For many people, retirement planning raises an important question: can the State Pension alone provide enough income to live on?
While the State Pension forms a valuable foundation, for most people it is unlikely to fully fund the lifestyle they want in retirement.
Private pensions, workplace pensions and other savings are often needed to bridge the gap.
Understanding how these income sources work together is key to building a sustainable retirement plan.
The State Pension is a regular payment from the Government that you may be entitled to when you reach State Pension age.
For the 2026/27 tax year, the full new State Pension is £241.30 per week (around £12,547 per year), as set out on the official New State Pension GOV.UK page.
Most people need 35 qualifying years of National Insurance contributions or credits to receive the full amount, as explained in the State Pension eligibility guidance.
Overall, the State Pension is designed to provide a basic level of income in retirement rather than replace earnings entirely, as outlined in the UK Government State Pension overview.
A private pension is a long-term savings arrangement designed to support you in retirement, usually built through a workplace scheme or personal pension.
It grows through a combination of:
The final value depends on how much is paid in, how long it is invested, and how investments perform.
As highlighted in Fairstone’s retirement planning across life stages guide, starting early and contributing consistently can significantly improve long-term retirement outcomes.
To understand its real-world impact, it helps to compare the State Pension with typical retirement income needs.
The Retirement Living Standards provide a useful benchmark:
With the full State Pension at around £12,547 per year, it is clear it generally covers only a basic level of living costs rather than a moderate or comfortable lifestyle.
Several long-term trends are increasing reliance on private pension savings.
People are living longer, meaning retirement savings need to last more years.
At the same time, the cost of living has increased, and fewer people now benefit from generous defined benefit pension schemes.
As highlighted in Fairstone’s early retirement planning guide, this shift means individuals are taking on more responsibility for funding their own retirement than previous generations.
For some people with low living costs, the State Pension may provide a basic income in retirement. However, for most, it is unlikely to be enough on its own.
Typical shortfalls include:
As highlighted in Fairstone’s financial planning in later life guide, understanding both income and expenditure is essential when planning for retirement.
Private pensions are designed to sit alongside the State Pension and provide additional income in retirement.
They typically work through workplace contributions, employer payments, and tax relief, all of which help boost savings over time. Investment growth can further increase the value of a pension pot over the long term.
In short, they are designed to bridge the gap between the State Pension and the income needed for a comfortable retirement.
Good retirement planning is about steady progress rather than last-minute decisions.
Fairstone’s retirement planning considerations guide highlights the importance of reviewing pensions regularly and making the most of tax-efficient saving opportunities.
Small actions such as increasing contributions or consolidating old pension pots can make a meaningful difference over time.
The State Pension and private pensions are not competing systems — they are designed to work together.
The State Pension provides a foundation level of income, while private pensions build on top of this to support lifestyle choices and financial flexibility in retirement.
Together, they form the basis of most retirement income strategies in the UK.
A financial adviser can help you understand whether you are on track for retirement, how much income you may need, and how to structure your pensions efficiently.
Fairstone’s retirement planning service supports individuals in building tailored strategies based on income needs, goals and long-term financial planning.
Get in touch with an adviser today to find out more.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions
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The State Pension is a regular payment from the UK Government that you may be entitled to once you reach State Pension age. For the 2026/27 tax year, the full State pension is £241.30 per week (around £12,547 per year), although the amount you receive depends on your National Insurance record.
Most people need 35 qualifying years of National Insurance contributions or credits to receive the full new State Pension. If you have fewer qualifying years, you may receive a reduced amount.
The State Pension provides a valuable foundation for retirement income, but for most people it is unlikely to cover the lifestyle they want. It is designed to provide a basic level of income rather than replace your earnings.
A private pension is a long-term retirement savings plan that is usually built through a workplace pension or a personal pension. Your pension grows through your own contributions, employer contributions (where applicable), tax relief from the Government, and investment growth over time.
Private pensions help bridge the gap between the State Pension and the income many people need for a comfortable retirement. They can provide greater financial flexibility and help cover everyday expenses, leisure activities and unexpected costs.
According to the Retirement Living Standards, a single person typically needs around:
For couples, the estimated annual income is:
These figures illustrate that the full State Pension alone is unlikely to provide a moderate or comfortable standard of living.
Several factors mean people are relying more on private pension savings than previous generations, including:
While some people with low living costs may be able to live on the State Pension, most retirees will need additional income.
Common expenses that the State Pension may not fully cover include:
The State Pension and private pensions are designed to work together. The State Pension provides a basic level of income, while private pensions supplement this through additional retirement savings built up during your working life.
Small, consistent actions can make a significant difference over time. These include:
The earlier you begin saving, the more time your investments have to grow. However, it’s never too late to review your retirement plans and make positive changes that could improve your future financial security.
A financial adviser can help you understand whether you’re on track for retirement, estimate how much income you may need, review your pension arrangements and develop a retirement strategy tailored to your financial goals and circumstances.
In my role, I’m fortunate to work alongside financial planners, mortgage advisers and protection specialists every day.
One question I’ve been asked repeatedly by friends, family and people outside the industry is: “How do I choose the right financial adviser?”
The more time I’ve spent in the industry, the more I’ve understood why people ask this question.
Choosing a financial adviser isn’t like buying a television or switching utility providers. You’re selecting someone who may play an important role in your financial life for many years, so trust matters enormously.
If you choose the right adviser, it’s often a relationship that lasts. The best advisers get to know you, your family and your long-term ambitions, providing support and guidance as your circumstances evolve over time.
While I’m not an adviser myself, I’ve spent many years working closely with professionals across the industry and seeing first-hand the qualities that clients value most. I’ve also seen how the best outcomes are often achieved when different specialists work together to support a client’s wider financial goals.
With that in mind, I wanted to share some of the key things I’ve learned and the questions I believe everyone should ask before choosing a financial adviser.
