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Investing.com -- UK fund flows for August 2025 decreased by 10% compared to the same month last year, continuing a downward trend following July’s performance, according to Investment Association data analyzed by UBS.
The first two months of the third quarter show aggregate flows down 4% year-on-year. This decline appears primarily driven by Non-UK Intermediaries, whose flows dropped 28%, and UK intermediaries, with flows down 9%. Fund platforms partially offset these decreases with a 7% increase in flows.
UBS noted that July and August typically represent quieter months for fund flows. The bank also pointed out that Investment Association data has not tracked well compared to gross flow growth at listed UK asset gatherers.
The upcoming Autumn budget, scheduled for November 26, could potentially impact industry flow data. The chancellor is expected to present plans to address a potential fiscal deficit exceeding £30 billion.
Reports suggest the tax-free lump sum allowance for pensions, currently at 25%, might be removed. Similar reports before the 2024 Autumn budget likely contributed to increased pension withdrawals during the 2024/25 financial year, when outflows rose to approximately £18 billion compared to £11 billion in the previous year—a 60% increase.
UBS expects potential negative implications for St. James’s Place (LON:SJP) at third-quarter results, though likely less severe than last year. The bank believes other speculated changes will have minimal impact. For example, reducing the cash ISA allowance could benefit SJP, which only offers stocks and shares ISAs.
While increased property taxes could reduce wealth for SJP’s clients, such changes might simultaneously make SJP’s funds more attractive compared to property investments.