News

It’s been 40 years since Back to the Future delighted cinema-goers with its time-travelling adventure. Teenager Marty McFly discovers the power of the “ripple effect”, and it’s something that could be valuable when you’re creating a financial plan as well. 

 

One of the plot devices in Back to the Future is the ripple effect – the spreading impact of an initial event. Even a seemingly small change to the timeline has the potential to have far-reaching implications. 

The ripple effect can change the course of your life, too. Small decisions or events outside of your control could have a far larger effect on your future than you might expect. 

The good news is financial planning could give you a glimpse into the future too. While cashflow modelling doesn’t involve hopping into a DeLorean with your financial planner and reaching 88mph, it could offer you insights into your future that are just as valuable. This guide explains why.

There are other useful lessons you could pick up from Back to the Future as well, including:

• Balance your short- and long-term goals.
• Prioritise what makes you happy.
• Focus on following your own path.
• Be prepared for the unexpected.
• Recognise when you could benefit from working with a professional.

Download your copy here: “What the Back to the Future ripple effect could teach you about financial planning” to discover more about these lessons hidden in the cult classic.

If you want to talk to us about how cashflow modelling could inform your decisions, or any other aspect of your financial plan, please get in touch. 

Please note: This guide is for general information only and does not constitute advice. The information is aimed at retail clients only.

The Financial Conduct Authority does not regulate cashflow planning, tax planning, or estate planning.

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.  

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.

You’ve likely spent years preparing for retirement and envisioning the lifestyle you’d like to enjoy once work is officially behind you.

You might have even accumulated a significant pension pot through careful planning to help support this dream lifestyle.

As you explore some of the different ways to draw an income from your retirement fund, one option you might have overlooked is an annuity.

This allows you to convert some, or all, of your pension savings into a regular and guaranteed income, and recent figures show that the amount you receive could be favourable.

Indeed, MoneyWeek reports that annuity rates reached a 16-year high in March 2025.

While this might tempt you to purchase an annuity, you shouldn’t rush into the decision, as it is typically irreversible.

This is why it’s so important to shop around to find the annuity that is best suited to your needs. Despite this, it seems that many don’t. Research from Canada Life found that 31% of retirees bought their annuity from their existing pension provider without comparing options, potentially missing out on a higher income.

Continue reading to find out how annuities work, when they might be the right fit, and why reviewing your options could boost your retirement income.

When you purchase an annuity, you receive a guaranteed income for a set period of time

Simply put, an annuity is a type of insurance product you can purchase using part or all of your pension fund.

In return, you receive a guaranteed income, usually paid monthly or annually, for a specific period.

There are several different types of annuity available, each with features that affect how much income you’ll receive.

For instance, you can choose a “lifetime annuity” which pays a regular income for the rest of your life, or a “fixed-term annuity”, which provides an income for a set number of years.

The amount you receive then typically depends on several factors, such as:

• The size of your pension pot
• Your age and life expectancy
• Your health and lifestyle
• The annuity rates available at the time of purchase.

You may receive a higher income if you’re older or in poorer health, since the provider expects to pay out for a shorter period. There are even annuities – known as “enhanced annuities” – that are specifically designed for people with health conditions or lifestyle choices that may reduce their life expectancy.

You can also choose between a “single annuity”, which stops when you pass away, or a “joint annuity”, which continues to pay a proportion of your income to your partner or spouse after your death.

Additionally, some annuities offer a guarantee period, meaning that income is paid for a minimum number of years even if you pass away sooner. Alternatively, value protection can ensure that any unused value from your original pension fund is returned to your beneficiaries.

An annuity might suit you if you’re looking for financial security in retirement

If you’re looking for security in retirement and would prefer not to worry about stock market performance, an annuity could offer some much-needed peace of mind.

This is because once you purchase your annuity, you receive a guaranteed income that doesn’t fluctuate with the markets.

This reliability also makes it easier to plan your retirement spending. You’ll know exactly how much income to expect each year, potentially helping you to budget more confidently and avoid overspending.

There’s also the potential to receive more over your lifetime than you initially paid in. If you live longer than expected, the income from the annuity could exceed the total value of the pension savings you used to purchase it.

While this won’t always apply, it is one of the reasons some choose to purchase a lifetime annuity, especially when rates are favourable.

Due to their inflexibility, it’s vital to shop around before you commit to an annuity

Despite their many advantages, annuities do come with a vital drawback: they tend to be incredibly inflexible.

