Scott Kingsley, Senior Wealth Advisor
It’s been an eventful first six months of 2025 to say the least. Central bank shifts, surprise inflation data and a couple of geopolitical curveballs in the mix. Having your money spread across countries means you've probably felt the repercussions.
The economic headlines ripple right through pension pots, property plans, and everyday spending.
Whether you’re soaking up sun in Bangkok or darting between London and Lisbon, it’s worth checking in: after all the changes, is your financial setup still fit for purpose?
Let’s unpack what’s changed, what it means in real terms, and how you might adjust without losing sleep or opportunity.
Markets Show Signs of Life, But Unevenly
Equity markets have nudged upward this year, just about. As of mid-July, the S&P 500 has gained over 6% year to date, and has rebounded over 25% from its early-April low, buoyed by a surprisingly strong US economy and cautious hopes for rate cuts. It’s not fireworks, but it’s progress. European indices have moved more slowly, and UK equities? Still struggling to shake off political fog and deep-rooted structural challenges.
If you're holding UK shares and wondering when they'll play catch-up, you’re not alone. Plenty of investors are asking the same over their morning coffee.
Over in the bond world, it's been a tougher slog. Yields remain high, especially in the UK and US, where inflation has proved a stubborn guest that just won’t leave. That’s great news if you’re shopping for fresh income streams, not so great if you’re sitting on older, low-yielding paper.
For retirees relying on drawdowns, it means paying closer attention to duration risk and where exactly your fixed income is coming from. This isn’t the year to sleep on your bond portfolio.
Central Banks and Sticky Inflation
UK inflation remains above the 2% Bank of England target, though it’s slowed compared to 2024. In the eurozone, the ECB has taken the lead by cutting rates eight times this year and bringing the deposit rate down to 2%. Meanwhile, the Fed and the Bank of England are holding firm. Expect this policy divergence to fuel further currency volatility.
If you're living off a mix of currencies, this divergence matters. It impacts your exchange rates and, by extension, your real-world spending power.
Here’s one we did not expect: the abolition of the UK Lifetime Allowance (LTA). It's a game-changer, especially for expats.
Many are now asking, "Should I be contributing again? Is now the time to consolidate?"
The answer, as always, is: it depends.
We're seeing more clients review their setup: adjusting drawdown sequences, considering International SIPPs, and being more intentional with where they hold their assets.
In this kind of environment, diversification is more than a buzzword, it's your seatbelt.
A Tale of Two Realities
Ask around and you’ll get two very different stories. In cities like Lisbon, Chiang Mai, and Barcelona, some expats are living quite comfortably, especially if their income comes in sterling or dollars. They’re enjoying their morning coffees and weekend getaways with minimal fuss.
But scratch beneath the surface and another picture emerges. Rents are creeping up. Imported goods are pricier. And that little luxuries basket? It’s quietly getting heavier. Even places once considered "cheap havens" are feeling the pinch.
It’s a reminder that inflation doesn’t hit everything evenly. And if you’re not keeping an eye on it, it can sneak up on your budget.
FX Volatility Has Real Consequences
If you’ve ever timed your monthly pension conversion wrong, you’ll know the pain. One month you're fine, the next you’re tightening belts. Currency swings like GBP/EUR or GBP/THB can wreak havoc over time. It’s not theoretical. It’s Tuesday morning at the market, wondering why your grocery bill feels steeper.
Is It Time to Rebalance?
With markets still digesting inflation and rate signals, expats should consider tactical adjustments:
Location Matters More Than Ever
Your residence and tax status directly impact portfolio outcomes.
In both cases, the planning window hasn't closed, but it's definitely narrower.
Emma, a 68-year-old retired teacher from the UK, moved to Chiang Mai in 2022. She lives off a combination of UK state pension, a defined benefit scheme, and a SIPP. With the pound strengthening against the baht in early 2025, her disposable income increased slightly. But rising local food prices and higher school fees for her grandson (whom she supports) have offset that.
By restructuring her SIPP drawdown to reduce remittances to Thailand in the same year and using a baht-denominated savings account to mitigate currency volatility, she has improved tax efficiency and reduced her monthly FX conversion risk. She also consolidated two legacy pensions into an International SIPP, cutting annual fees by 0.6%.
Emma’s story isn’t unique, but it does show how a few smart moves can add up.
In a year like 2025, strategic allocation matters more than ever:
Surprises will keep coming, we know that much. But a solid plan turns those surprises into bumps in the road rather than full-blown detours. Whether you're rebalancing your portfolio, tweaking your drawdown, or just figuring out where your money feels most at home, this is your sign to take stock.
No one can predict the future, but smart positioning now means fewer nasty surprises later.
If it’s been a while since you’ve given your setup a proper look, let’s change that. Get in touch for information on how we can help.