Category: news

After Rachel Reeves’ impactful first Budget in autumn 2024, you might have been concerned about the announcements that would be included in her Spring Statement on 26 March 2025.

Reassuringly, the major headline from this year’s springtime fiscal event is that Reeves made few announcements that are likely to affect you and your personal finances directly. Although, it did reveal that none of the changes made in the Autumn Budget would be overturned. However, one significant change has been made to the High Income Child Benefit Charge, which could affect you or your family.

The chancellor did announce that, due to global uncertainty and after the economy declined in January, the Office for Budget Responsibility (OBR) has downgraded its 2025 forecast for UK growth from 2% in October 2024 to 1% as of March 2025. She also noted the OBR’s long-term forecast, indicating that growth would increase for each year remaining in this parliament.

In addition to growth figures, the chancellor’s Statement introduced a range of measures designed to increase economic activity in the UK, as well as cost-saving initiatives, predominantly at state level, to reduce government debt.

Read on for your summary of the chancellor’s 2025 Spring Statement.

Personal tax thresholds and allowances are set to remain unchanged

Those who were concerned the chancellor would announce sweeping changes that might affect their personal finances will be breathing a sigh of relief as many worries didn’t materialise.

Personal tax

Reeves stuck to a pre-Spring Statement commitment to not increase personal taxes.

So, Income Tax thresholds and rates will remain unchanged, and thresholds are frozen until April 2028. As a result, your Income Tax liability is likely to rise in real terms.

Similarly, the rates and thresholds for paying Capital Gains Tax (CGT) and Dividend Tax will remain the same.

Individual Savings Accounts (ISAs) 

Before the Spring Statement, the government was reportedly considering reducing the amount you can tax-efficiently place in a Cash ISA each tax year to £4,000 in a bid to encourage greater investment.

The good news is the ISA subscription limit will remain at the current level (£20,000) in the 2025/26 tax year. The ISA subscription limit is frozen until 2030.

The Junior ISA (JISA) allowance will remain at £9,000 in 2025/26.

However, the government did note it will continue reviewing ISA reform options to improve the balance between cash and equities to earn better returns for savers, boost the culture of retail investment, and support its growth mission.

Pensions

Last year, the government announced a new Pension Schemes Bill, which will legislate several areas of pension policy. However, further reforms weren’t announced in the Spring Statement.

The Annual Allowance will remain at £60,000 in 2025/26. Your Annual Allowance may be lower if your income exceeds certain thresholds or you have already flexibly accessed your pension.

As usual, there was also speculation that the amount you could withdraw from your pension tax-free would be reduced, but this has remained unchanged. So, when you reach the normal minimum pension age (55, rising to 57 in 2028), you may withdraw up to 25% of your pension (up to a maximum of £268,275) before paying Income Tax.

State Pension

As expected, there were no announcements relating to the State Pension or the triple lock, which guarantees the State Pension will increase every tax year by either the rate of inflation, average earnings growth, or 2.5%, whichever is higher.

As a result, the full new State Pension will pay a weekly income of £230.25 in 2025/26.

High Income Child Benefit Charge reforms will come into place this summer

Although the chancellor did not explicitly announce the change, the Spring Statement document revealed that those who pay the High Income Child Benefit Charge will be able to do so through PAYE from summer 2025.

As it stands, those who pay the charge need to register for self-assessment to do so, even if they do not otherwise need to self-assess. But this year, the government is making it easier for families to pay the charge without needing to submit a tax return.

Inflation is forecast to meet the Bank of England’s 2% target by 2027

After reaching a 40-year high of 11.1% in October 2022, inflation, as measured by the Consumer Prices Index (CPI), has gradually fallen, bringing it closer to the Bank of England’s (BoE) target of 2%.

The chancellor announced in her Statement that in the 12 months to February 2025, inflation rose by 2.8%, down from 3% in January. Now that inflation is better under control, the BoE has cut its base rate three times since the general election, bringing the rate down from 5.25% to 4.5%. These cuts mean borrowers will likely pay less while savers may see their interest payments fall.

It was then announced that, according to the OBR’s forecast, inflation will average:

• 3.2% in 2025
• 2.1% in 2026
• 2% in 2027, 2028, and 2029 – the BoE’s target rate.

