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The UK stock market started 2026 with a bang, as FTSE 100 broke 10,000 points for the first time in history. This followed an impressive 21.6% gain in 2025 – its best year since 2009.
But later in the week, the index had nearly fallen below 10,000 again, reflecting global pressures as disappointing trade data from China weighed on UK commodity-linked names.
For Britons focused on saving for retirement or a home, this mix of record highs and new uncertainty is a reminder to focus on quality – rather than chasing headlines. So for those thinking long term, what is the best way to plan for an uncertain 2026?
Global flexibility
Late last week, China’s trade data ballooned, and UK investors felt the tremors. Exports from one of the world’s biggest producers fell faster than expected in December, pushing down commodity prices and criticizing miners exposed by the FTSE.
However on January 9, large miners such as Glencore again Antofagasta they have already returned 10.6% and 3.5% respectively.
This volatility, combined with the OECD’s call for 2.5% UK inflation, may prompt some investors to rethink their investment strategy. While falling rates are helping bonds and utilities, consumer caution is hurting sales.
So now may be the time to focus on defensive stocks with broad moats – ideal for those with a 10-20 year horizon.
Self defense
A few popular defenses FTSE 100 stocks that investors may want to consider include National Grid, Unilever, BP, RELX again Pets at Home (LSE: PETS).
Let’s bring pets closer to home, because I’m a big fan of dogs and cats — but I’m a big fan of money.
When money is tight, people cut back on many things – eating out, holidays, drinking etc. What they do not reduce is to feed their livestock. That makes this pet-focused company a protective gem. Its veterinary services alone provide recurring revenue of more than £150m a year from subscriptions.
The company has a 24% UK pet care market share, boosted by omnichannel growth and loyalty programs that are up 8% year-on-year. On a budget basis, it offers a yield of 6.6% with a payout ratio of 68% covered by dividends and strong cash flow (34% cash payout).
Despite recent retail pressures, profits have been resilient. Now, analysts see it as undervalued, and the share price is 12 times earnings with growth potential. For retirement savers, it’s a consumer protection game with high income potential.
However, it is not without risks. Retail sales fell 3% and margins are under pressure from competition and higher costs. Also, the recent exit of its CEO amid profit warnings led to a sharp decline in the weather. If things don’t improve, short-term profit cuts aren’t off the table.
An important point
The global economy is volatile, as China’s trade slowdown and the OECD’s inflation warnings create surprises in stock markets. Amid uncertainty, UK defensive stocks such as Pets at Home offer stability with strong returns and reliable returns.
Now seems to be a good time to fund a portfolio with stocks that enjoy consistent demand, even in the lows. Utilities, healthcare and the consumer base are generally good choices, and having a mix from different sectors helps reduce the risk of concentration.
