What are the biggest companies in the UK by market cap?

This list ranks the UK’s biggest public companies by market capitalisation; the cumulative value of a company's total outstanding market shares. We’ll also be highlighting other key figures, such as the company's revenue, gross profit, and 1-year return (all based on the previous fiscal year). 

Some other key facts such as the exchange the company is listed on, the founding year and country the company is headquartered in are also covered.

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1. AstraZeneca PLC

• Market cap: £182.77 billion
• Revenue: £43.67 billion
• Gross profit: £31.67 billion
• 1-yr return: - 10.57%
• Exchange: London Stock Exchange
• Year founded: 1913
• Country: United Kingdom

AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development, and commercialisation of prescription medicines.

• Pharmaceuticals: A leading developer of treatments in major disease areas.
• Global reach: Its innovative medicines are used by millions of patients worldwide.

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2. HSBC Holdings PLC

• Market cap: £164.23 billion
• Revenue: £110.12 billion
• Gross profit: N/A 
• 1-yr return: + 42.14%
• Exchange: London Stock Exchange
• Year founded: 1959
• Country: United Kingdom

HSBC is one of the world’s largest banking and financial services organisations, serving customers worldwide from offices in 62 countries and territories.

• Wealth and personal banking: Provides a range of services from current accounts and mortgages to wealth management and insurance for individuals.
• Commercial banking: Offers banking services to small, medium-sized, and large corporations.
• Global banking and markets: Provides financial services and products to corporate, government, and institutional clients.

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3. Shell PLC

• Market cap: £158.58 billion
• Revenue: £212.38 billion
• Gross profit: £36.13 billion
• 1-yr return: - 0.33%
• Exchange: London Stock Exchange
• Year founded: 2002
• Country: United Kingdom

Shell is a global group of energy and petrochemical companies with a focus on the entire energy value chain.

• Integrated gas and upstream: Explores for and extracts crude oil, natural gas, and natural gas liquids. It also markets and transports oil and gas.
• Downstream and renewables: Turns crude oil into a range of refined products, which are moved and marketed around the world for domestic, industrial, and transport use. It is also investing heavily in low-carbon energy solutions like biofuels, hydrogen, and wind power.

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4. Unilever PLC

• Market cap: £114.06 billion
• Revenue: £50.24 billion
• Gross profit: N/A
• 1-yr return: - 5.63%
• Exchange: London Stock Exchange
• Year founded: 1930
• Country: United Kingdom

Unilever is one of the world's leading suppliers of Beauty & Wellbeing, Personal Care, Home Care, and Nutrition products with sales in over 190 countries.

• Global brands: Owns over 400 brands, including Dove, Ben & Jerry's, Knorr, Lipton, Magnum, and Persil.
• Consumer reach: Its products are used by 3.4 billion people every day.

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5. British American Tobacco PLC

• Market cap: £91.37 billion
• Revenue: £25.6 billion
• Gross profit: £16.58 billion
• 1-yr return: + 46.86%
• Exchange: London Stock Exchange
• Year founded: 1902
• Country: United Kingdom

British American Tobacco (BAT) is a leading, multi-category consumer goods business that provides tobacco and nicotine products to millions of consumers around the world.

• Traditional tobacco: A leading global seller of cigarettes with brands like Dunhill, Kent, and Lucky Strike.
• New categories: Investing heavily in a portfolio of non-combustible products, including vapour (Vuse), heated tobacco (glo), and modern oral nicotine pouches (Velo).

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6. Rolls Royce Holdings 

• Market cap: £90.23 billion
• Revenue: £19.54 billion
• Gross profit: £4.77 billion
• 1-yr return: + 119.47%
• Exchange: London Stock Exchange
• Year founded: 1906
• Country: United Kingdom

A world-leading industrial technology company that provides complex power and propulsion solutions for critical applications.

• Civil aerospace: Designs and manufactures engines for large commercial aircraft like the Airbus A350 and Boeing 787.
• Defence: A key supplier of engines for military aircraft and naval vessels worldwide.

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7. Rio Tinto PLC

• Market cap: £78.93 billion
• Revenue: £41.53 billion
• Gross profit: £10.08 billion
• 1-yr return: - 4.47%
• Exchange: London Stock Exchange
• Year founded: 1873
• Country: United Kingdom

Rio Tinto is a leading global mining group that focuses on finding, mining, and processing mineral resources.