The key fiscal announcements from the 2025 Spring Statement

The chancellor’s speech largely revolved around changes to government spending and investment. Some of the key measures and announcements included in the Statement were to:

• Increase defence spending to 2.5% of GDP by 2027, including providing an additional £2.2 billion to the Ministry of Defence next year
• Rebalance payment levels in Universal Credit to incentivise people into work, and review the assessment for Personal Independence Payments, with the OBR stating these changes will save £4.8 billion from the welfare budget in 2029/30
• Crack down on promoters of tax avoidance schemes, as initially announced in the Autumn Budget in October 2024
• Invest £2 billion in social and affordable housing, so housebuilding reaches a 40-year high that helps put the government on track to reach its target of building 1.5 million homes by the end of this parliament
• Introduce a £3.25 billion Transformation Fund to streamline public services using technology and Artificial Intelligence, making the government “leaner and more efficient”. Additionally, government departments will reduce their administrative budgets by 15% by the end of the decade.

2024 Autumn Budget changes remain intact

In October 2024, the chancellor announced a series of tax-raising measures during the Autumn Budget, some of which could have affected your personal finances. These included:

• Inheritance Tax (IHT) will be levied on unused pension benefits from April 2027.
• Agricultural Property Relief and Business Property Relief will be reduced from April 2026.
• CGT rates for non-property gains were raised in line with property rates with immediate effect, and Business Asset Disposal Relief and Investors’ Relief were both reduced.
• Employer National Insurance contributions (NICs) will rise from April 2025, from 13.8% to 15%, and the threshold at which employers start paying NICs will also fall.
• Income Tax thresholds will remain frozen until 2028.
• The IHT nil-rate bands will remain fixed for a further two years, until 2030.
• VAT was levied on fee-paying schools, effective from 1 January 2025.
• The non-dom tax regime is set to be abolished from April 2025.
• The Stamp Duty Land Tax surcharge on second home purchases rose from 3% to 5% from 31 October 2024.
• Corporation Tax is now capped at 25% for the duration of the parliament.

While many hoped the chancellor would row back on some or all of these measures, all remain intact.

Please note

All information is from the Spring Statement documents on this page.

The content of this Spring Statement summary is intended for general information purposes only. The content should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

While we believe this interpretation to be correct, it cannot be guaranteed and we cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained within this summary. Please obtain professional advice before entering into or altering any new arrangement.

You’ve probably noticed that the Blue Wealth team loves sport, and we’re dedicated to supporting our local community.

So, what better way to combine the two than by sponsoring a local football team?

Keep reading to find out more.

A little bit about Torpedo AFC

Torpedo AFC is a Bristol-based senior football team (for players aged 16 and over) that was established in 1966.

The club is represented by four teams in the Bristol Downs Association Football League, with one team in each of the league’s four divisions. This is a standalone amateur league that was founded in 1905 and sits outside the traditional English football league pyramid.

The league has a unique format where all games are played on the same grounds – Clifton Down and Durdham Down (“The Downs”). We can’t wait to drop by and see the team in action!

Past successes and upcoming fixtures

The club has a long and proud history, and we’re excited to support them. Here are just a few of their many achievements to date:

• Rising through the ranks of the Bristol Downs Association Football League to achieve entry into the First Division
• Winning the Division 1 Championship in the 2015/16 season
• Winning the All Saints Cup in 2023/24.

The club’s promotion to and consistent presence in the top division of their local league shows the level of the players’ commitment and success.

If you’re keen to see Torpedo AFC in action, they play every Saturday (between September and April) on the Bristol Downs. So, when you next have a free weekend, pop by and cheer the team on. If you spot one of the Blue Wealth team on the sidelines, be sure to come and say hello.

The Blue Wealth kit

The Bristol Downs League has been uniting families, friends and the community for the last 120 years. So, when we got the chance to sponsor Torpedo AFC by providing their new kit, we were thrilled.

If you’re lucky enough to see the team play, you might spot the Blue Wealth name on the players’ shirts. As you can see from the photo – it looks great!

Our managing director, Rob Bowers said, “We are keen to support local events including amateur sport. With the Bristol Downs League venue only a 1/4 mile from the Blue Wealth office, supporting one of the teams in this grassroots football league seemed an obvious choice.”

