Author: Talking Finances

Just over three months after her lengthy Autumn Budget, chancellor Rachel Reeves has addressed the House of Commons and delivered the government’s 2026 Spring Statement.

Ahead of the Statement, Reeves reinforced the government’s commitment to “one fiscal event, one Budget, a year”. So, it will come as a relief to many, including business owners, that the Spring Statement included no additional tax-raising measures. Furthermore, no changes to pensions or Individual Savings Accounts (ISAs) were announced.

Reeves also said that household disposable income is set to grow at twice the rate that was forecast in the Autumn Budget – leaving the average person £1,000 better off each year by the next election.

That being said, previous announcements, including changes to the tax regime, remain in place, and may affect personal finances and business owners in 2026/27 and beyond.

Reeves gave an overview of the Office for Budget Responsibility’s (OBR) economic forecast for the years to come. Notably, the OBR’s forecasts and the Statement as a whole made no mention of the potential economic impact of the unfolding situation in the Middle East, which may contribute to increased oil and gas prices that could prove inflationary and cause stock market volatility.

The chancellor confirmed the changes announced in the 2024 and 2025 Budgets

In an effort to reduce speculation and prevent a chop-and-change approach, the chancellor confirmed that key tax measures, announced in the Autumn Budgets of 2024 and 2025, will remain in place.

Among the key changes that have been reconfirmed and will affect personal finances are:

• Inheritance Tax (IHT) will be levied on most unused pension benefits from April 2027. It’s estimated that this change will result in an additional 10,500 estates being liable for IHT in 2027/28. This will contribute to a predicted rise in IHT receipts to £15 billion by 2030.
• Tax on income earned from property will rise by two percentage points from April 2027, increasing tax liability for landlords.
• There will also be a two percentage point increase in the basic and higher rates of Dividend Tax from April 2026, which may affect business owners and investors.
• Key tax thresholds, including those for Income Tax and the IHT nil-rate bands, will remain frozen until April 2031.

The lack of any tax-raising measures in the Spring Statement will be welcome news for many people. However, the previously announced changes could mean a review would still be beneficial.

The Office for Budget Responsibility has updated its forecasts for GDP growth, inflation, and house prices

The OBR has updated its real-terms GDP forecast every year between 2026 and 2029 when compared to the estimates it made in the 2025 Autumn Budget. The organisation now expects the economy to grow by:

• 2026 – 1.1% (a decrease of 0.3%)
• 2027 – 1.6% (unchanged)
• 2028 – 1.6% (an increase of 0.1%)
• 2029 – 1.5% (unchanged)

The OBR expects inflation to be at or around the Bank of England’s (BoE) 2% target over the next five years. Inflation easing would improve household spending power, which, in turn, could provide a boost for the economy and businesses. Indeed, real household disposable income is expected to grow by between 0.6% and 0.9% each year until 2030.

The BoE has already cut its base interest rate several times since the current government formed in July 2024, as inflationary pressures eased. If the OBR’s forecast is accurate, the BoE is likely to make additional cuts, which would reduce the cost of borrowing for households and businesses.

The OBR expects unemployment to rise from 4.75% in 2025 to a peak of 5.33% in 2026, driven by weaker demand for labour. After peaking in 2026, unemployment is expected to fall to 4.1% in 2030.

It also forecasts that house prices will rise by between 2.4% and 2.9% each year between 2026 and 2030.

The government reinforced its ongoing commitment to two key fiscal rules

In her speech, the chancellor confirmed the two fiscal rules set out in the Budget:

• Stability rule – Not to borrow money to fund day-to-day public spending by the end of this parliament (2029/30).
• Investment rule – To reduce government debt as a share of national income by 2029/30.

Addressing the stability rule first, although the cost of borrowing has risen during this period of heightened uncertainty, the chancellor vowed that the steps taken in the Statement will restore its headroom.

Turning next to the investment rule, Reeves also stated that this commitment will be met two years early, with net financial debt predicted to be 82.9% of GDP in 2025/26.

