When you consider how bias might affect your financial decisions, it’s often the harmful outcomes that come to mind. However, there are ways you can leverage certain biases, including framing bias, to your advantage. 

Framing bias refers to the tendency for how information is presented to influence your perception or decisions.

For instance, if you read that 10% of a business’s customers are unsatisfied, you might assume it delivers poor service. However, if you switch this to say that 9 in 10 customers are satisfied, you’re more likely to have a positive view of the business.

The information presented is the same, but one option focuses on the positive, which may influence the decisions you make. 

It’s a type of bias that could affect your financial decisions.

If you’re looking at an investment opportunity and see that it has a 10% chance of falling in value, this could trigger a fearful response. Even though there’s a greater chance that the value will remain the same or rise, the framing of the information means you’re more likely to focus on the risks. As a result, you may be tempted to place your money elsewhere, even if it’s an investment that fits your overall strategy.

On the other hand, if you read that an investment has a 90% chance of delivering returns, you may focus on how it could help you reach long-term financial goals. 

3 practical ways you could reframe your financial decisions 

1. Focus on long-term performance during market volatility 

When investment markets are volatile, panic can set in. Rather than focusing on short-term falls in the value of your portfolio, you can reframe them more positively. 

This may involve looking at long-term performance. Although the value of your assets might have dipped when compared to a month earlier, over your full investment horizon, you could still be in a strong position.

Alternatively, you could reframe market volatility as an opportunity. It’s a chance to buy stocks at a lower price and possibly benefit from the bounce-back.

Reframing investment volatility in this way could help you look at the bigger picture and avoid decisions based on fear. 

2. Frame financial sacrifices as paying your future self

Securing the future you want often involves making financial sacrifices today. To enjoy a retirement that is filled with the things you love, you might need to reduce your disposable income to increase pension contributions.

Rather than looking at these decisions as a sacrifice, view them as a way of paying your future self. This mindset adjustment could make sticking to your long-term financial plan easier because you’re working towards a clear goal, though this may not be suitable for everyone. 

Similarly, you can reframe essential spending.

For example, your monthly premiums for income protection or life insurance may seem like an added household expense with little immediate benefit. Reframing this outlay as a way to insure your future can help you focus on the benefits financial protection offers. 

3. Review information from a positive perspective 

People often avoid financial decisions or certain options because they’re worried about the outcome or believe they lack the knowledge they need. 

A July 2025 poll conducted by YouGov found that just 1 in 3 Brits express a willingness to invest savings in stocks and shares outside of a pension. One of the key reasons for avoiding investing was that it’s “too risky”.

While investing does present some risks, the markets have historically delivered long-term returns and recovered from downturns. While investment returns cannot be guaranteed, people who avoid investing because of their worries could be missing a chance to increase their wealth and reach life goals.

For those who focus on potential losses, reframing the information to emphasise potential returns and what they could enable in your life might be helpful. 

Of course, a positive outlook needs to be realistic and, when investing, it’s important to be aware of the risks. A financial planner can help you establish what investment risks are appropriate for your circumstances. 

Get in touch

Working with a professional financial planner could help you assess your financial decisions and identify when bias might be influencing the outcome. We could help you frame information in a way that allows you to assess your options. Please get in touch if you’d like 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.

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.

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. 

Tax treatment depends on individual circumstances and may change in the future. 

The US struck trade deals with several countries in July 2025, leading to markets rising and putting an end to some of the uncertainty that had plagued investors for months. Read on to find out what else may have affected your investments recently. 

While it might seem like 2025 has been a poor year for investors, due to geopolitical tensions and trade wars, the figures paint a different picture. 

In the first half of 2025, the FTSE 100, an index of the 100 largest companies listed on the London Stock Exchange, gained 7.2%. It’s the best performance in the first six months of the year since 2021. The data shows how markets often bounce back following short-term market movements, as the index fell sharply in April due to US tariff announcements. 

Remember, while markets typically deliver returns over a long-term time frame, they cannot be guaranteed, and it’s important to invest in a way that reflects your risk profile and goals. 

Trade deals lead to market rallies in July 2025

While uncertainty affected markets in July 2025, there were also several record highs. 

On 3 July, it was announced that the US and Vietnam had struck a trade deal. In addition, US data showed 147,000 new jobs were created in June. The good news led to global stocks reaching a record high, according to MSCI. 