If you’d like to find out more about the wonderfully unique Bristol Downs Football League, check out the fantastic nine-episode BBC podcast, Always at Home: Bristol’s Beautiful Game.

And as always, if you have any questions about Blue Wealth and how we can support you with all your financial planning needs, we’d love to hear from you.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

The tax year end on 5 April is rapidly approaching , so you have just a few weeks left to make the most of your tax allowances and exemptions for 2024/25.

What’s more, chancellor Rachel Reeves announced significant tax changes for business owners in her Autumn Statement last year, many of which come into effect from 6 April.

It’s important to understand how these new rules could affect your finances so that you can plan for the new tax year and beyond.

Read on to discover three important tasks to check off your to-do list if you want to keep your personal and business finances as tax-efficient as possible.

1. Make the most of your pension Annual Allowance

If you’ve ever uttered the words, “my business is my pension”, and paying into a separate scheme is low on your list of priorities, you’re not alone. According to This is Money, just 51% of business owners pay into a pension each month.

However, relying on your business to fund your retirement might be a risky strategy.

External factors could affect both the income your company generates and how much wealth you walk away with if you sell. For example, planned changes to Business Asset Disposal Relief (BADR) could mean that you incur a higher Capital Gains Tax (CGT) bill if you sell your company after 5 April (more on this later).

Alternatively, it might be difficult to access the funds you have tied up in your business when you retire.

That’s why paying into a pension and making the most of your Annual Allowance can provide valuable peace of mind.

Your Annual Allowance is the maximum amount you can contribute to your pension in a single tax year without facing an additional tax charge.

Most people can contribute up to £60,000 – the Annual Allowance for the 2024/25 tax year – or 100% of their earnings, whichever is lower.

Your Annual Allowance may be lower if your income exceeds certain thresholds or you have already flexibly accessed your pension.

Remember too that you can carry forward unused Annual Allowance from the previous three tax years. So, 5 April could be your last chance to make the most of any unused allowance from the 2021/22 tax year.

2. Prepare for changes to employer National Insurance rates

In her Autumn Budget, the chancellor announced that the rate of National Insurance (NI) you pay as an employer will increase by 1.2% from 6 April to 15%.

The threshold at which you start to pay NI will also be reduced from £9,100 to £5,000 a year from the start of the 2025/26 tax year. This threshold will remain frozen until 6 April 2028 and then increase in line with the Consumer Prices Index (CPI) thereafter.

While the Employment Allowance will increase from £5,000 to £10,500, and become available to all businesses from 6 April, changes to the NI rates for employers could have significant cost implications for your company.

As such, you might want to consider paying any planned bonuses before the April increase.

Additionally, switching to a “salary sacrifice” scheme could help you mitigate the effect of these changes. This means reducing your employees’ cash pay in exchange for a non-cash benefit, such as pension contributions.

The main benefit of salary sacrifice is that both you and your employees are likely to pay less NI, as the rate is calculated based on employees’ earnings. What’s more, your staff could see their take-home pay increase.

So, implementing such a scheme may make financial sense. There could be non-financial benefits too, such as boosting employee morale and helping you attract and retain talent.

3. Dispose of personal and business assets strategically

In the build up to the Autumn Budget, there was widespread speculation that CGT rates would be brought in line with Income Tax rates.

While the chancellor did not go quite this far, she did increase some CGT rates, which took effect immediately (from 30 October 2024).

CGT rose from 10% to 18% for basic-rate taxpayers, and from 20% to 24% for higher-rate taxpayers. There are no longer separate rates for residential property disposals.

Thankfully, the Annual Exempt Amount – which is the amount of profit you can make when you sell chargeable assets before CGT becomes payable – remains unchanged. It stands at £3,000 for the 2024/25 tax year.

So, if you’re planning to sell any of your assets, it might be worth doing so strategically. For example, you could spread sales over several tax years to avoid exceeding your Annual Exempt Amount. Alternatively, you might want to transfer assets to your spouse or civil partner to make use of their Annual Exempt Amount.

As mentioned previously, the chancellor also announced changes to BADR in her Budget.

