HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 1 of 10 Start here
Your first step

Before You Invest: Build Your Safety Net First

Investing suits money you won't need for a while. A safety net means an unexpected bill won't force you to sell your investments at a bad time.

  • Protects your future investments
  • Peace of mind for emergencies
Your action plan

Four steps to being ready to invest

Tap any step to find out why it matters.

Step 1

Know where your money goes

Write down what comes in and what goes out each month. Split your spending into essentials, like rent and bills, and extras you can cut back on. What's left over is what you can save or invest.

Step 2

Clear high-interest debt

Credit cards, store cards and overdrafts often charge more interest than investments are likely to earn. Paying them off is a sure way to stop losing money to interest, so it's usually a sensible first move.

Step 3

Build your cash buffer

Keep 3 to 6 months of essential living costs in an instant-access savings account. Then, if something unexpected happens, you can use this money instead of having to sell your investments.

Goal

Ready to start investing

With expensive debt cleared and a cash buffer in place, you can invest money you won't need for at least five years. That gives it time to ride out the ups and downs of the markets. Remember, the value of investments can fall as well as rise.

Interactive tool

Emergency buffer calculator

Move the sliders to see how much you might want to keep in your safety net.

£1,500
3 months

Essentials are the things you can't go without: rent or mortgage, energy bills, food, and minimum debt repayments.

Your safety net

Monthly£1,500
Months3
Your target£4,500

Keep £4,500 in an instant-access savings account, ready for emergencies. This money should stay in cash, not in investments.

Why a cash buffer matters before investing

Investment values go up and down. If an emergency comes up when prices are low and you have no cash to fall back on, you might have to sell at a loss. A cash buffer protects both your day-to-day life and your long-term investments.

Is my savings money safe?

If a UK-authorised bank or building society fails, the Financial Services Compensation Scheme (FSCS) protects up to £120,000 per person, per bank.

Jargon buster

Words worth knowing

Easy access (liquidity)
How quickly you can turn something into cash you can spend, without losing money.
High-interest debt
Borrowing that charges a lot of interest, like credit cards and overdrafts. It often costs more than investments are likely to earn.
Instant-access savings
A savings account you can take money out of at any time, with no penalty or waiting period.
Investment risk
The chance that your investment ends up worth less than you put in.
Common questions

Questions people often ask

Should I invest if I still have a mortgage?

Usually, yes. A mortgage is normally lower-cost, long-term borrowing, so you don't have to clear it before you invest, as long as you keep up your repayments. Whether to overpay your mortgage or invest instead depends on your interest rate and plans. That's a good question to talk through with an adviser.

Where should I keep my emergency fund?

In an instant-access savings account, so you can get your money quickly without a penalty. Avoid fixed-term accounts or investments, where the money is locked away or its value can fall. Keeping it separate from your everyday account makes it less tempting to spend.

Can I start investing before my buffer is full?

Some people do. For example, once expensive debt is cleared, they put most of their spare money into savings and a smaller amount into investments. And it's usually worth staying in your workplace pension, because your employer pays in too. A financial adviser can help you find the right balance.

What if I can't save 3 to 6 months straight away?

That's completely normal. Start with a small target, such as £200, and build from there. Even a small buffer helps. If debt feels hard to manage, free, confidential help is available from MoneyHelper.
Topic 1 of 10

Ready for the next step?

Next, find out the difference between saving and investing. Or talk it through with one of our independent advisers.

This guide is general information, not personal financial advice. The value of investments can go down as well as up, and you may get back less than you invest.

Sources: MoneyHelper – emergency savings · FSCS – deposit protection · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 2 of 10 The basics
Know the basics

Saving vs Investing: What's the Difference?

Saving keeps your money safe for the short term. Investing gives it a chance to grow over the long term, but its value can go down as well as up. Most people need a bit of both.

  • Saving: safe and easy to access
  • Investing: room to grow over time
Side by side

How saving and investing compare

Neither is "better". They do different jobs.

Saving

For short-term goals and emergencies

Where
A savings account or cash ISA with a bank or building society
How it grows
The bank pays you interest
Risk
Low. The amount you put in won't fall
Main danger
Inflation. If prices rise faster than your interest, your money buys less
Suits
Money you may need within about 5 years
Protection
FSCS covers up to £120,000 per person, per bank, if the bank fails

Investing

For long-term goals

Where
Shares, bonds and funds, often held in a stocks and shares ISA or a pension
How it grows
Through rising prices, dividends and interest
Risk
Higher. The value goes up and down, and you could get back less than you put in
Main danger
Needing to sell when prices are low
Suits
Money you can leave alone for 5 years or more
Protection
FSCS may cover up to £85,000 if an investment firm fails, but not if your investments simply fall in value
Which one for my goal?

When will you need the money?

Tap the timeframe that fits your goal.

Under 5 years

Saving is usually the better fit

For goals up to about five years away, a savings account, fixed-term savings or a cash ISA is usually the better home. Investments can fall in value, and there may not be enough time for them to recover before you need the money.

5 to 10 years

A mix can make sense

With five to ten years to go, you might keep some money in savings and invest some, depending on how comfortable you are with ups and downs. As your goal gets closer, many people move more into cash, so a late fall in the markets has less impact.

10 years or more

Investing has time on its side

The longer you can leave your money, the more time it has to ride out the ups and downs and benefit from compound growth. Pensions and stocks and shares ISAs are common ways to invest for the long term. Remember: the value of investments can fall as well as rise, and past performance is not a guide to the future.

Interactive tool

See how compound growth works

Compound growth means your returns start earning returns of their own. Move the sliders to see the effect over time. This is an example, not a prediction.

£100
20 years
4% a year

Growth isn't steady in real life. Investments rise and fall from year to year, and charges and inflation reduce what you end up with.

Your example

You put in£24,000
Growth earned£12,677
Example value£36,677

Putting in £100 a month for 20 years at an example 4% a year could grow to around £36,677. This is an illustration only. Real returns vary and aren't guaranteed.

The hidden risk of cash: inflation

Prices rose by 3.5% in the 12 months to September 2026. So something that cost £1,000 a year earlier cost about £1,035. If your savings earn less interest than inflation, your money buys a little less each year. Over the long term, investing gives your money a better chance of keeping up.

What protection do I get?

Savings with a UK bank are protected up to £120,000 if the bank fails. Investments with a UK-authorised firm may be protected up to £85,000 if the firm fails. FSCS does not cover losses when investments simply fall in value.

Jargon buster

Words worth knowing

Interest
Money a bank pays you for keeping your savings with them, usually shown as a yearly percentage.
Compound growth
When the returns you've earned start earning returns too, so your money grows faster over time.
Inflation
The rate at which prices rise. When it's high, the same amount of money buys less.
Shares
A small piece of ownership in a company. Their price goes up and down with how the company and markets are doing.
Fund
A pot that pools money from lots of people and invests it in many different companies or bonds at once.
Diversification
Spreading your money across different investments, so one bad result doesn't hit you too hard. "Don't put all your eggs in one basket."
Common questions

Questions people often ask

Is investing just gambling?

