A Word on Markets—and the News Cycle

Following the recent headlines, it is very hard to ignore the ongoing tensions in the Middle East. It is a worrying situation on a human level, and, naturally, it raises questions about what it might mean for markets and your investments.

So let us take a step back and put things into perspective.

Do Geopolitical Events Impact Markets?

The short answer is: yes—but often less, and for less time, than many expect.

Markets can react quickly to uncertainty and you might see short-term falls, spikes in oil prices, or increased volatility, which is completely normal.

But what is more important is what happens next.

What Markets Have Actually Been Doing

If we look at recent performance, the picture is more reassuring than the headlines might suggest:

• UK equities have been remarkably resilient. The FTSE All-Share has risen around 23% over the 12 month period to 31^st March.
• Global equities have also held well, with broad indices like MSCI World delivering around 16% over the 12 month period despite being nearly 2% down so far in 2026.

In other words, markets have remained strong —even against a backdrop of geopolitical tension, trade disputes, and economic uncertainty.

That is not because these events do not matter. It is because markets tend to focus on the longer-term path of earnings and growth, rather than reacting permanently to short-term shocks.

Why This Matters Right Now

The current Middle East situation is being closely watched, particularly for its potential impact on oil prices and inflation.

But so far, the effect on major equity markets has been contained rather than structural. We have seen some volatility—but not the kind of sustained decline you might expect if the global economic outlook had materially worsened.

This is consistent with history: markets tend to digest geopolitical shocks relatively quickly, unless they trigger a deeper economic impact.

A Helpful Perspective: UK vs Global Markets

One interesting takeaway from the past year is that returns have not just been driven by one region:

• The UK market, often seen as “unloved,” has actually been one of the stronger performers recently.
• Global markets remain diversified, with leadership rotating between regions rather than relying on a single driver.

Over longer periods, global indices like MSCI World and FTSE All-World have delivered broadly similar outcomes, even if leadership shifts year to year.

For investors, this reinforces a simple but powerful idea: diversification works.

What Should Investors Do?

Moments like this can feel uncomfortable, but they are also where discipline matters most.

• Avoid reacting to headlines
  News flow can change daily—but your investment strategy should not.

• Stay diversified
  Different regions perform at different times. The last year is a great example of this.

• Focus on the long term
  Markets have consistently moved higher over time, despite periods of uncertainty along the way.

A Final Thought

It is completely natural to feel uneasy when geopolitical tensions dominate the news.

Our Flagship portfolios have relatively modest exposure to the region, and this is indirect and diversified – through multi-asset funds with allocations to emerging markets and frontier market equities.  Direct exposure to Iranian assets is zero, due to the international sanctions already in place.  These allocations are diversified by design and do not represent concentrated geopolitical bets. 

This episode reinforces a principle we have long held: 

Geopolitical events are inherently unpredictable. Their investment implications become manageable when portfolios are diversified, disciplined and aligned to long-term objectives. 

Diversification is never a guarantee against loss, but it remains one of the most effective tools available to mitigate the impact of any single shock. 

As always, we continue to apply our philosophy of preparing, not predicting — seeking to help clients navigate uncertainty, while keeping long-term outcomes firmly in focus. 

As always, if you have any questions or want to talk through your investments, we are here to help.

What the November Autumn Statement Meant for UK Savers and Investors

While much of the November Autumn Statement focused on the broader economy, several tax changes announced last year, will directly affect UK savers and investors — with the first major changes starting in April 2026.

For long-term investors, tax does not usually drive strategy. But it does affect net returns — and over time, that compounds. Here is what is changing and what it could mean in practice.

1. Higher Dividend Tax from April 2026

From April 2026, dividend tax rates will rise by 2 percentage points:

• Basic rate: 8.75% → 10.75%
• Higher rate: 33.75% → 35.75%
• Additional rate remains at 39.35%

This matters if you hold dividend-paying shares or income funds outside tax wrappers such as ISAs or Pensions.

For example, a higher-rate taxpayer receiving £10,000 of dividends currently pays £3,375 in tax. From April 2026, that rises to £3,575. It may not sound dramatic in isolation, but over many years it reduces the compounding power of reinvested income.

Investments held inside ISAs or Pensions remain unaffected.

2. Higher Tax on Savings and Rental Income (from April 2027)

From April 2027, tax rates on savings interest and property income will also increase by 2 percentage points:

• Basic rate: 20% → 22%
• Higher rate: 40% → 42%
• Additional rate: 45% → 47%

For savers holding cash outside ISAs, this means lower after-tax returns on interest. With interest rates still higher than they were a few years ago, more people are now breaching their Personal Savings Allowance — so the impact may be wider than expected.

Buy-to-let investors will also feel the effect, as rental profits will be taxed more heavily.

3. ISA Changes

The overall Annual ISA Allowance remains at £20,000. However, from April 2027, the amount that can be allocated specifically to a Cash ISA will be reduced to £12,000 for most people under the age of sixty-five.

This effectively nudges savers toward investing rather than holding large sums in cash within tax shelters. Those wanting to protect more than £12,000 in cash from tax may need to consider how they allocate across different wrappers.

4. Fiscal Drag Continues

Income Tax thresholds remain frozen. This is not a new announcement, but it continues to have an impact.

As wages rise with inflation, more people are gradually pulled into higher tax bands — increasing the tax paid on earnings, dividends and savings income, without headline rate rises.

For investors, this means that over time, more portfolio income may be taxed at higher marginal rates.

What Should Investors Consider Now?

These changes do not require dramatic action — but they do reinforce some long-standing principles of sensible tax planning.

1. Make Full Use of ISA Allowances

ISAs remain one of the most powerful tools available. Dividends, interest, and Capital Gains inside an ISA are tax-free.

For couples, that is up to £40,000 per year sheltered between them.

If you are holding taxable investments outside wrappers, gradual “Bed & ISA” strategies could help reduce future tax exposure.

2. Review Asset Location

It can be tax-efficient to hold:

• Dividend-heavy equity funds inside ISAs or pensions
• Interest-bearing assets inside wrappers where possible
• Taxable accounts focused more on growth assets with lower natural income

Small structural changes can improve after-tax outcomes without altering your overall investment strategy.

3. Reassess Cash Holdings

With the future cash ISA limit reduced, holding large amounts of taxable cash may become less attractive — particularly once higher savings tax rates arrive in 2027.

For long-term money, investors may want to review whether excess cash could be working harder, while still maintaining appropriate emergency reserves.

4. Consider Pension Contributions

Pensions remain highly tax-efficient, particularly for higher-rate taxpayers receiving tax relief at 40% or 45%.

While there are some changes to salary sacrifice rules over time, Pensions continue to be one of the most effective long-term planning tools.

5. Do Not Let Tax Drive Investment Risk

The temptation when tax rises, is to chase alternatives or take unnecessary risk to “offset” it. That is rarely wise.

Investment strategy should remain aligned to your goals, time horizon and risk tolerance. Tax efficiency enhances returns — but it should not override disciplined portfolio construction.

The Bigger Picture

None of these changes fundamentally alter the case for long-term investing. Markets, inflation and economic growth will matter far more to portfolio outcomes over the next decade than a 2% shift in tax rates.

However, in a world where returns may be more modest than in the ultra-low interest rate era, preserving what you keep becomes increasingly important.

As always, thoughtful use of tax wrappers, sensible asset allocation and a long-term mindset remain the foundations of successful investing.