It feels increasingly difficult, and perhaps unhealthy, to keep up with the rollercoaster of news. The beginning of the year saw continuing war in Ukraine and Gaza, the re-entry of Donald Trump to the White House and the UK government grappling with the economic legacy of their predecessors following a hard-hitting Autumn Budget. The last three months have not seen the improvements that many hoped for in any of these arenas. The growth that the Chancellor has pegged the government’s planning on is proving slow to take off, while across the Atlantic the Trump administration’s whirlwind of federal cuts, tariffs and territorial threats have created an atmosphere of tension to say the least.
How the impact of potential US tariff wars will filter through to the UK is yet to be seen, but stability is predicted for our own economy this year with inflation expected to remain close to 2%. But as we move into a new tax year, challenges remain for government and taxpayers alike. In the Spring edition of our newsletter, our feature looks ahead to changes coming in 2025/26 and suggests some strategies to get the most from early tax year planning. We look at assessing if you’ll be caught by the frozen tax thresholds, whose levels are due to remain in place for another three years and have catapulted increasing numbers into higher tax brackets. With changes likely to how pension death benefits are treated for inheritance purposes, it’s also worth thinking about how you intend to use your pension in your retirement spending plans rather than setting it aside for inheritance purposes.
For those getting near to retirement age another critical date to know is when exactly you will reach your State pension age (SPA). A recent survey revealed an astonishingly high proportion of 54–64-year-olds did not know the date they would become eligible for their State pension. State retirement age is changing to 67 over two years, starting from April 2026, so the date your pension is due will shift according to your birthday over this period. The State pension forms a critical part of most people’s retirement plans and so make sure you know when yours is due, in particular if it lands during this transition phase.
Once you do reach retirement, you need to decide what to do with your pension pot and how to fund your living expenses. It has been 10 years since the introduction of pension flexibility and changes in the individual’s rights to manage their pension spending mean many have chosen to withdraw lump sums and take closer control of how and when they receive income since. Annuities fell out of favour, especially when return rates were low, but in the past six months they have become much more attractive, promising better returns, and of course a regular income for those seeking stability.
For updates on these and other issues that could affect your financial planning, please see our spring newsletter below.