US President Donald Trump previously set a deadline for trade deals. As this date approached on 7 July and countries without a deal faced high tariffs, shares on key US indices dipped slightly. The Dow Jones Industrial Average fell 0.16% and the S&P 500 was 0.3% lower.

With the trade deal deadline looming, Trump announced a pause on the levies for 14 trading partners to give countries time to negotiate with the US. It led to Asia-Pacific indices rising, including Japan’s Nikkei 225 (0.3%), South Korea’s KOSPI (1.9%), and China’s CSI 300 (0.8%). 

The good news continued the following day. The FTSE 100 climbed 1.23% to close at a record high. Mining stocks led the way with Glencore, Rio Tinto, and Anglo American all up more than 3.5%. 

On 14 July, European markets opened lower after Trump threatened to impose a 30% tariff on EU imports in August. The pan-European Stoxx 600 index was down 0.6%. Falls were also recorded on the main indices for Germany, France, Italy, and Spain. 

There was further positive news for investors of stocks on the FTSE 100 index on 15 July. It hit 9,000 points for the first time after a rise of 0.2%. The UK was one of the few countries to have a trade deal with the US, and UK stocks benefited from trade tensions as a result. 

The US and Japan reached a trade deal on 23 July. Under the deal, Japanese goods will incur a 15% tariff at the US border compared to the 25% Trump had previously threatened.

On the back of the news, Japan’s Nikkei index jumped 3.75%. Carmakers in particular saw rises, including Toyota (14.5%), Honda (10.8%), Subaru (16.8%), and Mazda (17.75%). 

There was yet more trade deal news on 28 July when an agreement between the US and EU was announced. Indices across the EU were up as a result, including Germany’s DAX (0.8%), France’s CAC 40 (1%), and Spain’s IBEX (0.8%). 

UK

With the Autumn Budget due in October, Reeves faces increasing pressure as key data released in July 2025 was negative.

Indeed, the Office for Budget Responsibility (OBR) said public finances are in a “relatively vulnerable position” with risks posed by tariffs, defence costs, and an ageing population. Based on current tax and spending policy, the organisation said public debt was on track to hit 270% of GDP by the 2070s. The projection would see public debt almost triple compared to the current level. 

The concerns around public debt were further highlighted when UK borrowing increased to £20.7 billion in June 2025 due to interest payments rising. Worryingly, the figure was £3.5 billion more than the OBR’s forecast and could prompt the chancellor to raise taxes or cut spending. 

In addition, data from the Office for National Statistics shows the UK economy shrank in May for the second month running. The 0.1% contraction was driven by a slump in industrial output.

The rate of inflation also unexpectedly increased to 3.6% in the 12 months to June 2025. It’s the third consecutive monthly increase and was the highest rate recorded since February 2024. 

While the Bank of England’s Monetary Policy Committee didn’t meet to discuss interest rates in July, member Alan Taylor signalled a cut was likely in August. He said the “deteriorating” UK economy warranted a deeper interest rate cut than financial markets currently predict. 

A Purchasing Managers’ Index (PMI) measures economic activity, and a reading above 50 indicates growth. In June, S&P Global’s PMI data for the UK found that the: 

• Manufacturing sector continued to contract with a reading of 47.7, but hit a five-month high 

• Construction sector was also contracting, but reached a six-month high with a reading of 48.8

• Service sector posted its strongest growth in 10 months with a reading of 52.8, and improvements in order books indicate further growth in the months ahead.

So, while there are setbacks for many UK businesses, the figures suggest there’s movement in the right direction. 

Europe

The eurozone hit the European Central Bank’s (ECB) 2% inflation target in the 12 months to June 2025. 

Over the last 12 months, the ECB has cut its base interest rate by a quarter percentage point eight times, taking the policy rate from 4% to 2%. Despite speculation that there would be a further cut when inflation hit its target, the central bank opted to leave the rate as it was.

S&P Global’s PMI suggests the manufacturing sector across the eurozone continues to contract. However, the data indicates it may have turned a corner as the reading in June 2025 was the highest in 34 months and only just below the 50 mark at 49.5. 

As the bloc’s largest economy, Germany’s exports are essential and ongoing challenges could dampen growth this year, though the new US-EU trade deal may ease some of the pressure.

A Destatis report found that German exports fell by 1.4% in May when compared to a month earlier. Exports to the US played a significant role as they were down 7.7% month-on-month and 13.8% lower than the same period in 2024. 