• Key materials: A major producer of iron ore for steel, aluminium for cars and smartphones, copper for wind turbines, and other essential minerals.
• Global operations: Owns and operates open pit and underground mines, mills, refineries, and smelters, as well as a network of railways and ports.

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8. BP PLC

• Market cap: £66.81 billion
• Revenue: £144.2 billion
• Gross profit: £22.79 billion
• 1-yr return: - 1.11%
• Exchange: London Stock Exchange
• Year founded: 1908
• Country: United Kingdom

BP is a global integrated energy company that delivers solutions for heat, light, and mobility.

• Oil and gas: Focuses on exploration, production, and refining of oil and natural gas.
• Convenience & mobility: Operates a large network of retail service stations.
• Low carbon energy: Investing in renewable energy sources, including bioenergy, hydrogen, and wind and solar power, as part of its transition to a net-zero company.

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9. RELX PLC

• Market cap: £62.96 billion
• Revenue: £9.53 billion
• Gross profit: £5.99 billion
• 1-yr return: - 4.01%
• Exchange: London Stock Exchange
• Year founded: 1903‍
• Country: United Kingdom

A global provider of information-based analytics and decision tools for professional and business customers.

• Risk: Provides data and tools for evaluating risk for industries like insurance and banking.
• Scientific, technical & medical: A major academic publisher through its Elsevier division.

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10. GSK PLC

• Market cap: £58.51 billion
• Revenue: £31.63 billion
• Gross profit: £22.68 billion
• 1-yr return: + 13.88%
• Exchange: London Stock Exchange
• Year founded: 1715‍
• Country: United Kingdom

GSK (formerly GlaxoSmithKline) is a global biopharma company with a focus on uniting science, technology, and talent to get ahead of disease together.

• Vaccines: A world-leading vaccine business, providing protection against a range of infectious diseases.
• Specialty medicines: Develops and manufactures innovative medicines for areas such as HIV, respiratory diseases, and immunology.

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What are the biggest companies by total annual revenue?

• Shell: £214.24 billion
• Glencore: £180.76 billion
• BP: £148.05 billion
• HSBC: £116.6 billion
• Tesco: £69.92 billion

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What are the biggest companies by workforce?

• Tesco: 336,430
• HSBC: 211,000
• Glencore: 150,000
• Unilever: 120,040

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Summary

Understanding a company's performance is crucial; it's how you truly know what you own. These metrics directly drive the value of your stocks and funds. When you understand these key drivers, you can navigate market changes with confidence, rather than just reacting to headlines.

Next we’ll be looking at the biggest companies in Europe by market cap.

All market data sourced from TradingView and company reports as of 01.09.2025.

What is portfolio rebalancing?

Rebalancing a portfolio means adjusting your investments back to their original mix of assets in line with your goal, risk tolerance, capacity for loss and time horizon when market changes cause them to drift.

Over time, some investments grow faster than others, which can leave you with more risk (or less) than you intended. Rebalancing helps keep your portfolio aligned with your goals, risk tolerance and capacity for loss.

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How to rebalance your portfolio

Start by asking yourself a few key questions:

• Am I still comfortable with my original asset allocation?
• Has my financial situation or goals changed since I set it?
• Is my portfolio more aggressive or more conservative than I’d like it to be?
• Has my risk tolerance or capacity for loss changed?
  

If the answers suggest your portfolio has drifted away from where you want it to be, it’s time to consider rebalancing.

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Simple steps to rebalance your portfolio

There are a few different approaches investors use:

• Selling and buying. Selling some of the investments that have grown beyond your target and using the proceeds to buy more of the underweighted assets.
  
• Adding new funds. Directing new contributions into areas of your portfolio that are underrepresented, rather than selling anything.
  
• Automatic rebalancing. Some platforms and funds offer built-in rebalancing, adjusting your portfolio for you on a set schedule.

Which method you choose depends on your investment style, account type, and comfort level with making changes.

See our full guide on portfolio management.

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How often should I rebalance my portfolio?

There’s no strict rule, but generally checking your portfolio consistently, once or twice a year or if your circumstances have changed.

Some investors prefer a “threshold” method, where they only rebalance if allocations drift by more than 5-10% from their targets.

The key is consistency, regular reviews and not overreacting to every short-term market movement.

