What to invest in now, according to Britain’s top wealth managers

Prabhu recommends reassessing cash holdings. “Cash plays a role in helping individuals and families access money for emergencies or earmarked purchases. However, interest rates are already lower than a few months ago and are likely to fall further as global monetary easing is expected to continue next year. That’s why it’s critical to reassess cash holdings. We continue to view the overall macroeconomic landscape as a supportive backdrop for risky assets, but we emphasize the importance of diversification within investment portfolios across geographies, sectors and asset classes. To navigate the increasingly dynamic and evolving landscape, investors must continue to focus on building robust and resilient portfolios. This includes diversification, income and real assets to help hedge against unexpected shocks while staying aligned with long-term investment objectives.”

Explore alternative tax structures to future-proof finances

‘Consider how the increase in capital gains tax will impact on future growth and returns, and whether other tax structures such as ISAs could be a more efficient way to achieve their future goals. There have been no changes to ISA allowances, so these can still form part of tax-efficient financial planning,” says Anna King, financial planner at NatWest Premier.

Nauman Gondal, Founder of Apollo Private Wealth recommends considering a Lump-sum Allowance (LSA). ‘Despite pre-Budget speculation, the lump sum allowance (LSA) remains consistent, at a quarter of the previous LTA, or £268,275. Withdrawing the LSA and using it during your lifetime to fund expenses or make gifts to family members could be an efficient way to reduce the value of a pension subject to inheritance tax.”

Gondal also recommends thinking about having a life insurance policy registered in your trust. ‘Life insurance provides a tax-free benefit to a chosen beneficiary upon your death’

‘In addition to donating enough assets to reduce your gross asset value to less than £2 million, if you have excess income in retirement it may make sense to consider a life insurance plan written in trust, to meet the final IHT liability, which could be up to £400,000 on an estate worth £2 million. It is important that the life insurance plan be written into a trust and that the premiums are paid using excess income, rather than assets. Otherwise, the premiums paid may be treated as a taxable lifetime transfer (CLT). Please note that probate is required to release probate, and IHT must be paid before probate is granted. Therefore, the assets of an estate cannot be used directly to meet IHT liability, and an alternative solution, such as life insurance in trust, provides the necessary resources,” says Gondal.

For more gold standard guidelines on wealth, family law, property, taxes and trust, visit the Tatler Advice.