Germany’s central bank, the Bundesbank, said the country’s exporters were losing competitiveness and called for urgent reforms to improve the business climate, including reducing barriers for skilled migrants and enhancing tax breaks for private investment. 

US

Official data from the Bureau of Statistics shows that inflation increased in the 12 months to June 2025 to 2.7%. The figure is above the Federal Reserve’s 2% target. 

Tariffs and uncertainty continued to leave a mark on the US’s trade deficit. 

In May, the trade deficit widened by 18.7% when compared to a month earlier, according to official data. The deficit now stands at $71.5 billion (£53.5 billion) as exports dropped by 4%. 

The consumer sentiment index from the University of Michigan suggests people are feeling more optimistic. The reading in July was 61.8, up from 60.7 in the previous month. It was the highest score since the trade wars began five months ago.

American chipmaker Nvidia became the first listed company to reach a valuation of $4 trillion (£3 trillion). The company announced it would build high-powered systems to train its AI software, which led to shares soaring. As of the start of July, the company’s shares have gained 22% in 2025. 

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.

Supporting a charity could give you that feel-good factor and provide a sense of purpose. When you’re looking at the benefits from a tax perspective, it might make financial sense in some circumstances too.

Indeed, according to a June 2025 article published by Professional Adviser, more people are leaving a charitable legacy in their will as a way to reduce a potential Inheritance Tax (IHT) bill. 

The first step to making your charitable efforts tax-efficient is to make them part of your financial plan. By viewing donations alongside your other priorities, you may be able to work with your financial planner to find the most tax-efficient ways of supporting the causes that are important to you.

Read on to find out why naming a charity as a beneficiary in your will might form part of your estate plan.

1. Claim tax relief through Gift Aid

If you’re a taxpayer, one of the simplest ways to donate to charities tax-efficiently is to use Gift Aid. 

By making a Gift Aid declaration, the charity you support can reclaim the basic rate of Income Tax you’ve already paid. As a result, if you donate £100 to a charity, the organisation will benefit from a £125 boost. 

In addition, if you’re a higher- or additional-rate taxpayer, you can claim the difference by completing a self-assessment tax return. So, if you pay Income Tax at 40%, you can claim back 25p in tax relief for every £1 you donate. 

2. Make donations from your income 

Some employers allow you to make regular donations directly from your income through a Payroll Giving scheme. 

The donation would be made from your gross salary, before your taxes and other deductions are made, which can make it tax-efficient. Similar to Gift Aid, it’s an option that could increase your charitable support and make sense from a personal tax perspective. For example, you might make donations from your income to avoid moving into a higher tax bracket and potentially losing other tax breaks. 

3. Donate land, property, or shares

When disposing of certain assets, including investments and property that isn’t your main home, you’ll typically be liable for Capital Gains Tax (CGT) if the profits exceed £3,000 in the 2025/26 tax year. 

However, you may receive CGT relief if you donate land, property, or shares to a charity. When making this type of donation, a charity may ask you to sell the gift on its behalf, and you can still claim tax relief on this donation. 

Be sure to keep an accurate record of the donations, including any requests from charities to sell the assets on their behalf. 

4. Leave a charitable legacy in your will

Leaving a charitable legacy in your will could reduce the rate of IHT your estate pays.

In 2025/26, the nil-rate band is £325,000. If the value of all your assets, known as your “estate”, is below this threshold, no IHT is due. If the value of your estate exceeds the nil-rate band, IHT could be due, but there are often other allowances and steps you could take to mitigate a potential IHT bill.

An estate plan could help you understand if your estate could be liable for IHT.

The standard rate of IHT is 40%. However, if you leave at least 10% of your estate to charitable causes when you pass away, the rate falls to 36%. 

So, for some estates, leaving money to charity could be a win-win – your beneficiaries might inherit more while also supporting a good cause. 

As assets left to charities aren’t liable for IHT, you might also leave assets to them in your will to bring the value of your estate under the IHT threshold.  

Contact us to talk about your charitable giving 

There are many reasons why you might want to make charitable giving a priority when creating a financial plan. If you’re keen to support good causes now or in the future, we could work with you to understand how you might do so tax-efficiently. 

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.

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 estate planning, Inheritance Tax planning, or will writing.

Cash can be comforting. It’s familiar, it’s accessible, and it’s tangible. But while cash savings can be part of a well-balanced financial plan, they’re not always the best-performing asset. 

