In its current form, the Chinese pension system is predicted to run out of money by 2035. The country’s population dropped by three million last year. China’s demographic timebomb of a shrinking and ageing population, driven by its past policies – including the one-child policy – and a growing reluctance among young adults to have children, threatens its economic revolution and the switch to a consumer-led growth model.

So, an event-packed week of central bank news, political events and economic data began with investors focused on the annual meeting of China’s National People’s Congress (NPC) and Premier Li Qiang’s vow to transform its economy, which is being battered by deflation risk, a property crisis, weak household consumption and local government debt problems. He announced an ambitious 2024 economic growth target of around 5%, which prompted considerable scepticism, and promised a raft of new stimulus measures.

But investors were underwhelmed by the familiar script from the country’s leaders, who seem content with the current trajectory of the economy rather than introducing stronger stimulus. “There was little to cheer at the NPC, but bad economic news could eventually become good news for Chinese equities if the rising risk of outright deflation prompts the authorities to take more aggressive fiscal and monetary action,” suggested David Rees, Senior Emerging Markets Economist at Schroders.

China’s challenges have drawn parallels with Japan’s ‘lost decades’ since the 1990s. Yet there is an important difference; Japan got rich before it got old, whereas in China it’s happening the other way round.

Japan’s Nikkei 225 index hit another record high before retreating on Thursday. This came after news that corporate spending on plant and equipment surged in the fourth quarter of 2023; a boost likely to swing GDP from negative to positive and meaning Japan was not in recession after all. Strong wages data prompted a Bank of Japan (BoJ) official to suggest the country was moving sustainably towards its 2% inflation target and heightened expectations that the BoJ could end negative interest rates as soon as this month.

Testifying to members of Congress on Wednesday, Federal Reserve Chair Jerome Powell reiterated his wait-and-see message on when and how fast US interest rates would be cut. Powell cautioned that continued progress on lowering inflation was “not assured”, but suggested rate reductions will “likely be appropriate” if the economy evolves as the Fed expects.

Investors expect rate cuts to start in June, decisions that will be taken through the lens of a presidential election year. The primary election results on Super Tuesday all but confirmed a Biden v Trump re-match in November.

It was a similar story from the European Central Bank on Thursday, which kept interest rates at a record high but laid the ground for a June rate cut, suggesting that first quarter wage data would be key evidence in progress towards its inflation target.

Enthusiasm over the prospect of transatlantic interest rates coming within months drove global shares to record highs, although most major indices closed the week marginally lower as investors took some profits. Markets were encouraged by a mixed US jobs report, which kept a June rate cut on the table. US employers added a surprisingly robust 275,000 jobs last month, but this was a significant downgrade on previous months. The unemployment rate rose to a two-year high of 3.9%, which also suggested a softening of underlying labour market conditions.

In the UK, the key event of the week was the Budget. Chancellor Jeremy Hunt delivered few surprises and confirmed a number of pre-election tax sweeteners, most notably a 2% cut in employee National Insurance contributions. Market reaction to the statement was tellingly muted.

Hunt also announced a consultation on a new British ISA, which would extend the annual ISA allowance to £25,000 for those investing the extra £5,000 in UK assets. The proposal received a mixed industry response, over concerns about complexity and whether it would achieve its objective of boosting investment in UK companies.

There was positive news from the Office for Budget Responsibility, the government’s official forecaster, which now expects the UK economy to grow 0.8% this year, up from its previous prediction of 0.7%. It also raised its forecast for 2025 to 1.9% from 1.4%.

“With all the big headline grabbers already leaked or rumoured, there was little unexpected in the chancellor’s announcements, undoubtedly bringing a welcome sigh of relief from the gilt market,” commented Hetal Mehta. “Taxes are down, with a focus on workers, but that won’t prevent the tax burden from rising to the highest since the late 1940s.”

“The remaining fiscal wriggle room is now even smaller than it was back in November, which gives little scope for the OBR’s relatively upbeat forecasts to disappoint,” she added. “We could still see one more fiscal event if the election is in the Autumn, but the room for more giveaways seems slim.”

For many people in the UK, pensions and ISAs remain the most popular and tax-friendly ways to save. Using all your pension and ISA allowances before this tax year-end will bring your tax bills down.

Even with the National Insurance cut announced in the Budget last week, many of us will face bigger tax bills this year, with the personal allowance frozen until 2027/28, plus the additional rate threshold dropping to £125,140.

In addition, the tax-free allowances for Dividend and Capital Gains Tax will halve in 2024/25 to £500 and £3,000 respectively.

These changes mean you may need to invest more to achieve your long-term goals. Or even pay your tax bill. It’s definitely wise to make the most of all your pension and ISA allowances.

Of the two, pensions are still the most tax-efficient, since the basic-rate tax relief guarantees you a 20% cash boost from the government on contributions you make (subject to certain limits). Plus, if you’re still in a workplace pension scheme, your employer will also be contributing at least 3% of your qualifying earnings.

Why else should you save more into your pension? First, you can’t access your pension until age 55 (though this is set to rise to 57 in 2028), stopping any temptation to dip into your savings. And there’s another plus; you can choose to pass your pension pot on when you die.

Pension contributions save you tax right now – but they could also save on your eventual Inheritance Tax (IHT) liability. Pensions generally fall outside of your estate when it comes to paying IHT, so that’s a wonderful thing to leave to a loved one.

ISAs are hugely popular. They’re a tax-efficient, simple and flexible way to save. There are various types of ISA, including Cash, Stocks and Shares, Lifetime and Innovative Finance.

Since you don’t pay tax on interest, income or capital gains in any of these ISAs, you don’t need to declare them on your tax return.

Financial advice can help you decide how you should split your money between pensions and ISAs, to improve your financial wellbeing both now and in the future.

To the Academy — movies are just a little bit over 100 years old…We don’t know where this incredible journey is going from here. But to know that you think I’m a meaningful part of it means the world to me.

Cristopher Nolan celebrates winning the Oscar for Best Director on Sunday night, one of seven awards Oppenheimer won.