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Advantages of portfolio rebalancing‍

• It keeps your portfolio aligned with your goals and risk profile.
  
• Improves diversification over time.
  
• Reduces the chance of being overexposed to one asset or sector.
  
• Helps manage volatility and risk.
  
• Supports long-term investing discipline.

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Disadvantages of portfolio rebalancing‍

• May reduce exposure to sectors that are currently performing well.
  
• Could increase exposure to underperforming assets.
  
• May trigger taxes or transaction fees, depending on your account type.
  
• Requires time, effort, and a clear understanding of your goals.

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Rebalancing your portfolio summary

Rebalancing is a practical way to keep your portfolio on track as markets shift. By comparing your current allocation to your target, making adjustments where necessary, and sticking to a consistent review schedule, you can manage risk and stay aligned with your long-term goals.

Next in this series: Pound-cost averaging and how investing small amounts regularly can reduce risk and smooth out returns.

What is pension drawdown? 

Pension drawdown is the overarching term for taking income directly from your invested pension pot, and since the 2015 Pension Freedoms, almost all new drawdown arrangements are set up as flexi‑access drawdown (the modern, unrestricted version of drawdown).

Introduced as part of those reforms, alongside the ability to take up to 25% of your pot tax‑free, it allows retirees to choose how much income they withdraw each year while keeping the remainder invested.

Pension drawdown is a method of taking a retirement income from your pension pot as you need it, whilst keeping the rest invested with the aim of generating further growth.

Instead of receiving a fixed income for life, you decide how much income to withdraw and when. This differs from purchasing an ‘annuity’, where you hand over your pot in exchange for a guaranteed income (we’ll cover this option in another guide).

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How does flexi-access drawdown work? 

Flexible pension drawdown works by moving your pension funds into a specific ‘drawdown’ account that allows for variable withdrawals.

1. Move your funds: Not every pension scheme offers drawdown directly. Many older workplace schemes are designed only to build up savings, not to pay it out flexibly in retirement. If your current provider does not support flexi-access drawdown, you will need to transfer your pension to a modern provider or a Self-Invested Personal Pension (SIPP) that does. 
2. Take your tax-free cash: When you move money into drawdown, you are typically entitled to take 25% of the pot as a tax-free cash lump sum, up to a maximum of £268,275. This cap was introduced when the Lifetime Allowance was abolished in April 2024. For most people with pension pots below around £1.07 million, the 25% figure will still apply in practice. You can take this all at once or in stages. . For example, if you have a £100,000 pot, you can take £25,000 immediately tax-free. The remaining £75,000 stays in the drawdown account.
3. Invest the rest: The remaining 75% of your pot stays invested in the stock market, bonds, or other multi-asset portfolios. The goal is to achieve investment growth that helps replenish the money you withdraw, ideally outpacing inflation.‍
4. Set your income: You then choose how to withdraw from the invested 75%. You can set up a regular monthly payment (like a salary), take occasional lump sums for holidays or big purchases, or take nothing at all for certain years. Crucially, every penny you withdraw from this part of the pot is treated as taxable income whenever you take it.

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Investment risks and sustainability

The defining feature of drawdown is that your income is not guaranteed. It is linked directly to the performance of your underlying investments, which means your pension pot can rise or fall in value.

• The sequence of returns risk: This is the danger of a poor market performance occurring just as you start your retirement. For example, iIf your portfolio drops by 20% in year one, and you continue to withdraw your planned income, you are selling assets at lower prices. This depletes your capital much faster than expected and makes it difficult for the pot to recover even if markets bounce back later.‍
• Risk of withdrawing too much: Because there are no guarantees, you need to choose a sustainable withdrawal rate. Historically, many people referred to the ‘4% rule’ (withdrawing 4% of your pot annually), but more cautious approaches such as a 3% withdrawal rate may offer an extra layer of protection against running out of money.

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Is a drawdown pension a good idea?  

Drawdown can be a good idea for those who want control over their pension pot and are comfortable with some investment risk during retirement, but it isn’t the right choice for everyone.

Pros:

• Income flexibility allows you to reduce withdrawals when you can rely on other income to cover your expenses, or take more when your expenses are high or unforeseen. 
• Potential for growth on your remaining invested pot, giving you the potential to keep up with or even outpace inflation. 
• Death benefits, any money left in your pot when you die can usually be passed on to beneficiaries. Learn more.

