Yes, we will be seeing out the old and welcoming in the new Financial Year on 5th April.
It matters because it gives you a narrow window to take full advantage of some key tax breaks and other timely opportunities. Doing something about it now may enable you to take advantage of any remaining reliefs, allowances and exemptions.
Taking full advantage of Individual Savings Account (ISA) allowances
This is a great place to start. The Government puts a cap on how much you can put into an ISA in any tax year (from 6 April – 5 April). The ISA allowance for 2022/23 is set at £20,000. (The ISA limit for Junior ISAs is £9,000 for 2022/23.)
If you’re a married couple, you can put up to £40,000 in ISAs between you.
If you hold more than one type of ISA, such as a Cash ISA and a Stocks and Shares ISA, you can spread your ISA allowance between them. Or you could put the full £20,000 into one.
It’s a case of ‘use it or lose it’, when the tax year ends on 5 April. Any unused ISA allowance will not be rolled over into the new tax year.
Consolidate your ISAs
You may like to consider consolidating your ISAs if, over the years, you have opened accounts with different providers. you won’t lose the tax-efficient ‘wrapper’ status. Many previously attractive savings accounts may cease to have a good rate of interest, and naturally some Stocks & Shares ISAs don’t perform as well as investors would have hoped. Consolidating your ISAs may also substantially reduce your paperwork. Let’s have a look at it together and see what can be done.
Topping Up Pensions
The pension annual allowance (AA) is the annual limit on the amount of contributions paid to, or benefits accrued in, a pension scheme.
Carry forward of unused annual allowance from earlier tax years may allow you to absorb or reduce any annual allowance excess paid in the current tax year which, in turn, would reduce any potential annual allowance charge amount.
The pension carry-forward rule allows you to take advantage of unused annual allowances from the previous three tax years, and add it to this year’s allowance.
This means, you can receive tax relief on pension contributions which exceed the usual £40,000 annual allowance. However, your earnings must be at least equal to the amount that you are looking to contribute at that point. It’s all very tricky, so if you’re not sure, book a Zoom call and we’ll have a chat.
Your New Year’s Resolution
Start your new financial year with fresh New Year resolutions. We’re not suggesting ‘Dry April’, increased exercise regimes, healthier diets – though as you will see in our Wellbeing Blogs, we will be looking at these too. No, we are recommending that everyone should make a resolution to review their protection and estate plans.
A solid plan will help you feel confident your family’s finances are secure. While no one knows what is around the corner, reviewing your protection, updating your Will and creating an estate plan will help you rest assured that the financial side of things is taken care of.
Such planning is ‘not just about the money’.
This is all about you, your life so far and how it might develop into a fulfilling lifestyle. What part do your actions ‘today’play in your life & lifestyle ‘tomorrow’? Make this part of your New Year Resolution – part of your review.
Few of us actually know what we want and when we expect to have it. Just what are these ‘possibilities’ we refer to. There will be highs, moments of joy. lows and perhaps the odd disaster too.
There is always something that happens in life that makes you think: “woh, wait a minute, what just happened there?” It is that ‘wake-up call’ that makes us stop, think about life, your life, its values, pressures, problems, and opportunities.
The shock could come totally out of the blue, being global or so very, very personal. The shockwave is life changing.
Why wait for the shockwave before thinking properly about your life, values, and wellbeing. You can balance the complicated elements that make up your personal wellbeing by talking to us.
Money Life Balance
Life is far more than working, saving, paying bills and managing responsibilities – at least it should be.
You can create a positive relationship between Money (the tool) and Life (the experience) – and do so with confidence, leaving concerns, uncertainties and anxieties behind.
This is our approach to helping people, just like you, to understand more about life below the financial umbrella.
This is OUR approach, but remember, it’s YOUR LIFE.