While their main audience is in Scotland, which has its summer bank holiday at the start of August rather than at the end, the timing was unusual. Nevertheless, that was the date chosen by the Fabian Society to release Expensive and Unequal. The case for reforming pension tax (2024). The Fabian Soc

Will increased capital gains tax (CGT) mean less tax gets paid? Source HMRC The Labour Party’s 2024 manifesto said, ‘We will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.’ The absence of any comment on CGT meant that Rachel Reeves received persistent questions during the election campaign about a possible increase. Unsurprisingly, there was no definitive answer. At the beginning of August, HMRC published new data about how much

Many chancellors ago, in November 2016, Philip Hammond announced an end to spring Budgets and their replacement with autumn Budgets. At the time it seemed a sensible idea to allow changes in tax to be legislated before the start of the new tax year. In practice, it did not go to plan: Hammond himself presented a Budget the following March and then a series of political, and other, disruptions caused Budget timing to go off the rails. In 2022, there was no formal Budget – the