Strategies for risk management.

Diversification spreads risk across different assets, markets and tax wrappers. It helps private investors smooth returns instead of relying on a single share, fund or property. The principle is simple: assets rarely move in perfect sync, so setbacks in one area may be offset by steadier performance elsewhere. A balanced portfolio is therefore less exposed to shocks and better placed to meet long-term goals such as retirement income, school fees or a future house purchase.

UK households already hold significant investable wealth, yet much of it sits in a narrow range of assets. HMRC reports that adult ISA pots were worth £725.9bn at the end of 2022/23 – almost three-fifths in stocks and shares accounts. The Office for National Statistics finds that median household wealth outside pensions stands at £181,700, while at the same time, the Office for Budget Responsibility expects real household disposable income to grow by only about 0.5% a year between 2025/26 and 2029/30. Against that backdrop, disciplined diversification, guided by clear risk limits and tax-efficient structures, can add real value.

Start with a written risk profile

Before you choose assets, agree on an evidence-based view of risk tolerance and capacity for loss. First, estimate the time horizon for each objective – five years for a home deposit, 20 years for retirement and so on. Next, map likely cashflow needs, separating essential spending from discretionary outgoings. Third, gauge how much short-term volatility the client can accept without abandoning the plan. Finally, run stress tests that model, say, a 20% equity market fall or a two-percentage-point jump in yields. Capturing these factors in writing creates an anchor for portfolio design and for future reviews.

Asset-class building blocks

A diversified allocation normally combines five components. Cash deposits provide day-to-day liquidity and a buffer for emergencies. Investment-grade bonds – UK gilt funds and sterling corporate issues – dampen equity swings and deliver income. Listed equities, both domestic and overseas, drive long-term growth through reinvested dividends and earnings expansion.

Property exposure, via real-estate investment trusts (REITs) or a directly owned rental, adds a different return stream linked to rents. Finally, alternatives such as infrastructure funds, commodities or market-neutral strategies contribute risk dispersion because they react differently to macro shocks. The exact weight of each building block flows from the risk profile and time horizon above.

Put tax wrappers first

Even a sound asset mix can leak value if it sits in the wrong wrapper, so we encourage clients to deploy allowances early in the tax year. The 2025/26 ISA subscription limit remains £20,000. All income and gains inside an ISA escape income tax and capital gains tax (CGT). The dividend allowance has shrunk to £500, so equity funds that generate material distributions belong inside an ISA or pension. Capital gains tax’s annual exempt amount is now £3,000; anything above that triggers tax at 18% or 24% depending on the investor’s income tax band. Choosing the right wrapper is therefore as important as picking the right asset.

Keep pensions at the core

The abolition of the lifetime allowance in 2024 simplified pension planning. For 2025/26 the key figures are as follows:

• Annual allowance: £60,000, subject to tapering for adjusted income above £260,000.
• Money purchase annual allowance (MPAA): £10,000 once flexible benefits have been accessed.
• New lump-sum limits: Lump sum allowance of £268,275 and lump sum and death benefit allowance of £1,073,100 remain in place.

For many higher-rate taxpayers, a pension remains the most efficient home for global equity and diversified bond funds. Regular contributions, employer matching and carry-forward of unused allowance can restore balance if market movements skew the overall mix.

Diversify by geography and sector

Concentration risk is not limited to asset class. UK-listed shares account for less than 4% of the MSCI All Country World Index (ACWI), yet many investors still hold a home-biased portfolio. You can mitigate that bias by blending global developed-market trackers covering North America, Europe and Japan with a measured slice of emerging-market equities.

Sector exposure also matters: healthcare, technology and infrastructure each carry distinct demand and regulatory drivers. By spreading holdings across regions, sectors and currencies, we lower the portfolio’s sensitivity to domestic inflation, policy or political changes.

Build in defensive holdings

Defensive assets help contain drawdowns when growth assets fall. Gilts often rise during risk-off episodes, though rising yields can dent prices in the short term. Short-duration bond funds limit interest-rate risk. Some clients allocate a small slice – typically no more than 5% – to gold-backed exchange-traded commodities because the metal’s long record of low correlation with equities adds ballast. Targeted absolute-return strategies that aim for steady positive returns can also serve as shock absorbers, provided the cost structure is transparent. The exact defensive allocation again links back to the written risk profile.

