A decade ago, the introduction of Pension Freedoms shook up retirement planning and gave retirees more options than ever. 

Before 2015, if you had a defined contribution (DC) pension, the common route was to use the money accumulated to purchase an annuity. The annuity would then provide you with a regular income, usually for the rest of your life. 

While an annuity can be valuable in some circumstances, it isn’t flexible.

To give retirees more choice, Pension Freedoms were introduced in 2015. If you choose, you can still purchase an annuity, but you might also opt to withdraw lump sums from your pension or take a flexible income that you’re in control of.

You may also mix the options. For instance, you may take an initial lump sum to kickstart retirement, purchase an annuity to create a base income, and withdraw a flexible income when you need to.

So, with a decade of Pension Freedoms data and experiences to draw from, what insights could be valuable when planning for your retirement?  

1. Pensioners could be missing out on returns by withdrawing a tax-free lump sum

One of the key changes in 2015 was the ability to withdraw 25% of your pension tax-free (up to £268,275 in 2025/26) when you turn 55, rising to 57 in 2028. 

The good news is that, despite fears of reckless spending, figures suggest most retirees aren’t immediately withdrawing this lump sum. According to Royal London data published in March 2025, just 8% of people took their tax-free lump sum within six months of turning 55. 

However, more than half of retirees choose to withdraw the lump sum at some point. The most common reason was to pay off a mortgage or reduce other debt, which could provide greater financial security over the long term.

Yet, around a quarter of people taking the tax-free cash simply deposited the money in the bank.

While having accessible cash might feel reassuring, leaving it in your pension, where it’s likely to be invested, could yield higher returns over a long-term time frame when compared to a savings account.

You don’t need to withdraw the 25% lump sum in one go to benefit from the tax-free cash. You can also spread it across multiple withdrawals. So, if you don’t have a clear plan to spend a lump sum, leaving it in your pension might make financial sense.

2. Over-50s are worried about running out of money in retirement 

As you\'re in control of how you access your pension savings, there is a risk that you could withdraw too much too soon, either by taking a large lump sum or withdrawing an unsustainable regular income. 

While figures suggest most retirees are taking a measured approach, 42% of over-50s told Royal London that they worry about running out of money in retirement. 

There are several ways to alleviate your fears and have confidence in your retirement finances. 

One option might be to purchase an annuity to create a base income. 

According to statistics from the Financial Conduct Authority (FCA), retirees are often choosing flexi-access drawdown over purchasing an annuity.

Indeed, in 2023/24, 68% of retirees accessing a pension worth between £100,000 and £249,999 did so by taking a flexible income. In contrast, just under 20% purchased an annuity. While an annuity isn’t right for everyone, it could offer peace of mind.

Another option is to work with a financial planner when you take a flexible income. We could help you assess your pension and other assets to understand what a sustainable income is for you.  

3. Retirees could face an unexpected tax bill

While you may have retired, you could still benefit from considering your tax liability, including Income Tax.

If your total income, including withdrawals from your pension and the income you receive from the State Pension, exceeds the Personal Allowance (£12,570 in 2025/26), you may be liable for Income Tax. Managing your withdrawals could help you avoid an unexpected tax bill or being pushed into a higher tax bracket. 

Yet, the Royal London research found just 4 in 10 people considered the tax implications of withdrawing a taxable lump sum from their pension. 

4. Most retirees aren’t seeking advice or guidance 

The FCA data indicates that just 30% of people accessing their pension for the first time took regulated financial advice. 

In addition, the Royal London survey suggests that 1 in 5 people didn’t speak to anyone about their pension or use any tools, such as income or tax calculators, before they made a withdrawal.

While retirement is an exciting milestone and you may feel confident handling your finances, it’s important to remember that the decisions you make now could affect your financial security for the rest of your life. 

Seeking professional advice or guidance could help you make choices that are right for you, identify potential risks, and put your mind at ease as you enjoy the next chapter of your life. 

Working with a financial planner may help you navigate Pension Freedoms  

Pension Freedoms mean you have far more flexibility than previous generations, but they may also come with additional responsibility, such as ensuring you don’t run out of money. A retirement plan could help you manage your finances as you prepare for the milestone and once you give up work. 

Please get in touch to speak to one of our team about your options for creating an income when you retire. 

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.  

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.

