October 2025 proved to be a positive month for many investors, with markets reaching record highs. Read on to find out more about what factors may have affected your portfolio’s performance.

Remember to take a long-term view when assessing your investments and consider your risk profile when making decisions. 

Markets experienced record highs, but investor uncertainty continued to have an effect

The month started strongly with the FTSE 100 closing at a record high on 1 October, according to the Guardian. AstraZeneca was the biggest riser, making the pharmaceutical firm the most valuable company listed in London.

In the year to 1 October, the FTSE 100 was up almost 15% and could be on track for its strongest year since 2009, when the market recovered from the financial crisis.

It was a similar picture in the wider European and US markets.

On 2 October the Guardian reported, European shares hit a record high. The pan-European Stoxx 600 index increased by 0.7%, driven by gains in German and French companies. Wall Street also reached new heights when it opened, with the S&P 500 index up 0.3%. 

Despite the promising start to the month, French stocks fell on 6 October. AA Stocks reported the market fell when new prime minister Sébastien Lecornu resigned after less than a month in office. The French index CAC 40 tumbled 1.8% as a result. 

Signalling that investors may feel nervous, a BBC article noted the price of gold surpassed $4,000 an ounce (£3,005) for the first time on 8 October. Gold is often viewed as a “safe” asset, and its price has increased by 50% in the first nine months of 2025. 

The Guardian noted soaring price of gold is good news for mining companies. Antofagasta, which operates gold mines in Chile, was the biggest riser on the FTSE 100 after jumping 2.7%. 

Trade tariff threats and actual tariff measures have caused market volatility throughout 2025, and October was no different. According to the Independent, on 13 October, the US and China threatened to impose tariffs, which led to Asian stocks falling. 

On 17 October, according to the Guardian, anxiety around US regional banks and credit concerns spooked the market. The US S&P 500 index was down 1.2%, and the ripple effect was felt in many other markets.

In the UK, the concerns sparked a sell-off that knocked nearly £11 billion off bank valuations. The FTSE 100 closed 0.87% down, with Barclays (-5.66%), NatWest (-2.88%), and HSBC (-2.5%) among the biggest losers. 

There was a similar sell-off in Europe. The Stoxx 600 index (which includes UK banks) was down 2.4%, and around €37 billion (£32.6 billion) was wiped off the value of the European banking sector. 

The Asia-Pacific markets weren’t immune. China’s CSI 300 dropped 2.3% and Japan’s Nikkei fell 1%, although the dip in this region was partly attributed to investor caution over profits of AI shares. 

The BBC reported Japanese markets quickly recovered on 21 October when Sanae Takaichi won a parliamentary vote to become the country’s first female prime minister. She is expected to push for looser fiscal policy. 

The US announced new sanctions on Russia on 23 October, which pushed up the price of crude oil. This led to both BP and Shell shares rising by around 3.5% and the FTSE 100 reaching another record high, according to a Share Talk article. 

The Guardian reported the positive news continued on 24 October. The FTSE 100 broke the record set the previous day and exceeded 9,600 points for the first time. On the back of an inflation report, the US indices – the S&P 500 and the Nasdaq – also broke records. 

In addition, Shanghai’s SSE Composite Index increased by 0.7% and reached its highest level in more than a decade. The boost was linked to Beijing stating it would focus on chips and AI to achieve technological self-reliance, which led to stocks in this sector rising. 

UK

In October 2025, the Office for National Statistics (ONS) reported in the 12 months to September 2025, inflation was 3.8% – stubbornly remaining above the Bank of England’s 2% target. 

The International Monetary Fund increased its 2025 UK inflation forecast to 3.4% (up from 3.1% in April), saying the UK was set to have the highest in the G7.

Official figures estimate UK GDP increased by just 0.1% in August. The report suggested there was no service growth, which may reflect business caution ahead of the upcoming Budget. 

Data from the ONS shows the government borrowed £99.8 billion between April and September 2025. This is the largest sum borrowed since 2020 and is £7.2 billion more than the Office for Budget Responsibility forecast in March 2025. The news will add further pressure to the chancellor ahead of the Budget, which will take place on 26 November 2025. 

Trade data released in October 2025 was also poor. According to the Guardian, the trade deficit widened with exports to the US and EU falling by around £700 million and £800 million respectively in August 2025. 

Readings from a Purchasing Managers’ Index (PMI) suggest that businesses may be taking a cautious approach in the lead-up to the Budget.

The S&P Global PMI found that sluggish demand led to a reading of 50.8 in September in the service sector. While the figure remains above the 50 mark that indicates growth, it’s a marked drop from the 54.2 recorded in August. 

Reuters reported the manufacturing sector shrank at the fastest pace in five months as factories were affected by subdued domestic demand and falling export orders. The reading of 46.2, which indicates contraction, was also linked to a cyberattack on Jaguar Land Rover that halted production and disrupted supply chains.

