Insignis 014: Get Cash Clever - Discover the Bank of England governor’s take on the budget’s “biggest issue”.

Welcome to this week's edition of Get Cash Clever by Insignis Cash.

In this week’s edition of Get Cash Clever, we cover pensions reform, the impact of rising national insurance and inheritance tax, and what falling interest rates could mean for managing cash in 2025.

Plus, find out what the Bank of England governor is calling the “biggest issue” caused by the budget announcement.

Get insights on the news impacting your cash in just 3 minutes.

Current Bank Rate: 4.75% (Bank of England) - The next update is due on December 19th, 2024

CPI Inflation Rate: 2.3% (Bank of England)

TOP INSIGNIS SAVINGS RATES*

Easy Access –  Cynergy Bank: 4.66% 

6 Months Fixed – Hampshire Trust Bank: 4.55%

1 Year Fixed – Shawbrook Bank: 4.43%

TOP EURO ACCOUNTS:

Easy Access: Santander Financial Services Plc: 1.95% 

95 Day Notice: Santander Financial Services Plc: 2.70% 

To enquire about our USD or Euro products please reach out to your Account Manager

Pensions reform is vital to raise the UK’s dismal savings rate  (Financial Times) 

The FT’s Martin Wolf argues that if successful, pension reforms could drive economic growth, enhance security, and become a defining legacy of the current government. Wolf highlights five key considerations, with managing risks demanding intergenerational cooperation and collective DC schemes as a potential solution.   

National insurance rise ‘biggest issue’ after budget, says Bank of England governor (The Guardian) 

Bank of England Governor Andrew Bailey warns that economic uncertainty in the UK and globally is rising. The upcoming national insurance rise is the "biggest issue" following the budget, as businesses face tough decisions on how to absorb or pass on increased costs. Bailey noted that businesses now need time to assess how to balance prices, wages, and employment. 

UK’s biggest individual inheritance tax bills were £9.2m  (IFA Magazine) 

Recent figures show that while the UK's wealthiest families are facing inheritance tax bills exceeding £9.2 million, more middle-class families are also being hit with unexpected six-figure bills due to rising home prices bringing them into the IHT net.  According to experts,’ strategies like lifetime gifting and trusts can help mitigate tax liabilities, making early financial planning crucial to protect intergenerational wealth. 

What Falling Interest Rates and Tax Uncertainty Could Mean for Cash in 2025

What happened?

With interest rates currently elevated, the Bank of England is widely expected to begin gradually cutting rates next year. This will potentially create a narrow window next year for those seeking to lock in higher returns on cash products before rates start to move.  

At the same time, as we know, uncertainty around tax policy—particularly inheritance tax (IHT) and capital gains tax (CGT)—is prompting caution. Many HNWIs are liquidating assets, moving into cash to maintain flexibility as they await clearer signals. After a year in which cash allocations in portfolios have dipped, there is also growing interest in rebalancing liquidity, preserving wealth, and positioning for future opportunities

Why does it matter?

Cash, as we already know, is more than just a safe harbour. It’s a strategic asset, especially during times of economic and tax policy uncertainty. For now, elevated interest rates offer the chance to secure competitive returns and cash will always be used as a tool to balance liquidity with longer-term considerations; something that is increasingly vital as clients navigate their options. 

What could this mean for your clients?

The months ahead present a chance to reassess how cash fits into the wider financial picture of each client. With interest rates, tax policies, and economic conditions in flux, clients may value thoughtful conversations about how to position their cash effectively. Many of your clients will enter 2025 facing the reality of the private school VAT increase taking effect—a significant financial adjustment that could swiftly curtail their festive cheer. Whether it’s preserving wealth, planning for tax efficiency, or staying flexible for future opportunities, there is plenty of scope to support clients in making the most of what cash has to offer in an uncertain environment.. 

The Latest from Insignis

This month, we’re excited to have been featured in IFA Magazine, where our CEO, Giles Hutson, shared his insights on the Chancellor’s Mansion House speech.

 And in case you missed it, our new pension solution also made headlines in FT Adviser.

Additionally, we were highlighted in The Fintech Times in their article, "Why Physical Money Still Matters".

Wishing you a wonderful rest of the week. Until next time!

The Insignis Cash team

*Rates are correct on the Insignis Cash Platform as of 10th December 2024. All interest rates displayed are quoted gross p.a. and easy access may be variable. Rates are subject to a minimum and maximum deposit size, please shop around. Availability of products will vary depending on the client type. Check your FSCS coverage. Fixed-term deposits cannot be broken early. Insignis Cash does not provide financial advice.

Market information does not constitute financial advice. Forecasts may change and actual performance may vary. Please seek your own professional financial advice before making a decision.

Insignis Cash is a trading name of Insignis Asset Management Limited (Company number 09477376). Insignis Asset Management Limited is authorised by the Financial Conduct Authority under the Payment Service Regulations 2017 (813442) for the provision of payment services.