Rebalance with discipline

Market movements push allocations off target over time. We encourage at least an annual rebalance, or an interim trade if any asset drifts more than five percentage points away from its strategic weight. That discipline restores the intended risk level, trims winners after strong runs and directs new cash to under-represented areas after a fall. Most modern platforms let you automate the process, which removes emotion from timing decisions and improves long-run consistency.

Track allowances and threshold freezes

Tax thresholds are frozen again in 2025/26, keeping the personal allowance at £12,570 and basic-rate band at £37,700. As earnings creep up, investors may slip into higher tax bands, making wrapper strategies even more valuable. Meanwhile, the Office for Budget Responsibility projects real household disposable income to grow only 0.5% a year on average over the next five years. Low real-income growth increases reliance on investment returns, underscoring the case for careful risk management.

Key annual tasks include the following:

• Personal allowances: Track income shifts and adjust pension or salary-sacrifice levels.
• ISA funding: Maximise before 5 April.
• Pension contributions: Use carry-forward where affordable.
• Dividend and savings allowances: Migrate taxable assets into wrappers where practical.

Avoid common pitfalls

Over-concentration is one of the most frequent issues, for example, when a legacy single-stock holding dominates the equity sleeve or a buy-to-let property dominates total wealth. Options include seeking gradual sales within the CGT allowance, using “bed and ISA” transfers, and – where appropriate – taking out insurance to reduce the liquidity risk tied to property.

Another trap is abandoning bonds because yields look unattractive – that step often leaves the investor with unwanted volatility just when liquidity matters most. Inadequate rebalancing is another danger: without a systematic rule, investors are prone to chase last year’s winners and miss recovery rallies. Documented policy plus automated platform tools solve this problem quickly.

How we work with you

As accountants, we have deep insight into our clients’ income streams, cashflow patterns and tax position. We complement that insight with regulated investment advice, portfolio construction and ongoing monitoring. Working together, we provide the following:

1. Data sharing: Secure exchange of tax returns and pension statements ensures up-to-date figures.
2. Joint planning meetings: Align the investment mandate with tax strategy and life goals.
3. Quarterly reporting: Plain-language updates on performance, asset allocation and forthcoming allowance deadlines.
4. Year-end checklist: Confirm ISA and pension funding, crystallise CGT losses if needed and document rebalancing trades.

Keeping your goals in focus

Diversification works because it brings together assets that respond differently to economic events, interest-rate moves and policy changes. By spreading exposure across shares, bonds, property and selected alternatives, investors reduce the chance that one setback wipes out years of progress.

The mechanics may feel straightforward, yet the real benefit comes from the discipline that surrounds them. A written risk profile keeps goals, time horizon and capacity for loss in clear view. Regular rebalancing restores the intended shape of the portfolio, while ongoing tax checks make sure wrappers and allowances do as much of the heavy lifting as possible.

The coming tax years are set against a backdrop of frozen thresholds and shrinking allowances. Without careful planning, more income and gains will fall into higher bands and erode real returns. A pension, with its generous upfront relief and freedom from CGT, remains the most effective shelter for long-term holdings. ISAs follow close behind for shorter-term objectives and for investors who have already reached the annual pension limit. Beyond those wrappers, thoughtful use of the annual CGT exemption and dividend allowance can still trim the liability on taxable accounts.

Moving forward

Diversification is not a one-off event; it is a continuing cycle of review, measurement and adjustment. Market prices move daily, but the investor’s goals change more slowly. We bridge that gap by monitoring allocations against the agreed risk range and by making incremental trades rather than wholesale shifts. That steadiness reduces emotional decision-making and helps clients stay invested through market noise.

Your accountant sits at the centre of your financial picture, turning raw numbers into clear actions. Because they see your cashflow, business income and reliefs in real time, they can flag spare allowances, shape pension contributions and schedule ISA funding before deadlines bite. Regular conversations also let them harvest CGT losses, monitor dividend limits and adjust salary-sacrifice arrangements. With that proactive oversight, tax savings fall naturally into place and your long-term goals stay on course.

In short, a diversified portfolio, backed by clear documentation and regular maintenance, stands the best chance of preserving and growing purchasing power over the long term. It turns market uncertainty from a threat into an opportunity, enabling clients to pursue their financial goals with greater confidence and clarity.