Whether you’re planning for retirement, investing for the future, buying a home, protecting your family, managing an inheritance or preparing to pass on wealth to the next generation, the right adviser can help you make informed decisions with confidence.
However, not all financial advice firms operate in the same way.
One thing I’ve noticed from speaking to clients and advisers over the years is that many people initially focus on investments.
However, advisers often tell me that the most important conversations tend to be about retirement goals, family priorities and long-term planning rather than investment products themselves.
A financial adviser helps individuals and families make informed decisions about their finances.
Depending on your circumstances, advice may cover:
Many people assume financial advice is only about investments. In reality, the most valuable advice often takes a broader view, bringing together all aspects of your financial life into a coordinated plan.
Before choosing an adviser, think about what you’re trying to achieve.
You may be:
The best advisers focus on understanding your goals before discussing products or solutions.
Good financial planning starts with understanding where you want to get to and creating a roadmap to help you get there.
Any firm or individual providing regulated financial advice in the UK should be authorised by the Financial Conduct Authority (FCA) or act as a representative of an authorised firm.
Before engaging an adviser, check the FCA Register and ensure you understand the services they are authorised to provide.
This simple step can help provide confidence that you’re dealing with a regulated professional operating within UK standards and requirements.
One of the most important questions consumers can ask is whether an adviser is independent or restricted.
Both types of adviser are regulated by the FCA, but the range of solutions they can consider may differ.
Understanding this distinction helps you determine whether the adviser can access the breadth of solutions you may require, particularly if your financial needs become more complex over time.
All practising financial advisers must meet minimum qualification standards.
However, some advisers and firms achieve Chartered status, which demonstrates a commitment to higher professional standards, ethical conduct and ongoing professional development.
While qualifications alone do not determine the quality of advice, many consumers view Chartered status as an additional indicator of professionalism and expertise.
Many people focus solely on the adviser sitting across the table from them.
One of the most common themes I’ve seen is that clients rarely have just one financial objective.
Someone might be planning for retirement while helping children onto the property ladder and reviewing inheritance plans for their own parents. This is often where access to different specialists can become particularly valuable.
Your financial life rarely exists in separate boxes.
A mortgage decision may affect your retirement plans. Protection arrangements may influence your wider financial strategy. Tax planning may impact investment decisions. Estate planning may shape how wealth is managed and passed on.
For this reason, it’s worth understanding not only the adviser you’re working with, but also the expertise available around them.
Financial planning often involves multiple disciplines.
A financial planner may help create your long-term strategy.
A mortgage adviser may help structure borrowing effectively.
A protection adviser may help safeguard your income, family or business.
An investment manager oversees and manages investment portfolios in line with your goals and attitude to risk.
Together, these specialists can help create a more comprehensive financial plan that considers all aspects of your financial life.
When specialists work together, clients can benefit from:
This can be particularly valuable for families, business owners, professionals and retirees with multiple financial priorities.
For most people, a mortgage will be one of the largest financial commitments they ever make.
Mortgage advice can help clients:
Mortgage decisions shouldn’t be made in isolation.
The amount you borrow, the term you select and the structure of your repayments can all affect:
This is why mortgage advice can be most effective when considered alongside broader financial planning.
Many people spend years building wealth but overlook the importance of protecting it.
Protection planning helps create financial resilience when life doesn’t go according to plan.
Protection advice may include:
Without appropriate protection in place, unexpected events can significantly affect financial plans.
Protection advice helps ensure that wealth-building strategies are supported by appropriate safeguards.
Investments are important, but they are only one component of financial planning.
The most effective advisers focus on helping clients achieve life goals rather than simply selecting investment products.
Transparency is essential.
You should always understand what you’re paying for and what services are included.
Trust is one of the most important factors when choosing a financial adviser.
In my experience, the advisers who build the strongest client relationships aren’t necessarily the ones who talk most about investments.
They’re usually the ones who listen carefully, explain things clearly and take time to understand what matters most to their clients.
Alongside FCA authorisation and qualifications, it’s worth understanding how existing clients view the adviser or firm.
Independent reviews can provide useful insight into service quality, responsiveness and client experience.
Consider reviewing:
Reviews should not be the sole basis for your decision, but they can provide valuable context when assessing trust and service quality.
Before making a decision, consider asking:
1. Are you independent or restricted?
2. Are you a Chartered Financial Planner or Chartered Firm?
3. What qualifications do you hold?
4. Do you provide access to mortgage advice?
5. How do you assess protection needs?
6. What services do you provide beyond investment management?
7. How do you tailor advice to individual clients?
8. How do you get paid?
9. What do existing clients say about working with you?
10. How do the different specialists within your business work together?
The right adviser should help you feel informed, understood and confident about your financial future.
Many people find value in firms that:
Ultimately, the best financial advice is rarely about a single product or recommendation.
It’s about having the right people working together to help you achieve your goals.
Before working in financial services, I assumed financial advice was primarily about choosing investments.
What has surprised me most is how much time advisers spend helping clients think through major life decisions, retirement plans, family priorities and long-term goals.
Choosing a financial adviser isn’t simply about finding someone to manage investments.
If there’s one thing I’ve learned from working in the industry, it’s that the best financial advice relationships are rarely built around products.
They’re built around trust, communication and a shared understanding of what success looks like for the client.
By understanding the difference between independent and restricted advice, considering Chartered status, reviewing client feedback and evaluating the breadth of expertise available, you can make a more informed decision about who is best placed to help you achieve your financial goals.
The most effective financial plans are often built when financial planning, mortgage advice and protection expertise work together towards a common objective: helping you achieve the future you want.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
Chris Coulson is Marketing Director at Fairstone. Chris works closely with financial planners, mortgage advisers and protection specialists across the UK and regularly produces consumer education content on financial planning, retirement, wealth management and personal finance.