Once you purchase an annuity, you typically can’t alter the terms, access the capital, or transfer to a new provider. This lack of flexibility is partly why shopping around before you commit is so important.

Yet, many people seemingly don’t do this. According to the Canada Life research above, 1 in 8 retirees planning to purchase an annuity wouldn’t consider switching providers, even if that meant receiving more income.

This could be a significant missed opportunity, particularly given how much rates can vary between providers.

Which? shows that, as of 6 May 2025, a healthy 65-year-old with a £100,000 pension could receive anything from around £4,799 to £7,939 a year, depending on the annuity. This is a difference of more than £3,000 each year, potentially accumulating to tens of thousands over a typical retirement.

It’s also vital to review the terms and features on offer. Features such as inflation protection, fees and charges, and the financial security of your next of kin could all affect your wellbeing in retirement.

By comparing providers, you could give yourself the best chance of securing an annuity that offers the right balance of income and personalisation.

Get in touch

If you’re still unsure whether an annuity is right for you or can’t decide which product would best suit your needs, then we can help.

Make sure to get in touch today to find out how we can support you with your retirement planning.

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. 

The Financial Conduct Authority does not regulate estate planning.

A Junior ISA (JISA) is often an effective way for parents to start putting money aside for their children to help them reach their goals when they reach adulthood. One important question parents need to consider is: Should the money be held in a Cash JISA or invested through a Stocks and Shares JISA?

Read on to find out what you need to know about JISAs, and how to choose between saving and investing.

Up to £9,000 can be deposited in Junior ISAs in 2025/26

Like their adult counterparts, JISAs are efficient as the interest or returns generated are not liable for tax. In the 2025/26 tax year, you can deposit up to £9,000 across all JISAs for each child.

Only a parent or guardian can open a JISA, and once it’s set up, other loved ones can pay money into it.

The money placed in a JISA is not usually accessible until the child turns 18. So, it’s a useful option if you’re saving to help them reach a long-term goal like funding university, paying for driving lessons, or buying their first home. However, keep in mind that the child will have control of the money and how it’s used once they turn 18.

Government statistics published in December 2024 show that around £1.5 billion was added to JISAs in 2022/23, and more than 40% was placed in Cash JISAs. So, what’s the difference between a Cash JISA and a Stocks and Shares JISA?

• Cash JISA: A Cash JISA is similar to a savings account, and the money deposited will earn interest. While the money isn’t exposed to investment market volatility, you might want to consider the effect of inflation. If the rate of inflation is higher than the rate of interest, the value of the savings held in a Cash JISA will fall in real terms.
• Stocks and Shares JISA: With this option, the money can be invested in a range of assets that suit your risk profile. Over a long-term time frame, the investment returns have the potential to be higher than interest rates and inflation, so the value grows in real terms. However, investment returns cannot be guaranteed, and there are risks to consider.

Interestingly, an April 2025 report in MoneyAge indicates that parents who have a Cash ISA are almost twice as likely to open a Cash JISA for their child. While cash may be the right option for some families, choosing it because it’s what you’re familiar with could mean your child misses out on potential long-term returns.

3 questions that could help you choose between saving and investing

If you’re unsure whether to select a Cash JISA or a Stocks and Shares JISA, these three questions could help you identify which one is right for your needs.

1. When does your child turn 18?

How long the money will be held in a JISA before it’s accessed might influence your decision for two key reasons.

First, the effects of inflation compound over time. So, if your child is still young, the rising cost of living could have a much greater effect on the value of savings than if they were a teenager.

Second, it’s usually sensible to invest with a minimum time frame of five years. This is due to markets experiencing volatility – a longer investment period provides more opportunity for the peaks and troughs to smooth out.

So, if your child is nearing 18, a Cash JISA may be more suitable, while you might want to consider investing if they’re younger.

2. What are your goals?

How you want the money to be used will often play a role in how much risk you feel comfortable with. As a result, setting out your goals may be useful.

For example, if the money is essential for helping your child pursue further education, you might be less inclined to take a risk than if it may be used to fund a holiday.

A financial planner could work with you to understand your risk tolerance and assess if investing is right for your goals.

3. What other steps are you taking to build a nest egg?

You might also be taking other steps to build a nest egg for your child. For instance, you could have a savings account for them or simply be putting money to one side in your own account.

If you are, it’s important to look at your JISA decision in a wider context – if your child will already receive cash savings on their 18th birthday, choosing a Stocks and Shares JISA may make financial sense.