For a deeper discussion of a specific investment case, please contact us.

Practical steps to grow your business through exports.

Exports already account for around 30% of UK gross domestic product (GDP), and the government wants that share to rise further by helping more small firms sell overseas. In the 2024 Autumn Statement, ministers renewed the goal of lifting UK exports to £1 trillion a year by 2030. Although the headline target often makes the news, the real shift will come from the thousands of owner-managed businesses that decide to quote for an order in Dublin, Dubai, or Denver for the first time.

That decision can feel bold, yet it is rarely speculative. The latest Business Insights survey from the Office for National Statistics shows that 22% of UK firms with 10 or more staff shipped goods, services or both abroad in the 12 months to April 2025. The same dataset suggests that a further 9% expect to start exporting within the next year. Cheap cloud software, predictable customs processes and direct-to-consumer platforms mean that geography limits fewer firms than before.

Of course, every extra customer, currency and border adds work. Directors must prove product compliance, hold export evidence for VAT, and protect cashflow against longer settlement periods. That is where your accountant comes in, offering clear, specific guidance that reflects current tax rules and funding schemes.

This guide focuses on three practical questions. Is the business ready? What are the tax and compliance rules for 2025/26? Which public or private programmes can reduce the upfront costs?

Why exporting still matters for SMEs

A larger export base lifts national output and improves productivity, and the opportunity is tangible even for smaller firms.

• Market potential: Exports give a micro business access to customers whose combined spending power far exceeds that of the UK alone.
• Scale benefits: Higher volumes can lower unit costs and justify investment in automation or product development.
• Resilience: Revenue from more than one region can offset domestic slowdowns or sector-specific downturns.

The appetite is growing. Momentum is visible in the trade data too. The value of UK goods exports rose by £1.8bn (6.3%) in January 2025 compared with December 2024.

Assessing readiness – finance and operations

Before a firm starts quoting to overseas buyers, encourage directors to work through the points below.

• Turnover stability: Has the business produced at least two years of steady income and profit?
• Free cashflow: Can it fund longer payment cycles and higher inventory without short-term borrowing spikes?
• Management capacity: Does the team have time to deal with customs queries, language differences and extra paperwork?
• Intellectual property: Are trademarks or patents protected in the target market?
• Supply-chain resilience: Can key inputs be sourced from more than one supplier or location?
• Product compliance: Do existing certifications meet local safety or labelling rules?
• Customer-service planning: Is after-sales support, including returns, feasible at a distance?

As accountants, we help clients quantify each item. A quick-ratio test and rolling 12-month cashflow forecast often reveal whether the business can shoulder the extra working capital.

Tax and compliance framework 2025/26

Trading overseas brings added tax considerations, even for experienced domestic businesses.

Corporation tax

The small profits rate remains at 19% for profits up to £50,000, while the main rate of 25% applies to profits above £250,000. Marginal relief is available for profits that fall between these thresholds.

For clients with group structures, it’s worth modelling how overseas activity might affect overall profit allocation – particularly if they’re planning to open a foreign branch.

Value added tax (VAT)

• The UK VAT registration threshold remains £90,000 of taxable turnover for 2025/26.
• Exports of goods are usually zero-rated, but the seller must hold evidence of dispatch within three months.
• Digital services supplied to EU consumers fall under the non-Union one-stop shop (OSS) scheme, which simplifies registration in multiple member states.

Customs and duties

Agree on the correct incoterms (international commercial terms) at the quotation stage so everyone knows who books the transport, who pays duty and at what point the risk passes. Show the terms on the commercial invoice alongside the eight-digit commodity code, customs value, and net and gross weight. Submit your export declaration through the Customs Declaration Service (CDS) and give the haulier the movement reference number before collection.

For consignments entering the EU, the UK-EU Trade and Cooperation Agreement can remove tariffs if the goods meet the rules of origin. Keep supplier declarations or a self-declaration on the invoice confirming UK origin and store the paperwork for at least four years, as customs officers may ask for proof long after the shipment clears. If the product falls outside the agreement – for instance, because it contains a high proportion of non-UK inputs – build the duty rate into your landed-cost calculation so you quote a realistic price.

