Independent planning for families, trustees and business owners

Markets and finances at a glance

At Oakcrest Private Office, we help you turn complex wealth into clear, confident life plans - independent, bespoke, and built to last. In this edition, the main feature is a review of Q3 2025, examining what moved markets and their implications for diversified portfolios.

The secondary piece answers a common question: Can you claim tax relief on private school fees? (Short answer: not directly, but there are tax-efficient ways to fund them.)

Q3 2025: A friendlier breeze, not a tailwind

If you only read one thing: The Fed’s first trim eased nerves; earnings held up; AI leaders kept leading. Better backdrop to collect income and be choosy, but not a licence to swing at everything.

UK - upbeat, with gilt risk in the rear‑view (for now)

UK shares had a good quarter. A softer pound helped the big overseas earners, and the reliable sectors (healthcare, staples) performed well. Oddity of the quarter: 30‑year gilts popped to levels last seen in the late ’90s. That’s the market reminding us that fiscal signals and balance‑sheet runoff can move long rates around even while the front end chats about cuts.

What we saw in positioning: a move towards quality‑tilted UK equities; adding selective mid‑caps as the domestic mood thaws; running a 1–5 year bond ladder for tidy, predictable income. Index‑linked gilts still earn a seat at the table while UK services inflation runs hotter than peers.

Crowd check: investors seem to like the UK “value” story post‑rally. Sticking to quality - not buying every cheap cyclical just because it’s cheap.

US - rate cut delivered; leadership still a club

The September rate cut helped. More stocks joined the advance, but the mega‑cap/AI club still sets the pace. That’s fine - until it isn’t.

What we saw in positioning: investors owning the winners, but not relying on them. Pairing equity risk with short/intermediate high‑quality bonds now that bonds actually pay.

If markets are wrong: a stickier‑than‑hoped services Consumer Prices Index (CPI) or a re‑firming dollar can take some shine off the soft‑landing story.

Europe (ex‑UK) - steady as she goes

The European Central Bank (ECB) is in wait‑and‑see mode. While continental European shares rose, the gains were less than those of the UK or the US. Germany dragged; France made modest progress despite political noise.

What we saw in positioning: investors picking quality, but not forcing it. This was a stock‑picker’s patch, not a “buy everything” tape.

Emerging markets & Asia - helped by a softer dollar

Emerging markets brightened as the dollar eased and AI demand kept North Asia humming. Great when the dollar plays nice; choppier when it doesn’t.

What we saw in positioning: investors keeping positions sensibly sized; favouring markets with clear earnings support (Korea, Taiwan) and being realistic about China - potential opportunity with caveats.

How we’re positioned

Equities: we saw a definite quality bias in the UK; with investors adding selective mid‑caps rather than a wholesale move. Globally, there was caution about becoming hostage to a handful of US names - with investors considering them, but avoiding overdependence on them.
Bonds: evidence of a move to a 1–5 year ladder for income and reinvestment discipline; with many adding a touch of intermediate duration as portfolio insurance.
Inflation hedging: UK inflation is cooling but not “done”. Index‑linked gilts are attracting interest alongside good‑quality nominal bonds.

What could move markets in Q4

Central banks: Nov/Dec meetings set the tone for how fast the US eases and how long the UK/Euro area sits tight
Earnings breadth: Do gains spread beyond the mega‑caps or narrow again
Rates & liquidity: Long‑end gilts and quantitative‑tightening remain the wild cards.
Commodities & FX: Gold’s momentum and the dollar’s path are dictating EM risk appetite.

Key dates (subject to change)

- UK - Bank of England (BoE) (Thu 6 Nov; Thu 18 Dec) • CPI (Wed 19 Nov; Wed 17 Dec) •Autumn Budget (Wed 26 Nov)

- US - Federal Open Market Committee (FOMC) (Tue–Wed 9–10 Dec) • CPI (Wed 15 Oct; Thu 13 Nov; Wed 10 Dec) • Personal Consumption Expenditures (PCE) (Wed 26 Nov; Fri 19 Dec)

- Euro area - ECB (Wed–Thu 17–18 Dec) • HICP (Wed 19 Nov final; Tue 2 Dec flash; Wed 17 Dec final)

Quarterly performance statistics

UK: FTSE 100 best quarter since 2022; 30‑yr gilt yields near late‑1990s highs; CPI ~3.8% y/y in August with services sticky.
US: S&P 500 total return about +8% for Q3; Fed –25bp in September; tighter credit spreads; core bond indices modestly positive.
Europe ex‑UK: MSCI Europe ex‑UK roughly +2.8%; ECB on hold with medium‑term inflation projections near 2%.
EM/Asia: Outperformed DMs; North Asia (Korea, Taiwan) strong on AI; EM debt supported by attractive real yields.
Multi‑asset: Global small caps +8.6%; REITs +4.4%; Bloomberg Global Aggregate +0.6%; Bloomberg Commodity Index +3.7% (oil softer; gold at fresh records in early October).

Bottom line: Friendlier breeze, not a tailwind. Keep quality, keep income, and keep your diversification honest.

Can you claim tax relief on private school fees?

Short answer: No. There’s no mainstream UK tax relief that directly cuts private school fees. But families can fund them more tax‑efficiently with sensible planning. The right route depends on who pays, where the assets sit, and timing. If it sounds like magic relief, it isn’t.

Myth vs. reality

Myth: “There’s a loophole that makes school fees tax‑deductible.”

Reality: There isn’t. The gains come from tax‑efficient funding and cash‑flow planning, not from the fee payment itself.

What you can do (practical routes)

Use wrappers early: Build fee money in ISAs/JISAs so growth/income is sheltered. No relief at payment, just better compounding before you pay.
Grandparents’ help: Regular gifts out of surplus income (without impacting their standard of living) can be immediately outside the estate for IHT if genuine and habitual. Bigger lump sums typically take seven years to dissipate.
Trusts (case‑by‑case): The right trust can align assets to the child’s timeline and, in some cases, shift income/gains away from higher‑rate taxpayers, but monitor settlement rules.
Portfolio built for cashflow: Blend natural income with planned sales so you’re not forced into tax‑inefficient withdrawals at bad moments.
School discounts: Pre‑payment or sibling discounts can be worthwhile - compare the effective discount rate with your after‑tax, after‑fee return and consider counterparty risk.

Common pitfalls

Paying via a company usually creates taxable benefits/complexity, and is rarely efficient.
Parents gifting to children: can trigger parental settlement (income taxed back on the parent). Grandparent gifts are treated differently.
Too much cash for too long: inflation quietly erodes spending power.

Next steps (1–5 year horizon)

Map who funds what, model the cashflows, and match the investment approach to the timetable and risk tolerance. Coordinate early with your accountant (and the school) so the plan, tax and payment mechanics line up.

Reminder: Tax rules change, and outcomes depend on personal circumstances. This is not advice. Seek regulated advice before acting.

How Oakcrest helps

Build a joined‑up plan across investments, pensions, borrowing and estates.
Coordinate with your accountant/solicitor/lenders so the left hand knows what the right hand is doing.
Independent, ongoing relationship - no in‑house products, no hard sell.

Questions or changes in your world? Contact us to schedule a review, or share this brief with family members who should be in the loop.

Q3: Quarterly Investment Review