4 key Spring Statement measures

1. Boosting defence spending

At a time of growing worldwide tension, the chancellor announced increases to defence spending, aimed at making the UK a “defence industrial superpower”. Defence spending is set to reach 3.5% of GDP by 2035.

Defence innovation will include harnessing AI and drones, creating employment opportunities for engineers in the devolved nations, while a previously announced Defence Growth Board is also being created to support £400 million for defence innovation.

2. Tackling youth unemployment

The chancellor reconfirmed her commitment to getting those in Britain who can work into work. She stated that 1 in 8 young people is currently not in employment, education, or training.

The chancellor confirmed that reforms to the welfare system will produce welfare savings of £4.8 billion between 2026 and the end of the forecast period (2029/30).

3. Increasing property revenue

Previously announced property planning reforms will go ahead.

The reforms are expected to increase real levels of GDP by 0.2%, the equivalent of £6.8 billion for the economy, by 2029/30. Over 10 years, this is expected to increase to 0.4% of GDP (£15 billion). Reeves said this represents the biggest growth forecast for a policy with no fiscal cost

4. Making government more efficient

The abolition of NHS England was announced back in March 2025 as part of wider efforts to increase NHS efficiency and productivity, and to cut spending. These measures will also include reducing costly agency outsourcing.

More widely, Reeves confirmed the £3.25 billion of investment in a new “transformation fund” that will drive modernisation across the public sector through digital reform and the adoption of AI. It’s hoped that these changes will result in a “leaner” and more efficient public sector.

After announcing a raft of changes in the Autumn Budget, the Spring Statement acts as a fiscal pitstop, upholding the government’s commitment to one significant fiscal event a year.

Please note

All information is from the chancellor’s speech, the gov.uk website, the Spring Statement press release and the Autumn Budget documents published by HM Treasury.

The content of this Spring Statement summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

While we believe this interpretation to be correct, it cannot be guaranteed, and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.

The Financial Conduct Authority does not regulate tax planning.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

When you’re investing for retirement, the time frame typically covers decades, and it could make sense to incorporate your values by considering ESG principles.

ESG principles provide a framework for evaluating a company’s sustainability alongside its financial performance. As well as assessing profitability and long-term growth opportunities, you’d also consider its performance across three pillars – environmental, social, and governance.

ESG principles encompass a broad range of areas that might be important to you, from how businesses are contributing to climate change to the health and safety of workers operating in their supply chain.

Businesses with a strong focus on ESG principles could support long-term investment strategies.

Businesses with an ESG focus may be more likely to take a long-term approach

Companies with a strong ESG focus may be more inclined to take a long-term approach to their strategy. Making ESG issues a core part of business operations often means looking beyond short-term profits to assess how the company will manage long-term opportunities and risks. For investors with a long-term time frame, such as those investing for retirement, this could be attractive.

From an environmental perspective, companies that prioritise sustainability may invest in reducing their emissions or using materials or resources more efficiently. These practices could reduce long-term costs and limit the likelihood of facing regulatory challenges as governments encourage transitions to low-carbon economies.

Initially, companies taking a proactive approach could find that it negatively affects their profits, but over the long term, they may be in a better position than businesses that take a reactive approach.

Similarly, practices that support the social or governance pillar could demonstrate that a company is focused on long-term stability.

For example, strong social principles could lead to a happier workforce, which in turn may lead to greater productivity, lower employee turnover, and reduced risk of disputes. In addition, effective governance supports robust risk management that could limit financial losses.

For investors, this long-term approach might translate into more resilient returns. While ESG-focused companies may sometimes face higher upfront costs, their emphasis on sustainability and strong governance could reduce volatility and risk over time.

Strong ESG principles might support investment performance

While you might be interested in ESG investing to align your financial decisions with your values, performance remains important.

Your pension will provide you with an income once you give up work, and investment performance could affect how comfortable you’ll be in retirement. Fortunately, data suggests that considering ESG principles doesn’t automatically mean missing out on investment returns.