You can open both a Cash JISA and a Stocks and Shares JISA for your child

Depending on your circumstances, you might decide to open more than one JISA for your child. As a result, you could save and invest at the same time.

Remember, the £9,000 JISA allowance in 2025/26 applies to all JISAs, so you may need to keep track of deposits going into each account, including those made by other people.

Contact us to talk about building wealth for your child

As well as opening a JISA for your child, other steps could make their future more financially secure. For example, you may pay into a pension on their behalf, make them a beneficiary of your will, or pass on a one-off financial gift during your lifetime.

Please get in touch to discuss your financial goals and how you could build a nest egg for your child.

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.

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.

The Financial Conduct Authority does not regulate will writing or estate planning.

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. 

A recent article published by an influential think tank, the Institute for Fiscal Studies (IFS), has suggested that the Labour government should consider increasing the basic rate of Income Tax in order to boost revenue and curb the amount of money it has to borrow.

Doing this would break a so-called “taboo” as no chancellor has increased the basic rate of Income Tax for 50 years. Indeed, for much of that time, the aim of most chancellors has been to cut the basic rate as a symbol of their commitment to low personal taxation.

In this article, you can discover why the IFS is suggesting the government make this move, and how it could affect your finances.

The basic rate of Income Tax has been gradually reduced over the last 50 years

The last chancellor to increase the basic rate of Income Tax was Dennis Healey in 1975, who raised it from 33% to 35%. At the time, the UK government was facing the combined financial threats of economic weakness at home, together with global uncertainty driven by the oil crisis.

Since that time, the basic rate has only ever been reduced, with the final reduction to its existing rate of 20% made by the former chancellor, Gordon Brown, in 2007.

In reality, however, the freeze in tax thresholds and the Personal Allowance since 2021 has actually resulted in many individuals paying more Income Tax. The Personal Allowance stands at £12,570 and is set to be frozen at this level until 2028, meaning that the more a person earns, the higher their Income Tax is likely to be. This is commonly known as a “stealth tax”.

Previous governments have sought alternatives to Income Tax to raise revenue

Instead of increasing the basic rate, successive governments have used other methods to raise revenue, such as implementing higher taxes on businesses and capital gains.

The rate of VAT has also increased markedly in the last 50 years, from 8% in 1975 to 20% in 2025/26, as chancellors have seen taxing consumption more politically acceptable to the electorate than taxing income.

Previous governments have also put up the rate at which individuals pay National Insurance contributions (NICs) on their income. While having the same effect as an increase in Income Tax, this does seem to be somewhat less emotive. This could be down to the fact that NICs receipts are hypothecated and used to fund the State Pension and other benefits such as Maternity Allowance, so earners understand where their contributions are going.

Election promises have restricted the government’s revenue raising options

During the 2024 general election campaign, the Labour Party manifesto pledged no increases in:

• The standard rate of VAT
• Employee NICs
• Income Tax.

Labour made it clear that the government intends to fund increased public spending through the proceeds of economic growth rather than higher taxes. It has also committed to only increase borrowing to fund growth.

To this end, this government has announced a series of measures, including a massive house-building programme, along with big infrastructure projects such as airport expansion and the Oxford-Cambridge corridor.

However, all those measures will take time to come to fruition and deliver growth. In the meantime, public services, such as the NHS, schools, and local government, remain in need of financial support.

External events have blown government plans off course

As well as internal challenges, the government’s financial position has been made even more precarious by two external events:

1. The reduction in the US financial and military commitment to Ukraine, which has forced other nations, including the UK, to boost defence spending.
2. The imposition by President Trump of a 10% tariff on all UK exports to the US.

While increased military expenditure could ultimately be an effective growth driver, it poses an immediate funding problem for the treasury.

Tariffs on UK goods and services entering the US provide a more immediate challenge. A paper issued by the Department for Business and Trade confirmed that these have led to a reduction in business confidence, and a report in the Guardian suggesting that this would hinder the very growth the government is hoping for.

The effect of an Income Tax rise on your income

Clearly, there is no danger of Income Tax rates reverting to the level they were at in 1975.

However, according to the government, just a 1% increase in the basic rate would raise £6.55 billion in 2025/26 and £7.9 billion the following year. Additionally, if the government were to announce an increase of 1% on all Income Tax rates, this would raise £8.1 billion next year.

So, how would an increase in Income Tax affect your take-home pay?

