Mehak Bambrah- Financial Planner

WEEK WATCH: Pension withdrawals on the rise 📈

Growing numbers of people are taking money out of their pensions ahead of April 2027, when unused pots will fall into an estate for inheritance tax (IHT) purposes.

Several reports suggest that hundreds of thousands of UK pension savers are cashing out their pension pots in full, in anticipation of the proposed changes coming into force next year. Historically many savers have used pensions as a way of passing on family wealth to beneficiaries, as pensions were exempt from IHT.

But it means many people could be paying more tax than necessary. The lump sum allowance (the amount a pension saver is allowed to take tax free) is typically 25% of the pension pot, to a maximum of £268,275. Any withdrawals above this level are taxed at the individual’s marginal tax rate.

This means that withdrawing a pension in one go could push many people into higher tax bands, potentially triggering avoidable tax bills.

Government estimates suggest that bringing most unused pension wealth into scope for IHT from the 2027/28 tax year could have a noticeable impact. Around 10,500 more estates are expected to become liable for IHT, with a further 38,500 likely to pay more. On average, affected estates could see
their IHT bill rise by around £34,000.*

Read more here:
https://partnership.sjp.co.uk/article/detail/sjpp/weekwatch-01-06-2026.html

*SOURCE: UK government: Inheritance Tax on pensions: liability, reporting and payment - Summary of responses, July 2025

The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is dependent on individual circumstances.

Passing on wealth to future generations is one of the most rewarding things you can do with your hard-earned money. The assets you pass on could help your children or grandchildren buy homes, get great educations or set up their own business. So, ring-fencing as much as you can in order to mitigate the amount of Inheritance Tax or IHT you will need to pay is an important part of estate planning and future financial wellbeing.

3️⃣ Here are three practical things you can do right now to help safe guard your wealth:
• Make sure your financial affairs and your Will are set up to allow the tax- efficient transfer of your assets when you die.
• Start transferring assets before your death through the prudent use of lifetime gifts.
• Create a tax-efficient fund to provide a legacy or to help your beneficiaries pay any Inheritance Tax due.

Building your wealth takes enterprise, vision and hard work. Protecting that wealth also takes foresight and expert trust and estate planning.

The value of an investment may fall as well as rise. You may get back less than you invested.

Taxation rules can change at any time and are dependent on individual circumstances.

Advice relating to a Will involves the referral to a service that is separate and distinct to those offered by St. James's Place. Wills and Trusts are not regulated by the Financial Conduct Authority.

The Pensions Commission has warned that 15 million people across the UK are not saving enough for retirement.

In an interim report published last week, the government-backed Commission highlighted the key challenges facing the current system. Low and middle earners, the self-employed and women are among those groups most at risk of inadequate pensions, it said. This is because they are failing to save enough for retirement.

The report also revealed that around 18 million people, equivalent to 45% of working age adults, are not saving into a pension. In addition, only 4% of the self-employed are saving for retirement.

The Pensions Commission will publish its final report in early 2027.

In its recently published Financial Health Report 2026, the fifth in the series, St. James's Place found cost of living pressures have caused a drop in financial resilience among UK households.

The survey, conducted by Opinium among 6,000 adults, found fewer people now describe themselves as financially comfortable, compared to 12 months ago (37% in 2026 compared to 42% in 2025).

Read more in this week's WEEK WATCH:
https://partnership.sjp.co.uk/article/detail/sjpp/weekwatch-26-05-2026.html

One of the most difficult conversations families can have is also one of the most important.

This week is Dementia Action Week, a reminder that planning ahead matters, not just financially, but personally too.

There are currently almost one million people living with dementia in the UK, with numbers expected to rise to 1.4 million by 2040.

A Lasting Power of Attorney (LPA) allows someone you trust to make decisions on your behalf if you lose mental capacity. There are two types:
• Property & Financial Affairs
• Health & Welfare

Without one in place, loved ones may need to go through a lengthy and expensive Court of Protection process before they are able to help manage affairs.

It’s easy to assume these conversations can wait. In reality, putting plans in place earlier often gives families far greater clarity and peace of mind later on.

Source: Alzheimer's Society - accessed May 2026

St. James's Place has published its fifth Financial Health Report, carried out by Opinium. It found that financial resilience has fallen since 2025, as cost of living pressures continue. One in three are making lifestyle changes to deal with their stretched financial situation.