Indeed, data from Morgan Stanley (8 September 2025) suggests the opposite could be true.

In the first half of 2025, sustainable funds generated median returns of 12.5%, compared with 9.2% for traditional funds.

So, investing with ESG principles could support your retirement plans.

However, it’s important to note that investment returns cannot be guaranteed, and the Morgan Stanley report shows there have been times when traditional funds have outperformed sustainable options. It remains important to be aware of the potential risks and remember that past performance is not a reliable indicator of future performance.

You can usually change how your pension is invested online

If you want to switch your pension investments to reflect your ESG values, it’s often simple to do so.

Usually, your pension provider will offer you several funds that you can invest in. These funds will have different risk profiles and objectives, and there’s often at least one with an ESG focus.

You can typically find out more about the available funds and change how your pension is invested online in just a few clicks.

If you decide you’d like to switch your pension fund, keep in mind it’s still important to weigh up other factors. For example, you should ensure the new fund aligns with your investment goals and risk profile. While a fund might align with your ESG values, it still might not be right for you.

Contact us

If you’re interested in learning more about ESG principles and how to incorporate them into your retirement plan, please get in touch.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

When you’re balancing work and the wellbeing of your loved ones with everyday tasks, you may find that life gets incredibly busy.

When you feel you rarely get a moment’s peace from the minute you wake up to the time you go to bed, you may feel mentally drained and short-tempered.

These busy schedules often go hand in hand with high levels of stress.

In fact, research from Vitality reveals that 22% of Brits admit to feeling stressed every day, while a further 21% say they’re seriously stressed at least once a week.

If you leave this unmanaged, it can affect almost all aspects of your wellbeing, such as your:

• Physical health, including high blood pressure, headaches, and a weakened immune system
• Quality of sleep
• Concentration
• Appetite
• Ability to cope with daily challenges.

It’s important to note that removing stress from your life entirely is almost impossible. However, you can take practical steps to manage it.

So, continue reading to discover seven simple ways you could manage stress in a busy world.

1. Get out and exercise

Physical activity is one of the simplest yet most effective ways to reduce stress. When you move your body, your brain releases endorphins, the feel-good chemicals that improve your mood and helps you feel calmer.

You don’t need to run a marathon to benefit, either. The NHS recommends that adults aged 19 to 64 should aim to do at least 150 minutes of moderate-intensity activity a week, or 75 minutes of vigorous-intensity exercise.

Even a brisk walk, short bike ride, or a few stretches could make a difference to your long-term wellbeing.

Regular exercise can also improve your sleep and clear your mind after a busy day.

2. Get in touch with your friends and family

Spending time with people you trust can help you process your stress and feel supported. Even a brief phone call or a quick catch-up over coffee could lift your mood and give you perspective on your worries.

You might even find that sharing your challenges helps you release tension rather than letting it build.

3. Spend some time doing the activities you enjoy

When your days are packed, it’s easy to let your hobbies fall by the wayside. Yet, making time for the activities you genuinely enjoy could give your mind a much-needed break.

Whether you like reading, cooking, or playing an instrument, activities you love offer an escape from your daily pressures.

These moments can even reduce your anxiety levels and help you recharge your mind for more difficult tasks ahead.

4. Get plenty of sleep

The amount of sleep you get can affect both your stress levels and the way you manage challenges each day.

Indeed, without enough rest, your body produces more of the stress hormone, cortisol. And when you’re feeling tired, you may find it harder to focus on even the simplest of tasks and think clearly.

This, in turn, can cause more stress and affect the quality of your sleep that night, resulting in a vicious cycle.

As such, it’s vital to create a regular bedtime routine.

According to Bupa, adults between the ages of 18 and 65 need seven to nine hours of sleep each night, while people 65 and over should aim for seven to eight hours.

To achieve this, you may want to:

• Avoid screens and distractions in bed
• Keep your room cool and dark
• Aim for a consistent schedule.