If you’re eligible for BADR – which allows you to pay less CGT when you dispose of all or part of your business – the rate of CGT will rise from 10% to 14% from 6 April 2025, and to 18% from 6 April 2026.

As such, if you’re considering selling your business or shares in a business, you may want to do so before the new rates take effect.

Get in touch

Professional financial advice could play a key role in helping you manage your business and personal finances tax-efficiently.

If you’d like help preparing for the tax year end or planning for the year ahead, we’d love to hear from you.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

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. Past performance is not a reliable indicator of future performance.

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.

Workplace pensions are regulated by The Pension Regulator.

Approved by Best Practice IFA Group 17/03/25

When a new tax year starts, many allowances reset. So, checking if you could use these valuable allowances before 5 April 2025, when the 2024/25 tax year ends, might help your money go further.

It’s important to understand which allowances fit into your financial plan and suit your goals. So, this guide could help you assess which allowances you might want to use before the current tax year ends.

The guide explains the:

1. ISA allowance
2. Junior ISA allowance
3. Dividend Allowance
4. Capital Gains Tax Annual Exempt Amount
5. Marriage Allowance
6. Pension Annual Allowance
7. Inheritance Tax annual exemption

Download your copy here: ‘7 allowances you might want to use before the end of the 2024/25 tax year’ to find out more now.

If you have any questions about using allowances before the end of the tax year or managing your finances in the new 2025/26 tax year, please get in touch.

On 30 October 2024, chancellor Rachel Reeves announced a number of tax changes as part of her Autumn Budget.

One of the most significant – at least in terms of estate planning – was the inclusion of unused pension funds and death benefits in a person’s estate for Inheritance Tax (IHT) purposes.

Indeed, PensionsAge has reported that more than 150,000 estates may be affected by this amendment to current rules.

While this change is not due to take effect until April 2027, it could have important implications for your pensions and estate plan. As such, it’s worth getting to grips with the new rules and potentially, reconsidering how you want to pass on your wealth to loved ones.

Keep reading to learn more.

Pensions currently offer a tax-efficient way to pass on your wealth to loved ones

Your beneficiaries may face an IHT bill when they inherit your wealth if the value of your estate exceeds the following thresholds:

• £325,000 for most estates – This is your “nil-rate band”.
• £175,000 when passing on a home to your children or grandchild – This is your “residence nil-rate band”. Your residence nil-rate band may be reduced if your estate exceeds £2 million in total.

The government has frozen these thresholds at current levels until 2030.

You could combine these two IHT-free thresholds and pass on up to £500,000 tax-free – or up to £1 million as a couple.

Additionally, you can usually leave assets to your spouse or civil partner without triggering an IHT charge.

Any portion of your estate that you do not leave to a spouse or civil partner or that exceeds the IHT thresholds, is usually taxed at 40%.

However, under current rules, your pension is not considered part of your estate for tax purposes. As such, pensions can provide an effective way to pass on your wealth tax-efficiently.

Yet, it’s important to note that the Lump Sum and Death Benefit Allowance (LSDBA) limits the overall amount that your beneficiaries can take from your pension scheme without incurring a tax charge. This only applies if you die before you turn 75.

Inheritance Tax changes could result in a “double tax” on pensions

From April 2027, pensions will no longer be exempt from IHT. So, if your estate exceeds the tax-free thresholds, any unused pension savings will be included in IHT calculations.

According to figures from the UK government, this change could increase the average IHT bill by £34,000.

What’s more, if you pass away after the age of 75, your beneficiaries will pay Income Tax at their marginal rate when they draw from your pension.

This could mean that any pension savings you leave for your loved ones are diminished by a “double tax” – IHT and Income Tax.

So, if you’re currently relying on using your pension to help mitigate IHT, it might be worth reviewing your estate plan.

3 practical ways to address the planned Inheritance Tax changes

Fortunately, there are several ways you could mitigate a potential IHT bill, in light of the planned changes.

1. Gift some of your wealth during your lifetime

You could reduce the value of your estate and a potential IHT bill by gifting some of your wealth to loved ones during your lifetime.

