Top 5 FAQs in March 2025
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As we prepare to exit Q1 of 2025, many UK savers face an increasingly complex market. From pension changes to rising interest rates, understanding how current policies and economic conditions impact your financial planning (UK-based) is more important than ever.
This month, our advisers at Advice Rooms have noticed a sharp rise in clients’ questions about how to make the most of their savings, ISAs, annuities, and pensions. To help, we’ve rounded up the top five most frequently asked questions in March 2025 and provided clear, practical answers for each.
1. Should I Still Be Contributing to a Pension in 2025?
Short answer: Yes – and now is a great time to review your pension strategy.
Following the abolition of the Lifetime Allowance (LTA) and the ongoing Triple-Lock increase to the State Pension, many individuals now have more flexibility in building their pension pots.
Key 2025 Updates:
- No upper tax penalty on total pension savings
- State Pension has increased to £233.60 per week
- The annual contribution limit remains at £60,000 (subject to tapering)
Many people worry about whether continuing to contribute is “worth it” if they’re close to retirement. The truth is that pensions remain one of the most tax-efficient ways to save for the long term.
If you’ve already accessed part of your pension, check whether the Money Purchase Annual Allowance (MPAA) affects your contribution limits.
2. Are Cash ISAs Still Worth It with Inflation and Higher Interest Rates?
Short answer: Yes — but they need to be part of a broader savings strategy.
In March 2025, cash ISA rates have risen in line with interest rates, with some providers offering over 4.5% AER. However, inflation is still hovering around 4%, which can erode actual returns.
Key 2025 Considerations:
- ISA allowance remains at £20,000 per year
- Fixed-rate ISAs are offering better returns than easy-access accounts
- Stocks and Shares ISAs continue to outperform over longer terms
Savers are often unsure whether to keep money in cash or invest. Many hold large sums in low-interest accounts out of caution, missing growth potential.
A mix of cash ISAs and investment ISAs can balance access, risk, and growth.
3. What Are My Annuity Options in 2025, and Are They Worth It?
Short answer: Annuity rates have improved; for some, they offer solid value.
After years of being out of favour, annuities are making a comeback. Rising interest rates have significantly improved annuity income levels, and the security of a guaranteed income is becoming more attractive in uncertain markets.
Key Market Trends:
- Joint-life and inflation-linked annuities are becoming more competitive
- Enhanced annuities offer higher payouts for those with health issues
- Flexi-access drawdown remains a popular alternative
Many retirees are unsure whether to commit a lump sum to a lifetime product. The fear of locking money away without flexibility is real.
A blended retirement income strategy combining drawdown and annuities may offer the best of both worlds.
4. Is It Safe to Save in Fixed-Term Accounts in 2025?
Short answer: Yes — fixed-term savings accounts are seeing some of the best rates in a decade.
With the Bank of England base rate still high, fixed-rate savings bonds offer 5% or more, depending on the term and provider.
Key Considerations:
- 1–3-year fixed accounts are offering strong returns
- FSCS protection covers up to £85,000 per provider
- Some accounts allow early access with penalties
Many savers feel unsure about locking money away in case rates rise further or if they need access to cash.
Consider laddering fixed-term accounts so that not all funds are tied up simultaneously.
5. How Do I Make the Most of My Allowances Before the Tax Year Ends?
Short answer: Use it or lose it — use all available allowances before April.
March is a crucial time to review your:
- ISA allowance (£20,000)
- Pension contributions (up to £60,000)
- Capital Gains Tax allowance
- Gifts for Inheritance Tax Planning
Many people wait until the last minute and miss out on allowances that reset in April. Lack of planning can lead to unnecessary tax bills.
Work with a financial planner to identify unused allowances and build a tax-smart strategy.
Final Thoughts
March is one of the best times to manage your finances, whether building up savings, preparing for retirement, or making the most of your tax allowances.
But understanding how pensions, ISAs, annuities, and savings interact can be overwhelming. That’s where expert advice can make all the difference.
Book Your Free Financial Review Today
At Advice Rooms, we offer clear, personalised advice to help you get the most out of your money in 2025 and beyond.
Book a free appointment today and speak with a qualified adviser about your financial goals.
