The Money and Mind Report 2025, which surveyed 1,000 UK adults to understand attitudes to finances and wellbeing, shows that financial concerns profoundly impact both mental and physical health. Those aged 35-54 were more concerned about their finances than older age groups, highlighting the challenges of balancing multiple financial responsibilities while potentially facing career uncertainties

For those with financial concerns, 79% reported that this affects their mental wellbeing, underscoring the importance of proactive financial management. 29% of those concerned indicated that financial worries affect them both mentally and physically, manifesting in symptoms such as sleep disturbances, headaches and other stress-related physical ailments.

41% of those surveyed said they have made sorting out their finances a top priority, a 5% increase from 2023. However, while 55% of respondents said they were likely to create a financial plan, only 8% currently had one in place. Loved ones were found to be the most common source of support for those with financial concerns, while just 6% consult a professional financial adviser, highlighting a gap in professional financial guidance that needs to be addressed. The report found that 22% believed financial planning would be too expensive, underscoring the importance of affordable, accessible financial advice to help people manage their money better and reduce any negative impacts on wellbeing.

Key findings:
• 62% of respondents concerned or very concerned about finances
• 79% of those with financial concerns report that their financial situation impacts their mental wellbeing
• 70% are worried about the impact of the cost-of-living crisis
• 55% are likely to make a financial plan but only 8% currently have one in place
• 33% confide in a loved one, while only 6% discuss their money worries with a professional financial adviser
• 22% think financial planning would be too expensive
• 41% have made sorting out their finances a top priority, a 5% increase from 2023

Ben Waterhouse, chief client officer at Schroders Personal Wealth, said: “This report highlights the importance of financial wellbeing and the critical role that financial planning can play in supporting individuals. By understanding key concerns and priorities, we can develop strategies and solutions that not only help alleviate financial stress but also aim to enhance overall wellbeing. We hope that the insights from this report will inspire meaningful conversations and actions towards a more financially stable and mentally healthy future.”

Alice Harmer, personal wealth adviser at Schroders Person Wealth, added: “Achieving financial goals requires more than just good intentions; it needs a well thought-out plan and the right guidance. As financial advisers, our role is to help clients navigate the complexities of financial planning, from budgeting and saving to investing and retirement planning.

“We provide the expertise and insights needed to make informed decisions that align with their long-term objectives. By working with a financial adviser, individuals can gain clarity on their financial situation, set realistic goals, and develop a plan that aims to achieve them. This personalised approach ensures that individuals are not only prepared for the future but also able to enjoy peace of mind knowing they are on the right path.”

Speaking at the World Economic Forum in Davos, she committed to tabling an amendment to the Finance Bill which could remove some of contentious elements of its changes to non-dom taxation though there is little detail to go on.

Reeves is widely quoted as saying that “we have been listening to the concerns that have been raised by the non dom community”.

In early reaction amid scant detail on what tweaks she might make, Stephen Kenny, head of private client at audit and accountancy firm PKF Littlejohn said: “This very much feels like too little too late. The changes to the non-dom rules were first announced by the previous government in March 2024. Since then, many in the industry raised the likely impact these changes would have, and the new government has had the opportunity to reassure the internationally mobile community that the UK is open for business. But they have not heeded the warning until too late.

“Having worked with non-domiciled High Net Worth individuals for most of my career one of the key benefits the UK used to offer was certainty and a stable tax regime. This has been eroded by successive changes to the non-dom regime which have, for the most part, have not been managed as effectively as they could have been. The feedback I get from people wanting to leave the UK is that they are not only unhappy because of changes in the tax regime but because they have no confidence that it won’t change further in the future.

“I doubt this announcement will do much to change people’s opinion. If the government is serious about keeping the UK open for business they should be taking the opportunity to engage with advisors to create a fair regime that will work for the UK and allow people to effectively plan for the future.”

Anthony Whatling, managing director at Alvarez & Marsal Tax, said: “The announcement by Rachael Reeves that the Government will introduce amendments to the proposed non-dom changes is very welcome. It is reassuring to hear that the Government is listening to the concerns raised by non-doms and industry experts about the potential exodus of wealthy individuals from the country.

“However, it appears that the only amendment planned is to extend the “temporary repatriation facility,” allowing taxpayers to bring their historic income and gains to the UK at a reduced tax rate. While we await the specifics of these changes, it is doubtful that this measure alone will significantly stem the outflow of wealthy non-doms.