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An independent adviser can consider products and providers from across the market. A restricted adviser may be limited to specific providers, products or areas of advice. Both should be regulated by the FCA.
Many people value financial advice because it can help them create a structured plan, avoid costly mistakes and make informed decisions aligned to their goals.
All regulated advisers must meet minimum qualification requirements. Some advisers and firms also hold Chartered status, which demonstrates a commitment to higher professional standards and ongoing development.
A Chartered financial planner has achieved a recognised professional designation that reflects advanced qualifications, ethical standards and ongoing professional development.
You can search for advisers and firms using the FCA Register to confirm their regulatory status.
Costs vary depending on the services provided, complexity of advice and ongoing support requirements. Advisers should clearly explain all charges before you proceed.
Not always, but many people benefit from advice that considers both mortgage decisions and wider financial planning objectives together. Some financial advisers also have permission to advise on mortgages.
Protection planning can help safeguard your income, family and financial plans should unexpected events occur.
Where are you going on holiday this year?
As peak holiday season hoves into view, many of us will be thinking of distant shores, sun-drenched beaches and relaxing by the pool with a cool drink in hand.
The chances are that capital gains tax considerations or mulling over the relative benefits of active versus passive investing may be rather further from your mind.
But should they be?
In my experience, holidays aren’t just about taking it easy and sampling the delights of the local cuisine – although I have to confess that I do enjoy both of those.
Being on holiday also allows you to free yourself of your day to day work and home concerns and give you the time to think about other things.
In my case, I find holidays are about the only time I get to think about life in a wider context – where I want to go, what I want to do and how I can go about achieving that.
It is actually a great time to consider your life plan – and a big part of that is your financial plan.
For example, you might be sat in your sun lounger thinking “I could get used to this a bit more often”.
If that’s the case, maybe it’s time to consider whether you’re putting away enough money for a retirement which allows for plenty of foreign travel.
Perhaps you’re loving life so much that you may even be thinking about retiring abroad – in which case, what do you need to do to put that idea into motion and how early can you stop work to make your dream come true?
If you’re in the middle of a fun-filled family holiday, that might make you think a bit more about how you can help your children or grandchildren get a great start to their grown-up lives with savings put aside, or further down the road, begin their own pensions so they have financial security later in life.
Holidays also give you time to be nice to yourself and to spend money on doing things which you enjoy.
This should act as a reminder to you that saving money for retirement and accumulating wealth is a means to an end, not an end in itself.
The phrase “don’t be too busy making a living to make a life” is very apt here.
It is not uncommon in our profession to see clients who have built up retirement income comfortably into seven figures yet who still feel stressed and anxious about their finances.
They have enough assets to live a very comfortable and enjoyable retirement, but they are so used to saving money that they can’t permit themselves to spend it – they have built a fortress of wealth but somehow can’t bring themselves to live in it.
That’s another reason why talking to a financial adviser can be so beneficial.
As well as putting into action those plans you’ve mapped out while enjoying your sunshine break, a financial adviser can also act as an impartial expert observer of where your wealth actually stands.
Using impactful tools such as cashflow modelling and their own experienced insight, they can show you what’s possible with the money you’ve put aside.
So if you’re still wondering whether you can really afford that holiday of a lifetime you’ve always promised yourself, if the circumstances are right and the numbers add up, your adviser can give you the good news.
That could be something to really think about as you sip your sangria this summer.
For expert professional help on putting your financial goals into practice, get in touch with one of our advisers.
Up to 15 million people in the UK may not be saving enough for retirement, according to recent findings from the Pension Commission.
The Commission’s report led to alarming headlines across the media about the pensions savings crisis and its effect on the country.
So how much money will you need when you retire – and how can you go about making up a shortfall if you haven’t got enough at the moment?
A lot of people don’t realise how much income they may actually need once they stop working.
The independent Retirement Living Standards guide estimates that a single person now needs around £13,900 a year as a minimum, around £32,700 a year for a “moderate” retirement lifestyle, and approximately £45,400 a year for a “comfortable” retirement.
For couples, those figures rise to £22,500, £45,400 and £62,700 respectively:
There are several reasons why people in the UK are not saving enough to enjoy the retirement they want.
Many younger workers understandably prioritise more immediate financial goals e.g. buying a house, car or going on holiday, because retirement can feel like something that’s years away.
Periods out of work due to caring responsibilities, illness, self-employment or career changes can all reduce pension contributions.
These gaps can mean fewer years of pension contributions and less time for investments to grow, particularly earlier in someone’s career.
Many women have career breaks for childcare or looking after parents, work part time or earn less than men, which can affect their pension contributions.
Women aged 55 to 59 have median private pension wealth of around £81,000, compared with £156,000 for men of the same age, showing how large the gap can become over time.
Pensions can feel complicated, especially for people who have built up several workplace pensions over their career. As a result, many people lose track of older pensions or simply avoid reviewing them altogether.
Many individuals underestimate how much they will need in retirement or are unaware of the tax advantages available when contributing to a pension.
Over recent years, rising household bills, mortgage costs and inflation have left many people focusing on short-term financial priorities.
When household budgets are stretched, pension saving is often reduced because people naturally prioritise money they can access immediately.
If you are amongst the 15 million people who haven’t saved enough for retirement, don’t panic. There are several ways in which you can help make up the shortfall.
Even increasing pension contributions by 1% or 2% can still have a noticeable impact over the long term.
Many people choose to increase contributions after a pay rise, allowing them to save more without noticing a difference in their income.
Some people can also choose to pay bonuses or extra savings into pensions to help boost retirement savings faster.
Employers are required to automatically enrol qualifying employees into a workplace pension. Employers also contribute into the pension, helping boost employees’ retirement savings.