Drawdown pension plans (unsecured income) are complex and are not suitable for everyone. Pension decisions can affect your income for the rest of your life (and that of any partner and other dependants). Where benefits are accessed on a flexible basis, these are not fixed or safeguarded for life. If security of income is important to you then you should consider purchasing an annuity or taking a scheme pension to provide a secured level of income.

Creating a financial plan can seem complicated, especially if you need to take into account your partner’s views, assets, and goals. At times, you might have conflicting ideas about what is “right” and it can be a difficult situation to navigate.

Working with a financial planner as a couple could help you overcome some of the key challenges you might encounter when building a financial plan with a partner. 

Challenge 1: Starting money conversations 

Talking about money is sometimes seen as a taboo subject. So much so that even talking to your partner about shared finances can feel awkward.

Indeed, according to a March 2024 survey from Aqua, just 24% of Brits discuss finances with their partner frequently. In fact, far more (39%) admitted they don’t talk about money with their partner regularly. 

From discussing everyday spending to investing for your future, it’s important to be on the same page, and that’s impossible if you’re not talking about money. 

Having a regular meeting as a couple with a financial planner gives you dedicated time to talk about money and get those important conversations started – you might find they come more naturally over time. 

Challenge 2: Balancing different priorities  

Even if you’re working towards the same overall goal, there might be times when you and your partner have different priorities. 

Perhaps you want to put extra money into your pensions so you can retire early, but your partner would rather focus on building a nest egg for your children. Balancing these competing priorities can be challenging and lead to arguments, even though managing your finances well is important to both of you. 

A financial plan that’s tailored to you can help you understand the effect of your decisions so you can balance different priorities. 

For example, in the above instance, you might calculate if you could still reach your retirement goals if you delayed increasing pension contributions for five years. The outcome may mean you feel more comfortable adding contributions to your child’s savings, knowing that your long-term future is still on track.  

Challenge 3: Managing conflicting money habits 

Conflicting views on how to use money and spending habits are a major cause of arguments in relationships. 

Indeed, an Independent report from March 2025 suggests that 30% of people in relationships are worried that discussing savings or investments will cause arguments. Working with a financial planner could minimise conflicts and ensure you’re both on the same page. 

Having a shared goal could reduce conflicting spending habits. Imagine you’re in a relationship where one of you is a “spender” and the other a “saver”. 

Having a defined amount that needs to be added to savings or investments each month to reach a defined goal may mean the spender is less likely to overspend. Similarly, the saver may feel more comfortable spending disposable income if they know long-term goals are on track.

Sometimes your financial planner acting as a neutral third party can be useful when you’re discussing differing money habits too. They may be able to highlight where a compromise could be made or demonstrate why one option better supports your lifestyle goals. 

The good news is that when you’re working together, you could get more out of your money.

Challenge 4: Bringing together different assets

Understanding how assets may be used to reach your goals can be complicated and when you’re planning with a partner, bringing them together may be a challenge.

For example, you may both be paying into a pension – what income could each provide and is it enough to deliver the lifestyle you want? Should you have individual savings accounts or combine them?

A financial plan can help you get to grips with your assets, understand your options, and make decisions based on your goals. 

Equally, many tax allowances and reliefs are individual. So, you might need to consider how to use both your ISA allowance, pension Annual Allowance and more in a way that reflects your circumstances and provides both of you with financial security. 

We can work with you and your partner to create a bespoke financial plan

A plan that’s tailored to you and your partner could help both of you feel more confident about the future and ensure you are working towards goals together. 

Please get in touch to talk to us about your aspirations and build a financial 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.

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. 

Whether you analysed the text in school or have watched the film, you’ll no doubt be familiar with the tantalising story of Jay Gatsby. 

Indeed, 100 years after The Great Gatsby was first published, it’s still synonymous with the hedonism of the Jazz Age in New York City in the 1920s, from lavish parties to opulent mansions. And a century later, there is an important money lesson you can learn from its pages.

On the surface, the obvious money lesson might seem like it’s how to build wealth. After all, Gatsby is a self-made millionaire living a lifestyle many people dream about.  

Yet, as the novel progresses, it becomes clear that Gatsby spends his money to show off his wealth and catch the attention of his lost love, socialite Daisy Buchanan. While Gatsby appears to have it all, he isn’t happy. 

So, what’s the lesson you could learn from The Great Gatsby? Accumulating wealth alone won’t bring you happiness; how you use it is essential. 

A financial plan focuses on what adds meaning to your life

When you think about financial goals, it’s easy to focus on wealth accumulation. You might have a set amount you’d like to see in your savings account or pension. 