No. Gambling is a short bet where the odds are against you. Investing means owning part of real companies or lending to governments and businesses, usually for many years. There is still risk, and you could get back less than you put in. Spreading your money widely and investing for the long term can help manage that risk.

Can I lose money by investing?

Yes. The value of investments can go down as well as up, and you may get back less than you invest. That's why it's important to only invest money you won't need for at least five years, and to keep an emergency fund in cash.

How much do I need to start investing?

Less than many people think. Lots of investment platforms let you start with a small regular amount each month. Investing a fixed amount regularly can also smooth out the ups and downs, because you buy at different prices over time.

Should I save or invest, or both?

Most people need both. Savings cover emergencies and short-term goals, and investments are for goals that are years away. If you're not sure how to split your money, a financial adviser can look at your situation and goals with you.

What's a sensible way for a beginner to start?

The FCA suggests beginners start with mainstream investments, such as funds that invest in a range of companies for you. Be wary of anything promising high or guaranteed returns, and check any firm on the FCA Register before you invest.
Topic 2 of 10

Ready for the next step?

Next, find out how ISAs let your savings and investments grow tax-free. Or talk it through with one of our independent advisers.

This guide is general information, not personal financial advice. The value of investments can go down as well as up, and you may get back less than you invest. Past performance is not a reliable guide to future returns. Growth figures are illustrations only and are not guaranteed.

Sources: MoneyHelper – save or invest · ONS – consumer price inflation · FSCS – investments · FCA InvestSmart · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 3 of 10 The basics
Tax-free saving

ISAs Explained: Your Tax-Free Wrapper

An ISA (Individual Savings Account) is like a protective wrapper around your savings or investments. Whatever grows inside it is free from UK income tax and capital gains tax, and you don't need to report it on a tax return.

  • £20,000 allowance each tax year
  • No tax on interest or growth
The four types of ISA

Which ISA does what?

Tap a card to see how it works.

Cash ISA

Tax-free savings, low risk

A cash ISA works like a normal savings account, but you pay no tax on the interest. It's a good home for your emergency fund or money you'll need within about five years. Cash ISAs with UK banks and building societies are covered by the FSCS.

  • You can put up to the full £20,000 a year in cash ISAs if you're 18 or over.
  • A planned cut to £12,000 for under-65s from April 2027 has been cancelled.
Stocks & shares ISA

Tax-free investing for the long term

A stocks and shares ISA lets you invest in funds, shares, bonds and investment trusts. You pay no income tax or capital gains tax on anything you earn inside it. It suits money you can leave for five years or more. The value can go down as well as up, so you could get back less than you put in.

  • You can pay in up to £20,000 a year.
Lifetime ISA

A bonus for your first home or retirement

You must open one and make your first payment before you turn 40. You can then pay in up to £4,000 a year until you're 50, and the government adds a 25% bonus, up to £1,000 a year. You can use it to buy your first home, or take it out from age 60.

  • If you withdraw for any other reason, you'll usually pay a 25% charge, so you could get back less than you paid in.
  • If you buy a first home costing over £450,000, the charge is 20% rather than 25%.
  • A new First Time Buyer ISA will replace it for new savers from April 2029. If you already have a Lifetime ISA, you can keep paying in.
Innovative finance ISA

Peer-to-peer lending, higher risk

An innovative finance ISA lets you lend money to people or businesses through a lending platform, and the interest you earn is tax-free. Borrowers can fail to repay, and this money is usually not covered by the FSCS. It's generally not a starting point for beginners.

Interactive tool

Plan your £20,000 allowance

You can split your allowance across different ISAs in the same tax year. Move the sliders to see how much you'd use, and what a Lifetime ISA bonus could add.

£5,000
£10,000
£4,000

Your tax year

Allowance used£19,000
Left to use£1,000
Lifetime ISA bonus+£1,000

You'd use £19,000 of your £20,000 allowance, with £1,000 left. Unused allowance can't be carried over after 5 April.

What the Budget on 28 October 2026 changed

  • The overall ISA allowance stays at £20,000, and you can still put all of it in cash ISAs.
  • You can still move money between cash ISAs and stocks and shares ISAs.
  • The Lifetime ISA will close to new savers when the new First Time Buyer ISA starts in April 2029.

Moving an ISA? Transfer it, don't withdraw it

You can move your ISA to another provider at any time. To keep the money tax-free, ask your new provider to arrange the transfer. If you take the money out yourself and pay it back in, it may count towards this year's allowance.

Jargon buster

Words worth knowing

Tax year
The UK tax year runs from 6 April to 5 April. Your ISA allowance starts again each 6 April.
ISA allowance
The most you can pay into ISAs in one tax year: £20,000 for 2026/27. If you don't use it, you lose it.
Tax wrapper
An account that shields what's inside it from tax. An ISA is a wrapper. The savings or investments inside are what you actually own.
Flexible ISA
An ISA that lets you take money out and put it back in the same tax year without using up more of your allowance. Not all ISAs are flexible, so check with your provider.
Government bonus
The 25% top-up the government adds to Lifetime ISA payments, up to £1,000 a year.
ISA transfer
Moving your ISA to another provider without losing its tax-free status. The new provider arranges it.
Common questions

Questions people often ask

Can I have more than one ISA?

Yes. You can save up to £20,000 in one ISA or split it across several in the same tax year, including more than one of the same type. You can only pay into one Lifetime ISA each tax year.

What happens to allowance I don't use?

It's lost at the end of the tax year on 5 April and can't be carried over. Your ISAs stay open, though, and the money already inside them stays tax-free for as long as you keep it there.

Do I need to tell HMRC about my ISA?

No. You don't need to declare ISA interest or investment growth on a tax return. Your provider deals with HMRC for you.

Can I take money out of an ISA?

Usually yes for cash and stocks and shares ISAs, depending on your provider's terms. Some fixed-rate cash ISAs charge a penalty if you withdraw early. With a Lifetime ISA, you'll usually pay a 25% charge unless you're buying your first home, you're 60 or over, or you're terminally ill.

Can children have an ISA?

You need to be 18 or over to open an adult ISA. For under-18s there's the Junior ISA, which we cover in Topic 6, Investing for children.
Topic 3 of 10

Ready for the next step?

Next, find out how pensions work and why they're one of the most tax-efficient ways to save for later life. Or ask one of our independent advisers which ISAs suit you.

Next: Pensions 101 Speak to an adviser

This guide is general information, not personal financial advice. Tax rules can change, and how they affect you depends on your circumstances. The value of investments in a stocks and shares ISA can go down as well as up, and you may get back less than you invest. Figures are for the 2026/27 tax year and reflect the Budget on 28 October 2026. Some Budget changes still need to be made law.

