Market & Policy Overview
After digesting the Chancellor’s Autumn Statement, we find ourselves with mixed feelings. On the upside, the widely speculated changes to Pension contribution limits and tax‑free cash did not come to pass. On the downside, the move to include unspent Pensions within Estates for Inheritance Tax is still set to proceed.
The Pensions industry has expressed strong opposition, particularly around the added complexity and administrative burden this places on personal representatives. Despite this, the only concession offered so far is that Executors may request providers to retain 50% of a Pension pot for 15 months to cover potential tax liabilities.
These developments have prompted many clients to reassess their long‑term financial planning. With dividend income and savings interest facing higher taxation, this is a timely moment to review whether your strategy remains tax‑efficient in today’s shifting landscape.
Government Messaging on Investing
The Chancellor struck a notably positive tone on long‑term investing, highlighting that a regular stock market saver since 2001 would now be over £50,000 better off than someone who held cash throughout. As Aquila clients, this insight will feel familiar.
However, the decision to cut the Cash ISA limit by £8,000 for under‑65s may not be enough to turn the UK into a “nation of investors,” especially given that the average one‑off ISA deposit remains just over £6,000.
Market Reaction & Bond Stability
With memories of the Truss/Kwarteng budget turmoil still fresh, we were relieved to see gilt markets stabilise quickly following the OBR’s early‑release mishap, which briefly rattled confidence. The FTSE 100 also ended that day in positive territory.
Meanwhile, the UK continues to grapple with significant debt servicing costs: £1 in every £10 of tax revenue is now spent purely on interest payments. Managing the nation’s finances remains a substantial challenge.
Global Market Highlights
S&P 500: A Pause After Two Record Years
After two years of 20%-plus gains—a run not seen since the late 1990s—the S&P 500 has posted more modest returns of around 11% year‑to‑date. Notably, around three‑quarters of this growth has again been driven by the “Magnificent 7,” whose influence on global markets remains immense.
FTSE 100: Quietly Strong
The FTSE 100 has delivered an impressive 23% gain this year. The index moved past 9,000 in July and came within a few ticks of 10,000 in November. This strength reflects a search for stability and a hedge against a softer US Dollar, more than a booming domestic economy.
As we move into December, we will see whether the traditional “Santa Rally” can push the index through that symbolic 10,000 level.
Looking Ahead
As policy landscapes shift and markets evolve, we continue to monitor the opportunities and risks on your behalf. If recent changes leave you questioning whether your financial plan remains efficient and aligned with your goals, we are here to help.
Please get in touch if you would like to review your investment or tax‑planning strategy.
