Coleshill Wealth Management

Understanding the Savings Allowance

Rachel Goodhall — Fri, 06 Nov 2026 11:10:21 +0000

The Savings Allowance allows you to earn a certain amount of interest without paying tax on it. The allowance is simple in principle but it works differently depending on your level of income, which means it can affect people in different ways.

What the Savings Allowance Covers

The Savings Allowance applies to interest earned on savings. This includes interest from bank accounts, building society accounts and some other forms of cash savings. The allowance gives you a portion of interest that is taxed at zero percent which means you keep more of what you earn.

How the Allowance Varies

The amount of Savings Allowance you receive depends on your tax band. Basic rate taxpayers receive a larger allowance. Higher rate taxpayers receive a smaller allowance. Additional rate taxpayers do not receive a Savings Allowance at all. This structure is designed to give more support to people with lower levels of taxable income.

How It Works in Practice

Most banks and building societies pay interest without deducting tax. If your interest stays within your allowance there is nothing further to do. If your interest exceeds your allowance you may need to pay tax on the excess. This is usually handled through your tax code or through self assessment if you complete a tax return.

My Final Thoughts

The Savings Allowance is a simple idea that can make a meaningful difference to how your savings are taxed. It rewards people who save and it ensures that smaller amounts of interest are treated gently. In the next blog we will look at the Dividend Allowance and how it affects income from shares and investments.

The value of investments can fall as well as rise and you may not get back the full amount you invested. Past performance is not a guide to future returns. Decisions should be made with care and professional financial advice can help you understand what is most appropriate for your situation.

Published on: 06.11.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

The information contained in this blog is for information purposes only and does not constitute advice. Please seek financial advice before making any decisions. 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 not a guide to future returns.

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Understanding the Personal Allowance

Rachel Goodhall — Fri, 16 Oct 2026 08:00:15 +0000

The Personal Allowance is the starting point for understanding how income tax works in the United Kingdom. It determines how much you can earn before you begin paying tax and it affects almost everyone, whether they are employed, self employed or receiving pension income. Although it is simple in principle, it plays a major role in shaping your overall tax position.

What the Personal Allowance Covers

The Personal Allowance applies to most types of income. This includes salary, pension income and self employment earnings. You only begin paying income tax once your income rises above the allowance. For many people it is the single most important part of the tax system because it sets the threshold at which tax begins.

When the Personal Allowance Changes

The allowance does not stay the same forever. Governments can increase it, reduce it or freeze it. When it is frozen while incomes rise more people gradually pay more tax. This is often described as fiscal drag. Understanding how the allowance moves over time helps you anticipate changes in your tax bill.

When the Allowance Reduces

For higher earners the Personal Allowance can reduce gradually once income reaches a certain level. This means that some people pay tax not only on their income but also on the loss of part of their allowance. It is an important detail that can affect long term planning.

My Final Thoughts

The Personal Allowance is simple but significant. It determines how much of your income is taxed and how much is not. Knowing how it works and how it changes can help you make better decisions about saving, investing and planning for the future. In the next blog we will look at the Savings Allowance and how it affects interest earned on your savings.

Published on: 16.10.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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Personal Tax Allowances: A Quick Overview Before We Dive Deeper

Rachel Goodhall — Fri, 09 Oct 2026 08:00:06 +0000

Personal tax allowances form the foundation of how your income is taxed in the United Kingdom. They determine how much you can earn before paying tax, how different types of income are treated and how your overall tax bill is calculated. The system can appear complicated at first glance but it becomes much clearer once you understand the main categories.

This blog gives you a quick overview. In the next few blogs we will explore each allowance individually in more detail.

The Personal Allowance

This is the amount most people can earn before paying income tax. It applies to salary, pension income and self employment earnings. For many people it is the single most important allowance.

The Savings Allowance

This allowance lets you earn a certain amount of interest from savings without paying tax on that interest. The amount you receive depends on your tax band.

The Dividend Allowance

If you receive dividends from investments or shares a portion of that income is taxed at zero percent. This allowance has reduced over time but it still plays a role for many investors.

The Marriage Allowance

This allows one spouse or civil partner to transfer part of their Personal Allowance to the other. It can reduce the household tax bill but it is only available in specific circumstances.

The Blind Persons Allowance

An additional allowance for eligible individuals which increases the amount of income that can be earned tax free.

My Final Thoughts

Personal tax allowances are the building blocks of the United Kingdom tax system. Once you understand the categories the rest becomes far easier to navigate. In the next blogs we will look at each allowance individually and explore what it covers, who can use it and how it affects your tax bill.

