Wealth Management Update March 2025

Are Cash ISAs on the way out? Why it might be time to switch

For a brief moment, cash ISAs seemed like a good deal, offering returns that actually beat inflation. But that didn’t last long. With inflation now at 3% and cash ISA interest rates averaging just 1.77%, savers are once again losing money in real terms. And with the Bank of England expected to cut interest rates this year, the gap is likely to get even worse.

If you’ve got money sitting in a cash ISA, it’s time to ask yourself: is it really working for you?

Inflation quietly eats away at the value of savings. Over time, what seems like a safe option can actually mean a loss of spending power. A stark example—£10,000 in a cash ISA since 2012 would now be worth just £7,918 after inflation. In contrast, the same amount invested in global equities would have grown to £22,221.

This doesn’t mean cash ISAs have no purpose. They’re useful for short-term savings where you need certainty, but for long-term Wealth building, they’re falling behind.

There’s also been growing speculation that Chancellor Rachel Reeves could scale back or even scrap cash ISAs to encourage more Investment. While nothing has been confirmed, the idea is that shifting more money into stocks and shares ISAs could help grow the economy while giving savers a better chance at real returns.

If you’ve been holding off on Investing, now might be the time to reconsider. Stocks and shares ISAs offer a tax-efficient way to grow your money over the long term, and history shows they have a far better chance of beating inflation than cash.

Source: ONS, Bank of England, Quilter

 

Don’t take Financial advice from people on the telly!

Taking Financial Advice from TV shows might seem like a good idea—after all, experts like Martin Lewis explain things in a clear and engaging way. But here’s the problem: their advice is designed for a broad audience, not for your specific situation. What works for one person might not work for another, and making Financial decisions based on general guidance could lead to costly mistakes.

Also, people like Martin Lewis, a well-known Financial journalist and broadcaster, do not always hold formal Financial qualifications. A qualified Financial Adviser, on the other hand, takes the time to understand your personal circumstances, goals, and Financial challenges. They can provide tailored advice that actually fits your needs, rather than one-size-fits-all recommendations that may not apply to you.

Even trusted TV personalities get it wrong sometimes. In a recent episode, Martin Lewis, when discussing ISAs, said that they were generally IHT-exempt. Whilst he was talking about married couples where an exemption is applied, this confused many viewers who went away thinking that ISAs were an IHT-free vehicle…which they are not. This highlights an important point: even the best-known Financial experts on TV aren’t infallible. That’s why relying on professional, regulated Financial advice is so important.

Good Financial Planning isn’t just about quick tips or blanket advice—it’s about making the right decisions based on your unique situation. TV shows can be a useful source of general information, but when it comes to making big Financial decisions, nothing beats professional, personalised advice.

 

Why you shouldn’t DIY your LPAs

With DIY options readily available, it can be tempting to create your own Lasting Power of Attorney (LPA) to save money. But while it might seem straightforward, an improperly drafted LPA can lead to serious consequences—leaving your chosen attorneys unable to act when you need them most.

An LPA is a legally binding document, and even small errors can result in rejection by the Office of the Public Guardian (OPG). Common DIY mistakes include unclear instructions, incorrect signatures, and missing essential details. A rejected LPA means extra costs, delays, and stress when urgent decisions need to be made.

Many DIY LPAs simply appoint attorneys without considering complexities like Financial Management, medical preferences, or specific guidance. A professionally drafted LPA ensures your wishes are clearly set out, protecting your best interests and avoiding future disputes.

Professionals ensure your LPA is legally sound and correctly registered. The OPG occasionally makes errors, and without expert oversight, you could end up with a faulty LPA. Professional services also include insurance, offering an extra layer of protection—a safeguard in which DIY approaches lack.

An LPA is one of the most important legal documents you’ll ever create. Having it professionally prepared ensures your attorneys have the authority, clarity, and legal backing to act in your best interests when the time comes.

While DIY LPAs may seem cost-effective, the risks far outweigh the savings. A professionally drafted LPA provides security, legal accuracy, and peace of mind. Contact us on 02920 450 143 or email us on [email protected] to find out how we can help ensure your future is protected properly.

 

Why has inflation risen – and what does it mean for interest rates?

Inflation in the UK has risen again, catching many by surprise. In simple terms, this means the cost of everyday goods and services—things like food, transport, and even school fees—has gone up. One of the biggest drivers behind this rise is wage growth. Businesses are paying staff more, which is great for workers, but it also means companies pass those costs on to consumers, keeping prices high.

The big question is: what does this mean for interest rates? The Bank of England sets interest rates to keep inflation under control. When inflation is high, they tend to keep rates higher for longer to stop the economy from overheating. This means borrowing costs—such as mortgages, loans, and credit cards—stay expensive. On the flip side, savings accounts continue to offer better returns than we’ve seen in years.

There has been a lot of talk about when interest rates will start coming down again after the most recent cut, but with inflation proving stubborn, the Bank of England is likely to be cautious. There is hope that there will be at least two more rate cuts in 2025, but that will remain to be seen.

Source: ONS

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