Financial planning involves shifting your mindset. Instead, you focus on what your lifestyle goals are and then how your assets could help you achieve them. 

When you’re retirement planning, you might start by saying you want to retire when you’re 60. Then you may consider the lifestyle you want to enjoy in retirement – what’s most important to you? Spending time with family, travelling, or being part of a local club could all be essential to creating a fulfilling lifestyle. 

With your desired lifestyle set out, you can start to understand how much you might need to save in your pension. A financial plan can then identify the steps you might take now to turn it into a reality. 

So, unlike Gatsby, who believed simple wealth accumulation would lead to happiness, the focal point of your financial plan is what will make you happy and how your finances can support this. 

The people in your life are essential for happiness 

Starting in 1938, the Harvard Study of Adult Development has been tracking the happiness of hundreds of people to find out what they need for a good life. 

In February 2023, researchers analysed 85 years of data, and found that, while a one-size-fits-all answer isn’t possible, social connections were essential. Strong relationships were found to improve health and wellbeing.

When the first round of participants turned 80, after decades of being involved in the study, they were asked what they were most proud of. For both men and women, the proudest achievements focused on relationships, such as being a good parent, friend, or mentor.

A lack of meaningful social connections is important to Gatsby’s story. He’s regretful of a missed connection with Daisy, and he spends huge amounts to gain her attention. While hundreds of people flock to his opulent parties, his existence remains a lonely one. 

Bringing your important social connections into your financial plan could take many forms. You might:

• Gift assets to loved ones to improve their financial security
• Earmark money to spend on days out with your family or friends
• Dedicate some of your time in retirement to mentoring people in your local community
• Calculate if you could reduce your working hours or retire early to spend more time with your family.

So, rather than focusing on building wealth, starting your financial plan by answering this question could lead to a happier life: what do you want to spend your time doing, and who do you want to do it with?

A financial plan could help you make decisions based on happiness 

If you want to learn from the mistakes of Jay Gatsby, a financial plan could provide you with an opportunity to consider what makes you happy and how your wealth could support this. Whether that’s exploring the world with your partner, enjoying days out with your grandchildren, or supporting community projects, we could help you understand how to use your assets to create the life you want. 

Please get in touch to talk about your lifestyle goals and how you might achieve them. 

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.

Concerns around potential trade wars following President Trump’s inauguration weighed on investment markets in January 2025, but there was positive news too. Read on to discover some of the factors that may have affected the performance of your investments. 

Keep in mind that short-term market movements are part of investing and taking a long-term view is an important investment strategy for many people. 

UK

Headline figures were positive for the UK.

UK inflation fell to 2.5% in the 12 months to December 2024, data from the Office for National Statistics (ONS) shows. According to the Guardian, there’s a 74% chance the Bank of England (BoE) will cut interest rates in February as a result. 

The ONS also reported the UK economy returned to growth in November 2024, as GDP increased by 0.1%. While it’s only a small rise, it follows three months of stagnation.

What’s more, the International Monetary Fund expects the UK to grow by 1.6% in 2025 and be the third-strongest G7 economy in terms of growth. 

In encouraging news for the chancellor, at the World Economic Forum, PwC revealed that the UK is the second-most attractive country for investment, only falling behind the US. It marks the highest rank for the UK in the 28 years PwC has carried out the survey. 

Sharp rises in borrowing led to the UK bond market making headlines.

On 8 January, UK government debt hit its highest level since the 2008 financial crisis, just a day after 30-year bond yields were at the highest level since 1998. Bonds rising could lead to mortgage lenders increasing rates and could affect the value of pensions, particularly those who are nearing retirement and are more likely to hold bonds. 

Markets calmed down the following day but continued to experience ups and downs throughout January.

After the turmoil in the bond market, the FTSE 100 – an index of the 100 largest companies listed on the London Stock Exchange – was down 0.9% on 10 January. The biggest faller was financial group Schroders, which saw a dip of 4.3%. 

Yet, just weeks later, the FTSE 100 hit a record high and exceeded 8,500 points for the first time on 17 January. The boost of around 1% was linked to speculation that there would be several interest rate cuts this year thanks to falling inflation. 

However, many businesses still aren’t confident. 

According to the British Chambers of Commerce (BCC), confidence among British businesses fell to the lowest level since former prime minister Liz Truss’s mini-Budget in September 2022. The pessimism was linked to chancellor Rachel Reeves’s £40 billion tax increases, which have placed a large burden on businesses. The BCC survey suggests 55% of firms plan to raise prices as a result. 