Europe

In August, the euro area hit the European Central Bank’s inflation target of 2%. However, the Financial Times reported it increased to 2.2% in September. 

S&P Global’s PMI, which tracks business activity, was positive. According to the Guardian, the eurozone private sector delivered a reading of 52.2 after rising at the fastest pace in 17 months. Businesses also recorded the strongest increase in new orders in two and a half years.

The EU’s two largest economies, Germany and France, reported sharply contrasting performances. Germany’s output growth reached a 29-month high. In contrast, France posted 14 consecutive months of decline amid political uncertainty. 

While the PMI data suggests businesses are confident, unemployment figures released by Eurostat indicate many firms are being cautious. Across the eurozone, unemployment increased by 0.1% to 6.3% in August, according to Eurostat. 

Highlighting the far-reaching impact of US trade tariffs, Switzerland cut its 2026 economic growth forecast to 0.9% against the 1.2% predicted in June 2025. The Swiss government noted that exports have been affected by tariffs, creating a ripple effect across the broader economy. 

US

According to the BBC, inflation in the US in the 12 months to September 2025 was 3%. The figure is slightly lower than expected and could add to the pressure the Federal Reserve is already facing from the US president to cut interest rates. 

S&P Global’s PMI data for the US service sector fell to 54.2 in September but remained in growth territory.

However, a survey conducted by recruitment firm Challenger, Gray & Christmas and reported by Bloomberg suggests that business uncertainty may be causing firms to halt hiring plans. In the nine months to the end of September 2025, 205,000 fewer jobs were created when compared to the same period in 2024. 

Asia

According to Reuters, Takaichi, Japan’s new prime minister, could be welcome news for investors. She is expected to embrace government spending, lower interest rates, and adopt a looser approach to monetary policy than her predecessor. It’s hoped that this will encourage businesses to invest and support economic growth.

According to the Guardian, while China’s GDP growth of 4.8% year-on-year between July and September 2025 might seem high compared to other economies, it’s the slowest pace recorded in a year. In addition, hopes that the economy could reduce the impact of tariffs by moving away from exports to domestic consumption were tempered when retail figures remained weak. 

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.

An estate plan sets out how you’d like your assets to be managed and distributed during your life and when you pass away. It often involves thinking about difficult topics, such as your funeral preferences or who you’d like to receive heirloom possessions. 

Once you’ve created an estate plan, it can be tempting to put it to the back of your mind. 

However, both you and your loved ones could benefit from discussing the contents of your estate plan. While these topics can be challenging and emotional to bring up, they could be a valuable way for you and your family to align on your understanding and expectations.

Here are three conversations you might want to have with your loved ones about your estate. 

1. How your assets will be distributed when you pass away

Many people decide not to share how their estate will be distributed when they pass away. According to a September 2025 article from FTAdviser, 36% of UK adults don’t know what their parents’ inheritance plans are. 

There are several reasons why you might choose to discuss the contents of your will.

One key reason is that it can help your loved ones effectively plan their own long-term finances. Understanding your intentions may help them make informed decisions, although they should still base long-term plans on their own financial circumstances.

For example, if your child is expecting a substantial inheritance, they might plan to rely on it for retirement rather than contributing to a pension. If the expected inheritance doesn’t materialise, they could face hardship later in life. By being aware of your wishes, they could take steps now to ensure they’re able to retire comfortably. 

Another reason to have an open discussion is that it could reduce the chance of your will being contested.

An April 2025 article from Today’s Wills & Probate noted there was a 5% increase in contested wills reaching the courtroom between 2022 and 2023. 

Speaking to your loved ones now gives you a chance to explain your wishes, reduce the risk of someone feeling blindsided, and address potential disputes.

2. Your Inheritance Tax position 

If your estate may be liable for Inheritance Tax (IHT), it can be valuable to discuss the potential bill and any steps you may have taken to mitigate it – especially if a family member will act as your executor.

Loved ones may be uncertain about IHT and how it might affect their inheritance. Having a discussion now about your IHT position could put their mind at ease. 

Your chosen executor will be responsible for handling your estate, including selling assets, such as property or investments, and reporting the value of your estate to HMRC. They will also be responsible for paying IHT on behalf of the estate. Consequently, gaining a clear understanding of your tax strategy could make the process less stressful and ensure that any steps you’ve taken to reduce the bill aren’t overlooked. 

3. Your wishes if you lose mental capacity 

Your estate plan isn’t only about how you’ll pass on assets, but how you’d like your affairs to be managed if you’re unable to oversee them later in life.

Thinking about losing mental capacity can be emotional, but talking about your wishes can provide your loved ones with valuable guidance. 

As part of your estate plan, you might give someone you trust Power of Attorney (POA), which would give them the power to make decisions on your behalf.