Published on: 02.10.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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How Workplace Pensions Use Lifestyling

Rachel Goodhall — Fri, 02 Oct 2026 11:51:57 +0000

Most workplace pensions use a technique called lifestyling. It is designed to adjust your investments automatically as you get closer to retirement. The idea is simple. When you are younger, your pension can take more risk. As you approach retirement, the pension gradually reduces that risk to help protect what you have built.

Early Career: Growth First

In the early years, workplace pensions usually invest more heavily in growth assets such as equities. These have the potential for higher long term returns, and younger savers have time to ride out market ups and downs.

Mid‑Life: A Gradual Shift

As you move through your forties and fifties, the pension begins to adjust. The shift is slow and deliberate. Growth assets are reduced and replaced with investments that aim to be steadier. The goal is to lower the impact of market volatility as retirement gets closer.

Approaching Retirement: Protecting What You Have

In the final years before retirement, lifestyling becomes more noticeable. The pension may move into lower risk assets such as bonds or cash‑like holdings. The intention is not to grow the pot aggressively but to protect it from sharp market swings at the point you may need to start drawing income.

My Final Thoughts

Lifestyling is designed to make pension investing easier by adjusting risk automatically as your circumstances change. It is not perfect, and it may not suit everyone, but for many people it provides a simple, structured way to manage risk without needing to make constant decisions. Understanding how it works helps you judge whether it aligns with your own retirement plans.

Published on: 02.10.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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Understanding Index Funds — What They Are and How They Work

Rachel Goodhall — Fri, 25 Sep 2026 08:00:08 +0000

Index funds are often described as simple, transparent and cost‑effective. But what do they actually do, and why have they become such a common part of investment portfolios? This blog focuses on the practical side of index investing, keeping the explanation clear and accessible.

What Index Funds Actually Do

An index fund tracks a specific market index. Instead of trying to pick winning companies, it buys the same companies in the same proportions as the index it follows. This means:

No active stock selection
No attempts to outperform the market
A clear, rules‑based approach

The goal is to match the performance of the index as closely as possible.

Common Indices Investors Track

Index funds can track a wide range of markets, including:

The S&P 500
The FTSE 100
Global equity markets
Emerging markets
Specific sectors or themes

The principle is the same regardless of the index: broad exposure, low cost and clear rules.

The Strengths of Index Funds

Index funds offer several advantages:

Diversification across many companies
Lower fees than most active funds
Transparency — you know exactly what you own
Simplicity — easy to understand and easy to use

For long term investors, these features can be appealing, especially when combined with regular contributions.

The Limitations You Should Be Aware Of

Index funds are not perfect. Their limitations include:

No ability to avoid overvalued areas of the market
No flexibility to respond to short term opportunities
Concentration risk if an index becomes dominated by a few large companies
No chance of outperforming the index

These points do not make index funds unsuitable — they simply highlight the importance of understanding what you own and why.

My Final Thoughts

Index funds provide a simple, transparent and low cost way to invest. They remove the need to pick individual companies and offer broad exposure to markets. But like any investment, they have strengths and weaknesses. Understanding both sides helps you decide whether they belong in your long term plan.

Published on: 25th September 2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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The Rise of Index Funds — How a Simple Idea Changed Investing

Rachel Goodhall — Fri, 18 Sep 2026 08:04:05 +0000

Index funds are now a familiar part of the investment landscape, but their origins tell a story of academic research, market evolution and shifting investor behaviour. What began as a niche concept has become one of the most influential developments in modern investing.

Where Index Funds Began

The foundations of index investing were laid in the 1960s and 1970s, when academics began studying how markets behave. Research from economists such as Eugene Fama suggested that markets were broadly efficient — meaning prices already reflected available information. If this was true, consistently beating the market after fees would be extremely difficult.

In 1971, Wells Fargo launched the first institutional index fund. Five years later, Vanguard introduced the first index fund available to individual investors. At the time, it was criticised for not trying to outperform the market. Yet its purpose was clear: buy the whole market at low cost and avoid the pitfalls of stock picking.

This simple idea would go on to reshape investing.

Why Index Funds Became So Popular

Index funds grew steadily through the 1980s and 1990s, but their popularity accelerated in the 2000s and 2010s. Several factors contributed:

Lower fees compared with active funds
Greater transparency
Consistent performance relative to the market
Growing evidence that many active funds struggled to outperform after fees

As investing became more accessible, index funds offered a straightforward way to participate in markets without needing specialist knowledge.

My Final Thoughts

Index funds began as an academic experiment and evolved into a cornerstone of modern investing. Their history explains why they are so widely used today: they offer simplicity, transparency and low cost access to markets. Understanding where they came from helps you appreciate why they continue to attract attention.

In the next blog, we look at what index funds actually do, how they work in practice, and the strengths and limitations investors should be aware of.

Published on: 18th September 2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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Money Market Funds: What They Do and When They May Be Useful

Rachel Goodhall — Fri, 11 Sep 2026 08:00:08 +0000

Money market funds are often mentioned in conversations about short term saving, cautious investing or managing cash within a portfolio. They sit quietly in the background of the investment world, rarely grabbing headlines, yet they play an important role for many investors. Understanding what they do and when they may be useful can help you decide whether they have a place in your financial plan.

What Money Market Funds Actually Invest In

Money market funds invest in high quality, short term instruments, but the exact maturity profile depends on the type of fund and its objectives. These instruments typically include:

Short dated government securities
Certificates of deposit
Commercial paper issued by large companies
Other low risk, short maturity assets

Some money market funds maintain very short average maturities. Others hold slightly longer dated instruments to capture higher yields. The aim is broadly the same: to provide stability, daily liquidity and a return that reflects prevailing short term interest rates.

They are not designed for long term growth. They are designed to be steady.

Why They Are Considered Low Risk

Money market funds are often viewed as one of the lowest risk options within the investment universe. This is because:

The underlying assets are generally high quality
Maturities are managed to reduce interest rate sensitivity
Prices tend to move very little day to day
They aim to maintain a stable value

However, they are still investments. They are not bank accounts and they are not guaranteed. Their value can fall, although such movements are usually small.

When Money Market Funds May Be Useful

Money market funds can be helpful in several situations, especially when stability and liquidity matter more than growth.

Short term holding periods If you expect to use the money soon, a money market fund can provide a steadier experience than equity or bond markets.

Managing cash within a portfolio Investors sometimes use money market funds as a temporary home for cash while waiting to invest or rebalance.

Reducing risk without leaving the market entirely During periods of uncertainty, some investors prefer to hold part of their portfolio in a money market fund rather than moving fully to cash.

Corporate or trustee needs Money market funds can be useful for organisations that need daily liquidity and a cautious approach to managing cash.

The Limitations: What Money Market Funds Cannot Do

Money market funds have clear strengths, but they also have limitations.

They do not provide long term growth
They may underperform inflation over time
They are not a substitute for a diversified investment strategy

Their purpose is stability, not wealth creation.

My Final Thoughts

Money market funds are designed to offer stability, liquidity and a modest return linked to short term interest rates. Their maturity profile varies depending on the type of fund, but the core purpose remains the same. They can be useful for short term needs, cautious cash management or reducing risk within a portfolio. But they are not a long term growth engine and should be used with a clear understanding of their role.

Published on: 11.09.26

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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What Octopus’s Trading Pause Really Tells Us About Business Relief Liquidity

Rachel Goodhall — Fri, 28 Aug 2026 08:29:06 +0000

On 28 July, Octopus Investments temporarily paused applications and withdrawals across its Octopus Inheritance Tax Service, with an expected suspension of six to eight weeks. The stated reason is that Fern Trading, the unquoted company in which OITS investors hold shares, is progressing a transaction affecting part of its portfolio, and that until this settles a fair share price cannot be set.

On the surface this reads as routine, sensible investor protection. Look a little closer and it says something more important about how these Inheritance Tax Planning products work.

The pause shows that Business Relief pricing is a valuation exercise, not a market price

Unlike an AIM-listed share, Fern Trading shares are not traded on any exchange. Their price is set periodically by Octopus itself, based on the value of the underlying businesses. Most of the time that produces welcome stability compared with volatile public markets. But it also means the price is only ever as reliable as the manager’s ability to value the business accurately at that moment. When a material transaction is in progress, that becomes impossible, and pricing must stop. This is not unique to Octopus. It is a structural feature of every unquoted Business Relief investment.

How long really is “temporary” when it comes to a pause in withdrawals?

Six to eight weeks is Octopus’s honest estimate, and it may well prove accurate. But suspensions of this kind have a habit of outlasting their original timeframe, as anyone who held property funds through 2016 or 2020 will remember. Clients and advisers should plan around the possibility of a longer pause, not just the one initially quoted.

This is precisely the liquidity gap we flagged a few weeks ago

Business Relief is often chosen because, after two years, it offers inheritance tax relief while remaining notionally more accessible than gifting or trusts. This pause is a useful, if unwelcome, illustration of the gap between accessible in principle and accessible when you need it.

An investor needing funds during this window, to meet an unrelated tax bill, care costs, or simply a change of plan, simply cannot get them, however flexible the product brochure made it sound. For clients who hold Business Relief investments as part of a wider estate plan, rather than as their only liquid asset, that gap may be manageable. For those who do not, it is not.