Some employers also offer contribution matching schemes, where they will increase their own contributions if employees contribute more themselves.
Some workplaces offer salary sacrifice pension schemes. Under salary sacrifice, employees agree to exchange part of their salary for increased pension contributions.
This can reduce both Income Tax and National Insurance contributions, which can make pension contributions more tax-efficient for both employees and employers.
In some cases, employers may also pass on part of their National Insurance savings into the employee’s pension.
Most basic-rate taxpayers currently receive 20% tax relief on pension contributions. In practical terms, for every £80 contributed into a pension, the Government adds £20, meaning £100 is invested overall.
Higher-rate and additional-rate taxpayers may be able to claim back even more through their tax return or through the Government website, depending on individual circumstances.
Tax relief can significantly boost long-term returns.
Depending on your circumstances, it may be possible to make larger contributions by utilising unused allowances from the previous three tax years.
This is often useful for people trying to catch up on retirement savings later in life.
Many people accumulate multiple pensions throughout their working lives as they move between employers.
Reviewing older pensions can provide a clearer picture of overall retirement savings and whether existing arrangements are still suitable.
A financial adviser can also assess whether pension consolidation may be appropriate.
While concerns around pension adequacy and the future of the State Pension are growing, there are still opportunities for people to improve their personal financial position before retirement.
Reviewing pensions early and making small changes consistently can make a meaningful difference later in life.
A financial adviser can help individuals understand whether they are on track for retirement, identify gaps in their retirement planning and explain ways to improve pension savings in a tax-efficient way.
To check on how your pension savings are adding up – and for what to do if they’re not – get in touch with one of our advisers today.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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According to the Retirement Living Standards, a single person may need around £45,300 per year for a comfortable retirement lifestyle, while couples may require approximately £62,700 annually.
You may be able to catch up by increasing pension contributions, using unused pension allowances, consolidating pension pots and making use of pension tax relief.
Pension tax relief is a Government incentive that boosts pension contributions. For example, basic-rate taxpayers contributing £80 will receive an additional £20 from the Government.
Salary sacrifice allows employees to exchange part of their salary for increased pension contributions, potentially reducing Income Tax and National Insurance costs.
Career breaks, part-time working and lower average earnings can reduce pension contributions over time, contributing to the gender pension gap.
Yes, pension consolidation may help simplify retirement planning and provide a clearer picture of your overall pension savings. Professional financial advice may help determine whether consolidation is suitable.
Starting as early as possible gives investments more time to grow. However, even increasing contributions later in life can still improve retirement outcomes.
There has been a growing amount of noise around the proposed changes to salary sacrifice (also known as salary exchange) for pension contributions.
Unsurprisingly, this has led to confusion, speculation, and a number of persistent myths.
Employers and employees alike are asking what these changes mean for them, whether salary exchange is still worthwhile, and whether the structure will continue to exist in the long term.
The truth is far calmer than the headlines suggest.
Salary exchange remains a highly efficient and valuable mechanism for boosting pension savings, income tax relief remains fully intact, and the proposed National Insurance (NI) changes affect far fewer people than many believe.
Here we break down the most common misconceptions and clarify what is actually happening.
This is one of the most widespread claims circulating online and in the press, but it is simply not true.
Salary exchange is not being stopped, shut down, cancelled, or withdrawn.
The mechanism continues to operate as normal, both now and after the proposed changes take effect.
What is happening is more specific: from April 2029, the National Insurance exemption available on pension contributions made through salary exchange will be capped at £2,000 per year.
This means there will be a limit on how much NI can be saved through the arrangement — but salary exchange itself continues as a fully valid structure.
Crucially, income tax relief remains unchanged. Employees will continue to receive tax relief on the full amount sacrificed, regardless of the NI cap.
Even with the NI cap in place, salary exchange continues to offer meaningful financial benefits.
The average UK employee is unlikely to reach the NI savings cap, meaning their experience of salary exchange remains largely unchanged.
Employees continue to receive full income tax relief on their entire sacrificed contribution — one of the most powerful advantages of the arrangement.
Employers will continue to benefit from reduced employer NI costs, both before 2029 and after the cap is introduced.
For many employees, salary exchange continues to lower their taxable income, helping them manage thresholds such as the personal allowance taper or child benefit rules.
As a result, for most organisations and their workforce, salary exchange remains a highly efficient and valuable offering.
This is another misconception that has gained traction. The reality is that the majority of employees will see little to no change.
The NI cap is expected to impact employees earning around £40,000 or more, depending on contribution levels.
For employees below this threshold, their typical contributions are unlikely to generate NI savings worth more than £2,000 annually, meaning the cap has minimal practical effect.
Over 60% of UK workers earn less than £40,000 a year with average salaries between £32,000 and £35,000 so a majority of people will be largely unaffected as a direct result of the change.
No – this is entirely false. The proposed NI changes do not affect income tax relief in any capacity.
Employees will continue to receive income tax relief on their entire sacrificed contribution.
Salary exchange will remain a useful tool for helping employees reduce taxable income and manage the thresholds associated with higher tax bands.
This is a key message for employers to share with their workforce — income tax relief is unchanged and remains one of the strongest arguments for salary exchange participation.
The Chancellor’s announcement during the November Budget introduced the idea of a £2,000 cap on the NI savings available through salary exchange.
Since then, questions have understandably arisen across the financial services industry and among employers running these schemes.
Here is what we know:
Despite the noise, the actions required at this stage are simple and measured:
Contribution structures, member communications, and payroll rules do not need to be changed.
Employers should wait for the outcomes of the government consultation and draft legislation before making any structural changes.
The payroll providers will ultimately need to build and implement the NI cap calculations from April 2029 so you should ensure lines of communication to your provider remain open and active.
Nothing changes until 2029, and the benefits of salary exchange — including income tax relief — remain firmly in place. It is important that employees know that.