There are two types of POA, covering financial affairs and your health and wellbeing. You might want to talk to loved ones about topics like:

• Your preferences if you need care later in life
• Where your assets are held and how they should be managed
• Under what circumstances you would prefer to receive life-sustaining treatment. 

Your financial planner can help you tackle estate planning conversations

You don’t have to tackle these difficult conversations alone. Sometimes, having an impartial third-party present could be useful. 

For example, we can be on hand to answer your family’s questions about acting as an attorney, managing an inheritance effectively to reflect their goals, or understanding how assets will be distributed to minimise potential disputes. 

While having discussions about your wishes for later in life or when you pass away can be challenging, they can provide clarity for both you and your family. Please get in touch if you’d like to talk to us about your estate plan. 

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 doesn’t regulate will writing, Power of Attorney, Inheritance Tax planning or estate planning. 

According to a September 2025 Financial Planning Today article, 39% of people say a guaranteed income is their main priority in retirement. Knowing how much income you’ll receive from certain sources can provide the certainty you need to enjoy retirement with greater confidence.

There are several ways you might create a guaranteed income in retirement – here are three common options. 

1. State Pension

While the State Pension often isn’t enough to cover all of your retirement spending, it can provide a reliable base income.

The new full State Pension pays an income of £230.25 a week in 2025/26. To qualify for the full amount, you’ll need to have 35 qualifying years on your National Insurance record. If you have fewer years, you’ll usually receive a portion of the full amount. 

You can use the government’s State Pension forecast tool to understand how much you could receive and when you can claim it. 

As well as providing a regular income from State Pension Age until you pass away, the State Pension is valuable because, under the triple lock, it’s guaranteed to rise by at least 2.5% each tax year. This annual increase helps maintain your spending power in retirement.

2. Defined benefit pension 

If you have a defined benefit (DB) pension, also known as a final salary pension, it will provide you with a guaranteed income from the scheme’s pension age until you die.

The way your income is calculated varies between schemes, but it’s often linked to your average salary and how long you’ve been contributing to the pension. Usually, the income is linked to inflation, so the amount you receive will increase annually.

DB schemes can be generous compared to some other types of pensions, and the guaranteed income they provide could put your mind at ease if you’re worried about financial security in retirement.

In addition, DB pensions may offer other valuable benefits. For example, some schemes will continue to provide a guaranteed income to your spouse or civil partner if you pass away first. 

3. Annuity

If you have a defined contribution (DC) pension, you’ll have a pot of money you can use to create an income once you reach 55 (rising to 57 in 2028).

There are several ways you might access the money held in a DC pension, including purchasing an annuity if you value a guaranteed income.

Once purchased, an annuity will provide an income for the rest of your life. The income it provides will depend on annuity rates at the time of purchase. Rates can vary significantly between providers, so shopping around could help you get the most out of your money.

You can select an inflation-linked annuity so that your income rises each year, or a joint annuity, which would continue to pay a reliable income to your partner if you pass away first. 

Income flexibility may suit your retirement lifestyle

There are benefits to creating a reliable income in retirement, but it isn’t the right option for everyone. 

Indeed, in the survey featured in Financial Planning Today, 7% of people said they wanted the flexibility to take a higher income when needed. Even if a guaranteed income is a priority for you, you might still want to draw a flexible income to supplement it.

One example sometimes used in planning discussions is to use part of a DC pension to buy an annuity. If the income it delivers is enough to cover your essential outgoings, this could provide financial peace of mind.

You could leave the remaining half of your pension invested and access it flexibly as and when you choose. You could withdraw sums to pay for a holiday, give to loved ones, or increase your disposable income in your early years of retirement. 

A retirement plan that blends a guaranteed and flexible income could suit your lifestyle goals while still providing certainty.

Get in touch to talk about your retirement plan

We can work with you to create a retirement plan that’s tailored to your financial circumstances and lifestyle goals. Whether a guaranteed income is a priority or you’d prefer flexibility, please contact us to arrange a meeting with one of our financial planners. 

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.

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 start searching for the best ways to build a retirement fund, private pensions might be the first option that comes to mind. 

However, they’re not the only way you can prepare for your life after work. An alternative is the Lifetime ISA (LISA) – a government-backed savings account.

While you might assume you can only use a LISA to purchase your first home, this isn’t its only purpose. 

In fact, according to Financial Planning Today in September 2025, 45% of LISA savers opened their accounts specifically to save for retirement, compared to 46% who opened theirs to purchase a first home.

Despite their popularity, LISAs come with strict rules you must understand before you can decide whether they’re the most suitable choice.

Continue reading to discover how a LISA compares with a pension so you can make an informed decision about which best suits your long-term needs.

Lifetime ISAs are another form of Individual Savings Account that allows you to save wealth

A LISA is a specific type of savings account that can be opened by anyone between the ages of 18 and 39. You can use it to either save for the deposit on your first home or build a fund for later life. 