Over time, these habit changes can improve your energy levels, helping you escape the cycle and approach stressful situations more effectively.

5. Focus on your breathing

Controlled breathing techniques are a quick and easy way to calm your nerves and reduce immediate stress.

If you are feeling overwhelmed, you could try taking slow, deep breaths in through your nose and out through your mouth, repeating this for a few minutes.

Techniques such as “box breathing” – where you inhale for four seconds, hold for four, exhale for four, then hold for four – could help you lower your heart rate and respond to challenges more calmly.

6. Learn to accept that you can’t change everything

Even though you can take steps to limit stress, some sources are unavoidable. So, learning to accept that some things are outside your control could prevent unnecessary frustration and conserve energy for the areas you can influence.

You may want to practise reframing your negative thoughts or using mindfulness techniques that allow you to recognise when stress is unhelpful.

Accepting your limits doesn’t mean giving up entirely, but rather focusing on solutions and letting go of pressures that don’t benefit you.

7. Know when to get help

Stress can sometimes become too much to manage on your own. If you often feel overwhelmed, anxious, or consistently unable to cope, it might be worth seeking professional help.

You could start by speaking with your GP. They could diagnose conditions, offer advice, or refer you to specialists, such as NHS Talking Therapies.

This is confidential cognitive behavioural therapy (CBT) and goal-oriented support that helps you change how negative thought patterns and behaviours affect your life.

If you’d prefer a quick chat, you could call NHS 111, or one of the many mental health charities, such as Mind or CALM.

There is no shame in reaching out, as it’s a proactive step that helps you develop coping strategies and protect your mental wellbeing.

Brits could face a worrying shortfall if they need care later in life. A report from the Just Group (8 December 2025) suggests that 6 in 10 over-45s are underestimating the cost of a care home by thousands of pounds.

Industry figures suggest average residential care home fees are almost £66,500 a year. However, 60% of over-45s believe the annual cost would be less than £60,000, with 28% underestimating the true cost by more than half.

Of those surveyed who had previously helped find care for a loved one, 85% said they were shocked by the cost.

With the report estimating that 4 in 5 people aged over 65 will require some level of care before they die, thousands of families could be surprised by the care bill they receive.

Read on to find out whether you’re likely to need to self-fund care, and how to make it part of your financial plan.

Taxpayer support is means-tested, and many care home residents need to pay care costs

According to the report, 67% of people surveyed said they were surprised by how little financial support the state provides, and how much they’d have to contribute.

Indeed, taxpayer support is means-tested, and as a result, many people are required to cover all or a portion of their care costs.

In England and Northern Ireland, anyone with assets valued at more than £23,250 is expected to pay their own residential care costs in full. You will have to contribute some of your income to cover fees if the value of your assets is between £14,250 and £23,250. Whether your home is included when calculating the value of your assets will depend on your circumstances.

In Scotland, personal and nursing care is free, but you might still need to pay for other costs, such as accommodation. If your assets total more than £35,000, your local council will not cover the additional fees associated with a care home.

In Wales, you might need to cover all your care home fees if you have assets that exceed £50,000. If your capital is below this threshold, your local council will contribute towards your fees.

A care plan could provide certainty and peace of mind

While you may hope that you don’t need to move into a care home in the future, making the potential costs part of your financial plan now could offer peace of mind.

The report from Just Group found that 73% of people said the process of finding care was very stressful. Being unsure whether you can afford the costs and how it might affect your goals could further add to this stress for both you and your loved ones.

Yet, the survey shows only 7% of over-75s have made a specific provision to cover the cost of care themselves.

There are several ways you might fund care yourself. According to the report, among those paying for their own costs, the top three ways were:

• Savings or investments (59%)
• Pension income (48%)
• Proceeds from selling property (36%).

A care plan might involve reviewing your assets and setting a portion of them aside to cover care if it’s required.

Being proactive about planning for care could mean you have greater choice in the future.