Cons:

• Your income is not guaranteed, as the invested value of your pot can move up as well as down depending on investment performance.
• There is a risk that your pot could run out during your lifetime, unlike an annuity, which can provide a guaranteed income for life.

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Do you need financial advice? 

Deciding how to withdraw your pension is one of the most complex financial decisions we make in our lives. Because of the risk involved, taking regulated financial advice can be a good idea if you’re feeling unsure about your options.

An advisor can help you stress-test your retirement plan by modelling different scenarios and seeing how this would affect your pot. They can also help you navigate the tax  considerations involved in taking income, helping you avoid unexpected bills and ensuring you don’t accidentally breach your allowances. 

You can also take advantage of MoneyHelper’s free, government-backed Pension Wise service, which helps explain your options for withdrawing money from your defined contribution pension.

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Drawdown death benefits 

One of the benefits of pension drawdown is that any remaining pension savings can usually be passed to your beneficiaries when you die.

• If you die before age 75, any money can typically be inherited by your beneficiaries tax-free. They can take it as a lump sum or as an income.

• If you die after age 75, your beneficiaries can still inherit the remaining pot, but they will normally pay Income Tax on any money they withdraw at their own marginal rate.

It is worth noting that the government has announced plans to bring unspent pension pots into your estate for inheritance tax purposes from April 2027. If this change comes into effect, the tax treatment of inherited drawdown pots would change significantly.

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Annuities 

The main alternative to flexible drawdown is buying an ‘annuity’. This is where you give all, or part of, your pension pot to an annuity provider to purchase a fixed, guaranteed retirement income. 

Annuities are a much lower risk option than drawdown, as it guarantees an income for a fixed period or the rest of your life. You don’t, however, get the same potential growth benefits you could get from a drawdown pot. Read our annuities guide for further information. 

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How does a Savings Account Work?

‍Banks tend to offer a range of savings accounts with various interest rates. When you deposit money into a savings account, the bank will usually pay a small amount of interest on that money, which means that your balance will grow over time.

You can usually withdraw money from a savings account at any time unless it’s an account which requires you to send a notice to withdraw funds.

In general, savings accounts are a safe and easy way to help save money and earn interest on that money too. Learn some money saving tips.

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What Types of Savings Accounts are available in the UK?

‍There are a variety of savings accounts available in the UK. Some of the more common accounts are:

1. Easy Access Savings Account: This type of savings account allows you to deposit and withdraw money at any time, typically with no notice period or penalty for withdrawals. They usually have no minimum deposit requirements. Learn more.
2. Notice Savings Accounts: These accounts require you to give notice before making a withdrawal, usually 30, 90 or 120 days. Notice accounts tend to have a higher interest rate than easy access accounts.
3. ISA (Individual Savings Account): ISAs are tax-free savings or investment accounts that allow you to save money without paying tax on the interest earned. There are different types of ISAs, such as cash ISA or stocks and shares ISA.

Chip does not provide tax advice. Tax treatment depends on individual circumstances and may be subject to change in the future.

It’s always important to do your own research into the various savings accounts available and find one that best fits your needs.

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Opening up a Savings Account

‍It’s typically very simple to open up a savings account. However, you should make sure you do your research to ensure you open a savings account that’s right for you. Some tips for finding the right savings account include:

1. Interest Rate: Look for savings accounts that have a high AER (annual equivalent rate). The higher the AER, the more interest you can earn through deposits and the account balance. Learn more about interest rates.
2. Fees: Some savings accounts may come with fees, which could be for monthly maintenance or fees for withdrawing. Make sure you check the terms and conditions to ensure you don’t have to pay unexpected fees.
3. Accessibility: You should consider whether your cash can be instantly accessed or you need to give notice to withdraw funds. As a general rule you shouldn’t put savings you may need to access instantly in notice or fixed term savings accounts.
4. Minimum Deposit Requirement: Some savings accounts require a minimum deposit to open the account, while others don’t. Choose an account that best fits your financial situation.

It’s a good idea to shop around and compare the different savings accounts available, to find the one that best fits your needs.

What is passive income?

Passive income refers to earnings generated with minimal ongoing effort. Unlike active income, such as wages from employment, passive income typically stems from investments, a side business, or assets that continue to generate returns without your daily involvement.