Sources: GOV.UK – ISAs · HM Treasury – Budget 2026 tax overview · GOV.UK – Lifetime ISA · GOV.UK – First Time Buyer ISA consultation · MoneyHelper – cash ISAs · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 4 of 10 Pensions
Pensions

Pensions 101: Saving for Your Future Self

A pension is a long-term savings pot for later life. The government tops up what you pay in through tax relief, and if you work for an employer, they usually pay in too. The trade-off is that you generally can't touch it until your mid-50s.

  • Tax relief on what you pay in
  • Usually 25% tax-free when you take it
The big picture

Where your retirement money can come from

Tap a card to find out more.

State Pension

The foundation of your retirement income

The full new State Pension is £241.30 a week in 2026/27, or about £12,548 a year. You usually need 35 qualifying years of National Insurance to get the full amount, and at least 10 years to get any. State Pension age is rising from 66 to 67 between April 2026 and March 2028. On its own, the State Pension is unlikely to cover everything you'll want in retirement.

Workplace pension

Free money from your employer

Most employers must automatically enrol eligible staff into a workplace pension. Money comes out of your pay, your employer adds a contribution, and you get tax relief on top. If you opt out, you usually lose your employer's contribution too. We explain how it all works in Topic 5.

Personal pension

A pension you control

You can open a personal pension yourself, for example a SIPP (self-invested personal pension). It suits people who are self-employed, or who want to save more or choose their own investments. Your provider claims basic-rate tax relief and adds it to your pot. The value depends on how your investments perform, and it can go down as well as up.

Taking your money

How and when you can take it

You can usually start taking money from private pensions at age 55. This rises to 57 from 6 April 2028. Most people can take up to 25% tax-free, up to a maximum of £268,275. The rest is taxed as income when you take it. We look at your options in Topic 9, Planning for retirement.

Interactive tool

See how tax relief boosts your pension

When you pay into a personal pension, the government adds tax relief. Higher-rate taxpayers can claim extra back. Choose an amount and your tax band to see how it adds up.

£100
Your income tax rate

Uses rates for England, Wales and Northern Ireland, and assumes a pension where your provider claims basic-rate relief for you. Scottish rates are different. You can get relief on up to 100% of your earnings each year.

Each month

You pay£100
Government adds£25
Goes into your pension£125

Paying £100 a month puts £125 into your pension, or £1,500 a year.

Your pension is locked until later life

You usually can't take money from a private pension until you're 55, rising to 57 from 6 April 2028. Be very wary of anyone offering to unlock your pension early. These offers are often scams and can lead to large tax charges.

Quick win: check your State Pension forecast

It takes a few minutes on GOV.UK to see how much State Pension you could get, when you can claim it, and whether there are gaps in your National Insurance record. Check your State Pension forecast.

Jargon buster

Words worth knowing

Tax relief
Money the government adds to your pension, giving back the income tax you paid on the amount you put in.
Pension pot
The total value of the money built up in your pension, including any investment growth.
Defined contribution
The most common type. What you get depends on how much is paid in and how well the investments do.
Defined benefit
Also called "final salary" or "career average". It pays a set income based on your salary and years of service. Mostly found in the public sector and older workplace schemes.
SIPP
A self-invested personal pension. A type of personal pension where you choose the investments yourself.
Qualifying year
A year in which you paid, or were credited with, enough National Insurance to count towards your State Pension.
Common questions

Questions people often ask

Should I save in a pension or an ISA?

They work well together. A pension gives you tax relief going in and often employer contributions, but the money is locked away until your mid-50s and most of it is taxed when you take it. An ISA has no tax relief going in, but you can take the money out tax-free at any time. Many people use a pension for retirement and an ISA for goals before then.

How much should I pay into my pension?

It depends on your age, income and the lifestyle you want later on. A good first step is to pay in at least enough to get the full contribution your employer offers. An adviser can help you work out a target based on your own situation.

I've lost track of an old pension. How do I find it?

If you know the name of the employer or pension provider, the government's free find pension contact details service can give you their contact details. It won't tell you whether you have a pension or how much it's worth, so you'll need to contact the scheme directly.

Is my pension money safe?

Pensions with FCA-regulated providers have strong protections, including the Financial Services Compensation Scheme (FSCS) if a firm fails. This protection doesn't cover your investments falling in value. Always check a firm is on the FCA Register before you move your pension.

What happens to my pension when I die?

It depends on the type of pension and who you've named to receive it, so keep your nomination form up to date. From 6 April 2027, most unused pension pots will count towards your estate for inheritance tax. We cover this in Topic 8, Estate planning and inheritance tax.
Topic 4 of 10

Ready for the next step?

Next, find out how workplace pensions and auto-enrolment work, and how to make the most of your employer's contributions. Or ask one of our independent advisers to review your pensions.

This guide is general information, not personal financial advice. Tax rules can change, and how they affect you depends on your circumstances. The value of pension investments can go down as well as up, and you may get back less than you put in. Figures are for the 2026/27 tax year. Tax relief examples use rates for England, Wales and Northern Ireland.

Sources: GOV.UK – pension tax relief · GOV.UK – benefit and pension rates 2026/27 · GOV.UK – new State Pension · GOV.UK – minimum pension age · GOV.UK – tax-free lump sum · MoneyHelper – pension basics · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 5 of 10 Pensions
Pensions

Workplace Pensions: Don't Leave Free Money Behind

If you work for an employer, you're probably already saving into a pension through "auto-enrolment". Your employer has to pay in too, and the government adds tax relief. For most people, it's one of the most valuable ways to save.

  • Your employer pays at least 3%
  • 8% minimum going in overall
How auto-enrolment works

Your workplace pension in four steps

Tap a step to find out more.

Step 1

Who gets automatically enrolled

By law, your employer must automatically enrol you into a workplace pension and pay into it if you:

  • are aged between 22 and State Pension age
  • earn at least £10,000 a year
  • usually work in the UK.

Earn less or younger than 22? You can usually still ask to join, and your employer can't refuse.

Step 2

At least 8% goes in

The legal minimum is 8% of your qualifying earnings, which is pay between £6,240 and £50,270 a year. Your employer pays at least 3%. You pay the rest, and part of your share comes from tax relief. GOV.UK gives this example: you pay £40, your employer pays £30, you get £10 tax relief, and £80 goes into your pension. Many employers pay more than the minimum.

Step 3

Opting out: think twice

You can leave the scheme by contacting your pension provider. If you opt out within one month of joining, you get back what you've paid in. After that, the money usually stays in the pension until you retire. If you opt out, you also lose your employer's contributions and the tax relief. Your employer must re-enrol you about every 3 years, and you can ask to rejoin at any time.

Step 4

When you change jobs

When you leave a job, your pension stays invested in your name. Your new employer will usually enrol you in a new scheme. Keep a note of each provider and update your address when you move. You may be able to combine old pots into one, but check first for exit fees or valuable benefits you could lose, such as a guaranteed income.

Interactive tool

See what goes into your pension

Enter your salary and the percentages you and your employer pay. Your payslip or HR team can tell you these. The minimum is 5% from you and 3% from your employer.