According to Forbes, the UK national average salary is £37,430, as of April 2025.

Assuming you are entitled to the full Personal Allowance of £12,570, the table shows the comparative amounts of Income Tax you would pay.
Source: Government website

While any potential increase in Income Tax is likely to be relatively small, it’s clear that this would be controversial, especially given the manifesto commitment the Labour Party made not to take such a step.

However, the government could justifiably argue that it could not have foreseen the issues around defence spending and US tariffs.

As a result, it may be tempted to earmark any Income Tax rise for defence spending, which may well help to increase the public’s acceptance of it.

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.

The Financial Conduct Authority does not regulate tax planning.

As the weather starts to get warmer, you might be dreaming of a day at the beach.Although we can’t guarantee sunshine in the UK this summer, we can promise that there is a beach to suit everyone’s needs.

Read on to discover nine of the best beaches in the UK.

Blue Flag beaches

These three beaches have all been awarded Blue Flag status, which means they passed the Foundation for Environmental Education’s stringent standards for water quality, safety, and environmental education.

1. Aberdour Silver Sands, Fife

One of the most popular and attractive sandy beaches on the Fife coast, Aberdour Silver Sands is a charming beach that looks out to the abbey on the islands of Inchmickery and Inchcolm.

If you are interested in a hike before settling on the beach, the Fife coastal path passes by Aberdour, making it a perfect pit stop. Lifeguards also patrol the beach from the start of July to the end of August, so you can relax knowing you are safe.

2. Blackpool South Beach, Lancashire

Blackpool is a classic beach destination, with its famous piers and plenty of attractions for families.

South Beach has excellent water quality and amazing amenities, with the Blackpool promenade right beside it if you want to pop into any amusements, restaurants, or shops.

3. Abersoch Beach, Gwynedd

This delightful Welsh beach is part of a gorgeous seaside resort that tends to attract sailing enthusiasts and people interested in watersports.

With both Blue Flag status and certification from the Marine Conservation Society, this sandy beach is a picturesque place to relax or ride the adrenaline high of a jet ski.

Hidden beaches

On sunny days, many of the popular beaches can be swamped by people trying to make the most of the nice weather.

These smaller and more discreet spots are perfect for anyone who wants to enjoy a beach without having to compete with bustling families, a lack of space, and extra noise.

4. Kynance Cove, Cornwall

As it is only two miles from popular Lizard Point, many people miss the turn-off to this dramatic location.

The white sandy beaches are bracketed by colourful 200ft cliffs, so you can spend your day exploring the stunning location or enjoying the sun without having to deal with any crowds.

5. White Park Bay, Northern Ireland

This glorious three-mile stretch of sand is tucked away in a secluded spot on the Giant’s Causeway – the first World Heritage Site in Northern Ireland.

Even on sweltering summer days, this beach is empty. Explore the ancient dunes, admire Elephant’s Rock, and remember to keep an eye out for the local dolphins and porpoises.

6. Steephill Cove, Isle of Wight

If you were planning on visiting busy Ventnor beach, head down the road to Steephill Cove instead.

Since the only way to access the cove is down a winding narrow path, there is no road noise, pesky crowds, or tourist shops to ruin the stunning view.

Best historical beaches

Some of the UK’s beaches also come with a fascinating history. These spots are for you if you are interested in delving into the stories behind the destinations you visit.

7. Durdle Door, Dorset

In 2001, the Jurassic Coast became the UK’s first UNESCO World Heritage Site.

The famous limestone arch from which Durdle Door gets its name is one of the UK’s most iconic landmarks. Hunt for fossils and relax on the golden sands, and feel free to bring your four-legged friend as this beach is dog-friendly.

8. Albion Sands, Pembrokeshire

This secluded sandy beach is just west of the better-known Marloes Sands and has the same abundance of wildlife and fascinating geology.

However, the interesting story behind the beach’s name goes back to a shipwrecked paddle steamer from 1837, which crashed on the beach while carrying enough whisky from Dublin to keep Pembrokeshire drunk for a year.

If you visit at low tide, you can even see the Albion’s shaft protruding from the sand.

9. Abbot’s Cliff, Folkestone Kent

This pebbly seashore sits just below gorgeous white cliffs but is most well-known for its acoustic sound mirror, which was built in 1928 to listen out to sea for enemy aircraft.

The beach was damaged during the 77 air raids and 6 V1, which hit it during World War Two. But its history goes back even further, as the chalk from Abbot’s Cliff was used to build the local Roman Villa that was excavated in 1924.