Import VAT is usually payable by the buyer at the border, but you can simplify their cashflow by offering Delivered Duty Paid (DDP). In that case, you act as importer of record, recover the VAT through a local registration, and charge it back to the customer in sterling. Whatever model you choose, keep your evidence bundle – commercial invoice, packing list, transport documentation, origin statements, and any preference certificates – complete and well-indexed so future audits run smoothly.

Employment taxes

Posting staff abroad may trigger tax residence in the host country. Short-term business visitors can stay on UK payroll, but firms must apply for a short-term business visitor reporting agreement with HMRC.

Currency and cashflow management

A single delayed payment in a different currency can destabilise a small business. We recommend the following actions.

• Multi-currency accounts: Reduce transfer fees and allow receipts to be held until rates improve.
• Forward contracts: Lock in an exchange rate on the day the sale is agreed.
• Natural hedging: Match currency of revenue and costs where possible.
• Structured payment terms: Ask for a deposit on order, stage payments on shipment or use letters of credit.
• Export credit insurance: Protect against customer default in higher-risk markets.

We can build exchange-rate scenarios into your cashflow forecast so you can see the worst-case draw on working capital.

Market selection and risk evaluation

Choosing the first overseas market is often harder than shipping itself. Base the shortlist on measurable evidence.

• Begin by sizing the opportunity, focusing on sector demand rather than headline GDP.
• Check regulatory fit, confirming product standards, labelling rules and any licensing.
• Consider whether a UK free-trade agreement removes tariffs or quotas.
• Compare logistics cost and reliability – freight rates, sailing schedules, flight frequency and local warehousing.
• Look at payment culture by reviewing average settlement periods and the ease of enforcing contracts.
• Gauge political and economic stability through the Department for Business and Trade’s risk scores.

After ranking the options, advise the business to pilot one market at a time so it can refine price, marketing and distribution without heavy upfront costs.

Support programmes and finance

Several schemes reduce the upfront cost of exporting.

• UK Export Finance (UKEF) general export facility: Guarantees up to 80% of a working-capital loan from a high-street bank.
• UKEF export insurance policy: Covers up to 95% of the value of an export contract if the buyer defaults.
• DBT Export Support Service: Free advice on logistics, tax and market entry.
• Internationalisation Fund (England): Match-funds up to £9,000 of market research or trade-show expenditure.
• Growth Guarantee Scheme: 70% government guarantee on loans up to £2m, extended to March 2026.

Applications move faster when your accountant supplies historic accounts, management information and cashflow projections that align with the export plan.

Practical first steps

1. Define export goals: Set a revenue or unit target that is achievable within 12 months.
2. Choose a pilot market: Base the choice on data rather than anecdote.
3. Price the product: Include landed cost, margin and buffer for exchange-rate swings.
4. Register and comply: Obtain an economic operators registration and identification (EORI) number and confirm any local VAT obligations.
5. Arrange logistics: Pick incoterms, agree lead times with a freight forwarder and book insurance.
6. Protect cashflow: Secure a letter of credit, export insurance or deposit before production starts.
7. Monitor performance: Review profit per market each month and refine the plan.

Putting it into practice

Exporting remains one of the fastest ways for a small UK business to grow turnover, sharpen its product and diversify risk. It is also more structured, and therefore more manageable, than many owners first assume. The rulebook is clear, the support programmes are well funded and reputable logistics partners handle the mechanics of shipping every day.

What matters most is preparation. Reliable cashflow forecasts show whether the firm can carry longer payment terms. A documented VAT process avoids penalties and keeps input-tax recovery smooth. Early dialogue with UKEF or a relationship bank can secure a working-capital guarantee before production ramps up. When these foundations are in place, directors can focus on sales and service rather than firefighting finance issues.

Accountants sit at the centre of that preparation. We translate tax law into practical checklists, sense-check currency scenarios and package the numbers that lenders want to see. By doing so, we help businesses move from interest in exporting to sustainable overseas revenue. Use this guide as a living reference. Update the figures each spring, share the action points at board meetings and remind owners that data-led planning will always beat guesswork.

Talk to us about preparing your business for overseas sales.

The Bank of England has cut interest rates by 0.25% to 4.25%, aiming to support the UK economy as uncertainty rises. It marks the fourth reduction since August 2024.

The Monetary Policy Committee (MPC) warned that economic growth will likely remain subdued, predicting a further 0.3% slowdown over the next three years. Two members called for a larger 0.5-point cut in a split decision, while two voted to keep rates at 4.5%.