In the 2024/25 tax year, you are entitled to the following gifting allowances and exemptions:

• Annual exemption – Allows you to gift up to £3,000 to one or multiple people. You can carry forward any unused exemption to the following tax year – but only for one tax year.
• Gifts for weddings or civil partnerships – You can give up to £5,000 to a child, £2,500 to a grandchild or great-grandchild, and £1,000 to any other person.
• Small gift allowance – You can give as many gifts of up to £250 each tax year as you wish (provided that you have not used another allowance on the same person).
• Gifting from surplus income – This rule allows you to pass on money from your income directly rather than gifting from savings. Theoretically, there is no limit to the amount you could gift in this way, although you must meet the strict criteria to qualify for this exemption – payments must be made regularly, you must be able to maintain a reasonable standard of living while giving the gifts, and your gifts should come from surplus income.

Beyond these annual gifting exemptions, most other gifts you give are likely to be “potentially exempt transfers” (PETs).

Any PETs will usually fall outside your estate for IHT purposes, provided that you live for more than seven years after giving the gift. However, if you die within seven years, taper relief rules may apply.

This means that the amount of IHT due will be calculated based on how soon you die after making the gift.

The table below shows how IHT relief tapers for PETs:

Bear in mind that PETs will be the first part of your estate assessed against your nil-rate band. So, if you die within seven years of making PETs that do not exceed your nil-rate band, there will be no taper relief.

2. Leave your pension to your spouse or civil partner

Any wealth – including pensions – you leave to your spouse or civil partner is usually exempt from IHT. So, passing your pension savings on to them could be an effective way to mitigate your IHT liability.

However, your pension will not automatically transfer to your spouse or civil partner when you die; you need to actively nominate them as a beneficiary.

You can usually do this by contacting your pension provider and completing an “expression of wish” or “nomination of beneficiaries” form.

If you have multiple pensions, it’s important to make arrangements with each provider to ensure that your spouse or partner benefits from your full pension entitlement.

You might also want to update any expression of wish forms you have completed previously, for example, if an ex-partner is named as a beneficiary.

It’s worth noting that while your partner or spouse may not incur an IHT charge if you pass your pension on to them, they will still have to pay Income Tax on any withdrawals they make if you die age 75 or older.

3. Place life insurance in a trust

Calculating your IHT liability and setting up a life insurance policy for this amount may provide invaluable peace of mind.

Your beneficiaries could use the insurance payout to cover a potential IHT bill, which may alleviate some of the stress and financial pressure they may otherwise experience after you’re gone.

What’s more, placing your life insurance in a trust could mean that the payout will not form part of your estate for tax purposes and as such, will not be subject to IHT.

Additionally, your loved ones may receive their inheritance more quickly, compared to going through the probate process which can take months or more.

Get in touch

If you’re concerned about the upcoming changes to IHT and pensions, we can help you review and update your estate plan.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

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 Financial Conduct Authority does not regulate estate planning or tax planning.

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. Past performance is not a reliable indicator of future performance.

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.

Remember that taper relief only applies to gifts in excess of the nil-rate band. It follows that, if no tax is payable on the transfer because it does not exceed the nil-rate band (after cumulation), there can be no relief.

Taper relief does not reduce the value transferred; it reduces the tax payable as a consequence of that transfer.

Note that life insurance plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Approved by Best Practice IFA Group 11/02/2025

At Blue Wealth, we love what we do and work hard throughout the year to help you achieve your financial and life goals.

So, when December rolls around, we’re ready to let our hair down and celebrate our efforts at the team Christmas party.

Gatsby glad rags

Our end-of-year get-together took place on Friday 13 December, at the newly renovated Delta Hotels by Marriott in the heart of Bristol city centre.

The whole Blue Wealth team and partners turned up to enjoy some festive fun.

Our theme for the evening was The Great Gatsby. If you’ve read this classic novel by F. Scott Fitzgerald or seen one of the many screen and stage adaptations, you’ll know that this gripping story was set in the roaring 1920s.

We had great fun dressing up in suits, flapper-style dresses, sequins and glitz!

Delicious food and first-class entertainment

The party began with an excellent three-course meal, including turkey and all the Christmas trimmings.

We then moved on to a spot of gambling (with novelty money) at the casino tables, before singing and dancing the night away to music performed by an outstanding live band – there were some impressive moves on the dancefloor!