As of 2025/26, you can contribute up to £4,000 each year to your LISA.

It’s important to remember that this forms part of your overall £20,000 ISA allowance. If you save the full £4,000 into your LISA, you can only invest a further £16,000 in your Cash or Stocks and Shares ISAs.

You can benefit from a government bonus when you contribute to your Lifetime ISA

There are two main types of LISA. A Cash LISA functions much like a traditional savings account, offering interest on your wealth. 

Meanwhile, a Stocks and Shares LISA allows you to invest your contributions in a range of assets. While this typically exposes you to risk, it gives your wealth the potential for more competitive long-term returns. 

For every £1 you contribute to your LISA, you can benefit from a 25% government bonus. This means that if you deposit the full £4,000, your total savings for the year could reach £5,000.

While you can only open a LISA until your 40th birthday, you can continue receiving the government bonus until you reach age 50. This could significantly bolster the overall value of your retirement savings.

Better yet, as is the case with other forms of ISAs, your savings and investments are completely free from Income Tax, Capital Gains Tax, and Dividend Tax. 

You will typically face a withdrawal penalty if you don’t use the wealth for specific reasons

Perhaps the main limitation with LISAs is that you must use the funds to pay for the deposit for your first home (provided the property costs £450,000 or less) or leave them invested until you reach the age of 60. 

If you withdraw funds for any other reason, you’ll typically face a 25% fee. This penalty removes the government bonus and takes a portion of your savings, meaning you could receive less than you originally put in.

For instance, if you contributed £10,000 over several years, you would receive a total government bonus of £2,500. If you then withdrew this early, the 25% charge would be £3,125, leaving you with just £9,375.

If you’re approaching the age of 40 and haven’t yet opened a LISA, it’s worth considering whether the remaining years of government bonuses make it worthwhile.

Pensions allow you to build a pot of wealth to support your dream lifestyle when you stop working

Pensions can be an effective ways to save for retirement.

You can tax-efficiently contribute to a pension while still benefiting from tax relief up to the value of the “Annual Allowance”. As of 2025/26, it stands at £60,000, or 100% of your earnings, whichever is lower. This includes personal and employer contributions, as well as tax relief. 

This is significantly higher than the LISA limit, allowing you to save more each year.

You can even benefit from tax relief, which is when the government essentially “tops up” any contributions based on your marginal rate of Income Tax. This means that a £100 contribution would only “cost”:

• £80 for basic-rate taxpayers
• £60 for higher-rate taxpayers
• £55 for additional-rate taxpayers.

This government bonus can make saving in your pension particularly attractive, as it could help you reach your long-term goals more quickly.

While you can take the first 25% of your pension without incurring tax, the rest could count as income

Unlike a LISA, you can begin accessing your pension from the age of 55 (rising to 57 by April 2028). 

You can then typically take the first 25% of your fund without incurring tax, while the remainder is treated as taxable income. 

This means that when you draw from your pension, those withdrawals are added to any income you receive in that year, such as from your State Pension or property wealth. They will then be taxed at your marginal rate. 

This means you could pay:

• 20% on income between £12,570 and £50,270 (the basic rate)
• 40% on income between £50,270 and £125,140 (the higher rate)
• 45% on income above £125,140 (the additional rate).

However, you do have flexibility over how you take the remainder of your pension fund. 

You could choose to withdraw it through flexi-access drawdown, allowing you to leave the rest of your fund invested to continue generating potential returns. 

Alternatively, you could use it to purchase an annuity – a form of insurance product that offers a guaranteed income for a set period of time.

You can also invest in a range of assets through your pension

Most pensions allow you to invest your contributions in a range of assets, which could offer competitive returns over time. 

You can typically choose from several different strategies to suit your tolerance for risk and investment time horizon. 

Over several decades, the compounding effect – essentially “growth on growth” – combined with tax relief and employer contributions, could make pensions a practical long-term savings method.

A financial planner could help you decide which option would best suit your needs

When comparing a LISA and a pension, the “right” decision for you will largely depend on your goals, income, and the stage of life you’re currently at. 

If you’re younger and want the flexibility to either purchase your first home or supplement your retirement fund, the government bonuses and tax-free growth of a LISA could benefit you. 

Conversely, if your main focus is retirement and you want to take advantage of the higher contribution limits and tax relief, a pension might be the wiser option.

To ensure that your approach fits your personal circumstances, it’s worth seeking bespoke advice from a financial planner. 

A financial planner could help you determine which option – or combination of options – best supports your retirement goals.

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.

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.

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.

Your pension income could also be affected by the interest rates at the time you take your benefits. The tax implications of pension withdrawals will be based on your individual circumstances, tax legislation, and regulation, which are subject to change in the future.

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 tax planning.