October 2025 - Page 2 of 2 - Investing For Tomorrow

We’re excited to announce that we’ll be hosting a special client webinar on Thursday 11th December at 10:00am.

This session will give you valuable insights into how our investment portfolios have performed over the past 12 months, as well as a forward-looking view on what we can expect as we move into 2026.

We’ll be joined by two highly-respected experts:

George Cliff is Co-Chief Investment Officer and Director of Research at Clever. With over 11 years of experience in investment strategy and research, George will be reviewing performance of the portfolios over the last year.

Nathan Sweeney is the Chief Investment Officer of Multi-Asset Solutions at Marlborough with more than 25 years’ investment experience. Nathan will be sharing his economic outlook for 2026 and beyond.

Please mark the date in your diary – full registration details and joining instructions will follow shortly.

We hope you can join us for what promises to be a highly informative and engaging session.

This amount increases each year through the ‘triple lock’ system, which considers earnings, inflation or 2.5%, whichever is highest. Even those with private pensions often rely on the State Pension for extra security. For couples where both partners are eligible, the impact is even greater, potentially making a significant contribution to household finances.

Your entitlement depends on key factors

However, not everyone receives the full State Pension. Factors such as whether you were contracted out of the additional State Pension before 2016, whether you paid into the additional State Pension scheme and the number of qualifying National Insurance (NI) years all affect your entitlement.

To secure the full amount, you need at least 35 years of NI contributions. If your contributions are between 10 and 34 years, you will receive a proportion. There are many reasons why people might not meet the threshold, such as taking a career break to care for children or working abroad. The good news is that you can make voluntary payments to replace missing contributions.

Filling the gaps in your contribution history

Voluntary NI contributions help you fill gaps and boost your State Pension. For the 2025/26 tax year, the cost to fill one missing year is £923. Paying even for one gap can bring significant benefits; it usually increases your annual State Pension by 1/35th of the full amount. This roughly equals £342 per year based on current figures.

Generally, you can only fill gaps from the past six years. For example, in the 2025/26 tax year, you could address gaps dating back to the 2019/20 tax year. Before making any payments, it’s important to check whether you are eligible and if it is financially sensible.

Checking your State Pension forecast

The initial step to understanding your entitlement is to obtain a State Pension forecast. You can do this quickly and easily online via the Government Gateway. Your forecast will display your expected pension, any shortfalls in your contributions and the cost of making up these shortfalls.

Some people may mistakenly assume they will automatically receive the full amount or forget to check their forecast altogether. Overlooking it can result in receiving less financial support than expected. This mistake is especially common among parents who have taken time off work to raise children, believing their NI contributions are being credited automatically.

Unclaimed credits for stay-at-home parents

From 1978/79 to 2009/10, stay-at-home parents could benefit from Home Responsibilities Protection (HRP) if they claimed Child Benefit. This scheme was replaced in 2010/11 by National Insurance credits. Unfortunately, data inaccuracies have led to many eligible parents not receiving the necessary credits.

The Department for Work and Pensions (DWP) identified this issue through research carried out in 2011 and 2022. If you were a stay-at-home parent during this period and missed your credits, the government has announced plans to address the problem. Starting in April 2026, parents will have the opportunity to claim NICs even if they did not previously apply for Child Benefit.

Protecting spouse contributions in high-income households

Spouses in households with a high-income earner might choose not to claim Child Benefit due to tax implications. However, claiming this benefit is important to ensure their NI credits, and there is the choice of not receiving the actual child benefit payments. This highlights the importance of reviewing your pension forecast, especially if your family includes a stay-at-home parent.

The legislative updates in April 2026 are vital for couples in this situation. By claiming missed credits, individuals can protect their rightful State Pension entitlements, preventing financial shortfalls in retirement.

Taking a more holistic approach to retirement

Although the State Pension alone might not provide enough income for some, maximising your entitlement is a vital part of broader retirement planning. Combining the State Pension with workplace or private schemes creates a stronger financial safety net. By addressing any gaps early and utilising mechanisms like voluntary NI contributions, you can achieve greater peace of mind as you approach retirement.

This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional 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.

Current market conditions, sluggish economic growth, persistent inflation and rising unemployment have put significant pressure on public spending. Although there have been calls for a wealth tax, the government is reportedly considering the less politically sensitive option of reforming IHT thresholds.

Potential gifting caps under consideration

One option being considered is the introduction of a lifetime cap on tax-free gifts. Currently, individuals can pass on assets without tax if these gifts are made at least seven years before their death. Gifts made between three and seven years prior that are above the donor’s nil rate band are taxed on a sliding scale on the excess above the nil rate band, with rates decreasing annually from 32% to 8% in what’s known as ‘taper relief’.

By implementing a cap, the government could restrict the total value of assets or monetary gifts exempt from IHT rules, regardless of when they are given. This would represent a significant shift in policy and could impact taxpayers involved in long-term estate planning. Other aspects of the gifting framework, including the taper rate itself, are also reportedly being reviewed.

Baby boomers’ wealth transfers under scrutiny

Alongside organisational reforms, focus is shifting to the vast intergenerational wealth expected to pass from baby boomers. Increasing property prices, substantial pension pots and accumulated wealth have created a financial landscape the Treasury doesn’t want to overlook.

Last year signalled an early indication of the government’s plans to align pensions with IHT. From April 2027, unused pension funds and most death benefits will be incorporated into the IHT regime, ensuring these assets contribute to government revenue during the largest generational transfer of wealth in history.

Public sentiment and next steps

If such reforms are implemented, they are likely to spark debate across the political spectrum. While they may succeed in bolstering public finances, concerns over fairness and the potential impact on middle-income families loom large. Conversely, measures specifically targeting ultra-wealthy estates and large-scale gifts could potentially gain broader public acceptance.