It was a brilliant evening and a great opportunity to get the team together to mark the end of another successful year.

Now that January is in full swing, we’re back hard at work and looking forward to developing Blue Wealth in 2025.

Keep your eyes on your email for news of our next social and charity events.

Get in touch

If you’d like to find out more about the Blue Wealth team and learn how we can help you with your financial planning needs, we’d love to hear from you.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

January is the perfect time to reflect, set new financial goals, and seek out ways to make positive changes.

While it might be easy to identify unhelpful habits you’d like to adjust, understanding the “hidden” emotions that drive these behaviours could be more of a challenge.

Yet, becoming aware of why you behave in certain ways could unlock your potential for positive change – until you know the problem, it may be hard to find a solution.

Indeed, when it comes to financial decision-making, your subconscious mind might play a significant role.

Read on to find out how overcoming these four common psychological biases – unconscious and systematic errors in thinking – could help you make better financial choices in 2025 and beyond.

1. Loss aversion

According to the Nobel prize-winning psychologist and economist Daniel Kahneman, “losses loom larger than gains”.

This “loss aversion” could skew your perception of risk and lead you to make financial decisions based on your emotions, rather than data and logic.

For example, if there is a downturn in the market and your investments fall in value, your knee-jerk reaction might be to sell your assets to avoid or minimise losses. Yet, this essentially turns a paper loss into an actual one, potentially jeopardising your progress towards your long-term goals.

On the other hand, staying calm and holding on to your investments could allow them to bounce back in value if the markets recover.

Loss aversion might also drive you to favour low-risk investments that limit your returns.

Overcoming loss aversion

• Focus on your long-term goals and avoid reacting to short-term fluctuations in the market.
• Make financial decisions based on data and logic rather than your emotions.
• Seek objective advice from a financial planner who can help you balance risk effectively.

2. The endowment effect

This psychological bias could lead you to place a higher value on assets you own, compared to those you don’t.

If you’re emotionally invested in this way, you might find it difficult to sell your assets, even if this might be the most logical financial decision.

The endowment effect often goes hand in hand with loss aversion – you’re less likely to sell something if you feel this would equate to making a loss.

Indeed, in a classic 1990 study by Kahneman and his colleagues, published by Science Direct, participants who were given a mug were reluctant to trade it for an item of similar value. What’s more, the amount they were willing to pay to purchase an item was typically much lower than the amount they were willing to sell it for.

This shows how the endowment effect can act as a powerful psychological bias that could lead you to make irrational valuations of the assets you own.

Overcoming the endowment effect

• Create a solid investment strategy that includes a clear plan of when to buy and sell assets.
• Regularly review and rebalance your investment portfolio with the help of a financial planner.

3. The sunk cost fallacy

You’ve probably heard of the saying, “throwing good money after bad”. This is the simplest way to understand the “sunk cost fallacy”.

If you’ve ever doggedly continued with a financial strategy that isn’t working, because you’ve invested “too much” time, money, and effort to change course, that’s the sunk cost fallacy at work.

For example, you might continue to pour money into maintaining and marketing a rental property, even though you struggle to find regular tenants who can provide a worthwhile income.

While investing for the long term is often a valid strategy, if you’re continually investing in an asset that is underperforming, it’s important to objectively weigh up your options rather than holding tight for emotional reasons.

Overcoming the sunk cost fallacy

• Set clear goals and track the performance of your investments.
• Look forwards rather than backwards – acknowledge the “sunk cost” but base your decisions on your long-term plan rather than how much you’ve invested in the past.

4. Confirmation bias

Confirmation bias refers to the human tendency to seek out information that supports our pre-existing beliefs.

Perhaps you feel that investing is “too risky” or that financial protection is not for you because you think that insurers never pay out. Confirmation bias might draw your attention to news headlines and loved ones’ experiences that seem to validate these beliefs, such as stories about insurance companies that refused to pay out on a seemingly legitimate claim.

Unfortunately, this kind of irrational thinking could leave you stuck repeating the same financial mistakes over and over again.

For example, you might miss out on valuable investment opportunities that could help you progress towards your long-term goals, or fail to take out adequate financial protection, which could provide a valuable safety net.