Growth is expected to stall through the rest of 2025, with concerns including the impact of US trade policy and ongoing uncertainty over the UK’s future economic direction. The Bank announcement came shortly before the UK government confirmed a new trade deal with the US, which eases tariffs on cars, steel and aluminium. However, the Bank’s forecasts do not yet reflect the terms of that deal.

Inflation driven by higher council tax and utility bills will peak at 3.5% in the third quarter. Despite a slightly lower forecast, inflation is not expected to return to the 2% target until spring 2027.

The Bank also flagged the potential impact of the Chancellor’s recent £25bn rise in employer national insurance, warning it could affect jobs, wages and prices.

The Trades Union Congress urged faster rate cuts to ease pressure on households and support business investment. Prolonged price rises have weakened consumer confidence, which remains fragile, and further economic recovery looks limited.

Talk to us about this change.

Unemployment has risen to 4.5%, the highest level since summer 2021. The figure covers the first quarter of 2025 and marks a 0.2 percentage point increase from the previous quarter.

The rise in joblessness is based on data from the Office for National Statistics’ (ONS) Labour Force Survey, which has faced heavy criticism due to declining response rates. However, the ONS said recent updates show “clear improvement” in data quality.

Alongside the higher unemployment rate, job vacancies have also dropped. There were 761,000 vacancies in the three months to April, down 5.3% on the previous quarter and 131,000 fewer than a year earlier. The construction industry saw the most significant fall in openings.

Regular pay growth slowed slightly to 5.6% in the three months to March, compared with 5.9%. While still high by historical standards, the slower growth may reassure the Bank of England’s monetary policy committee, which reduced interest rates to 4.25% last week.

The number of payroll employees also dipped by 47,000 between February and March. The overall employment rate was steady at 75%, while economic inactivity increased to 21.4%, still above pre-pandemic levels.

The Bank of England is watching closely as firms adapt to a £25bn rise in employer national insurance contributions and a 6.7% increase in the national living wage. Meanwhile, the ONS is undergoing an independent review into the reliability of its data.

Talk to us about your business.

From 6 May 2025, HMRC is no longer confirming a taxpayer’s unique taxpayer reference (UTR) number over the phone. This change applies to individual taxpayers and agents calling on behalf of clients.

Instead, UTR numbers will only be available through HMRC’s digital services via the HMRC app or a personal tax account on gov.uk. Taxpayers familiar with these services should find their UTR easy to locate, as it is displayed in the account. It also appears on documents such as tax returns, notices to file and payment reminders.

The move is part of HMRC’s efforts to strengthen data security and prevent personal information from being given out incorrectly. While the department has notified professional bodies about the change, it has not yet updated public guidance on gov.uk.

HMRC will confirm UTR numbers by post after a series of security checks for those unable to use digital services. This means it could take longer to access the number if it’s lost or hasn’t arrived within the usual 15-day window after registering for self assessment.

The Association of Taxation Technicians has issued an alert, noting that agents will be pointed to where a UTR can be found, or offered postal confirmation where needed.

All taxpayers need a 10-digit UTR to file a self assessment return, so anyone registering or updating records should plan for possible delays under the new system.

Talk to us about your taxes.

Britain and India have signed a long-anticipated trade deal that is expected to boost the UK economy by £4.8bn a year by 2040.

Finalised after more than three years of negotiations under multiple governments, this agreement is one of the most significant post-Brexit wins for British trade.

The deal focuses heavily on tariff reductions across a wide range of goods. India will cut tariffs on 90% of UK product lines, including whisky, gin, chocolate, biscuits, cosmetics, lamb, salmon, soft drinks, aircraft parts, medical devices and electrical machinery. Based on 2022 trade data, these reductions will save UK exporters £400m annually from day one.

Tariffs on British whisky and gin, currently at 150%, will drop to 75% initially, and fall further to 40% by the 10th year. For British-made cars, tariffs will fall from around 110% to 10%, though quotas will apply to exports in both directions. In return, the UK will lower tariffs on Indian clothing, footwear and food products, offering consumers greater choices and potentially lower prices.