For example, 71% of people said a care home close to family would be important to them. If you have a care fund to draw on, you might be able to select a care home that would otherwise be out of reach.

Similarly, you might prefer a care home that has certain amenities, which would make the next chapter of your life more enjoyable. Again, making care part of your financial plan could mean you have the option to choose a care home that suits your needs.

Contact us to talk about your care plan

A care plan can help you set money aside in case you need support later in life and offer you peace of mind. Please get in touch to talk about making care part of your wider financial plan.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

On 5 April 2026, the current tax year will end, and the new one will start the following day. Making a note of the deadline in your calendar could help you make the most of tax breaks as part of your financial plan.

Here’s why the start of a new tax year might matter to you.

1. 5 April 2026 may be your last opportunity to use 2025/26 allowances

When a tax year ends, many allowances reset. Consequently, the coming weeks might be your last chance to use some of them.

For example, you can add up to £20,000 into ISAs in 2025/26. ISAs provide a tax-efficient way to save or invest, which might reduce your overall tax liability. You cannot carry forward your unused ISA allowance, so 5 April 2026 might be your last opportunity to use the 2025/26 allowance.

In some cases, you are able to carry forward unused allowances, but they still have a date by which you must use them.

The annual exemption allows you to pass on up to £3,000 without worrying that it may be included in your estate when calculating Inheritance Tax (IHT). So, if your estate could be liable for IHT, it may provide a valuable way to pass on some of your wealth now.

You can carry forward any unused allowance for one tax year. As a result, this may be your last chance to use your 2024/25 allowance if you haven’t already done so.

Arranging a meeting with your financial planner can help you understand how you’ve used allowances and exemptions so far this year. It could also identify other opportunities that may make sense as part of your wider financial plan.

2. You can make a tax-efficient strategy for 2026/27

Planning how you’ll use allowances and exemptions throughout the year, rather than waiting until the deadline approaches, might be useful.

The pension Annual Allowance is the maximum amount you can contribute to your pension during the tax year while still receiving tax relief without incurring an additional charge. It covers contributions made by you, your employer, and any third parties. You can only claim tax relief up to 100% of your annual earnings.

For the 2026/27 tax year, the pension Annual Allowance is £60,000 for most people.

Deciding how much you want to contribute in 2026/27, and making monthly contributions, could be easier to manage than discovering a shortfall at the end of the tax year and needing to contribute an additional lump sum.

It’s also important to note that some allowances and tax rates will change in the new tax year.

For instance, from 6 April 2026, the basic and higher rates of Dividend Tax will both increase by two percentage points, which may affect business owners and investors. Being aware of these changes could influence the financial decisions you make now.

In some cases, you might benefit from looking even further ahead.

The ISA allowance is set to change for under-65s on 6 April 2027. While adults will still have a £20,000 ISA allowance, only £12,000 can be placed in a Cash ISA each tax year, with the remaining £8,000 reserved for investments. You’ll still be able to contribute the full ISA allowance into an investment account if you choose to.

With this in mind, you might change how you use your ISA allowance in 2026/27.

Contact us if you have questions about your tax strategy

It can be difficult to keep up with tax changes and understand what they mean for you. If you have any questions about your tax strategy for the current tax year and beyond, please get in touch. We can help you make the most of allowances and exemptions to improve your tax efficiency.

Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

If you’re saving for retirement, you will want to get the most out of what you’re putting into your workplace or private pension.

Fortunately, there are plenty of tax efficiencies when you save your wealth into a pension.

Indeed, any investment returns generated within your fund are typically free from Income Tax and Capital Gains Tax.

Better yet, you can also receive tax relief on your contributions, significantly bolstering the value of your pot over time.

Despite these advantages, many people overlook one of the most valuable benefits pensions offer.

Research from PensionsAge (8 December 2025) found that 44% of UK adults don’t know what pension tax relief is, while just 31% could identify its purpose.