Overcoming confirmation bias

• Conduct unbiased research from a variety of sources before making any financial decisions.
• Use your trusted financial planner as an objective sounding board.

Get in touch

Becoming more aware of any psychological biases you might have could be a crucial first step towards more informed financial decision-making.

You may not be able to stop yourself from feeling certain emotions. Yet, understanding the reasons behind your financial behaviours could help you put strategies in place to overcome your biases and make data-driven, logical decisions.

If you’d like an objective perspective on your finances and to learn how to make decisions based on data and logic rather than emotions, we can help.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

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.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Approved by Best Practice IFA Group 20/01/25

In our October team update, we introduced you to our new charity partner for the year, Community of Purpose.

This award-winning, not-for-profit social enterprise offers a range of programmes to engage and support young people in Bristol.

We recently held a wine-tasting event in Clifton to show our appreciation for our clients while also raising funds for this meaningful cause, and we can’t wait to tell you all about it…

An evening of wine, celebration, and socialising

On Wednesday 27 November, the Blue Wealth team joined 50 clients and contacts for a wonderful wine-tasting event at Averys in Bristol.

This client appreciation evening was a great opportunity to get together, have fun, and raise money for Community of Purpose.

The event kicked off with a champagne reception, followed by an introduction from the Blue Wealth team. We were exceptionally proud to take to the stage and celebrate our recent inclusion in the New Model Adviser (NMA) Top 100 for the first time.

Next, the wine tasting began. We enjoyed three white wines, accompanied by a delicious selection of cheese and meats.

Halfway through the evening, Amy Kingston, the co-founder of Community of Purpose, gave an informative and insightful talk about the charity’s work. She also shared details about how to donate to this worthy cause.

Amy’s speech about all the great work her charity does for children in Bristol was truly inspirational and we have had lots of positive feedback.

We rounded off the event with three beautiful red wines. Again, these were sampled alongside some tasty cheeses and meats.

Thank you to all those who attended and made this a special evening. We’re looking forward to seeing you at our next event and raising more funds for our worthy charity partner.

Get in touch

If you’d like to talk to us about our charity fundraising, future events, or how we can work with you to meet your financial planning needs, we’d love to hear from you.

Please email us at hello@bluewealth.co.uk or call us on 0117 332 0230.

Putting your feet up and indulging in a festive film or two is a perfect way to relax, spend time with family, and enjoy the Christmas holidays.

You probably have a few favourites you like to watch each year. Whether they make you laugh or cry, these classics entertain you every time.

But did you know that many of these films you love so much could also offer invaluable financial lessons?

Read on to find out what three of the most popular Christmas films could teach you about managing your wealth in 2025 and beyond.

1. Home Alone – Preparing for the unexpected could provide valuable financial security

Released on 7 December 1990, Home Alone has become a modern Christmas classic enjoyed by children and adults of all ages.

The film tells the story of eight-year-old Kevin McCallister, who is accidentally left behind when his family go on holiday over Christmas.

At first, Kevin is delighted to have the house to himself and enjoys the freedom of eating ice cream in bed and watching whichever films he likes.

Yet soon, a pair of hapless burglars attempt to break into the property believing it to be empty. Kevin must then protect his home by creating a range of elaborate DIY booby traps to send the criminals on their way.

As well as being hugely entertaining, the film contains several valuable messages about protecting your finances against the potential effect of unexpected events.

When Kevin finds himself alone, he has no money or resources to buy everyday essentials, such as food and laundry detergent. Fortunately, he discovers his brother Buzz’s secret stash of cash, which Kevin uses to stock up with supplies.

This highlights the importance of keeping an emergency fund. Kevin was lucky that Buzz had saved some money. Without these funds, he might have gone hungry until his parents returned.

Additionally, Kevin’s meticulous preparation of his family’s home ahead of the burglars’ return allowed him to ward off the thieves.

In the same way, by planning ahead and putting financial protection in place, you could ensure that you and your loved ones are provided for if something unexpected occurs.

For example, investing in income protection now could give you the means to cover day-to-day costs such as utility bills and mortgage payments if you are unable to work due to illness or injury.

2. A Christmas Carol – Learning from the past and looking ahead could help you plan for the future you desire

Charles Dickens’ classic tale was first published in 1843 and has since been adapted for the big screen on multiple occasions.