Data shows that many UK adults are reluctant to depart from cash. In an update reported by MoneyWeek, the Financial Conduct Authority (FCA) reported that 61% of adults with £10,000 or more in investible assets are holding at least three-quarters in cash. 1 in 5 adults have cash savings of £25,000 or more, and around 1 in 10 have savings exceeding £50,000.

The regulator warned that holding such a large proportion of assets in cash could mean UK adults are missing out on the longer-term returns potentially available from investing, even when savings interest rates are high. 

Read on to find out alternative options to cash, how to begin moving into other investments, and the times cash might be a more appropriate choice.

Global economic uncertainty saw more investors turning to cash, but history tells us markets do rally

Part of the appeal of cash currently can be attributed to market volatility that spooked investors in the early months of 2025, with President Trump’s tariff announcements causing widespread uncertainty.

According to a May 2025 report from MoneyAge, this caused a rise in the number of DIY investors – those who manage their own portfolio – turning to cash. Between February and April, 56% increased their exposure to cash, a 10% increase compared to investors who switched to cash after the 2024 Autumn Budget. 

It’s understandable for you to want your wealth kept safe, and for global turbulence to drive you to think about cashing in. But history tells us that volatility is to be expected. While we can’t rely on past performance as an indicator for the future, we can also see that markets bounced back quickly from events such as the 2008 financial crisis, the pandemic, and the beginning of the conflict in Ukraine. 

The below graph from NatWest covering the period between 2003 and 2023 highlights this, showing the return on global equities (shares), bonds, and cash at critical points in history. Although cash remains relatively level, the eventual returns from bonds and equities would have been higher. 

Rising inflation could have a negative effect on your purchasing power

Inflation is always another key consideration with cash savings. Unless your savings interest rate is consistently above the rate of inflation, the real value of your money could remain the same, or even go down. 

Ultimately, this could dent your purchasing power in the long term. 

Consider this example. You have £100, which can buy £100 of goods and services today. If you save your money in a bank account with 1% interest, you’ll have £101 next year. But if inflation is 5%, those same goods and services will cost £105 next year. With £101, the money in the bank would no longer be enough to buy it – it has lost value in real terms.

Historically, shares and bonds have always outperformed cash. According to Vanguard, data from 1901 to 2024 shows that average annual returns after inflation were: 

• 5.34% for global shares

• 1.36% for bonds

• 0.89% for cash. 

So, you can see the argument for investing at least some of your wealth, helping it keep pace with the rising cost of living.

Considering your goals and risk approach can help design a suitable investment portfolio for you

Shifting some of your cash savings into investments could help you see better returns. But before you do this, the first thing to consider is your goals. For example, are you hoping to receive an income from your investments, or are you investing for long-term growth? 

This can help you determine the right place for your wealth. You also need to consider your approach to risk: do you want a low-risk option that will pay out less, or a higher-risk alternative with potentially higher returns? 

Talking with a financial planner can help you establish your own financial strategy, based on your aspirations, risk tolerance, and preferences. They can work with you to build a diverse portfolio, meaning that if you see losses in one area, these could be mitigated in others. 

Some of the most common types of investments you could consider include: 

• Stocks and shares. These are a stake in a company, and are traded on a stock exchange. The price of shares can go up or down. 

• Bonds. Investing in a bond means you’re effectively lending money to a company or government, which they pay back at a fixed rate of interest. They’re a more stable investment than shares, but can be negatively impacted by interest rate fluctuations. 

• Funds. Here, your money is invested along with other people’s to buy a range of assets, which can include shares and bonds, helping to diversify your investments. As they’re also spread across different markets and sectors, poor performance in one area can be offset by others. 

There are other investment options, too, which a financial planner can talk through with you.

Cash is a good option for short-term goals and as an emergency fund

None of this is to say that cash is obsolete. Far from it, cash can be an important part of a well-balanced financial plan. 

It’s a good idea to have a cash reserve in place as an “emergency fund”, which could be three to six months’ worth of your essential outgoings. 

It can also make sense to save for short-term goals and purchases in cash savings. For example, if you’re saving for a holiday in a year’s time, you need to know that you’ve saved enough, without risk, and that it will be accessible when you need it. 

Get in touch

Talk to us about how to strike the right asset balance, including cash, for your wealth portfolio. 

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.