The recent headlines have caused unnecessary concern, compounded by unrelated speculation around pension tax-free cash allowances. These were not changed, despite the rumours leading up to Budget day.
Employers and advisers now play an essential role in offering clarity, reassurance, and practical guidance as the consultation unfolds.
Salary exchange continues to offer significant value, and the proposed changes do not undermine its effectiveness for most employees.
Salary exchange remains a highly efficient, tax advantaged, and valuable mechanism for helping employees save for retirement.
While the NI cap introduces a new limit for some higher earners, the structure itself remains fully intact — and for the vast majority of employees, the impact will be minimal.
As more detail emerges, employers, payroll teams, and providers will collaborate to ensure a smooth transition. Until then, it’s business as usual.
A financial adviser can help ensure that both employers and employees maximise the benefits of salary sacrifice while remaining compliant and informed.
They can also help with a range of other aspects of financial planning for business owners.
For more information on how we can help you, get in touch today.
Fairstone Corporate Management brings together over 50 years of experience supporting businesses and business owners. Our goal is to help our clients attract, retain, and protect their workforce while reducing administrative burdens and increasing costs.
Our services include advice on workplace pensions, financial education & employee engagement, group risk solutions, private medical & cashplan schemes, Small Self-Administered Schemes (SSAS) pensions and pension scheme administration.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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No, salary sacrifice – also known as salary exchange – is not being abolished. The structure will continue to operate as normal. The only confirmed change is a £2,000 cap on National Insurance (NI) savings from April 2029.
The £2,000 cap limits the amount of NI savings that can be achieved through salary sacrifice each year. It applies to both employer and employee NI savings, not the total pension contribution.
Yes. Income tax relief remains fully intact and is not affected by the proposed changes. Employees will continue to benefit from tax relief on the full amount of salary sacrificed into their pension.
The cap is most likely to affect higher earners or those making large pension contributions. Many employees earning below £40,000 are unlikely to reach the NI savings limit and may see little to no impact.
Yes. Salary sacrifice remains a highly tax-efficient way to contribute to a pension. Even with the NI cap, employees benefit from income tax relief and reduced taxable income, while employers still save on NI contributions.
By exchanging part of your salary for pension contributions, your official gross salary is reduced. This can help you stay below certain tax thresholds, such as higher-rate tax bands or the personal allowance taper.
Employers should continue running their existing salary sacrifice schemes as normal. There is no need for immediate changes until further government guidance and consultation outcomes are published.
Yes, but not yet. Payroll providers will need to adapt systems to apply the NI cap from April 2029. Employers should stay in contact with providers but avoid making premature adjustments.
Yes. A financial adviser can help both employers and employees optimise contributions, understand tax implications, and prepare for the NI cap. They can also provide personalised modelling to assess the impact of changes.
Salary sacrifice is generally low risk when implemented correctly, but it can affect earnings-related benefits such as mortgage applications, life cover, or statutory payments. Professional advice can help mitigate these risks.
How long do you think you’ll live for?
Without being too morbid about it, this is an important question for all of us.
It’s also a factor in financial calculations such as annuities.
Yet there is another aspect to life expectancy which people often miss: how many years of healthy life do you think you’ll have?
This is arguably just as important as overall life expectancy – and should have an equal influence on how you plan for your later years.
The Office for National Statistics classifies Healthy Life Expectancy (HLE) as the number of years people are expected to spend in “good” general health.
This figure may well make you see life rather differently.
In the UK, men can expect to spend an average of 60.7 years in “good” health with women faring slightly better at 60.9 years.
In some cases, the prospects are worse.
For example, while in some areas of London and the South East people have a healthy life expectancy of almost 70, in Blackpool, men have an average HLE of just under 51.
This means that well before the State pension age, you could be living a life which is limited by poor health.
So, apart from potentially depressing you, what is my point in sharing these statistics?
It all goes back to the basic principles of financial planning which underpin everything we do here at Fairstone.
We work with you to help your money grow so that you can achieve your financial goals, whether that is retiring early, travelling around the world, putting funds aside for your loved ones or something else.
Whatever it is you are building wealth for, it is important to always bear in mind that the process of wealth accumulation is a means to an end, not an end in itself.
Wealth is important for what you can use it to do, not for what it is – it’s a tool, not a trophy.
It can be challenging for many people to switch their mindset from being a saver to being a spender.
Shifting from accumulating wealth to using it can take some getting used to.
One of our advisers told me how a client at a recent meeting was anxious and worried, despite having assets well into seven figures.
Try how he might, he could not contemplate using some of the wealth he had accumulated over the decades, fearful he might not be left with enough.
This ‘fear of tomorrow’ is more common than you might think.
However, with changes to the inheritance tax regime coming in April next year, people who hold on to all their assets ‘just in case’ could end up giving 40% of them to the Government rather than their loved ones.
And returning to the theme which I started with, there is a danger that if you continually put off that dream holiday you’ve always promised yourself or that round-the-world adventure you’ve planned for decades with your other half, you may end up not being well enough to enjoy it.
Spending money on yourself and your family while you are healthy is one of the great joys of life so make sure you don’t miss out on it.
Don’t let doing something ‘one day’ not happen on any day.
None of us know what is round the corner.
However, working with a financial adviser can help you plan for a whole series of eventualities – good and bad.
Creating a robust financial plan that’s flexible enough to change with your circumstances can help you face the future with confidence, whatever that may bring.
They can help you balance your current needs with what you want to leave when you’re no longer around.
And if you need some ‘permission’ that spending some of what you have accumulated is the right thing to do, just ask your adviser.
They will be able to give you an honest and informed opinion on your personal financial situation – and how using some of what you have accumulated will affect it.
Fairstone has expert advisers who can help you at every important stage of life, from buying your first home to planning your estate.