Over time, missing out on pension tax relief could be costly. So, continue reading to find out how pension tax relief works and how it could significantly improve your retirement income.

Pension tax relief is when the government tops up your contributions

When you pay into a pension, the government essentially “tops up” these contributions based on your marginal rate of Income Tax. Looking at it another way, tax relief acts as a “refund” of the Income Tax you have already paid on the money you put in your pot.

As a result, in England, Wales, and Northern Ireland, a £100 payment into your pension would typically cost:

• £80 if you pay basic-rate Income Tax
• £60 if you pay higher-rate Income Tax
• £55 if you pay additional-rate Income Tax.

Please note, Income Tax bands and rates are different in Scotland, which affects pension tax relief.

For most personal pensions, basic-rate tax relief is applied automatically using a system known as “relief at source”. Some schemes use net pay arrangements, where tax relief is applied differently (this article talks about relief at source only).

If you pay higher- or additional-rate tax, you’re usually entitled to relief at your marginal rate. However, this portion isn’t added automatically. Instead, you usually need to claim it through your self-assessment tax return or by directly contacting HMRC.

Many people forget to do this. Standard Life (24 February 2025) estimates that up to £1.3 billion of extra relief went unclaimed between the 2016/17 and 2020/21 tax years.

This can make a considerable difference:

• A £1,250 total pension contribution would cost a basic-rate taxpayer £1,000, as £250 is added by HMRC.
• For a higher-rate taxpayer, the same total contribution would only cost £750 once the extra relief is claimed.

As such, ensuring you claim everything you are entitled to could substantially increase the amount of money you can put towards retirement.

If you believe you have missed out in the past, it’s worth noting that it is possible to backdate your tax relief claims for up to four tax years.

There are limits to the amount you can tax-efficiently contribute to your pension

While the incentives of tax relief are generous, there are limits on how much you can pay into your pension each year tax-efficiently.

You can receive tax relief on any pension contributions worth up to 100% of your earnings for that tax year. But if you surpass the Annual Allowance, your contributions could face a tax charge.

The Annual Allowance sets the maximum amount that can be contributed across all your pensions in a single tax year without incurring a tax charge.

As of 2025/26, this is £60,000. While the Annual Allowance does reset each year, you may be able to carry forward unused allowances from the previous three tax years, provided you were still a member of a pension at the time. You also need to use all of the current year’s allowance before you can carry forward.

It’s vital to note that if you have a high income, you may face the Tapered Annual Allowance.

In 2025/26, this means that when your income exceeds £200,000, and your adjusted income (which includes your pension contributions) is above £260,000, the Annual Allowance falls by £1 for every £2 earned above that level. Just remember that the minimum it can fall to is £10,000.

What’s more, if you’ve already started accessing your pension wealth, you may have triggered the Money Purchase Annual Allowance.

This typically reduces the amount you can tax-efficiently contribute to your pension to £10,000 each year.

Compounding returns over time can make pension tax relief even more attractive

One of the most practical aspects of tax relief is that it’s added straight to your pension, where it is usually invested on your behalf by your provider.

Any growth is reinvested, allowing your savings to benefit from “compounding”. This is the “growth on growth” effect that further boosts your returns over a longer period of time.

Standard Life (21 August 2025) gives an example of how beneficial this can be.

If you contributed £200 to your pension each month from age 25 to 65, and your investments grew at an average rate of 5% each year, your pot could be worth around:

• £29,400 after 10 years
• £73,000 after 20 years
• £232,000 after 40 years.

While you might imagine that your pot would grow from £73,000 after 20 years to £146,000 after 40 years, it would actually increase in value significantly more. This is thanks to compounding returns and long-term growth.

As such, making regular payments, starting early, and making full use of tax relief can all improve your financial security later in life.

Contact us

We can help ensure you’re claiming all the pension tax relief you’re entitled to, helping you secure peace of mind for your retirement. Please get in touch to arrange a meeting.

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pensions Regulator.

The Financial Conduct Authority does not regulate tax planning.