ISA changes could well be welcome, but we shouldn’t underestimate how long new rules take to filter through, writes Claire Exley
ISA changes will take a long time to sink in
We’ve spoken to a lot of clients about ISAs over the last few months as the end of the tax year approaches and minds are focused on using the annual tax-free allowances. However, it is hard not to ignore recent headlines surrounding potential reforms to the current ISA regime.
While reform is important, and many will believe that simplification is right, we should all be aware of the unintended consequences of change. A recent poll of investors we ran at the start of 2025 found that there was still a lot of confusion in the UK over the current ISA rules and allowances.
Nutmeg research found that a majority of investors with over 10 years investing experience didn’t know that you could invest and save in multiple ISAs each year. The rule changes to accommodate this were announced in 2023 and came into effect in April last year. The study also found that nearly a quarter of young investors believed they could invest in crypto with your annual ISA allowance of £20,000. Under the current rules, crypto coins cannot be held in an ISA wrapper.
While rule changes are important, chopping and changing can create inertia and deter people from engaging with their personal finances. For me, the lesson is clear: we should not underestimate the time it can take for any reforms to filter through into the public consciousness and deliver results. Any reform needs to be long lasting and easy to understand in order to ensure better outcomes for consumers and the economy.
There is a clear role for banks, investment providers, media and the advice industry to educate consumers about any changes and how the rules impact them. Nutmeg remains up for the task and will always look to lead from the front on financial education.
What it really takes to retire at 55
Daydreaming at your desk today? Some might be wondering what it takes to retire early and hit the beach at the age of 55. Our advice and guidance team crunched the numbers and found that a couple needs £1.1m to retire at 55 and enjoy a comfortable lifestyle throughout retirement. To achieve this, a 30-year-old couple would need to put away around £2,500 per month between them. This will seem daunting for many, and the usual caveats apply (inflation etc.), but it is achievable with careful planning, decent investment returns and additional help from tax reliefs on pension contributions.
Perhaps this is why we’re seeing a new personal finance trend emerge: ‘mini retirements’. Akin to a gap year or long sabbatical, it involves taking occasional longer breaks from work to see the world, return to education, or pursue a hobby. This won’t be possible for everyone and will involve squirreling away money for expenses, but it reminds me how much changing approaches to work and careers have impacted our interactions with money.
A postcard from India’s Silicon Valley
I was privileged to visit Bengaluru, formerly Bangalore, in India last month to catch up with some amazing colleagues. It’s a unique city, famed for its impressive gardens, parks and palaces, but it is now commonly referred to as the ‘Silicon Valley of India’. Departing the airport you quickly see this as you drive down a highway with towers on each side of the road lit up with logos of the largest names in technology emblazoned on top. I left feeling inspired after seeing first-hand the dynamism of the city.
What I have been reading…
I recently read The Anxious Generation about the impact of smart phones on children. I’m all in favour of technology, and it has had a fantastic impact on democratising wealth management and sharing information people wouldn’t otherwise have access to. That said, this book definitely made me worry about the impact it will have on young people to have a huge portion of their lives centred around social media. I’m hoping to put it off for my children for as long as possible and it’s interesting to see the no phones at schools movement gathering pace.
Claire Exley is the head of financial advice and guidance at Nutmeg, a JP Morgan-owned digital wealth manager