In investing, passive income can take various forms: interest from savings, dividends from stocks, rental income from property, or returns from bonds and funds. 

While setting up these income streams often requires upfront capital or effort, the long-term goal is a source of financial stability that works for you in the background.

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Advantages and disadvantages of passive income

Advantages of passive income could include:

• Financial freedom: Passive income can supplement or even replace earned income, offering more control over your time.
• Compounding benefits: Reinvesting passive earnings can accelerate long-term wealth accumulation.
• Diversification: Passive income streams can help balance risk across different asset classes and reduce reliance on employment income.

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Disadvantages of passive income could include:

• Capital requirements: Many passive income strategies require an initial investment, whether in time, money, or both.
• Market and interest rate risk: Investment returns may fluctuate, especially with stocks, bonds, and property.
• Maintenance considerations: Some “passive” strategies (like rental property) require ongoing management or decision-making.

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Passive income investing ideas

Passive income doesn’t come from a one-size-fits-all approach. Here are several tried-and-tested investing avenues for UK investors:

Dividend Stocks

Dividend-paying shares distribute a portion of a company’s profits to shareholders, typically on a quarterly or annual basis. These can provide a regular income stream in addition to any potential capital gains if the share price rises. Understand how stocks work.

• Tax note: UK investors benefit from a tax-free dividend allowance (subject to change), but income above this threshold may be taxable. Chip does not offer tax advice.
• Risk level: Moderate to high, dependent on market volatility and company performance.
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Mutual Funds & Index Trackers

Rather than picking individual shares, investing in mutual funds or index trackers offers exposure to a broad range of assets. Some funds are designed to focus on income-generating holdings, distributing returns to investors at regular intervals.

• Example instruments: UK-focused equity income funds, global dividend funds.
• Risk level: Varies, diversified funds tend to carry lower risk than individual stocks.
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Income Bonds

Income bonds (not to be confused with NS&I Income Bonds) are debt securities that pay investors regular interest over time. These are popular among risk-averse investors who prioritise predictable income.

• Considerations: Interest rates affect bond performance, when rates rise, existing bonds may become less attractive.
• Liquidity: Some income bonds can be difficult to sell before maturity.
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Property & Real Estate

Buy-to-let properties or investments in Real Estate Investment Trusts (REITs) can provide regular rental income and potential property value growth.

• Management effort: Rental properties involve ongoing responsibilities, finding tenants, property maintenance, and legal compliance.
• Upfront costs: Stamp duty, mortgage deposits, and ongoing fees can be significant.
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Savings Accounts

While not typically thought of as an "investment", high-interest savings accounts and cash ISAs can generate passive income in the form of interest.

• Best suited for: Conservative investors seeking capital preservation and low risk.
• Returns: Generally lower than other investment vehicles, especially during inflationary periods.

Learn more about investment types and asset classes.

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Passive and active investing summary

Passive income can be a powerful pillar in your overall investing strategy, especially for those seeking long-term wealth with less hands-on effort. 

While it's not entirely “effort-free,” with the right knowledge and setup, passive investing can complement, or even surpass, active income over time.

In the next part of our Investment Strategies series, we’ll explore the Buy and Hold strategy, a long-term option for those looking to build wealth through passive income channels.

Why use multiple accounts?

Each type of savings account offers different perks. By splitting your money across several accounts, you can:

• Maximise interest: Some accounts offer better rates for certain types of savings.
• Keep your money accessible: Different accounts offer varying levels of access to your funds.
• Meet different savings goals: Whether it’s an emergency fund, retirement savings, or a holiday fund, separate accounts can help keep your financial goals on track.
• Benefit from tax perks: Some accounts offer tax-free savings, giving you more return on your money.
• Reduce risk: Spreading your money across different accounts means you’re less exposed to market changes or poor interest rates in one area.

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How to leverage UK savings accounts

Now, let’s explore the key UK account types and how to build them into your multi-account strategy:

1. ISAs (Individual Savings Accounts)

ISAs allow you to save up to £20,000 a year tax-free. This makes them an essential part of any savings strategy. Max out your ISA allowance if possible to shield more of your savings from tax. 

2. Instant access accounts

Instant access accounts let you withdraw money whenever you need it. While the interest rates are (generally) lower, the liquidity makes them perfect for short-term goals and emergency funds. Try to keep 3-6 months of living expenses here to cover any unexpected costs.