Get in touch with a Fairstone adviser to find out more.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
The acronym HENRY – High Earner, Not Rich Yet – has gained in popularity in recent years – and for good reason.
The term describes a growing cohort of people who look financially successful from the outside but feel increasingly stretched once the real numbers are laid out.
HENRYs are:
Yet many describe the same frustration: earning more doesn’t feel like getting ahead.
The reason, more often than not, appears when children arrive.
The UK tax system creates a sharp financial turning point around £100,000 of adjusted net income.
This is known in many circles as the £100k tax trap.
Once that threshold is crossed, families can lose access to key childcare support, including 30 hours free childcare and Tax-Free Childcare.
This support can be worth roughly £7,000 to £8,000 per year for a typical nursery-age child, depending on fees and location.
At the same time as losing this support, the tax-free personal allowance begins to taper away, reducing by £1 for every £2 earned above £100,000.
When you combine the loss of childcare support with higher effective tax rates, families can find themselves in a situation where earning more produces very little improvement in real disposable income – the £100k tax trap.
Recent commentary has highlighted how this is influencing real-life decisions.
Some professionals are now openly questioning whether progressing beyond certain income levels actually improves their standard of living.
From my perspective, this is not theoretical. It shows up in meetings I have with clients every week.
You can see how crossing £100,000 can actually leave some families feeling worse off, which feels completely counter-intuitive.
The consequences are real: some delay having children, others decide to stop at one child.
When financial systems create disincentives around family life, behaviour changes.
Is Elon Musk right? He has repeatedly warned about declining birth rates and long-term population trends, and while his views are often debated, the underlying point is hard to ignore: financial pressure increasingly influences family decisions.
The typical story is familiar.
A promotion or bonus pushes income above the threshold.
Nursery fees are already high and suddenly support disappears. Monthly outgoings rise just as income is supposed to bring more comfort.
The emotional response is usually confusion rather than tax planning ambition.
Clients aren’t trying to avoid success. They simply expected that earning more would make life easier.
Instead, they feel stuck.
This is the core HENRY experience: high income, high fixed costs and very little sense of momentum. Caught in the £100k tax trap.
What many families don’t realise is that the threshold is based on adjusted net income, not simply salary.
Pension contributions and other reliefs can materially change that figure.
This is where proper financial planning changes the conversation.
I regularly see situations where restructuring income or increasing pension contributions improves long-term wealth while also preserving access to childcare support.
On paper, it may look like a short-term sacrifice. In reality, it can significantly improve both current cashflow and future financial outcomes – and free you from the £100k tax trap.
When you model these decisions properly, the results are often surprising.
Families can see clearly how a relatively small structural adjustment today can reshape the next 10 or 20 years.
Childcare is simply exposing a broader issue facing high earners.
Income alone does not create financial security. Without structure, even strong salaries can leave households feeling dependent on the next payslip.
The childcare years are temporary, but they are often when you make the biggest financial decisions.
Done well, they become a period of acceleration rather than pressure.
Many high earners assume that financial comfort arrives automatically once income reaches a certain level.
In reality, the system becomes more complex exactly at the point where family life becomes more expensive.
The solution is not to avoid earning more or to step back from progression. It is to understand the rules well enough to work with them, not against them.
Because ultimately, the goal is not simply to earn well. It is to feel in control of what that income actually delivers.
Sitting down with a professional financial adviser and looking carefully at your income and outgoings will help you to create a robust, flexible financial plan – not only for when children are young, but also for your future after they have grown up.
It could free you from the £100k tax trap and help you see financial success for what it is – a boon and not a burden.
Get in touch with one of our advisers today to find out more.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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The £100k tax trap occurs when adjusted net income exceeds £100,000, triggering the loss of personal allowance and childcare benefits, creating a 60% effective marginal tax rate for some earners.
Families can lose access to 30 hours free childcare and Tax-Free Childcare once adjusted net income exceeds £100,000.
Adjusted net income is your total taxable income minus certain reliefs, such as pension contributions and Gift Aid donations.
Yes. Pension contributions can lower adjusted net income, potentially restoring childcare eligibility and reducing effective tax rates.
High fixed costs, tax tapering, childcare fees and reduced allowances can significantly reduce real disposable income despite six-figure salaries.
No. The better approach is structured financial planning to optimise income and long-term wealth rather than limiting career progression.
It’s that time of year when all our amazing superwomen get the spotlight: Mother’s Day.
We know that for a lot of mums, it’s a constant juggling act – trying to manage childcare, possibly pursuing a career, the day-to-day of managing a household, family logistics, trying to plan for the long-term, looking after their physical and mental wellbeing and the emotional labour of it all, all at once – and with a smile and probably a lack of sleep if the children are young.
There’s a huge invisible workload as well as the visible one and can take its toll.
Eeven superwomen need a financial plan.
Motherhood can change everything, including finances.
A child’s arrival often means a huge shift in priorities.
It might suddenly feel that that long-term planning is now more urgent, financial resilience is now essential and the question tends to shift from “will I be okay?” to “will they be okay?”.
Mother’s Day is the perfect time to reflect, not just on the emotional side of motherhood but the financial foundations supporting it.
There are a few areas we can look at to help bring clarity to family finances and future planning, which in turn can help reduce the toll that motherhood can sometimes take.
There are a couple of potential quick wins that could help when it comes to managing the increase in day-to-day expenditure that comes with having children.
You may be entitled to 30 hours of free childcare a week if you live in England and have a child between 9 months and 4 years old.
It’s important to note that certain factors (such as employment and earnings) play a part in eligibility, so this won’t be for everyone but it’s definitely worth checking if this is something you can claim for).
If you live in the UK and have a child under 16 (or under 20 in approved education/training), you may be able to claim a tax-free child benefit payment every 4 weeks.