£30,000
5%
3%

Each year

From your pay£950
Tax relief£238
From your employer£713
Total into your pension£1,901

About £158 a month goes into your pension, and only £79 of it comes from your take-home pay. If you opted out, you'd lose £950 a year from your employer and the government.

An illustration assuming basic-rate (20%) tax relief. How relief is given depends on your scheme, and the figures don't include investment growth or charges.

Opting out is like turning down a pay rise

When you leave your workplace pension, your employer stops paying in for you, and you miss out on tax relief. If money is tight, ask your employer or provider whether you can reduce your contributions for a while instead of stopping altogether.

Keep track of every pension pot

Most of us will have several employers, and several pensions. Keep your providers' details safe. If you've lost track of one, the free find pension contact details service can help. Pensions dashboards will eventually let you see all your pensions in one place online. Pension schemes had until 31 October 2026 to connect, but a date for the public to start using dashboards hasn't been set yet.

Jargon buster

Words worth knowing

Auto-enrolment
The law that means employers must put eligible staff into a workplace pension automatically, rather than waiting for them to sign up.
Qualifying earnings
The slice of your yearly pay that minimum contributions are worked out on: currently £6,240 to £50,270.
Employer contribution
The money your employer pays into your pension on top of your salary. At least 3% of qualifying earnings.
Opting out
Choosing to leave your workplace pension. Do it within a month of joining and you get your own payments back.
Salary sacrifice
You give up some salary and your employer pays it into your pension instead, which can save tax and National Insurance. From April 2029, only the first £2,000 a year will be free of National Insurance.
Default fund
Where your pension is invested if you don't choose. It's designed to suit most members, but you can usually pick a different fund.
Common questions

Questions people often ask

Should I pay in more than the minimum?

The 8% minimum is a starting point, and it may not be enough on its own for the retirement you want. Check whether your employer will "match" extra payments. Some employers pay more if you do, which is one of the easiest ways to boost your pension.

I earn under £10,000. Can I still join?

Yes. You can usually ask to join and your employer can't refuse. If you earn more than £520 a month, your employer must pay in too. If you earn less, they don't have to, but you can still pay in yourself.

I'm self-employed. What do I do?

Auto-enrolment doesn't cover the self-employed, so it's up to you to set up a pension. A personal pension or SIPP gets tax relief in the same way. See Topic 4, Pensions 101.

What happens to my pension if my employer goes bust?

Your pension is held separately from your employer's business, so it doesn't disappear if the company fails. If you think your employer hasn't been paying contributions, check your pension statements and contact your provider.

Should I combine my old pensions?

It can make things simpler and help you keep track, but it isn't always right. Some older pensions have valuable guarantees or charge exit fees. If you have a pension with guaranteed benefits, such as a final salary pension, worth more than £30,000, the law says you must get regulated financial advice before transferring it.
Topic 5 of 10

Ready for the next step?

Next, see how you can start investing for your children's future with a Junior ISA or a pension. Or ask one of our independent advisers to bring your old pensions together.

This guide is general information, not personal financial advice. The value of pension investments can go down as well as up, and you may get back less than you put in. Tax rules can change. Figures are for the 2026/27 tax year. Calculator results are illustrations only.

Sources: GOV.UK – joining a workplace pension · GOV.UK – what you and your employer pay · GOV.UK – leaving a workplace pension · The Pensions Regulator – earnings thresholds · GOV.UK – salary sacrifice from 2029 · FCA – pension transfer advice · Pensions Dashboards Programme · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 6 of 10 Family
Family money

Investing for Children: Give Them a Head Start

Time is the biggest advantage a child has. Small amounts put aside from an early age can grow into a useful sum by 18, for university, a first car or a home deposit. Here's how the main options work.

  • Up to £9,000 a year in a Junior ISA
  • No tax on interest or growth
How saving for a child works

Your child's savings in four steps

Tap a step to find out more.

Step 1

Choosing where to save

For most families, a Junior ISA is the starting point. A parent or guardian with parental responsibility opens it, and any interest or growth is tax-free. There are two kinds: a cash Junior ISA, which works like a savings account, and a stocks and shares Junior ISA, which invests the money. A child can have one of each. The money belongs to the child, not to you.

Step 2

Family and friends can help

Anyone can pay money into a Junior ISA, but the total for each child is £9,000 in the 2026/27 tax year, across all their Junior ISAs. Many providers let you start with small regular amounts, and family can add money for birthdays instead of buying another toy. Starting early matters more than starting big, because growth has more time to build.

Step 3

The £100 rule for parents

There's usually no tax to pay on children's savings. But if money you, as a parent, gave your child earns more than £100 of interest in a tax year, it's treated as your income, and you may have to pay tax on all of it. The rule doesn't apply to money from grandparents, other relatives or friends, or to money in a Junior ISA or Child Trust Fund.

Step 4

At 16 and 18

Your child can take control of their Junior ISA at 16, but can't take money out until they turn 18. At 18 the money is legally theirs, to spend or keep saving as they choose. Talking to them about money in their teens can help them make good choices when the time comes.

Side by side

Three ways to save for a child

Each has a different job. Many families use more than one.

Junior ISA

Most popular choice

Who opens it
A parent or guardian
Limit
£9,000 a year (2026/27)
Tax
No tax on interest or growth
Access
At 18, by your child

Children's savings account

Simple and flexible

Who opens it
Usually a parent, sometimes the child
Limit
Set by the bank
Tax
Usually none, but the £100 rule applies to parents' money
Access
Depends on the account

Junior pension

Very long term

Who opens it
A parent or guardian
Limit
£2,880 a year, topped up to £3,600 by tax relief
Tax
Tax relief going in, tax-free growth
Access
From 57 at the earliest, possibly later
Interactive tool

See what it could grow to by 18

Choose a monthly amount, your child's age now and a growth rate. The top amount, £750 a month, is the £9,000 yearly Junior ISA limit.

£50
Newborn
Growth each year

By their 18th birthday

Paid in£10,800
Growth£4,867
Could be worth£15,667

Starting from birth, £50 a month could grow to around £15,667 by 18.

An illustration only. It assumes the same growth every year after charges, which won't happen in real life. Investments can fall as well as rise, and rising prices mean the money will buy less in future.

At 18, the money is theirs

Once money goes into a Junior ISA, you can't take it back out, and at 18 your child decides what to do with it. If you'd rather keep control, for example to help with a house deposit later, you could save in your own ISA instead. It won't legally be your child's money, but you can choose when to hand it over.

Born between 2002 and 2011? Check for a Child Trust Fund

Children born between 1 September 2002 and 2 January 2011 were given a Child Trust Fund by the government, and many have been forgotten. Your child can take control of it at 16 and take the money out at 18. If you don't know where it is, use the free find a Child Trust Fund service on GOV.UK.

