Setting the scene
Lance Baron
Certified Financial Planner (CFP?? Chartered FCSI) based in East Sussex, UK. We support people with more than ￡500K to invest by building a financial plan that will help them live the life they want…
In this article, we set the scene for 2025 – we’ll look back over what’s happened to the markets over recent years and predict what we can expect to happen next.
Looking back at Plan100
In 2024, with the assistance of our friends at Timeline, we made small changes to most of our clients’ portfolios with the intention of reducing the cost of investing. As part of this, we may have switched their investments to different funds.
Why? Because that’s our role – managing what we do, well.
Looking back at the markets
This screenshot shows Trivium 100 (100% global equities) in the spotlight - they’ve risen 64.26% since this time five years ago.
As the curtain falls on 2024, you can see it was a stellar year for the markets. We came a long way out of the doom and gloom of the lockdown years.
Lance's stance
Here, I briefly talk through the graph to explain what it shows:
Looking forward to the crash
What’s waiting in the wings for 2025?
As we’re always saying, just wait long enough and the markets WILL rise.
However, we can also predict that there WILL be a crash at some point. But there is no point in trying to time it.
When you think things are good, they suddenly get bad. The converse is true as well. So there’s no need to get overly dramatic about it.
This isn’t new, and our related articles below give more details –?and, hopefully, reassurance.
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Looking forward to getting older
We can’t impact the march of time. And time brings changes.
As you probably know, there is to be a major shift in inheritance tax and pensions announced in the latest Budget, making this a year to revisit your Wills and Trusts.
Details are still being thrashed out. Consultation ends in January but not all the answers will be revealed until some time after that.
We used to be able to ignore pensions as part of IHT planning – we can’t do that any more.?
For our older clients, we’ll have to think about the best plan for your spending money. It used to be wise to spend your non-pension assets first, and that may now be different (our advice will vary depending on your own circumstances).
We may recommend you take advantage of remaining allowances such as making effective use of the Nil Rate Band and Residential Nil Rate Band.
You might benefit from business relief investments (although those are limited to ￡1 million per person).
As before, gifting must be done early as you need to survive at least seven years to avoid IHT. You might remember I call this “giving with a warm hand”.
This is just a brief overview. We’ll probably mention how these topics relate to our clients in their next annual review.
In short, financial planning takes centre stage in 2025. It’s even more important than ever, if you want to live comfortably into your old age, and you’d like your beneficiaries to pay less tax.
Cue: applause!
P.S. How many theatre-related references did you spot in this article? No prizes! It’s just for fun.
Related reading
We’ve written about this before: