Gower Corporate Pension Schemes Member briefing - December 2025

Member briefings are as much a product of the varying topics raised, or spoken of by  members and private clients, as they are of my own observations on the ebb and flow of financial markets. There are many and varying factors that can impact members as they build pension investment wealth over the course of decades. 

The 2nd half of 2025 has been no exception, but the topics have narrowed a little as unsurprisingly, budgetary developments in the UK are relevant for many members. The fallout from the UK Chancellor’s most recent budget announcements is still being felt. Tax in its many forms has been a feature of human existence for a very long time. You can easily argue it has been hugely beneficial in the development of free societies and how those societies grow, distribute and pay for public services.   

The tax bargain does invariably strike an imbalance between winners and losers. Whilst we may not always enjoy paying tax, we certainly like many of the services and initiatives which are provided.  Moreover, we are mostly accepting of the deficits that governments run, in spending more on these services than is raised in taxation. In the UK this has reached epic proportions hence the frequency with which economic growth is spoken of, or its absence is worried over.  

As the tax take gathers pace, members have posed questions around the dismantling of protections for UK pension assets from inheritance tax (IHT), prompting thoughts around transfer of pension assets sooner than planned. Adjustments to domicile, or the introduction of residency-based tests for a range of taxes, also poses questions and re- examination of members’ prior plans.  

In moving from the personal to the institutional, the extra surcharge on bank profits that were trailed pre-budget did not come to pass. A wise move no doubt, given that the government will be eager for these self-same banks to aid UK growth by lending more to British businesses. This hope is also aided by The Bank of England (BOE) easing Bank capital requirements slightly, which may free up more capital for lending purposes, for both business and those seeking home mortgage finance. 

Concerns abound around several themes: do asset prices have bubble-like characteristics, will an arguably over-priced stock market fall or should I adopt a ‘risk-off’ approach? These are all  common questions among members for which there is no immediate answer.  Bubbles can inflate for much longer than you expect and the fear of missing out can draw some investors into the wrong area at the worst possible time.  

Retail investors rarely, if ever, fare well when it comes to timing entry and exit points.  It is a treacherous thing to attempt and runs contrary to every investing rule. A fortuitous sale is rarely followed by a well-timed re-investment, even for professional investors.    

However, pension savers adding regular premiums, with some years left to retirement should be unconcerned by frothy markets and fear-driven headlines. The smoothing effect of the incremental additions is akin to the tortoise and hare fable. If anything, more volatile markets in the early stage of the journey can be beneficial by adding cheaper units, with time on your side. 

There is of course no disputing the record highs seen across stock market indices in the latter half of 2025. Yet earnings multiples and the measures which aid stock market valuations (if technology is your theme) are half what many businesses were displaying during our nearest reference point; the prior ‘dotcom’ bubble of 1999/2000. While the phrase ‘this time it’s different’ is often a warning sign, these financial ratios may have relevance to the current cycle; or may have none at all. 

Unsurprisingly the portfolio models and varying funds across which members invest their pension contributions have benefitted from the broader performance of markets. Where members have taken greater risk and been prepared to accept greater loss, they have certainly been rewarded through this cycle.  

This is pleasing, as recent years have clearly not been without significant challenge for investors. It is fair to acknowledge that few of the geopolitical challenges that have caused gyration and volatility across global stock markets over recent years have been solved. They remain with us and in some sectors are only more acute. 

The resilience of markets is therefore of some comfort and illustrative of the recuperative qualities that are the hallmark of equities, notwithstanding of course that around any given corner will be another unforeseen challenge with global impact. 

As ever the team at Gower are available to discuss or review any financial planning aspect.  Wherever you are along your own retirement path I would urge all pension scheme members to undertake a forecasting exercise to map your planning (see Gower's Future Forecast). A forecasting exercise can prove invaluable in helping determine where your retire plan actually is in relation to your own expectations of retirement income, as opposed to where you think it is. 

I wish all Gower pension members compliments of the season. 

Adam Sullivan

Senior Financial Adviser

 

Gower Financial Services Ltd. is licenced and regulated by the Guernsey Financial Services Commission. Company registration number 37312.  Risk Warning: Please note that the value of investments can go down as well as up, and you could get back less than your original investment. Past performance should not be used as a guide to future returns. Where investments are denominated in foreign currencies, changes in the rate of exchange may have an adverse effect on the value or price of the investment in Sterling terms