“A major concern remains that limiting tax benefits to the first four years in the UK makes the country relatively unattractive. Extending this four-year limit for new arrivals, perhaps in conjunction with an annual tax charge similar to the successful Italian regime, could better attract and retain internationally mobile ultra-high-net-worth individuals who contribute significantly to the local economy.”

Charlie Sosna, Head of Private Wealth and Tax at Mishcon de Reya, said: “Clients in and outside the UK will welcome the statements from the Chancellor. There has certainly been a feeling amongst many clients that the rules as proposed do not make the UK an attractive place for them to remain.

“Many significant clients have looked to relocate to their home countries, or other countries looking to attract their talent and wealth (such as Italy, Switzerland and Monaco). We certainly have many client families and their family offices who wish to review their position in the UK and are seeking assistance in relocating to other jurisdictions as a response to the abolition of the ‘non-dom’ regime’.

“It is important to remember that these clients do, and are very happy to, contribute and pay their way in society. However, the Government must balance that against offering a regime that entices them to relocate to or stay in the UK rather than simply remain in their home countries.

“Separately, the new rules have not gone far enough to entice many entrepreneurs and wealth makers to relocate themselves, their businesses and their families, from their home countries or elsewhere to the UK. Instead, they have created a regime that could attract people to come to the UK for a short period of time, contribute very little if anything in tax contribution to the UK, and then look to leave the UK once their favourable tax position ends. As a result, we have seen a slowdown in those looking to relocate to the UK with many looking at the UK with some scepticism and querying whether they and their businesses are truly welcome here.

“Given the Government’s desire to attract these people, it is understandable that they have taken stock of the reaction and decided to act to minimise the loss of these individuals and seek to convince those abroad that the UK is where they want to live and invest. We welcome any changes the Government may introduce to address these issues and ensure there is a regime where all contribute to society and ‘pay their way’, but in a way that incentivises them, their families and their businesses and investment to pick up sticks and come to, and remain in, the UK.”

Carol Katz, partner in the Private Wealth and Tax group at Mishcon de Reya, added: “In terms of the impact of the current proposed rules on the internationally mobile, we have seen an increase in the number of enquiries from existing and new clients who are looking to relocate out of the UK: the departure lounge is very much fuller than arrivals at present!

“Expanding the temporary repatriation facility could encourage more people to stay in the UK as the reduced tax rate (either 12% or 15%, depending on the year in which it is designated) is a significant carrot with which to encourage people to bring funds here to settle for the long term. Our clients would want to see the detail before changing their plans and time is running out.

“The new regime will be attractive to people looking to stay in the UK for only a short period in order to take advantage of four years of 100% tax relief on their foreign income and gains. However, four years is a short time to base a decision to relocate a family, with many people looking at Italy, Switzerland and Dubai as alternatives to the UK.”

Marc Acheson, global wealth specialist at Utmost Wealth Solutions, said: “The measures announced at the Budget made the UK far less attractive to non-doms and created the perfect storm of many leaving and less coming in. The replacement of the current remittance basis with the new 4-year foreign income regime encouraged the wrong type of behaviours and gave little incentive for people to come to the UK and establish long-term roots.

“Many of our clients have been exploring other jurisdictions in the EU and UAE. This community would rather not leave the UK and contribute significantly to the exchequer, so any review of those changes, particularly with reference to the erosion of IHT protections on existing settlements would be welcome.”

Rachel De Souza, tax partner at audit, tax and consulting firm RSM UK, said: “I welcome Rachel Reeves’ acknowledgement that concerns have been raised by the non-dom community to the changes due to come in on 6 April. Whilst an increase to the temporary repatriation facility must be a good move, it is woefully inadequate to prevent wealthy non-dom and British entrepreneurs from leaving the UK.

“The way to stem this exodus would be to maintain the exemption from IHT to offshore trusts but also reverse the proposed changes to agricultural and business property relief which impacts the farmers and entrepreneurs.”

Philip Munro, partner at Withers on whether they could change wealthy people’s attitude to staying in the UK: “As set out in the 2024 Budget, the new rules will be available for a limited period from 2025 to 2026.

“The tax rate will be 12% for the first two years and 15% in the final tax year of operation. This may be helpful to some individuals who have previously claimed the remittance basis, but it is unlikely that revisions to the terms will impact on the decision-making where individuals are considering leaving the UK.