3. Fixed-term savings accounts

These accounts offer better interest rates if you’re willing to lock your money away for a set period, typically ranging from one to five years. Use fixed-term accounts for medium- to long-term goals, such as buying a house or a big future purchase.

4. Prize-linked accounts

Instead of traditional interest, accounts like the Chip Prize Savings Account offer the chance to win tax-free prizes. Though there’s no guaranteed return, the prospect of winning big can be an exciting addition to your savings.

Prizes are not cash and are applied to your Chip account as a bonus. Prizes become cash once you withdraw your entire Prize Savings Account balance into your linked bank account.

T&Cs, eligibility criteria and minimum average balance of £10 applies. For current prize values, entry and eligibility criteria and how to opt-out see our full terms”.  FSCS limits of £120,000 apply to eligible deposits. Prizes are not eligible for FSCS protection.” (if mentioning the FSCS scheme).

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Structure your savings

Here’s how a typical multi-account setup might look:

• Emergency fund: Instant access account for peace of mind.
• Short-term goals: Cash ISA or high-interest instant access for a holiday or new car.
• Medium-term goals: Fixed-term accounts for savings you don’t need immediately.
• Long-term goals: Stocks & Shares ISA or a Cash ISA for retirement or a future property purchase.
• “Fun” money: Prize-linked accounts for a chance to win big.

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Tailor your strategy

The multi-account strategy is about building a system that works for your unique financial needs. Whether you’re saving for a rainy day, a dream holiday, or retirement, using multiple accounts lets you optimise every pound.

Make sure to review your strategy regularly, keeping up with the latest offers and adjusting your approach as your financial situation evolves. With a tailored multi-account system, you’re not just saving – you’re setting yourself up for financial success.

Note: Chip does not provide financial or tax advice. Tax treatment depends on individual circumstances and may be subject to change in the futureAlways consult a professional for personalised recommendations.

A bear market is a period when a major market index, such as the UK's FTSE 100 or the US's S&P 500, falls by 20% or more from its recent highs. This market environment is characterised by widespread pessimism. Investor confidence is low, leading many to sell stocks, which in turn pushes prices down further. This is the direct opposite of a bull market, where prices are rising and optimism is high.‍

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When are we in a bear market?

Bear markets can only be identified retrospectively, once a market index has fallen more than 20%. It is a backwards-looking label rather than a real-time indicator. 

However, certain economic signals often precede or accompany a bear market. These can include:

• Slowing economy: Key indicators like rising unemployment, a drop in corporate profits, and reduced consumer spending often signal an economic downturn that can lead to a bear market.
• Rising interest rates: Central banks, such as the Bank of England, raise interest rates to combat inflation. This can make borrowing more expensive, cooling the economy and sometimes triggering a market downturn.
• Geopolitical events: Major global events, such as wars or energy crises, create uncertainty and can cause investors to sell off assets in a flight to safety.

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How long do bear markets last?

There are different types of bear markets, and typically recovery times differ depending on the cause. Research from Goldman Sachs¹ identifies three distinct categories of bear market based on historical stock market data:

• Structural bear markets such as the Global Financial Crisis in 2007-2008 are triggered by a market imbalance and ‘bubbles’. By far the most severe type, average declines are around 60% and recovery time is around a decade. 
• Cyclical bear markets are tied to rising and falling economic cycles, and can be triggered by economic headwinds such as rising interest rates, impending recessions, and declining profits. Average declines are around 30%, which last an average of two years, and take about five years to fully recover. 
• Event-driven bear markets are triggered by single events such as wars, oil prices shocks, or a global crisis such as the Covid pandemic. Recovery periods are shorter, typically lasting around eight months, with full recovery in around a year. 

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What does bearish mean?

If you are a bear in the market, you are a stock market pessimist, and believe that prices are going to experience a downward trajectory. This is the direct opposite of being bullish, which is a belief that prices are heading upwards. 

A bear in the stock market might react differently depending on strategy and risk appetite. Some adopt a very high-risk strategy called short-selling, essentially betting on the falling price of a stock or market index, by borrowing shares from a lender, selling them on the open market, then selling them back to the lender at the (hopefully) lower price and profiting from the difference. 

Other bears might take a more defensive position, moving to ‘safe-haven’ assets such as cash and bonds, in an attempt to preserve or even grow capital during a market downturn.

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How to approach a bear market?