According to a Citywire report, forecasts from the Office for Budget Responsibility (OBR) suggest the amount of Inheritance Tax (IHT) paid to HMRC will have increased by 11.6% in 2024/25 compared to 2023/24.

This will mean that the total amount of IHT paid in the 2024/25 financial year will have reached a record high of £8.4 billion.

The report suggests that the big year-on-year increase has been primarily driven by the long-term freeze of the level at which IHT becomes chargeable, and the increase in asset values.

With the freeze on thresholds due to continue until 2030, this highlights the importance of ensuring you are taking effective estate planning measures to mitigate the amount of IHT payable on the value of your assets. Doing this can help ensure that your beneficiaries are not left with an unwelcome and substantial tax charge on your death.

There are a series of straightforward measures you can make use of to reduce your IHT liability. One of these, which is often overlooked, is known as “gifting from surplus income”.

In this article you can read about how it works, and help ensure that as much of your wealth as possible passes to your beneficiaries rather than HMRC.

Gifting assets is an effective way to reduce your IHT liability

In the 2025/26 tax year, IHT is normally charged at 40% on the value of your estate in excess of the £325,000 allowance, commonly referred to as your “nil-rate band”.

If your primary residential property is included in your estate and it is passed to a direct descendant, your total tax-free allowance will likely increase to £500,000.

It’s also important to bear in mind that these allowances apply to individuals, so a couple can enjoy a combined tax-free allowance of up to £1 million.

The most common and straightforward way to reduce your IHT liability is by gifting assets – belongings, investments, or cash – to your beneficiaries during your lifetime, so they no longer form part of your estate.

You have three annual gift allowances you can make use of:

1. A £3,000 annual exemption, which can be split among as many recipients as you like. You can “carry forward” any unused allowance from one year into the next. This means that you and your spouse or partner could gift £12,000 immediately if you have not previously made any gifts
2. Wedding gift allowances of £5,000 for a child’s wedding, £2,500 for a grandchild’s wedding, or £1,000 for anyone else. This exemption counts in addition to the standard annual exemption.
3. Unlimited small gifts of £250 or less to other individuals, provided they have not been the recipient of another of the above exemptions.

Beyond these three allowances, all other gifts you make will be treated as potentially exempt transfers (PETs) and subject to the “seven-year rule”.

This means that if you live for seven years from the date of making the PET, no IHT will be payable. Within those seven years, however, a taper relief system is applied, which means that the amount of IHT will depend on how long you live after making the gift.

As well as allowable gifts and PETs, a further effective way to mitigate your IHT liability is by utilising the “gifts out of surplus income” rule.

Gifts out of income are usually Inheritance Tax-free

Making gifts out of your regular income is an effective estate planning measure. Not only are these gifts usually IHT-free, making them carries the added benefit of you being able to provide the recipient of your gifts with valuable ongoing financial support.

While there is no limit to the amount you can gift in this way, there are three strict conditions you need to comply with:

1. You must be able to demonstrate that the gifts you make are from your income, such as your salary or regular pension, rather than your accrued capital.
2. The gifts must be made on a regular basis and not simply be one-off transfers.
3. By gifting from your income, you must ensure that you are not reducing your own standard of living, and that the income in question is surplus to your requirements.

As well as not reducing your living standards, you will also need to assess how making such gifts on a regular basis could affect your own long-term financial plans.

You will need to review your own arrangements to confirm that the gifts you make are affordable when set against your other priorities, and that you are not creating future problems for yourself if the money you are gifting could be better allocated for other uses.

For example, you might be better off setting money aside for future care provision, or to cover moving costs if you intend to downsize to a smaller property.

You should also carefully consider how any gifts of this kind will be used. Earmarking these for a specific purpose can often be advantageous. This could include paying annual school fees for your grandchildren, or putting regular amounts into a Junior ISA, that they can then access when they are 18.

You should keep accurate records of all gifts you make

As with all your personal finance transactions, it’s important to keep detailed records of all gifts you make, whether they are out of income, within your gift allowance, or PETs.

This is certainly the case when it comes to gifts out of income and substantial PETs, as your executors are likely to need to provide these to HMRC when they are dealing with your estate on your death.

Accurate records can help expedite the process of obtaining probate, and ensure that your beneficiaries are able to enjoy your bequest to them without any unnecessary delay.

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.

The Financial Conduct Authority does not regulate tax planning or estate planning.

Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.

Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.