The deal also includes a reciprocal exemption from national insurance contributions for workers temporarily seconded between the two countries for up to three years. Though this has sparked controversy in the UK, it was a key demand from Delhi and a central sticking point in talks. India’s government has hailed the exemption as a “huge win” and a landmark achievement.

Ministers say the deal will strengthen economic ties, open new markets and support industries.

Talk to us about your business.

Nearly half of UK businesses are rethinking their recruitment plans in response to higher employment taxes and labour costs

According to new research by recruitment company Reed, 46% of companies said the recent rise in national insurance contributions (NICs) would impact their hiring decisions.

From 6 April, employers began paying NICs at a higher rate – up 1.2 percentage points – while the threshold at which payments began fell to £5,000. These changes are expected to add pressure to labour-intensive sectors, such as hospitality and retail, which often rely on part-time staff and tight margins.

The survey, which polled 254 businesses representing more than 260,000 employees, found that the financial impact could be significant. On average, respondents predicted a 29% drop in annual profits due to the NIC increase.

Many businesses are already adjusting. Over a quarter (27%) said they were postponing or cancelling recruitment plans. Others are taking further action to manage costs: 19% are delaying or cancelling salary reviews, and 16% are making redundancies.

Reed said the findings highlight growing concerns about the affordability of maintaining or expanding workforces under the new tax rules. With employers facing increased financial pressure, businesses must make difficult decisions that may affect jobs, pay and future growth.

While the changes are designed to support public finances, business leaders have called for further support to offset the impact on employment and ensure sectors like hospitality and retail can recover and thrive.

Talk to us about your business costs.

Understanding your pension and how to maximise it.

The State Pension remains a foundation of retirement income for millions across the UK. Although private pensions and other investments often play a significant part in retirement plans, the State Pension provides a consistent baseline of support. Many people seek clear guidance on what to expect from the State Pension, especially when government policies evolve. Changes set for the 2025/26 tax year have prompted questions about how much pensioners will receive, how the system affects those who are planning to retire soon, and what individuals can do to stay informed. This guide addresses these questions and offers an overview of the updated State Pension system.

Overview of the new State Pension

The UK introduced the “new State Pension” for people who reach State Pension age on or after 6 April 2016. This new system replaced the old basic State Pension and additional State Pension (sometimes called SERPs or S2P). Its goal was to simplify retirement benefits and make them more transparent, but several changes have occurred over the years.

Under the new State Pension, you need at least ten “qualifying years” of National Insurance (NI) contributions to receive anything. You typically need 35 qualifying years to receive the full new State Pension. These are broad guidelines; some people who paid or received NI credits under the old system may have special situations, so it’s worth checking your own NI record to confirm your status.

From April 2025, the UK government will continue to determine State Pension amounts according to policies in place at that time. Although the official weekly figure for 2025/26 will depend on economic factors like inflation, average wage growth, and policy decisions, the triple lock (discussed in the next section) means that the new State Pension is expected to rise in line with either average earnings, inflation, or a minimum rate (2.5%), whichever is highest.

From April 2025, the full rate of the new State Pension will be £230.25 per week, while the old basic State Pension will be £176.45 per week.

Key takeaways:

• If you reach State Pension age on or after 6 April 2016, you fall under the new State Pension rules.
• You need at least ten qualifying years of NI contributions to receive any State Pension.
• You typically need 35 qualifying years to receive the full new State Pension.

Recent increases and the triple lock

The triple lock has been a cornerstone of the government’s approach to State Pension increases. It ensures that each year, the new State Pension rises by the highest of three measures:

1. Average earnings growth
2. Inflation (usually measured by the Consumer Prices Index, or CPI)
3. A flat 2.5%

Because of this policy, the new State Pension has risen significantly in some years, especially when inflation or wage growth has been higher. According to the UK Parliament’s data in recent years, pensioners often rely on the State Pension for more than half of their income. This underscores why each annual increase remains so important for retirees, especially during times of rising living costs.

State Pension age changes

The government has gradually increased the State Pension age over the past decade. This process affects both men and women. It is already 66 for most individuals, and it is set to become 67 between 2026 and 2028. The government has also explored raising the State Pension age to 68 earlier than planned, but those proposals usually require further parliamentary debate and public consultation.

For 2025, the State Pension age remains 66 for most people, though those who were born in specific years may face a shift to 67 if their birthday falls within the transition period. It’s wise to check the government website or use the official “Check your State Pension age” tool to see your personal pension age.