There is no one-size-fits-all approach to a bear market event, but for investors with a long-term horizon, the same key principles apply.

1. Avoid panic selling: keeping calm in the event of a market downturn is crucially important if prices have already fallen, and selling will simply ‘lock in’ any losses you’re seeing in your portfolio. You risk missing the recovery period, and could derail your long-term goals. 
2. Review your goals: if your financial goals are still years away, you likely have sufficient time to wait out the downturn. Familiarising yourself with the upward trends of the stock market over time can help put things in perspective.
3. Stay diversified: spreading your investments across different asset classes and regions, can help cushion the impact of a bear market, particularly in event-driven circumstances that can be specific to an industry or market region. 
4. Regular investments: continuing to invest a fixed amount, whatever the price, can help smooth out the ups and downs of the market. In a bear market, these investments are taking advantage of lower prices and potentially increasing returns when the market recovers. 

While bear markets can be unsettling, they’re a natural feature of the economic cycle, and can even present opportunities if navigated properly. Historically, bear markets in global markets have eventually been followed by a new bull market and a period of economic recovery, so staying the course if your financial goals allow it can be the best route for investors. 

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As one of Europe’s most crowdfunded businesses, we have 28,000 people (largely Chip customers) who shape what we build and the direction of the business.

This customer focused community has been our secret to success and played a huge role in our growth so far, seeing us named in 2025 as the 6th fastest growing company in the UK by the Sunday Times and the 12th fastest growing in Europe by the FT.

In this spirit, I want to share the key themes from the discussion with all Chip customers, to give you all a view on what’s coming in the next year and a chance to share your thoughts on it.

We’ve also pulled together a quick visualisation to give you a glimpse of what all this will look like.

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We want to use AI to bring personalised planning and financial advice to Chip.

The growth of AI in the last two years has opened up an incredible opportunity for Chip to explore building a truly personalised advice and planning service for our customers.

Imagine instead of having to learn your way around the intricacies of personal finance, you could start with a conversation about you.

Discuss your goals and ambitions — where you are now and where you want to get to.

Chip’s AI could then build a personalised plan based on this conversation, suggesting which savings and investments accounts to open, how much to put into a pension vs an ISA, what short and long term goals to set, and recommend an automated plan to effortlessly top up your savings.

You would be able to review the suggestions, easily tweak them to fit your needs in an open discussion and when you’re happy, you simply say “make it so” and Chip’s AI could crack on with the leg work; opening the accounts, initiating deposits, transfers and all the boring admin work done for you.

But you’d still have easy oversight of everything in your app, with simple graphs and portfolio views to track your progress against your goals.

You’d be able to pre-program nudges for yourself and book in regular reviews, and at any time simply discuss with the AI to update the plan for you if your ambitions grow or circumstances change.

While we might be some way off replacing the human touch from an expert wealth advisor at this early stage, we do think there's a lot that can be automated via AI to open up the benefits of financial advice to everyone.

In addition to building the technology, we are exploring the correct permissions and regulated set-up to offer more planning and advice. This is an industry that is very strictly regulated and as you can imagine, there are no shortcuts to getting a fully functioning AI advice service live.

However, the regulator is also increasingly recognising the potential of tech to offer a better outcome to consumers and the FCA has announced reforms to help close the “advice gap”.

In their own words:

“These once-in-a-generation reforms will help people navigate their financial lives and give them greater confidence to invest … There are about 7 million adults in the UK with £10,000 or more in cash savings who may be missing out on the benefits of investing throughout their lives.”

So, we hope these changes could open a quicker path for us to bring you a more personalised service within the next year.

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The first step towards more personalisation

Our first step towards offering more personalisation has been rebuilding our Goals feature from the ground up.

Those of you who have been with us for a while will know that we’ve always offered Goals as a feature to help keep our customers focused on achieving their long term ambitions.

I’m delighted to announce that Goals will very soon fully integrate with all the accounts in Chip and offer a seamless easy experience.

We’ll continue to enhance our Goals feature over the next year, with the intention to eventually tie it into our new AI planning service.

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Coming early next year

To be able to offer you a true wealth management experience, we know we need to offer you pensions.

Self-Invested Personal Pensions, commonly abbreviated to SIPPs, offer powerful tax benefits to people saving for their retirement.