Similarly, a survey from the BoE suggests more than half of UK firms plan to cut jobs or raise prices in response to employer National Insurance contributions increasing in April 2025.

The effects of the chancellor's Budget were also evident in S&P Global’s Purchasing Managers’ Index (PMI).

The index fell to an 11-month low in December and into contraction territory. Rob Dobson, director at S&P Global Market Intelligence, noted there were also sharp staffing cuts as some companies acted now to “restructure operations in advance of rises in employer National Insurance and minimum wage levels”. 

Europe

Data paints a gloomy picture for the eurozone. 

As expected, following an interest rate cut by the European Central Bank to boost the flagging economy, inflation across the eurozone increased. In the 12 months to December 2024, inflation was 2.4%. 

Germany – the largest economy in the bloc – reported GDP falling 0.2% in 2024 when compared to the previous year, and it follows a decline of 0.3% in 2023.

According to an index from sentix, the challenges Germany is facing are negatively affecting investor morale across the eurozone. Indeed, investor confidence fell to a one-year low at the start of 2025. Germany is set to hold a snap general election in February, which could ease some of the uncertainty investors are feeling. 

PMI figures from the Hamburg Commercial Bank fail to offer investors optimism. 

While the eurozone service sector improved, it was still in decline at the end of 2024. In addition, the construction sector continues to contract and new orders fell markedly, suggesting that a recovery isn’t on the horizon. 

US

Dominating the headlines in the US in January was the inauguration of Donald Trump, which took place on 20 January. Trump will serve a second term as US president and promised a “golden age” for America in his inaugural address.

In the first days of his presidency, Trump continued to make similar trade threats to those he made during his campaign. He suggested a 10% tariff on Chinese-made goods arriving in the US could be implemented as early as 1 February 2025. Trump also hinted that he was considering levies on imports from the EU, as well as a potential 25% tariff on the US’s two largest trading partners, Mexico and Canada. 

According to the US Bureau of Labor Statistics, inflation increased to 2.9% in the 12 months to December 2024, up from 2.7% a month earlier. The inflation data could mean the Federal Reserve is less likely to cut interest rates in the coming months.

Indeed, on 13 January, Wall Street fell when it opened as traders expect interest rates to remain where they are. 

Technology-focused index Nasdaq fell 1.3% and the S&P 500, which tracks the 500 largest companies listed on stock exchanges in the US, lost 0.8%. Pharmaceutical firm Moderna experienced the largest slump when share prices fell 24% after the company cut its outlook due to shrinking demand for its Covid-19 vaccine.  

Markets faced more turmoil on 27 January. The emergence of a low-cost Chinese AI model, DeepSeek, led to concerns about the sustainability of the US artificial intelligence boom.

According to Bloomberg, shares in US chipmaker Nvidia fell by 17% and erased $589 billion (£473 billion) from the company’s market capitalisation – the biggest in US stock market history.  

Other US technology giants saw share prices fall too. Microsoft, Meta Platforms and Alphabet, which is the parent company of Google, saw losses between 2.2% and 3.6%. AI server makers saw even sharper drops, with Dell Technologies and Super Micro Computer sliding by 7.2% and 8.9% respectively.

PMI data from S&P Global indicates business could pick up at the start of 2024. In fact, the service sector posted its biggest growth in output and new orders in December 2024 since May 2022. The jump was linked to firms anticipating more business-friendly policies under the Trump administration. 

Asia

Threats of trade tariffs from the US in 2025 meant Chinese manufacturers rushed to fill orders at the end of 2024. Indeed, exports increased by 10.7% in December 2024 when compared to a year earlier, according to official customs data. With exports outpacing imports, China’s trade surplus was just under $1 trillion (£0.8 trillion) in 2024.

China’s National Bureau of Statistics also reported the economy hit its official target of growing by 5% in 2024. 

Chinese manufacturer BYD could be on track to overtake US technology giant Tesla this year. BYD revealed it sold 1.76 million battery electric cars in 2024 falling only behind Elon Musk’s company, which sold 1.79 million. In fact, when including hybrid vehicles, BYD surpassed Tesla. 

However, the new year didn’t start positively in the Chinese stock market. On 2 January, weak manufacturing data contributed to a sell-off of Chinese stock. The Chinese Stock Exchange fell by 2.7%, and the Chinese yuan also fell to a 14-month low against the US dollar. 

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.