You can find out more about what qualifies for approved education/training on the Gov.uk website.
A High Income Child Benefit Tax Charge may apply if you or your partner earn over £60,000 but this could still be worthwhile.
In addition to these benefits, there are also some helpful savings vehicles that you could consider for your children, as well as important considerations in terms of dealing with a financial emergency.
These can be used to save for children under the age of 18.
Limits are currently set at £9,000 per year for the 2025/26 tax year and any gains and income are tax-free.
These can be opened either as Cash ISAs, Stocks and Shares ISAs, or both.
You can find out more about Junior ISAs in our recent article.
One way to help achieve a level of financial resilience is to work towards ensuring an easily accessible savings pot.
This should have at least 3-6 months’ worth of essential expenditure, not earmarked for anything other than an emergency fund.
This pot helps provide a buffer to be able to cover anything that might crop up unexpectedly, such as redundancy or unexpected bills.
Motherhood is a beautiful thing and being able to take time out to care for children is incredibly special.
Sadly, for a lot of mothers, this can also mean extended periods of time where personal and employer contributions into pensions aren’t being made.
This can then have significant effects on retirement savings in the long-term.
In addition, 35 years of qualifying National Insurance contributions or credits are required in order to be entitled to receive the full State pension at State Pension Age.
These NI contributions can also be significantly affected during this time.
When children are young, retirement can feel like a distant concept. However, the earlier planning begins, the more flexibility it creates later.
An important point in terms of retirement is that, according to the Office of National Statistics, women statistically live longer than men in the UK.
Inevitably, this means that retirement funds may need to stretch further than anticipated – and also be more resilient.
Some of the key considerations when it comes to retirement for mothers include:
Seeking financial advice can be instrumental in planning for the future and helping ensure that your retirement looks the way you want it to.
The clarity and peace-of-mind that this can create can be unmatched.
For many families, one of the biggest financial risks to a household is loss of income due to illness or death.
Financial protection planning is quite often put onto the back burner as it’s seen as not being ‘today’s problem’, but if either of these eventualities ever occurs, protection planning can be the difference between being able to continue looking after your family as normal or struggling to make ends meet.
Another important point to note here is that even unpaid caregiving has financial value and so protecting this is crucial.
By this, I mean that if one parent spends more time looking after the children, either by not working, or working less hours, replacing this childcare if something happened could be incredibly costly.
This pays out an income if you are unable to work due to illness or injury.
This pays out a lump sum in the event of death.
Joint policies can also be taken out between spouses and can also be held in trust.
This means the beneficiary of the payment does not have to wait for lengthy probate, which can have financial and emotional consequences at an already difficult time.
Life insurance policies can be in the form of term assurance (term-specific and may be aligned to a liability such as a mortgage or other debt) or on a Whole of Life basis.
This is similar to life insurance but pays out an income rather than a lump sum on death.
It can be critical for ensuring children are able to be looked after if something happened to you or your partner.
This is a lump sum paid out in the event of serious illness.
The definitions of what is included vary between insurers and this is where a financial adviser can help.
Protection simply ensures that difficult circumstances do not become financial crises.
Estate planning is often postponed but is one of the most critical steps parents can take.
As simple as it sounds, getting a Will in place, or ensuring it is up-to-date helps to:
Reviewing beneficiary nominations on pensions and life policies are also important to review and update, as these typically sit outside of a will.
As mentioned, since women are statistically more likely to outlive male partners, reviewing ownership of assets, tax planning strategies and long-term care considerations can provide the assurance that your legacy is protected.
Financial planning for mothers is not just about spreadsheets and products, it’s about confidence.
Confidence that:
Motherhood often involves putting others first. A financial plan that is robust and unique to you can ensure that doing so does not come at the expense of your own long-term wellbeing.
As Mother’s Day approaches, it may be worth asking not just what you are doing for your family today, but how you are supporting the woman who is holding it all together.
An expert financial adviser can help you create a robust yet flexible financial plan to help guide you through motherhood and beyond.
Get in touch with one of our advisers today to find out more.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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Financial planning for mothers ensures family security, protects against income loss, supports retirement goals and helps create long-term financial resilience.
Taking career breaks or reducing hours can reduce pension contributions and National Insurance credits, potentially lowering retirement income.
Parents may be eligible for Child Benefit, childcare support and National Insurance credits. Eligibility can be checked via Gov.uk.
Families often consider income protection, life insurance, family income benefit and critical illness cover to protect against loss of income.
Ideally, families should aim for 3–6 months of essential expenses in an easily accessible emergency.
Yes. A Will ensures assets are distributed correctly and guardianship arrangements are in place for minor children.
When you’re planning your perfect retirement, not many people want to think about preparing for potential care home costs.
The same is true for people who are already retired. Some 93% of over-75s have made no specific provision to cover the cost of their care, according to one survey.
Many people put off considering care costs – for themselves, a family member or a friend – because they find it too daunting or worrying.
However, thinking about these things now could prove invaluable for the future.
Here we look at some of the most common topics associated with care costs – and how consulting a financial adviser can help with the process.
If you are seeking support for care home costs or other care costs, there is a two stage assessment process.
First a Health Assessment is carried out to identify your wellbeing needs. This is called an NHS Continuing Healthcare assessment.
The second stage is a financial assessment to gauge the level of assets available to you.
NHS Continuing Healthcare provides full funding but only applies in very limited circumstances and only when your assets are below £23,250.
In most cases, it is sensible to assume that you will not quality for full funding, but you should still go through the process as you may qualify for nursing funding from the NHS which can help towards care costs.
Assuming you do not qualify for NHS Continuing Healthcare, you will then need to self-fund the care costs, until your assets fall below £23,250.
Local Authority financial support can begin when your assets fall below £23,250.
Pensions are not included in the £23,250 asset level, as they are seen to produce an income instead.
