You may recall the mythical Pushme-Pullyou animal (or Pushmi-Pullyu in the original) from Dr Doolittle. With two heads facing opposite directions, it epitomises trying to balance conflicting forces. Following the Chancellor’s Spending Review in June, in which Rachel Reeves laid out an ambitious programme of capital spending and investment while sticking to self-imposed rigid fiscal rules, the image feels apt. A backbench rebellion against proposed benefit cuts coincided with confirmation of additional defence spending at the NATO summit in late June. With the push coming from President Trump on increased contributions across the NATO allies, and the pull from the raft of other domestic public spending commitments and demands, it seems the run up to the autumn Budget will be fraught with difficulty.
One of those commitments was the government’s pledge to maintain the pensions triple lock in its 2024 election manifesto. But the State pension alone is not enough to pay for the retirement costs of older age. Our feature in the latest edition of our newsletter highlights recent research that found many, particularly in the younger generations, are likely to find their pension income won’t meet their lifestyle costs in retirement. We look at the different investment strategies you should pursue to make sustainable pension contributions throughout your working life.
The transition into retirement is today less precipitous than it once was, with many people reducing their hours more gradually or continuing with part-time jobs. Once you have stopped working completely, your costs and spending patterns will shift. One report found homeowners are likely to spend more money initially in retirement, perhaps on improving their property as they spend more time at home, but then those costs reduce as time goes on. How you access your retirement income is a complex decision. Some find an annuity is the right solution for their needs, where others may prefer flexible drawdown to pay for one-off, higher expense bills. Regular reviews are crucial to ensure your decisions match your needs.
Meanwhile, the self-employed and property investors with qualifying income over £50,000 are the latest group to be affected by HMRC’s Making Tax Digital project. From April 2026 they will need to use automating tax reporting software that connects self assessment taxpayers’ accounts straight to HMRC. If you think you could hit that threshold you should be preparing now, with the next phase including those with qualifying income over £30,000 coming in from April 2027.
For updates on these and other issues that could affect your financial planning, please see our summer newsletter. We will be back in touch in September, when we will be looking ahead to the Chancellor’s second Budget.