This is the last financial product type missing from our fundamental offering. So, I’m delighted to say this is currently under development and should be ready to launch in the first half of 2026.

In the long term we want to offer the ability to transfer your existing pensions into Chip, so you'll have one easy view of all your wealth.

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All of your ISAs in one place

There have of course been some rumblings from the government about changing cash ISA limits, but they remain one of the most popular tools available to UK savers and our cash ISA is certainly one of the most popular products at Chip.

Whatever happens, we believe that ISAs will remain the cornerstone of the savings and investments accounts we offer.

First, we are going to create a seamless experience between your Chip Cash and Stocks & Shares ISAs.

We want to give you one clear view on your tax allowance across both these accounts, so you can easily see how you are diversifying your portfolio and if you’re taking full advantage of your annual ISA allowance.

Then, we’ll look at adding LISAs and JISAs too, so you can enjoy more ways to tax-efficiently build wealth.

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We're here to make you wealthier. Your way.

Our mission remains the same. We want to make our customers' lives wealthier.

We’ve spent much of the last eight years putting as many tools, products and accounts in the palm of your hands as possible. So you can literally build your wealth at the tap of a button.

But now, we’re presented with a game changing moment to tie it all together with a personalised user experience powered by AI.

Essentially, you’ll have everything you need to build and grow your wealth in a couple of taps across cash, investments, pensions (and eventually even more).

But also, you’ll have a guide that listens to what you want, asks about your goals, and builds a plan around your needs that is personal to you.

I know you’re going to love it and I can’t wait to share it with you.  

Again, if you'd like to take a sneak peek at what the future holds, see our webpage for a preview.

What Is buy and hold?

Buy and hold is a passive investment strategy. It involves purchasing an investment and holding it over the long term, often years or decades, with minimal trading. 

The rationale is based on historical data showing that markets tend to rise over time despite short-term volatility.

Rather than reacting to daily market news or price swings, buy and hold investors focus on the long-term potential of their investments, allowing compounding returns and capital appreciation to work in their favour.

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Advantages of a buy and hold strategy

• Compounding Returns: Over time, reinvested dividends and interest can significantly increase the total value of an investment.
• Lower Costs: Because it involves less buying and selling, this strategy reduces trading fees and potentially lowers capital gains tax liabilities in taxable accounts.
• Less Emotional Investing: A long-term view helps investors avoid reactive decision making in response to market dips or economic news.
• Tax Efficiency: In the UK, assets held longer than a year may be subject to more favourable capital gains treatment, especially when held within tax-efficient wrappers such as ssISAs or pensions.

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Risks of a buy and hold strategy

While buy and hold is relatively simple and historically effective, it’s not without risk:

• Market Downturns: Bad market days can still negatively affect portfolio values, particularly if they occur near an investor's time of withdrawal.
• Company or Sector Risk: Holding individual stocks over long periods can expose you to company-specific risks such as poor management or disruptive competition.
• Inflation Risk: Over decades, inflation can erode real returns if your investments don’t grow faster than inflation.
• Behavioural Risk: The strategy requires patience and discipline, emotional decisions can undermine its effectiveness.

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How to build a buy and hold strategy

1. Set Clear Objectives

Determine your financial goals, risk tolerance, and time horizon. Buy and hold works best with long-term objectives such as retirement planning.

2. Choose a Diversified Portfolio

Instead of focusing on single shares, many investors use diversified instruments like index funds or ETFs to spread risk across different sectors or markets.

3. Use Tax-Efficient Accounts

In the UK, Stocks and Shares ISAs or Self-Invested Personal Pensions (SIPPs) allow your investments to grow free from Capital Gains Tax and dividend income won’t count towards your Personal Allowance.

4. Automate Where Possible

Regularly investing a fixed amount (pound-cost averaging) can smooth out market volatility over time and build a habit of disciplined investing.

5. Review, But Don’t Overreact

Check and manage your portfolio annually or after major life changes, but avoid frequent trading. Adjust only if your goals or circumstances change.

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Buy and hold strategy summary

The buy and hold strategy is a cornerstone of long-term investing. Its simplicity and historical success make it especially appealing for new investors looking to build wealth over time.

While not without risks, its disciplined, passive nature aligns well with long-term financial goals.

In the next guide, we’ll compare two distinct investing styles: defensive and aggressive strategies, helping you understand how different approaches to risk and return can shape your investment journey.