Jargon buster

Words worth knowing

Junior ISA
A tax-free savings or investment account for under-18s. A parent or guardian opens it, but the money belongs to the child.
Junior SIPP
A pension for a child. Payments get tax relief, but the money is locked away until pension age.
Bare trust
A simple way of holding money or investments for a child. The child is usually entitled to take it once they become an adult. Take advice before setting one up.
Child Trust Fund
An older tax-free account given to children born between 1 September 2002 and 2 January 2011.
Parental responsibility
The legal rights and duties a parent or guardian has for a child. You need it to open a Junior ISA.
Compound growth
Earning growth on your earlier growth, not just on what you paid in. The longer the money stays invested, the bigger the effect.
Common questions

Questions people often ask

Cash or stocks and shares Junior ISA?

It depends on how long the money will be saved and how comfortable you are with ups and downs. With 18 years ahead, investing has historically had more time to recover from falls, but there are no guarantees. Cash is steadier, but inflation can eat into it. A child can have one of each, so you can split the money.

Can grandparents pay into a Junior ISA?

Yes. Anyone can pay in, as long as the total for the child stays within £9,000 a year. Money from grandparents isn't caught by the £100 rule. Grandparents can also give £3,000 a year in gifts without it counting towards their estate for Inheritance Tax, and regular gifts from spare income can be exempt too. See Topic 8.

Is a pension for a child worth it?

It can give a huge head start, because the money has decades to grow and the government adds tax relief. But your child can't touch it until at least 57, and that age may rise. Most families fill a Junior ISA first and only look at a junior pension for money they'll never need back.

My child has a Child Trust Fund. What now?

A child can't have a Child Trust Fund and a Junior ISA at the same time. You can ask the provider of the new Junior ISA to transfer the Child Trust Fund into it, which may give more choice and lower charges. Up to £9,000 a year can still be paid into a Child Trust Fund.

Do I need to tell HMRC about my child's savings?

Usually not. You only need to tell HMRC if money a parent gave the child earns more than £100 of interest in a tax year, or if the child's income is over their Personal Allowance, for example from a trust.
Topic 6 of 10

Ready for the next step?

Next, find out what to do if you're starting to save later in life. Or talk to one of our independent advisers about saving for your children or grandchildren.

This guide is general information, not personal financial advice. The value of investments can go down as well as up, and your child may get back less than was put in. Tax rules can change and depend on individual circumstances. Figures are for the 2026/27 tax year. Calculator results are illustrations only.

Sources: GOV.UK – Junior ISAs · GOV.UK – interest on savings for children · GOV.UK – Child Trust Funds · GOV.UK – pension tax relief · GOV.UK – gifts and Inheritance Tax · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 7 of 10 Catching up
Catching up

Starting Late: It's Not Too Late to Catch Up

If you're in your 40s or 50s and feel behind with saving, you're not alone. You may still have 10 to 25 working years ahead, and these are often your highest-earning years. A clear plan now can make a real difference.

  • Up to £60,000 a year into pensions
  • Free pension guidance from age 50
Your catch-up plan

Four steps to get back on track

Tap a step to find out more.

Step 1

Find out where you stand

Start by gathering what you already have. Look out old pension statements, and use the free find pension contact details service for any you've lost track of. Then check your State Pension forecast on GOV.UK. It shows how much you could get, when, and whether you can increase it. Many people find they have more than they thought.

Step 2

Make the most of pension tax relief

Paying more into your pension is usually the most powerful catch-up tool. Basic-rate tax relief turns every £80 you pay into £100, and higher-rate taxpayers can claim more back. Ask your employer whether they'll match extra payments. Most people can pay in up to £60,000 a year in total, including employer payments, though you only get tax relief on up to 100% of your earnings. If you've used that, you may be able to carry forward unused allowance from the previous 3 tax years.

Step 3

Check your National Insurance record

You usually need 35 qualifying years on your National Insurance record for the full new State Pension, and at least 10 to get any. If you have gaps, you may be able to pay voluntary contributions, but usually only for the past 6 years. Check your forecast first, because filling a gap doesn't always increase your pension, and you may be able to get free credits instead.

Step 4

Plan your finish line

From 6 April 2028, most people can't take money from a private pension until 57. The State Pension age is rising from 66 to 67 between 2026 and 2028, and it's reviewed regularly. If you want to stop work before your State Pension starts, you'll need savings to bridge the gap. From 50, you can book a free Pension Wise appointment to talk through your options.

Side by side

Pension or ISA for catching up?

Both are useful. A pension usually gives the biggest boost, while an ISA gives you access before pension age.

Pension

Built for retirement income

Going in
Tax relief added to what you pay
Yearly limit
Usually £60,000 in total
Access
From 57 (from April 2028)
Coming out
Usually 25% tax-free, the rest taxed as income

ISA

Built for flexibility

Going in
No tax relief
Yearly limit
£20,000
Access
Any time
Coming out
No tax to pay
Interactive tool

See what you could still build

Choose your age, when you'd like to retire, a monthly amount and a growth rate. Tick the box if you're paying into a pension, to add basic-rate tax relief.

45
67
£300
Growth each year

By age 67

You pay in£79,200
Tax relief£19,800
Growth£57,921
Could be worth£156,921

Starting now, £300 a month could build around £156,921 by 67. Waiting another 5 years to start would give around £108,580.

An illustration only. It assumes the same growth every year after charges, which won't happen in real life, and doesn't allow for inflation, so the money will buy less in future. Investments can fall as well as rise.

Beware of quick fixes and scams

Feeling behind can make "too good to be true" offers tempting. Scammers often target people in their 40s to 60s with free pension reviews, promises of high returns or time-limited deals. Cold calls about pensions have been banned since 2019, so if one comes out of the blue, hang up. Check any firm on the FCA's ScamSmart site before you act.

Free, impartial guidance from 50

If you're 50 or over and have a defined contribution pension, you can book a free Pension Wise appointment, backed by the government. It explains when you can take your pension, your options, how each is taxed, and how to avoid scams. It's guidance, not advice, so it won't recommend what you should do.

Jargon buster

Words worth knowing

Carry forward
Using pension allowance you didn't use in the previous 3 tax years, so you can pay in more than £60,000 this year. You need to have been in a pension scheme in those years.
Annual allowance
The most that can go into your pensions each year with tax relief, including employer payments. For most people it's £60,000.
State Pension forecast
An online estimate from the government of how much State Pension you could get and when.
Voluntary National Insurance
Payments you can choose to make to fill gaps in your National Insurance record and increase your State Pension.
Money purchase annual allowance
A lower £10,000 limit on what you can pay into pensions each year once you've started taking taxable money from a pension pot.
Minimum pension age
The earliest age you can usually take money from a private pension. It's 55 now and rises to 57 on 6 April 2028.
Common questions

Questions people often ask

Is it too late to start a pension at 50?

No. At 50, you may still have 15 years or more before you retire, and these are often your highest-earning years. With tax relief and any employer payments added, money paid in now can still make a real difference. The key is to start as soon as you can.

Should I pay off my mortgage or pay more into my pension?

It depends on your mortgage rate, your tax rate, your employer's offer and how soon you need the money. Pension tax relief and employer matching are hard to beat, but a smaller mortgage means lower bills in retirement. Many people do a bit of both. This is a good question to talk through with an adviser.