The Treasury has not yet confirmed any decision, but it is clear that no revenue-raising strategy is being ruled out. With the Autumn Budget just around the corner, taxpayers would do well to stay informed about potential changes that may impact their estate planning efforts.

This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice. The value of your investments can go down as well as up, and you may get back less than you invested. The Financial Conduct Authority does not regulate estate planning, tax advice or trusts.

The report’s findings reveal that over a third (36%) of people are worried about their financial future. With tax thresholds frozen and the potential for further increases, demand for professional financial advice is increasing. People are increasingly seeking to understand the implications of IHT and ways to ensure their wealth is passed on efficiently.

Bonds offer efficient estate planning tools

One solution gaining popularity is the use of onshore bonds. Offering a unique blend of flexibility and tax efficiency, these investment tools enable savings to grow while helping to minimise future IHT liabilities. When incorporated into a well-designed estate planning strategy, bonds not only reduce tax exposure but also simplify the transfer of wealth across generations.

Onshore bonds are especially beneficial because they can be transferred to family members without generating a chargeable gain. The recipient is regarded as having held the bond since the start. This enables them to make the most of full top-slicing relief and any unused 5% tax-deferred allowances in future withdrawals.

Trust structures support tax mitigation

When used within a trust, onshore bonds offer an effective way to reduce IHT and simplify administration. Trustees can access a 5% tax-deferred withdrawal allowance when taking funds for expenses, while avoiding the complications linked to income-producing assets.

Furthermore, bonds structured as clustered policies enable trustees to allocate specific portions to beneficiaries later. This flexibility not only diminishes future tax exposure but also ensures beneficiaries receive financial support at the appropriate time, aligning with the original trust objectives.

Long-term financial planning objectives

However, despite these advantages, research indicates that more than two-thirds (67%) of people are unaware of how bonds can assist with inheritance planning or lower tax burdens. This gap in understanding underscores the crucial role that professional financial advice plays in this area.

As awareness increases, more people are aiming to equip themselves with the tools needed to leave a lasting legacy. Bonds, with their distinctive features, provide an attractive option for those seeking to combine investment growth with long-term financial planning goals.

Education and professional advice are essential

Given the complexities surrounding estate planning and the legislative changes to IHT, it has become essential to seek professional advice. We can help individuals and families make well-informed decisions by guiding them through the intricate landscape of tax-efficient investment options.
Onshore bonds, in particular, can serve as a valuable tool for individuals seeking to achieve capital growth while reducing tax exposure. By incorporating bonds into a broader financial strategy, clients position themselves to benefit future generations while remaining compliant with changing tax laws.

Bonds combine simplicity with flexibility

One of the main appeals of bonds is their straightforwardness. Unlike other financial planning tools, they provide a transparent way to manage tax and inheritance matters. This simplicity not only makes bonds accessible to investors but also practical for trustees handling long-term wealth.
Another reason is the flexibility that bonds provide. With the ability to transfer ownership, manage withdrawals and adapt to changing circumstances, bonds can accommodate a wide range of estate planning scenarios. Ultimately, this flexibility ensures they remain a relevant and powerful tool for passing on wealth.

Take action to secure your financial legacy

Bonds remain a valuable and often overlooked resource for those seeking to grow their wealth while reducing Inheritance Tax. By combining tax efficiency with flexibility, they provide a practical solution to meet the increasing demand for intergenerational wealth transfer.

Source data:

[1] Survey of 4,000 nationally representative UK adults conducted for LV= by Opinium in March 2025.

This article does not constitute tax, legal or financial advice and should not be relied upon as such. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. For guidance, seek professional advice. The value of your investments can go down as well as up, and you may get back less than you invested. Tax planning & estate planning is not regulated by the Financial Conduct Authority.

With over 3.3 million pension pots, each averaging £9,470[1], believed to be ‘lost’ in the UK, and nearly a quarter of UK workers (23%) planning to leave their jobs in 2025[2], it is crucial to stay informed about your retirement savings and understand the steps to take after changing employment.

What happens to your pension when you leave a job?

When you leave a job, your investments stay in place. However, both your contributions and those from your employer cease. While your savings can still grow through investment, ongoing charges on the account may gradually decrease its value if not monitored.

It’s important to notify your pension provider of any changes to your personal email or home address, particularly if your work emails are deactivated. Updating your contact details regularly helps you stay informed about your savings and prevents losing contact with your funds.

Tracking down old pensions

If you’ve had several jobs, it can be difficult to keep track of your different pension pots. You may not immediately know where all your savings are held, but tools are available to assist you. A pension tracing service can help locate any lost pensions using details from previous employers.
Once you identify these old pots, consolidation could simplify the management of your retirement savings by reducing administrative tasks and allowing you to focus on a single account. However, the decision depends on individual circumstances, and important benefits might be lost during the transfer process.

Should you consolidate your pensions?

Before consolidating pensions, assess both the advantages and possible drawbacks. On the positive side, merging pensions could lower fees, make retirement savings simpler, and provide clearer insight into your progress towards retirement goals.

However, some older pension schemes provide unique benefits, such as guaranteed income options, higher growth rates or early retirement terms. These could be lost if transferred, so research your specific plans carefully to ensure that consolidation is the right decision for you.

What to do if you’re in between pensions

If you’re taking a career break, changing jobs or working in a role that doesn’t offer an immediate workplace pension, it’s still important to manage your retirement savings. You might still be able to contribute to your existing pension, depending on your provider.

For those without such an option, considering a personal pension plan could be a practical solution. By remaining consistent with contributions, even during transitional periods, you will ensure your retirement savings stay on course.