Your house may also be excluded, should your spouse remain in the home, or if a relative over 60 lives in the property.
If you are paying for care (which can be the occasionally help around the home), you may qualify for Attendance Allowance.
This is available as a weekly benefit regardless of means. They may also help provide respite or occasional hours of care.
Yes, you may need to sell your home to fund care home costs.
As mentioned above, the value of your home is excluded should your spouse remain in the home, or a relative over 60 lives in the property. Otherwise, it may need to be sold.
In my experience, renting the property often doesn’t result in the income needed to cover care costs, so do bear this in mind when deciding how to fund your care.
There are generally two options to consider when using your assets to pay for care:
Previously, some insurers provided products for pre-funding care, but unfortunately these are no longer available.
Once your assets (excluding pensions) are below £23,250, the local authority can get involved.
It’s a bad idea to deliberately reduce your assets to qualify for local authority funding. Having money available provides choice.
Think about using cashflow planning to assess affordability and provide financial understanding and security.
When considering how much to withdraw from your pension – and when – make sure you stage those withdrawals at sustainable levels.
You should consider earmarking specific funds for care costs as part of your retirement planning while maintaining quality of life (and enjoyment) in the early years.
If it sounds too good to be true then it normally is – gifting property to children or into trust can leave you vulnerable and not achieve what you want it to in terms of your care planning.
Getting expert financial advice – particularly at an early stage – can provide valuable peace of mind for you and your family when it comes to care costs.
At Fairstone, we have a number of financial planners (including myself) who are accredited with the Society of Later Life Advisers (SOLLA), who specialise in this type of work and would be delighted to provide assistance.
All SOLLA accredited advisers must attain the Society’s Later Life Adviser Accreditation and adhere to a strict Code of Practice.
The SOLLA Later Life Adviser Accreditation is widely regarded as the gold standard in later life financial advice.
To discuss planning your potential future care needs, get in touch with an adviser today.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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In England, local authority funding typically begins when assets fall below £23,250 (excluding certain pensions and property exemptions).
Eligibility is limited and based on primary health needs.
Most people do not qualify, but it is still important to complete the assessment.
Not always. Your home may be excluded if a spouse or qualifying relative remains living there.
A care annuity (also called an immediate needs annuity) is a financial product that converts a lump sum into a guaranteed, tax-free income paid directly to a care provider.
Deliberately reducing assets to qualify for funding may be treated as deprivation of assets and can be challenged by the local authority.
No. Attendance Allowance is not means-tested and may be available regardless of income or savings.
Pssst! Want some free money?
Hopefully that has got your attention.
This isn’t my money we’re talking about, but funds from a far better capitalised source: the Government.
That may sound surprising, but despite the well-publicised tax rises from the last two Budgets, the Government does give out money as well as taking it away.
I’m not talking about statutory benefits such as the State Pension or child benefit.
What I’m referring to are the incentives which the Government gives for people to save and invest.
All too often, people are either unaware of these incentives or end up missing out because they don’t take action soon enough.
Let’s take Individual Savings Accounts (ISAs) to start with.
As you may be aware, ISAs are accounts where you can enjoy the proceeds free of tax, whether that’s in the form of a cash ISA, stocks & shares ISA or Lifetime ISA (although these are being phased out).
You can save or invest up to £20,000 across all your adult ISAs each tax year and all interest, dividends, or capital gains within an ISA are tax-free.
The ISA deadline for the current tax year is rapidly approaching – it’s April 5th.
If you can afford to and it forms part of your financial plan, you really should take advantage of the opportunity to maximise tax-free ISAs as much as you can.
While the value of investments in stocks and shares ISAs can fall as well as rise, in the long-term – as I referred to last month – investing money has outperformed returns on cash.
Putting some of your investments in an ISA shelters them from tax and, if you do this regularly, the potential to see your money grow is compelling.
“But this isn’t free money,” you might argue, but tax-free makes a material difference to investment returns.
However, when it comes to pensions, there really is free money for our clients.
If you save in a workplace pension, your contributions are made from pre-tax income, thus saving you anything from 20% to 45% according to the size of your wage packet.
Still not free money?
OK, how about the fact that if you have a private pension – such as one which you’ve created from consolidating pensions from previous workplaces – and you put money into that from your post-tax income, the Government will add 20p to 45p in tax relief for every £1 you put in, depending on your tax rate.
While this is subject to various income and contribution limits, it is without doubt free money.
What’s more, the Government will also give free money to your children or grandchildren.
Any parent can set up a child’s pension for their child.
It doesn’t have to start with a huge lump sum or have vast amounts put into it.
Regular contributions – even small ones – can really add up over time and make a nest egg for later life.
What’s more, other family members – such as grandparents, aunts and uncles – and family friends can also contribute.
Currently a maximum of £2,880 can be paid into a child’s pension for any one tax year.
And – here’s where the free money comes in – the Government will pay 20% tax relief on those contributions, making it £3,600 a year before a single penny has been earned from investments.
Start early, contribute regularly and your child could potentially have a £1m pension pot by the time they can access it – at age 58 under current legislation.
Investing in a Junior ISA can also give your children a great start to their adult lives.
Junior ISA contributions don’t count towards your personal ISA allowance. Up to £9,000 a year can be put into a Junior ISA in any one tax year and your child gets to keep all interest, dividends, or capital gains tax-free when they turn 18.
There really is no time like the present to make a start on making a difference to your life or the lives of your children.
It worked for me – my daughters have house deposits as a result of Junior ISAs started when they were babes in arms.
They also have started pensions to capture the free money and harness the power of compound investment returns to unlock the financial independence that a £1m pension pot provides.
It’s also easy to do. Get in touch with a Fairstone adviser to find out how you can make the most of what is on offer and how that could fit into your financial life.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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