I'm a higher-rate taxpayer. Do I get extra tax relief?

Yes. If you pay tax above the basic rate, you can usually claim extra relief through your Self Assessment tax return, or by contacting HMRC if you don't complete one. In Scotland the rates are different. Many people forget to claim it.

I've already taken money from my pension. Can I still pay in?

Yes, but if you've taken taxable money from a pension pot, rather than just your tax-free lump sum, your yearly limit for future payments usually falls to £10,000. This is the money purchase annual allowance. Check before you take anything if you plan to keep saving.

Can I retire before my State Pension age?

Yes, if you have enough private pension and other savings to live on until your State Pension starts. You can usually take money from private pensions from 57 (from April 2028). ISAs can help bridge the gap because you can take money out at any age.
Topic 7 of 10

Ready for the next step?

Next, find out how estate planning and Inheritance Tax work. Or talk to one of our independent advisers about a catch-up plan that fits your situation.

This guide is general information, not personal financial advice. The value of investments can go down as well as up, and you may get back less than you put in. Tax rules can change and depend on your circumstances. Figures are for the 2026/27 tax year. Calculator results are illustrations only.

Sources: GOV.UK – annual allowance · GOV.UK – pension tax relief · GOV.UK – pension schemes rates · GOV.UK – voluntary National Insurance · GOV.UK – State Pension forecast · GOV.UK – minimum pension age · MoneyHelper – Pension Wise · FCA – ScamSmart · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 8 of 10 Your legacy
Estate planning

Estate Planning and Inheritance Tax: Look After the People You Love

Estate planning simply means deciding what happens to your money, home and belongings when you die, and who can help if you become unable to manage them. A little planning can save your family stress, delay and sometimes tax.

  • £325,000 tax-free allowance each
  • Up to £1 million for some couples
The basics

Estate planning in four steps

Tap a step to find out more.

Step 1

Why a will matters

A will lets you choose who inherits your money, home and belongings, who deals with your estate (your executors) and who would look after any young children. Without one, the law decides, and an unmarried partner gets nothing automatically. You can write a will yourself, but it must be signed and witnessed properly to be valid, and you should get advice if your situation isn't straightforward. Review it after big life events. In England and Wales, getting married or entering a civil partnership usually cancels an existing will.

Step 2

Your tax-free allowances

Everyone has a tax-free allowance of £325,000, called the nil-rate band. If you leave your home to your children or grandchildren, you can usually add up to £175,000, making £500,000. Anything you leave to a husband, wife or civil partner is normally tax-free, and any allowance you don't use can pass to them. That means a married couple or civil partners can pass on up to £1 million between them. Above the allowance, the tax is usually 40%. These allowances are frozen until April 2031.

Step 3

Gifts while you're alive

You can give away £3,000 a year in total without it counting towards your estate, and carry forward one year's unused allowance. You can also give as many gifts of up to £250 per person as you like, as long as they haven't had another allowance from you. Wedding gifts and regular gifts from spare income can be exempt too. Most other gifts become tax-free if you live for 7 years after giving them.

Step 4

Lasting power of attorney

A lasting power of attorney lets you choose people you trust to make decisions for you if you're no longer able to. There are two types: one for property and financial affairs and one for health and welfare. In England and Wales, registering each one costs £92, and you need to set it up while you can still make your own decisions. Scotland and Northern Ireland have their own versions.

Side by side

What a will changes

Many people assume their family will automatically get everything. Without a will, that isn't always true.

With a will

You decide

Who inherits
The people and charities you choose
Partners
You can include an unmarried partner
Children
You can name guardians
Who sorts it out
Executors you trust

Without a will

The law decides

Who inherits
Set by the intestacy rules
Partners
An unmarried partner gets nothing automatically
Spouse with children
First £322,000, personal belongings and half the rest (England and Wales)
Who sorts it out
Usually the closest relative must apply
Interactive tool

Would your estate pay Inheritance Tax?

Add up what you own (home, savings, investments and belongings) minus any debts. This assumes you leave it to your children or other family, not a spouse or civil partner.

£600,000

Estimate

Tax-free allowance£500,000
Taxable amount£100,000
Passes to family£560,000
Inheritance Tax at 40%£40,000

Your estate is £100,000 over your allowance, so there could be around £40,000 to pay. Gifts, charity donations and good planning can reduce this.

A rough guide only. It ignores gifts made in the last 7 years, reliefs for businesses and farms, and the 36% charity rate. From 6 April 2027, most unused pensions will count towards your estate too.

Pensions will count from April 2027

At the moment, most pensions sit outside your estate for Inheritance Tax. For deaths on or after 6 April 2027, most unused pension money and pension death benefits will be included. Pensions left to a spouse or civil partner should still be tax-free, and death-in-service benefits are excluded. If you've been relying on your pension to pass on wealth, now is a good time to review your plans.

Allowances are frozen until 2031

The £325,000 and £175,000 allowances are fixed until 5 April 2031. As house prices and savings grow, more families may find their estate goes over the limit. Checking your figures every few years, and after any big change, helps you avoid surprises.

Jargon buster

Words worth knowing

Estate
Everything you own when you die, such as your home, savings, investments and belongings, minus any debts.
Nil-rate band
The amount of an estate that's free of Inheritance Tax: £325,000 per person.
Residence nil-rate band
An extra allowance of up to £175,000 when your home goes to your children or grandchildren. It shrinks for estates over £2 million.
Executor
The person named in your will to deal with your estate, pay any tax and pass things on to the right people.
Probate
The legal right to deal with someone's estate after they die. It's often needed before money can be released.
Lasting power of attorney
A legal document that lets people you choose make decisions for you if you can't make them yourself.
Common questions

Questions people often ask

Will my husband, wife or civil partner pay Inheritance Tax on what I leave them?

Usually not. Anything you leave to your spouse or civil partner is normally free of Inheritance Tax, as long as you've both lived in the UK long term. Any tax-free allowance you don't use can also be passed to them, which helps when they die.

How does the 7-year rule work?

If you give something away and live for 7 more years, it normally falls outside your estate. If you die sooner, the gift may be taxed. If your total gifts in the 7 years before death are over £325,000, the tax goes down the longer ago the gift was made:
Years between gift and deathTax on the gift
Less than 340%
3 to 432%
4 to 524%
5 to 616%
6 to 78%
7 or more0%

Is my life insurance part of my estate?

It can be. If a policy pays out to your estate, it may be counted for Inheritance Tax. Many policies can be "written in trust" so the money goes straight to the people you choose, often faster and outside your estate. Ask your insurer or an adviser.

Does leaving money to charity help?

Gifts to UK charities are free of Inheritance Tax. And if you leave 10% or more of your estate's net value to charity, the rate on some of the rest can fall from 40% to 36%.

Do I need a solicitor to write my will?

Not legally, but a mistake can make a will invalid or cause disputes. It's worth getting help if you have children from different relationships, own a business or property abroad, or want to use trusts. Scotland and Northern Ireland have different rules.
Topic 8 of 10

Ready for the next step?