National Insurance contribution requirements

Your NI record is the foundation of your State Pension entitlement. Each tax year in which you pay or are credited with sufficient National Insurance contributions counts as one “qualifying year.” You need at least ten qualifying years to receive any portion of the State Pension, and around 35 qualifying years to receive the full new State Pension.

Ways to build your NI record:

• Pay NI contributions through employment: If you are employed and earn above a certain threshold, you automatically pay NI contributions.
• Pay NI contributions if self-employed: If you are self-employed, you pay Class 2 and/or Class 4 contributions depending on your profits.
• NI credits: If you receive certain state benefits (for example, Child Benefit for a child under 12), you may receive NI credits. These credits can fill in gaps for years when you are not working.
• Voluntary contributions (Class 3): If you have gaps in your record, you can pay voluntary contributions to top up certain years. You usually have up to six years to fill past gaps, but from time to time, the government extends these deadlines.

Special note for 2025/26

If you discover missing years in your NI record when you check in 2025, you may still be able to buy back some prior years – if the deadlines allow. Keep in mind that voluntary contributions might not always boost your State Pension if you already qualify for the full amount, so you should confirm before making payments.

Deferring the State Pension

You do not have to start claiming your State Pension as soon as you reach State Pension age. If you choose to defer, the amount you eventually receive will increase. The government calculates deferral increases daily, and you usually need to defer for a minimum period before seeing a rise in your weekly pension.

For the new State Pension, the deferral rate for each year you delay is roughly just under 5.8% extra per year (the precise rate can vary). This means that if you have other sources of income and do not need the State Pension right away, you might consider deferring. However, it can take several years of receiving a higher pension to offset the time you spent without payments. So you should review your personal circumstances and consider factors such as health, life expectancy, and current financial needs.

Possible impact on your personal finances

The changes in 2025/26 may influence your financial planning, especially if you are close to retiring or already in retirement. Here are some points to consider:

• Inflation and cost of living: If inflation remains high, an increase in the State Pension could help you keep pace with rising prices. At the same time, costs for essentials such as energy bills or groceries could offset some of the benefit of a pension increase.
• Other benefits and allowances: People who receive the State Pension may also qualify for other benefits, such as Pension Credit or Housing Benefit, depending on their income and circumstances. If the State Pension rises, it could affect how much help you get from these benefits.
• Interaction with private pensions: If you have a defined benefit or defined contribution pension, you may want to look at how your total retirement income will stack up. The State Pension can serve as a safety net, but it might not be enough on its own for your financial goals.
• Tax considerations: The State Pension counts towards your taxable income. If a rise in the State Pension pushes you into a higher tax bracket, you could end up paying more in income tax.

Stay aware of how the annual changes in State Pension rates could influence your tax situation. Many people in retirement find themselves with multiple sources of income – part-time work, private pensions, savings, or investments – so it can be helpful to forecast how an increase in the State Pension might affect your taxable income.

How to check and boost your State Pension

A few straightforward steps can help you understand your entitlements and increase your State Pension if you have gaps:

1. Check your State Pension forecast: The government’s website (gov.uk) offers a service where you can see your forecast based on your NI record. It will show you how many years you have, how many you need for the full amount, and any shortfalls.
2. Review your NI record: You can check your NI record online to see if there are any gaps. This information is crucial when deciding if voluntary contributions make sense for you.
3. Consider voluntary NI contributions: If you have empty or partially empty years in your record, think about paying voluntary Class 3 contributions to help you qualify for a higher State Pension. Ensure you seek guidance – sometimes from a professional adviser – before paying, because it might not always boost your pension.
4. Understand credits for carers: People who take time off work to raise children or look after someone with a disability may receive NI credits that count towards the State Pension. It’s important to confirm that you have received all the credits you are entitled to.
5. Stay up to date on government announcements: The government may extend deadlines or offer temporary concessions, such as the chance to buy back older missing years, which can help you fill longer-standing gaps.

The importance of staying informed

With each financial year, the State Pension rules can shift through legislative changes or new government initiatives. You might see proposals to adjust the triple lock, alter the State Pension age schedule, or change the contributions system. While not all proposals become law, it helps to stay aware of discussions in Parliament.