“The decision to leave the UK and to be non-resident is generally taken for one or both of two reasons:

1. One is simply that a move to worldwide taxation on income and gains in the UK is not acceptable. There are many countries which offer lower tax rates and can incentivise entrepreneurs to relocate to them. The non-dom tax reforms only offer a four-year period during which full UK tax is not applicable and that is only for those who are moving to the UK (and generally not to those already living here); and
2. Inheritance tax – there may be a positive incentive to leave the UK now in many cases to avoid a 40% inheritance tax exposure applying on worldwide assets. The non-dom tax reforms have a potential IHT ‘tail’ of up to 10 years for those who leave the UK in the future and this may well be unacceptable to many wealthy and internationally mobile individuals.

“If the Government wants to stop non-dom individuals leaving the UK, measures on these points would also be required.”

Mauro De Santis Bo, partner at GSB Wealth said: “The proposed softening of the non-dom rules is likely aimed at preventing the loss of high-net-worth individuals who contribute significantly to the UK’s economy.

“By extending the temporary repatriation facility to three years and slightly lowering the tax burden during this period, the government is sending a signal that the UK remains a welcoming place for global wealth. Although this may look like it is going to help retain wealthy individuals who might otherwise move their funds elsewhere, I believe that is only helping those non-doms that are already thinking of staying and they have been lobbying intensively over the past months to make the new rules slightly more favorable for them.

“There’s no denying that the initial uncertainty and proposed tightening of the non-dom regime have already pushed some individuals to leave the UK or reconsider their long-term commitment to the country. Wealthy individuals value stability and clarity in tax policy, and many will have already acted on the earlier announcements, relocating funds or even themselves to jurisdictions with more predictable regimes.

“This softening can be seen as a positive step, but for those who have the decision of leaving or already left, it may be too late to reverse their decisions and I doubt this ‘softening’ will be enough to make them change their minds. The UK now faces a challenge in rebuilding trust among this community and demonstrating that it can balance fiscal needs with a competitive, business-friendly environment. Timing is everything, and a stronger, clearer commitment to welcoming global wealth sooner could have mitigated the damage.”

She said: “We do not support unused pension and death benefits being shoehorned into the Inheritance Tax regime, as this is unworkable and riddled with issues. IHT is already complex, and including pensions within the regime makes it even more so.

“We are asking HMRC to explore a simpler and more effective alternative that would keep any tax charges payable on death within the pensions regime, such as levying a tax on pensions in scope where above a certain level. For example, the first £100,000 of unused pensions on death would be inherited free of the new pension tax charge. This also has the added benefit of avoiding encouraging individuals to run-down their pension too quickly to avoid an IHT charge.

“If HMRC does proceed with its proposals and tries to retrofit pensions into the IHT regime we believe a number of fundamental changes are needed. First, Pension Scheme Administrators and Personal Representatives need to be given much longer than the standard 6 months IHT deadline to gather all the necessary information and calculate any tax liability for what can often be multiple pension arrangements.

“Second, we strongly believe all ‘death in service’ benefits should be outside of scope. These are designed to provide a lump sum or income for beneficiaries, commonly financial dependants, on the untimely death of the individual, often before the minimum normal pension age. There’s no suggestion these can be used to avoid Inheritance Tax.

“As a whole, IHT is designed around a number of exemptions and thresholds, specifically the nil-rate band of £325,000 and the spouse exemption for legal spouses and registered civil partners. This enables these individuals to inherit significantly more, after IHT, than other potential beneficiaries, such as common-law partners or children who may be financial dependants.

“Given the steady decline in opposite-sex marriage, the increase in co-habitation, and the number of children born to unmarried parents now exceeding the number born within a marriage, we believe this is out-of-step with today’s societal norms. In the longer term, we urge the Government to carry out a review of IHT so that it reflects modern day realities.”

Inheritance Tax Act 1984 gives relief from IHT on “relevant business property”. Relevant business property is stated as including “property consisting of a business or interest in a business”.

The legislation states; “A business or interest in a business, …, [is] not relevant business property if the business … consists wholly or mainly of … making or holding investments.”

Mrs Pearce owned a fishery at Fulling Mill on the River Itchen described as “one of the ‘classic’ chalk rivers of southern England”. The Itchen supports a variety of fish including brown trout, grayling and the occasional salmon.

Following her death, her executors claimed IHT business relief on part of her residence including an office from which she managed the business, a reception room, and a rod room where customers could store fishing equipment and kit. Additionally, relief was claimed on the value of an outbuilding and garage where mowers, strimmers and hand tools used for maintaining the land around the river were kept.

IHT business relief was also claimed on the river and the streams which fed it and the banks of the river and streams.