Next, find out how to plan for the retirement you want. Or talk to one of our independent advisers about protecting your family and your estate.

This guide is general information, not personal financial, tax or legal advice. Inheritance Tax rules are complex and depend on your circumstances, and they can change. Figures are for the 2026/27 tax year. Calculator results are rough estimates only. Will-writing and some trust and tax planning are not regulated by the Financial Conduct Authority.

Sources: GOV.UK – Inheritance Tax · GOV.UK – residence nil rate band · GOV.UK – thresholds frozen to 2031 · GOV.UK – gifts · GOV.UK – Inheritance Tax on pensions · GOV.UK – making a will · GOV.UK – lasting power of attorney · Citizens Advice – if there's no will · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 9 of 10 Retirement
Retirement

Planning for Retirement: Turn Your Savings Into an Income

Retirement planning is about two questions: how much will you need each year, and where will that money come from? Knowing your options before you start taking your pension can help your money last and avoid paying more tax than you need to.

  • Full State Pension £241.30 a week
  • Usually 25% of your pension tax-free
The basics

Retirement planning in four steps

Tap a step to find out more.

Step 1

What might retirement cost?

A good place to start is the Retirement Living Standards, which show what a year of retirement costs at three levels. For a single person outside London, the latest figures (2026) are about £13,900 (minimum), £32,700 (moderate) and £45,400 (comfortable). For a couple they are £22,500, £45,400 and £62,700. Costs in London are a little higher. These figures are after tax and assume you no longer pay rent or a mortgage.

Step 2

Where your income could come from

For most people, the base is the State Pension. The full new State Pension is £241.30 a week in 2026/27, about £12,548 a year, and it rises each April. How much you get depends on your National Insurance record, so check your forecast on GOV.UK. On top of that, add any workplace or personal pensions, savings, ISAs and any part-time work. Remember you have to claim your State Pension: it isn't paid automatically.

Step 3

Your choices for a pension pot

With a defined contribution pension, you can usually take up to 25% tax-free (up to £268,275 in total). With the rest, you can buy an annuity (a guaranteed income), move it into drawdown (stay invested and take money when you want), take cash lump sums, or mix these. You don't have to take your money at all at the minimum age. Not every provider offers every option, and you can shop around or move to another provider.

Step 4

Staying on track

Retirement can last 25 years or more, so it's worth checking your plan at least once a year. Taking large amounts in one go can mean paying more tax, and once you take taxable money flexibly, the amount you can pay into pensions with tax relief usually drops to £10,000 a year. If you're 50 or over with a defined contribution pension, you can book a free appointment with Pension Wise to talk through your options.

Side by side

Annuity or drawdown?

These are the two main ways to turn a pension pot into an income. You don't have to choose just one: many people use part of their pot for each.

Annuity

A guaranteed income

How it works
You swap some or all of your pot for a regular income
How long it pays
For life, or for a fixed number of years
Investment risk
The insurer takes it, so your income is fixed
Flexibility
Usually can't be changed once bought
Good if
You want certainty and peace of mind

Drawdown

A flexible income

How it works
Your pot stays invested and you take money out
How long it pays
Until your money runs out
Investment risk
You take it, so your pot can go down
Flexibility
Take more, less or nothing as you choose
Good if
You want control and can cope with ups and downs
Interactive tool

How long could your pension pot last?

See how long your savings might last if you take a set amount each year while the rest stays invested (drawdown).

£200,000
£10,000
66
Growth each year

Your first year

From your pot£10,000
State Pension£12,548
Total income before tax£22,548
Your pot could last25 years (to age 91)

Taking £10,000 a year, your pot could last around 25 years, to about age 91. With your State Pension, your income of £22,548 a year (before tax) is between the minimum and moderate levels for a single person.

An illustration only. It assumes the same growth every year after charges, which won't happen in real life. Falls in the early years of retirement can make money run out sooner. It ignores tax and your 25% tax-free cash. Investments can fall as well as rise.

Watch out for tax on your first withdrawal

The first time you take taxable money flexibly from a pension, your provider often uses an emergency tax code, so you may pay too much. You can claim it back from HMRC straight away using form P55 (if you took part of your pot), P53Z or P50Z (if you took all of it). Otherwise, it's usually corrected after the end of the tax year. Find out more on GOV.UK.

Shop around, and stay safe

You don't have to buy an annuity or drawdown from your current provider. Rates and charges vary, and some annuities pay more if you have certain health conditions. Pension money is a target for scammers, so be wary of cold calls, "free pension reviews" and offers of early access. Check any firm on the FCA's ScamSmart site, and use free, impartial guidance from Pension Wise.

Jargon buster

Words worth knowing

Annuity
A product, usually from an insurance company, that turns your pension pot into a guaranteed income for life or a fixed time.
Drawdown
Keeping your pension invested and taking money out of it when you need it. Your income isn't guaranteed.
Tax-free lump sum
The part of your pension you can usually take without paying tax, normally 25%, up to £268,275 in total.
Emergency tax code
A temporary tax code often used on your first pension withdrawal. It can mean you pay too much tax at first.
State Pension age
The age you can start getting your State Pension. It's rising from 66 to 67 between 2026 and 2028, depending on your date of birth.
Retirement Living Standards
Yearly cost estimates for a minimum, moderate and comfortable retirement, produced by Pensions UK.
Common questions

Questions people often ask

How much do I need to retire?

It depends on the lifestyle you want. Start with the Retirement Living Standards: for a single person outside London, a moderate retirement costs about £32,700 a year after tax. Take away what your State Pension and any other guaranteed income will pay, and the gap is what your savings need to cover.

When can I get my State Pension?

When you reach State Pension age, which is gradually rising from 66 to 67 between 2026 and 2028 for people born on or after 6 April 1960. You can check your exact date and forecast on GOV.UK. You need to claim it, and you can choose to put off claiming to get more later.

Should I take my 25% tax-free cash straight away?

Not necessarily. Money left in your pension stays invested and can keep growing, and taking a large lump sum means less income later. You can often take your tax-free cash in stages instead. Think about what you'd use it for before you take it.

Will I pay tax on my pension?

Usually, yes. Your State Pension and other pension income count as taxable income, apart from your tax-free cash. Most people have a £12,570 Personal Allowance before Income Tax is due. The State Pension is paid without tax taken off, so any tax due is usually collected through your other pensions.

Can I keep working and take my pension?

Yes. Many people work part-time while taking some pension money. If you take taxable money flexibly from a defined contribution pension, the most you can pay into pensions with tax relief usually falls to £10,000 a year, so check this if you still plan to save.
Topic 9 of 10

Ready for the next step?

Next, find out when it makes sense to get financial advice and what to expect. Or talk to one of our independent advisers about turning your pensions into a retirement income.

This guide is general information, not personal financial or tax advice. The value of investments and any income from them can fall as well as rise, and you may get back less than you put in. Tax rules can change and depend on your circumstances. Figures are for the 2026/27 tax year. Calculator results are illustrations only.