Final thought

None of this is a criticism of Octopus’s decision itself. Pausing dealing while price-sensitive information is unresolved would appear to be the responsible option. Arguably, this is better than allowing investors to buy or sell at a price nobody can currently stand behind.

The real message is broader. Every Business Relief investment carries some version of this illiquidity, and a sound estate plan built around it needs a genuine cash buffer sitting alongside, not a product that only looks liquid until the moment it matters.

Published on: 28.08.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

This content represents an opinion at the time of writing and should not be interpreted as financial advice. Rates, rules, and figures referenced may change over time and should be independently verified. Readers should seek personalised advice from an FCA-regulated adviser before acting on any information in this article.

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The Quiet Importance of Liquidity in Inheritance Tax Planning

Rachel Goodhall — Fri, 14 Aug 2026 08:40:21 +0000

Inheritance tax planning often focuses on structures, allowances and long term strategy. It is easy to become absorbed in the technical detail and overlook one of the most practical elements of all. Liquidity. The simple ability to access money at the exact moment it is needed. It is an issue that rarely receives attention, yet it sits at the centre of almost every successful estate plan.

Estates need cash long before assets can be sold

When someone dies the estate immediately faces costs. Funeral expenses. Professional fees. Property maintenance. Tax liabilities. These arrive long before investments can be encashed or property can be sold. Families often discover that the estate is valuable on paper but has very little accessible cash. That gap creates stress, delays and in some cases forces the sale of assets that were never meant to be sold.

HMRC expects inheritance tax to be paid even when the estate is illiquid

One of the most overlooked realities of inheritance tax is that HMRC expects payment on time regardless of how liquid the estate is. If the estate includes property, business interests or long term investments, the tax bill may arrive months before those assets can be turned into cash. This can leave families scrambling to find money at short notice. In some cases they may need to borrow or sell assets quickly simply to meet the tax deadline. Liquidity becomes not just helpful but essential.

Many popular planning strategies reduce liquidity without people realising

Gifting, trusts and long term investment planning can all reduce the amount of cash available when the estate needs it most. These strategies may be effective in reducing the eventual tax bill, but they can also leave families with a short term liquidity problem. It is a tension that is easy to overlook because the focus is usually on the future tax position rather than the practical realities of administering an estate.

Final thought

Liquidity is often treated as an afterthought in inheritance tax planning, yet it is the factor that determines how smoothly an estate can be managed and whether HMRC can be paid on time. It is the difference between a plan that works in theory and a plan that works in real life. In a follow up piece we can explore how liquidity interacts with gifting, trusts and investment choices, and why it deserves far more attention than it usually receives.

Published on: 14.08.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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What Is Really Behind the Move To Bring Pensions Back Into Estates

Rachel Goodhall — Fri, 07 Aug 2026 08:20:14 +0000

The decision to bring certain pension death benefits back into the scope of inheritance tax from April 2027 has been presented as a technical adjustment. Many people assume it is simply another way of increasing inheritance tax. That may be part of the outcome, but it is unlikely to be the main motivation. The real driver appears to sit elsewhere, in an area that receives far less attention.

The government wants people to withdraw more of their pensions during their lifetime

For years pensions have been treated differently from other assets on death. Keeping a pension outside the estate has encouraged people to preserve their pension pot and draw on other assets first. This has had an unintended consequence. It has reduced income tax receipts because people have been withdrawing less from their pensions and therefore paying less income tax at their marginal rate.

Bringing pensions back into the estate changes that incentive. If a pension may now create an inheritance tax charge on death, people may feel more pressure to draw on it earlier. That means more withdrawals, more taxable income and a higher income tax take for the Treasury. In many cases this will generate far more revenue than inheritance tax ever could.

The reform aligns with a wider shift in how the state views pension wealth

Over the past decade the pension system has moved steadily toward greater flexibility. People can access their pots earlier, draw income in different ways and use pensions as part of wider financial planning. The one constant has been the favourable treatment on death. Removing that protection signals a change in how pension wealth is viewed. It suggests that the state now expects pension savings to be used during life rather than preserved as a tax efficient legacy.

Final thought

The move to bring pensions back into estates is often described as an inheritance tax reform, but the deeper motivation appears to be about income tax. If people begin withdrawing more from their pensions to avoid a future inheritance tax charge, the Treasury benefits from a steady and predictable increase in income tax receipts. It is a shift that may prompt many investors to rethink how they manage risk, how they draw income and how they allocate assets across their retirement plans.

Published on: 07.08.2026

Contact: Daniel Sperber at Coleshill Wealth Management

T: 01675 622 445

E: daniel@coleshillwealthmanagement.co.uk

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