However, among those who have a financial plan, who are investing, and who have had professional financial advice in the past 10 years, the outlook is more positive. Those with a financial plan were three times more likely to say their financial situation had improved in the past year.

This chart shows how average household wealth climbs significantly among those who have a financial plan, are investing, and are receiving ongoing financial advice.

Read the report’s findings here:
https://www.sjp.co.uk/sites/sjp-corp/files/SJP/how-can-we-help/tools-information/SJP-Financial-Health-Report-2026.pdf

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

🌍 WEEK WATCH: UK government bond yields continued rising last week, as UK government leadership challenges and international questions increasingly weighed on investor minds.

Starting with the UK, 10-year gilt yields spent most of the past few days above 5%, ending the week above 5.1%. To put that number into context, 10-year gilt yields haven’t breached 5% since 2008.

Meanwhile the 30-year gilt yield ended the week within touching distance of 6%, reaching its highest levels since 1998.

Yields have been trending up since Covid, however, the recent increases have had some specific triggers.

The ongoing public conversation about potentially replacing Sir Keir Starmer as prime minister is creating uncertainty across domestic bond markets. Several candidates are lining up to fill the role (should it become vacant), and there are concerns candidates would look to open the purse strings to secure their position. With UK government finances already tight, any suggestion the government might increase spending will not be welcomed by markets.

Read more here:
https://partnership.sjp.co.uk/article/detail/sjpp/weekwatch-18-05-2026.html

WeekWatch - 18/05/2026 WeekWatch - 18/05/2026

Financial resilience doesn’t happen accidentally.

According to the latest SJP Financial Health Report, 76% of people with a financial plan describe themselves as financially resilient, compared to just 52% of those without one.

For many families, resilience means more than investment performance alone. It’s about knowing there’s a plan in place for the future, understanding how decisions today affect tomorrow and feeling prepared for unexpected changes along the way.

That sense of security often starts with clarity.

Read the full report here:
https://partnership.sjp.co.uk/insights?category=&archived=false¤t=true

Source: Opinium survey of 6,000 UK adults between 17 March and 9 April 2026. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population.

WEEK WATCH: Local elections and government borrowing

Following bruising local election results, media reports have been awash with gossip around the prime minister Keir Starmer’s future. Judging by the UK bond market, however, lenders appear to prefer the stability of continuity over the uncertainty of a leadership challenge, at least for now.

UK borrowing costs haven’t been kind to the current government. Since the general election nearly two years ago, 10-year gilt yields (i.e. the interest the government pays on the bonds) have climbed from under 4% to a peak of over 5%.

Higher yields make life difficult for governments, as it means more expensive borrowing, limiting their options around taxes and spending.

Many of the causes of this rise are outside the government’s direct control – an aging population, a large debt pile and the actions of foreign powers, for example.

Over the past two weeks, a combination of high oil prices and local election predictions helped 10-year gilt yields spike to over 5% for the first time since 1998.

Read more here:
https://partnership.sjp.co.uk/article/detail/sjpp/weekwatch-11-05-2026.html

WEEK WATCH: Pension Schemes Bill receives royal assent after months of wrangling

After months of debate between the Lords and Commons, the Pension Schemes Bill received royal assent last week.

The breakthrough came after the Lords agreed a scaled back version of the mandation powers, which had been a major point of contention. These powers allow the government to influence how pension schemes can invest savers’ money.

Under the new law and following concessions made by the Commons, the House of Lords was satisfied that the mandation powers will now have the appropriate safeguards in place.

The pensions industry has welcomed the Pension Schemes Act 2026. The Act will bring major reform of the UK pensions system, requiring schemes to prove they are delivering value for money for pension savers.

READ MORE HERE:
https://partnership.sjp.co.uk/article/detail/sjpp/weekwatch-05-05-2026.html

WeekWatch - 05/05/2026 WeekWatch - 05/05/2026

Financial wellbeing and mental wellbeing are closely linked.

People experiencing financial difficulty are more than twice as likely to experience mental health problems compared to those without.*

Many families we speak to express concern about having everything in place for the future.

A clear financial plan helps answer those concerns. It provides structure, direction and reassurance that the right provisions are in place for the people who matter most.

That sense of security is often where peace of mind begins.

*Source: Centre for Mental Health - The Big Mental Health Report 2025