Reliable sources for up-to-date information include:

• uk (official government site with detailed explanations, calculators, and eligibility checkers).
• UK Parliament website (for legislative updates).
• Advisory services such as Citizens Advice or Pension Wise (for free guidance on retirement options).

Statistics from the Office for National Statistics (ONS) often offer insights into trends such as pensioner incomes, average lifespans, and employment patterns among older workers. These data points can give you a sense of where retirement planning stands on a national level.

Final thoughts

The State Pension remains an important building block of retirement security. Although private pensions, savings, and investments can be significant, many retirees rely on the State Pension for a sizeable part of their income. The updates expected in 2025/26 will likely continue the pattern of annual increases, but you should monitor official sources for the precise figures.

Paying attention to your National Insurance record and considering whether voluntary contributions could help you top up your future pension are good steps if you suspect shortfalls in your NI history. If you plan to retire around 2025 or slightly later, you should look at your anticipated State Pension age to see if you might be affected by any forthcoming age changes.

It can also help to reflect on how the new State Pension interlocks with your other sources of income. If the State Pension pushes your total earnings in retirement above certain tax thresholds, you should plan for that possibility. Meanwhile, if you have a smaller income, you should see whether you qualify for benefits such as Pension Credit. These decisions can benefit from professional advice, and many accountants, financial advisers, and charity services can guide you based on your individual circumstances.

The steps you take to check your forecast and NI record can make a difference. Accessing government services online and reading official guidance can confirm that you are on track to get the maximum amount for which you qualify. If you have a gap in your record, paying voluntary contributions might mean the difference between missing out on a higher payment or receiving a boost that could last the rest of your life.

Staying aware of potential changes is worthwhile, especially if you intend to retire in the near future. Even though the State Pension is only one part of your income in retirement, it can provide a dependable foundation. If you keep up with announcements and take a proactive approach to your NI record, you’ll be in a better position to ensure your State Pension meets your expectations.

Have any questions about your State Pension? Get in touch – we’re here to help.

According to a new survey from the Institute of Chartered Accountants in England and Wales (ICAEW), business confidence in the UK has dropped to its lowest level in two years.

The industry body found that rising tax concerns, persistent cost pressures, and weakening sales expectations weigh heavily on companies. Its business confidence index fell to -3 in the first quarter of 2025, down from 0.2 in the final months of 2024. This marks the weakest reading since late 2022.

ICAEW surveyed 1,000 chartered accountants, over half of whom (56%) cited tax increases as a growing challenge – the highest proportion since the survey began in 2004. The pressure comes after Chancellor Rachel Reeves raised employer National Insurance contributions as part of a £40 billion tax package introduced on 6 April.

Meanwhile, international headwinds are also adding to the strain. US President Donald Trump’s renewed trade war is expected to dent UK economic growth, with the National Institute of Economic and Social Research warning that high US tariffs could push GDP growth close to zero in 2026.

Despite stronger-than-expected growth in February, official figures show a 0.5% economic uptick and business sentiment remains fragile. Surveys suggest job shedding at levels not seen since the 2008 financial crisis, though official labour market data has painted a more resilient picture.

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The Bank of England (BoE) is now widely expected to cut interest rates in May, as escalating trade tensions sparked by Donald Trump’s tariff hikes weigh heavily on the global economic outlook.

President Trump has imposed a 10% tariff on all UK exports to the US (although a 90-day pause on proposed tariff hikes has been called), claiming it’s a response to British duties on American goods. The move follows US levies of 25% on UK steel, aluminium and cars. The UK Government has so far refused to retaliate, warning that it won’t be rushed into trade decisions.

With financial markets jittery and the risk of a global recession rising, investors expect at least three rate cuts from the BoE this year – up from two earlier. The Bank Rate currently stands at 4.5%, but three 25 basis-point cuts would bring it down to 3.75% by December. A former BoE policymaker has called for even faster action.

The Monetary Policy Committee (MPC) will next meet on 8 May. While the BoE has remained cautious about inflation, the threat to growth is becoming harder to ignore. After briefly hitting the 2% inflation target in May last year, inflation has since risen to 2.8%.

Meanwhile, BoE Governor Andrew Bailey has been nominated to chair the Financial Stability Board, a global organisation monitoring financial system risks. His appointment comes at a time of heightened concern about market volatility and the broader economic impact of US trade policy.

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