The FTSE 100 index hit a record high today, surpassing 10,000 points for the first time. Within the initial hour of trading, it reached 10,046 points before slightly pulling back post the new year’s break. Comprised of the top 100 UK companies on the London Stock Exchange, the FTSE 100’s performance impacts not only investors but also individuals with pension investments.

This milestone follows a strong performance in 2025, with the index ending the year 21.5% higher, driven by increased share prices in sectors like precious metal mining, defense, and financial services. Investors have been drawn to the stock market amidst global political uncertainties and sluggish UK economic growth.

Closing at 9,931.38 in 2025, the FTSE 100 outperformed several European and US counterparts, including France’s Cac 40 and New York’s S&P 500. Breaking through the 10,000 level marks a significant moment for the index since its inception in 1984.

Rachel Reeves, the Chancellor, expressed satisfaction with the FTSE 100’s achievement, emphasizing the benefits of investing in UK shares over keeping cash in banks. Reeves sees this as a vote of confidence in the UK economy and a positive start to 2026. In a move to encourage stock market investments, changes to the cash ISA annual limit were announced in the last November Budget.

From April 2027, individuals under 65 will only be allowed to put £12,000 into a cash ISA annually, down from the current £20,000 limit. Over-65s can still contribute £20,000 to cash ISAs, maintaining the overall £20,000 ISA limit for potential savings into both cash and stocks and shares ISAs.