Time to spring-clean your finances

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Time to spring-clean your finances

Now, with the end of the tax year fast approaching, is a good time to spring-clean your finances, for instance to make sure that your pension savings are on track and that you are making the most of the various allowances and tax reliefs to which you are entitled.

Here are a few tips to help you optimise your finances in the 2018/19 tax year – and possibly for many years ahead. To be effective for the current tax year you need to act before 6 April.

Use or lose annual allowances

Using the annual allowances that the government makes available to you each year can help you shelter as much money as possible from tax in the future.

  • Check how much income your Local Government or other workplace pension is likely to provide. Will this be enough to cover your expenditure in retirement? If not, consider paying in more, especially as the 20% income tax you paid is added to your contributions and any growth is free of tax.
  • Have you and your family made the most of your £20,000 ISA allowances for the 2018/19 tax year? ISAs are an efficient way of saving because there is no tax to pay when you withdraw money and, unlike pensions, you can access them whenever you want.
  • Would you like to help your children or grandchildren financially? If so, you could consider paying in to an ISA on their behalf. You could also pay into your spouse’s or children’s pensions. Although you won’t receive any tax benefits, the person receiving the pension contribution can, depending on how much they receive, get income tax relief.

Reducing income tax

This is particularly important for people with income of £50,000 – £60,000 and who could lose child benefit.

  • Are you on the right tax code? Even a small change in your circumstances can affect it.
  • Have you included charitable donations on your tax return and, if you pay higher rate tax, reclaimed it on gift aid donations?
  • Could you contribute more to your pension without going over your annual contribution and lifetime allowance limits?
  • Might it make sense to transfer some income-producing assets to your spouse or partner or vice versa, if one of you does not use your full personal allowance or pays a higher rate of tax?

As ever, there are pros and cons to these suggestions and it is important to understand the full implications of what you are considering. It therefore makes sense to talk to one of our professional financial advisers before you act. As Napo’s preferred provider of financial advice, we specialise in helping people like you achieve their financial goals. The advice we provide is practical, affordable, easy to understand and specific to you.

Complimentary initial consultation

We are offering every Napo member a no obligation, complimentary initial consultation with one of our professional financial advisers.

Book your complimentary, no obligation initial consultation now! Call freephone 0800 085 85 90 or email appointments@lighthousefa.co.uk.

The value of your investments can go down as well as up, so you could get back less than you invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation. Tax advice which contains no investment element is not regulated by the Financial Conduct Authority

Lighthouse Financial Advice Limited is an appointed representative of Lighthouse Advisory Services Limited, which is authorised and regulated by the Financial Conduct Authority.

Lighthouse Financial Advice Limited and Lighthouse Advisory Services Limited are wholly-owned subsidiaries of Lighthouse Group plc. Registered address: 26 Throgmorton Street, London EC2N 2AN. Registered in England No. 4795080. View our privacy policy at www.lighthousegroup.plc.uk/privacy-policy.

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