Mrs Pearce worked full time running the wild fishery, even though it was increasingly unprofitable. The riverbank had to be kept clear of vegetation so the fishermen had access to the river. Trees and other plants along the riverbank had to be managed to provide the right amount of shade and the right conditions to encourage the flies on which the fish fed. The river itself had to be kept clear and the banks protected from erosion.

It was common ground that Mrs Pearce was carrying on a business. The issue for determination by the Tax Tribunal was whether the business, at the date of Mrs Pearce’s death, consisted wholly or mainly of holding investments.

HMRC’s position was that the deceased’s business was the exploitation of land to produce income – which is an investment activity. The land was exploited by the granting of licences to people who wanted to fish in the river. The only income was from ‘rod fees’ – there were no sales of equipment or fees for tuition. HMRC accepted that Mrs Pearce took active steps in running the business and carried out a great deal of maintenance.

The Executors contended that the deceased’s wild fishery business could not be regarded as a property letting business. The income was derived, not from the exploitation of land but from the running of a fishery business. Looked at in the round, the deceased’s business was not one of the holding of investments but the provision of services and incidental facilities so as to take it out of the investment category.

The Tribunal adopted the following approach;

(1) The starting point is that the owning and holding of land in order to obtain an income from it is generally to be characterised as an investment activity.

(2) It is the nature of the activities, not the level of activity, which matters. Very active management of an investment does not prevent the business being an investment business.

(3) There is a spectrum of businesses involving the exploitation of land in order to generate income. At one end are property letting businesses which are clearly investments. At the other end are hotels, shops and farms which are clearly not investment businesses.

(4) Where on that spectrum a business falls can be determined by looking at the investment and non-investment activities as a whole, standing back, and looking at the business in the round.

(5) Where there are investment and non-investment activities, consider whether, looking at the business in the round, the non-investment activities are of sufficient importance that the business is not mainly an investment business.

The Tribunal concluded;

“Having considered matters in the round we have concluded that the business carried on by Mrs Pearce at the time of her death was mainly a business of holding investments. Although there were non-investment elements, they are not sufficient to outweigh the investment elements. Accordingly, the business is not eligible for Inheritance Tax Business Relief.”

The tool provides a clear methodology for addressing key questions, such as ‘How much guaranteed income should be purchased?’ and ‘What level of risk should be taken with the remaining pot of invested assets?’

Head of behavioural finance at Oxford Risk, Dr Greg B Davies said: “A common strategy for advised clients entering retirement is to allocate part of their pension pot to provide a guaranteed income for life, while keeping the remaining portion invested to allow flexible withdrawals. This approach not only reduces sequencing risk but can also enhance the investor’s capacity for risk-taking with their remaining investible assets.

“However, financial advisers face a significant challenge: how to demonstrate and evidence that their recommendations on these two components – guaranteed income and the remaining portfolio – are both suitable independently and optimally aligned together.”

Just Group, who specialise in UK retirement products and services, is feeding live data into the new tool developed by Oxford Risk, providing accurate and up to date intelligence on health, mortality and product pricing – enabling advisers to get accurate insight from the Oxford Risk solution on the level of Secure Lifetime Income (SLI) to provide for their clients, taking into account the client’s personal circumstances.

Stuart Slegg, head of retail investment solutions at Just Group said: “We’re very pleased to continue our work with Oxford Risk to support advisers achieve better outcomes for their clients in-retirement. The challenges faced by clients in-retirement are different to those accumulating wealth, so it’s important advisers can evidence how the solution they recommend meets their clients’ individual objectives.

“There’s a growing body of evidence that shows how including a proportion of Secure Lifetime Income within a drawdown portfolio can enhance client outcomes. How much Secure Lifetime Income to purchase for a client and how to adjust the remaining investments in the portfolio is a question that Oxford Risk have been working hard to solve. Its unique methodology provides advisers with a solution to this important question.”

The tool is being introduced against the backdrop of Increasing regulatory scrutiny of retirement advice in the wake of last year’s thematic review (TR 24/1) whoich has thrown down a challenge to advisers grappling with how best to demonstrate and evidence suitability.

Oxford Risk had observed that many firms in the financial advice industry are struggling to meet the FCA’s stricter requirements, particularly in areas like information collection, suitability assessments, and disclosures.

The behavioural finance specialists cite the growing popularity of guaranteed income products as just one example of how retirement income planning is changing and consequently how advisers must adapt.

Annuity sales rose 39% to 82,000 individual contracts sold in 2023/24, the highest since before ‘pension freedom and choice’ reforms in 2015. The £6 billion invested in annuities was more than 49% higher than the previous year.