Sources: Pensions UK – Retirement Living Standards · GOV.UK – new State Pension · GOV.UK – how you can take your pension · GOV.UK – tax-free pension · GOV.UK – pension tax refunds · GOV.UK – pension allowances · MoneyHelper – annuities · Pension Wise · Last reviewed

HUMBOLDT FINANCIAL

Beginner's Money Guide

Topic 10 of 10 Final topic
Getting advice

Do I Need a Financial Adviser? How Advice Works and What to Expect

You don't need an adviser for every money decision. But for big choices, like how to take your pension or what to do with a lump sum, the right advice can help you avoid costly mistakes. Here's how to tell what kind of help you need, and how to find someone you can trust.

  • Check any firm on the FCA Register
  • Many advisers offer a free first meeting
The basics

Getting help in four steps

Tap a step to find out more.

Step 1

Guidance, targeted support and advice

Guidance gives you information about your options but doesn't tell you what to do. It's free from MoneyHelper and Pension Wise. Since 6 April 2026, banks, pension providers and investment firms with FCA permission can also offer targeted support: suggestions for groups of people in a similar situation, but not a full look at your own circumstances. Regulated financial advice is a personal recommendation, based on a detailed review of your situation and goals. You usually pay for it, and you get the most protection.

Step 2

When advice is most useful

Advice is most valuable when a decision is large, complicated or hard to reverse. Examples include turning your pensions into a retirement income, investing a lump sum such as an inheritance, planning for Inheritance Tax, or bringing several pensions together. If you have a final salary (defined benefit) pension worth more than £30,000 and want to transfer it, the law says you must get advice from an FCA-authorised adviser first.

Step 3

Picking the right adviser

Independent financial advisers (IFAs) can recommend products from across the whole market. Restricted advisers only look at certain products or providers, and they must tell you how they're restricted. Whichever you choose, check the firm on the FCA Register to make sure it's authorised to give the advice you need. Ask about qualifications, how they charge, and whether they offer ongoing reviews. Many advisers offer a free first meeting.

Step 4

What happens when you get advice

An adviser will start by asking about your income, savings, pensions, debts, goals and how you feel about risk. They must tell you their fees in writing, before they advise you. If they recommend a product, you'll get a suitability report explaining what they recommend and why. If something goes wrong, you can complain to the firm, then to the free Financial Ombudsman Service. If the firm has gone out of business, the FSCS may pay compensation of up to £85,000.

Side by side

Three kinds of help

The words sound similar, but they mean different things, and the protection you get is different too.

Guidance

General information

Who offers it
MoneyHelper, Pension Wise and others
Cost
Free
Personal to you?
No. It explains your options and you decide
Good for
Learning the basics and simple decisions

Targeted support

New since April 2026

Who offers it
Your bank, pension or investment provider, with FCA permission
Cost
Set by the firm
Personal to you?
Partly. Suggestions for people in a similar situation
Good for
Nudges such as moving spare cash or checking withdrawals

Regulated advice

A personal recommendation

Who offers it
An FCA-authorised financial adviser
Cost
A fee agreed with you upfront
Personal to you?
Yes. Based on a full review of your situation
Good for
Big decisions and the whole picture
Interactive tool

Could advice help you? A quick check

Tick anything that applies to you. It takes less than a minute.

Your result

Situations ticked0 of 6
Good first stepFree guidance
Quick check resultGuidance may be enough for now

Free, impartial guidance from MoneyHelper or Pension Wise could be a good first step. If your situation changes, you can talk to an adviser later. Many offer a free first meeting.

A simple guide only, not a recommendation. Everyone's situation is different, and an adviser can tell you at a first meeting whether advice is worth paying for in your case.

Check before you trust

Before you share any details or money, search for the firm on the FCA Register and make sure it's authorised for the advice you need. Scammers sometimes copy the name and details of real firms, so contact the firm using the details on the Register, not ones you've been sent. Be wary of cold calls, "free pension reviews" and promises of high returns. The FCA's ScamSmart site can help.

You're protected when you use a regulated adviser

If you're unhappy with advice, complain to the firm first. If you don't get a final response within 8 weeks, or you're unhappy with it, the Financial Ombudsman Service can look into it for free. If the firm has gone out of business, the FSCS may pay up to £85,000 per person, per firm. This protection doesn't cover investments that simply fall in value.

Jargon buster

Words worth knowing

Independent financial adviser (IFA)
An adviser who can recommend products from across the whole market, not just certain providers.
Restricted advice
Advice limited to certain products or providers. The adviser must explain the restriction.
Guidance
Free, general information about your options. It doesn't tell you what you personally should do.
Targeted support
Suggestions from your bank or pension provider for groups of customers in a similar situation. Available since April 2026.
Suitability report
A written report from your adviser setting out what they recommend and why it suits you.
FCA Register
The official public list of firms and people authorised by the Financial Conduct Authority. Free to search online.
Common questions

Questions people often ask

How much does financial advice cost?

It varies. Advisers may charge a fixed fee, an hourly rate or a percentage of the money they advise on. According to the FCA, independent advisers' upfront fees typically range from 1% to 3%, and ongoing fees from 0.5% to 1% a year. Whatever the method, the adviser must agree the cost with you in writing before they start.

What's the difference between independent and restricted advice?

An independent adviser can recommend products from across the whole market. A restricted adviser looks at a narrower range, for example one provider's products or only pensions. Both must meet the same standards, and restricted advisers must tell you how they're restricted. It's worth asking before you start.

What should I bring to a first meeting?

Bring details of your pensions, savings, investments, income and any debts, plus your State Pension forecast from GOV.UK. Most importantly, think about what you want your money to do for you, such as when you'd like to stop work or what you'd like to leave to your family.

Is advice worth it if I don't have much money?

Not always. For simple decisions, free guidance from MoneyHelper or Pension Wise may be all you need. Advice tends to be most useful when the amounts are large or the decision is hard to undo. Many advisers will tell you at a free first meeting whether they think advice is worth paying for in your case.

What if I get bad advice?

First, complain to the firm. It usually has 8 weeks to send you a final response. If you're unhappy with the answer, or don't hear back, you can take your complaint to the Financial Ombudsman Service for free, usually within 6 months of the firm's final response. If the firm has gone out of business, the FSCS may be able to pay compensation of up to £85,000. Neither covers investments that simply fall in value.
Topic 10 of 10

You've reached the end of the guide

Well done for taking the time to understand your money. When you're ready, talk to one of our independent advisers about your plans, or go back to the start to refresh the basics.

Talk to an adviser Back to the start

This guide is general information, not personal financial advice. The value of investments and any income from them can fall as well as rise, and you may get back less than you put in. The quick check is a simple guide only. Rules and figures are correct as of the date below and can change.

Sources: MoneyHelper – do you need a financial adviser? · MoneyHelper – choosing an adviser · FCA – targeted support · FCA – advice fees (CP26/10) · FCA – pension transfer advice · FCA Register · Financial Ombudsman Service · FSCS – investments · Last reviewed

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