Whether you prefer the 1951 film starring Alastair Sim, the 80s comedy Scrooged featuring Bill Murray, or the 90s musical The Muppet Christmas Carol, the story of Ebenezer Scrooge is probably one you’re familiar with.

Yet perhaps you’re less aware of an instructive financial planning tip hidden in the storyline.

When Scrooge is visited by three ghosts on Christmas Eve, he is given an invaluable insight into his past, present, and future. By reflecting on his behaviours and looking forward to what might lie ahead, the miserly old man realises the error of his ways and takes steps to change his future.

Similarly, when it comes to your finances, reviewing past behaviours and thinking carefully about what you want in the long term could help you craft a plan that aligns with your goals.

While you may not receive a visit from the Ghosts of Christmas this festive season, a financial planner could offer just the help you need.

By using cashflow modelling, a financial professional can paint a clear picture of how your wealth might look in years to come, based on factors such as your income, outgoings, investment returns, and so on.

This could help you assess whether you’re on track for the future you desire, and if not, adapt your plan accordingly. For example, you might decide to increase your pension contributions or change your investment strategy to ensure that you can retire early without running out of money.

3. It’s a Wonderful Life – A fresh perspective might help you overcome difficult times

It’s a Wonderful Life has become a “must-watch” film at this time of year.

The story begins on Christmas Eve, with troubled businessman George Bailey looking forlornly at his life and feeling that he has nothing to contribute to the world. As his company is in financial trouble, all he sees is problems.

Thankfully, George is visited by his guardian angel, Clarence, who shows him all that he has contributed to his community and family. As a result, George comes to appreciate all that he has and could have in the future, and that it truly is a “wonderful life”.

Just like George, if you’re facing difficult financial times, you might find it hard to stay positive.

For example, if the value of your investments falls due to a dip in the market, you might rush to sell your shares for fear of further losses. Yet, a downturn is unlikely to last indefinitely, and markets typically recover over the long term.

However, it can be hard to hold your nerve and avoid emotional decision-making if you’re facing financial challenges.

That’s why working with a financial planner can be so beneficial.

A financial professional can act as an objective sounding board, providing a fresh perspective if you can’t see a way forward. They have the knowledge, skills, and resources to guide you towards data and logic-informed decisions.

Think of your financial planner as your Clarence – a guardian angel who is there to provide the insight you need to banish your negativity and realise the wonderful possibilities in your future.

Get in touch

If you’d like help getting your finances in order ahead of the festive season and beyond, we can help.

Please email hello@bluewealth.co.uk or call us on 0117 332 0230.

Please note

The content of this newsletter is offered only for general informational and educational purposes. It is not offered as, and does not constitute, financial advice.

Blue Wealth Ltd is not responsible for the accuracy of the information contained within linked sites.

Blue Wealth Ltd is an appointed representative of Best Practice IFA Group Ltd, which is authorised and regulated by the Financial Conduct Authority.

The Financial Conduct Authority does not regulate cashflow planning.

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.

Note that financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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It’s not hard to argue that winter is a magical period. In northern hemisphere countries like here in the UK, it’s the time of year when cities sparkle with festive lighting, snow dusts dramatic landscapes, and much of the globe slows down to celebrate what is really important to them.

While some people might enjoy spending this time at home relaxing and preparing for Christmas, others dream of visiting exciting new areas of the world, whether that’s a northern winter wonderland or a blissful sunny escape in the southern hemisphere.

If you’re searching for some holiday inspiration for a last-minute trip this year or are already thinking about your plans for 2025, this guide could help you identify your next destination. Find out more about why you might want to plan a visit to:

1. Lapland, Finland
2. Quebec City, Canada
3. New York City, USA
4. Blue Lagoon, Iceland
5. St Moritz, Switzerland
6. Bariloche, Argentina
7. Sapporo, Japan
8. Queenstown, New Zealand
9. Bruges, Belgium
10. Tallinn, Estonia

Download your copy here: ‘10 of the world’s best destinations to travel to during winter in the UK’ to discover exciting new destinations now.

If exploring the world or jetting to new places to relax is a priority for you, we could help you make it part of your financial plan. Please get in touch to talk to us.