The world of investment is changing, especially where it is no longer possible to ignore statements from our own UK Government making it clear that change is happening.
The Climate Change Act 2008 committed the UK to an 80% reduction in carbon emissions relative to the levels in 1990, to be achieved by 2050. In June 2019, secondary legislation was passed that extended that target to “at least 100%”.
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November 2020 and the world is still in the midst of the Global pandemic that is Covid-19.
Lockdown, and the easing of restrictions, has led us to living life and looking at life differently and more closely.
But how often should we be looking at our financial wellbeing?
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You usually pay tax if your pension pots are worth more than the lifetime allowance (LTA), which is currently £1,073,100 (Tax year 2020/2021) and which has increased annually by the Consumer Prices Index (CPI) since the 2018/19 tax year.
The Lifetime allowance is triggered when a member reaches age 75 or accesses their pension benefits.
Read moreApril 2015 saw the introduction of pension freedoms. So, what does this actually mean for people who are looking to access their pension pot?
Prior to April 2015 the options available for the majority of people were very limited and in most cases an annuity would be the only option, offering a lack of flexibility and a poor deal especially with interest rates being at rock bottom.
Read moreThis April, ISAs celebrate their 21st birthday. So, I thought it would be a good idea to remind you how good an investment vehicle they can be, just before the end of this tax year.
Statistics suggest ISAs have become a huge hit with savers. The value of adult ISAs stand at over £600 billion, shared between around 22 million account holders. They have also proved popular with successive Chancellors as a means of encouraging the saving habit with the annual subscription limit having almost trebled since launch.
Read moreWith so much uncertainty out there, people are quite rightly thinking about every decision made. Sometimes even holding back on non-essential expenditure in order to keep savings or build on savings just in case.
These decisions are all based on you weighing up the pros of buying that TV vs the risk that you may need the money soon. This simple decision has lots of moving parts to it and is affected by your past decisions and experiences, as well as other considerations. You are assessing risk.
Read moreThis month, The Office of Tax Simplification (OTS) launched their latest report. The topic this time was inheritance tax.
The OTS does not consider policy issues such as should a tax abolished – they instead look at the administrative side of taxation.
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Did you know that there is over £400million sitting in pensions that people have lost? 1
1 https://www.thisismoney.co.uk/money/pensions/article-4644230/Is-worth-combining-pensions-one.html
On average people undertake 11 jobs during their lifetime which could mean 11 different pensions. This makes it very difficult to work out how much money you will actually have once you retire.
Read moreWith the help of a financial adviser and some simple financial planning ahead of the tax year-end (5th April 2019) you can make the most of the tax allowances available to you such as your ISA and pension Annual Allowance.
You have a £20,000 ISA allowance each tax year. This is a ‘use it or lose it’ allowance as it cannot be carried forward if it is not fully utilised. This allowance will remain at the same level in the 2019/2020 tax year.
There are 4 types of ISA and you can put money into one of each kind of ISA each tax year:
An ISA such as the Help to Buy ISA can be beneficial if you are saving to buy your first home. First time buyers get a 25% bonus from the Government on savings in a Help-to-buy ISA. The maximum bonus you can receive is £3,000 (if £12,000 has been saved). The deadline for opening a new Help to buy ISA is 30th November 2019.
With a Junior ISA,a UK child under 18 can currently save up to £4,260 in one tax year.
A financial adviser will be able to help you find the type of ISA most suitable for you and your investment goals.
UK individuals can ‘normally’ contribute up to £40,000 gross, or up to their annual gross income, per tax year into a pension scheme. This allowance will remain at the same level in the 2019/2020 tax year.
Funds are tax efficient within a pension although the Lifetime Allowance (currently £1,030,000) limits the total amount you can accrue in a pension pot without an additional tax charge.
You can take a look at our previous blog to find out if you are making enough pension contributions.
The Annual Allowance can be carried forward, subject to a few rules. If you have been a member of a pension scheme but have not fully utilised your Annual Allowance for the previous three tax years, you could be able to carry this forward to make a larger contribution in the current tax year.
Tapered Annual Allowance – this is when the Annual Allowance is reduced by £1 for every £2 of ‘adjusted income’ over £150,000. It can affect you if your income from all sources is over £110,000.
The Inheritance Tax (IHT) nil rate band is currently frozen at £325,000 until 5th April 2021.
Inheritance tax planning can enable you to utilise the available exemptions including:
The annual exemption for the current tax year is £11,700. This is also an allowance that cannot be carried forward if it is not fully utilised. Unused losses are carried forward and can be offset against future gains.
After 6th April 2019, the minimum wage for 18-20 year olds will increase from £5.90 to £6.15 per hour. For 21-24 year olds it will increase from £7.38 to £7.70 and for anyone aged 25+ it will increase from £7.83 to £8.21 per hour.
This will increase from £11,850 to £12,500 in the 2019/2020 tax year.
This will increase from £1,030,000 to £1,055,000 in the 2019/2020 tax year.
This will increase from £11,700 to £12,000 in the 2019/2020 tax year.
One of our independent financial advisers at Temple Wealth Management can advise you on how best to plan for the end of the tax year, as well as how to fully utilise your available allowances in the new tax year.
To discuss your end of tax year planning needs, contact one of our advisers on 01329 282882 or use our website contact form.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor. The Financial Conduct Authority does not regulate Tax Advice.
