As the days tick down to a new tax year, it’s time to take a look at your finances and make sure you’re approaching the fiscal watershed in good shape.
Whether you’re a regular or occasional saver, there are tax reliefs and allowances to be had.
For example, some of the income tax you pay can be saved by increasing the contributions you make to your pension.
ISAs are a great way to save up to £20,000 a year tax free, so if you have funds available, it is also worth checking what you could still deposit before the April 5 deadline.
Forecasting your future
The state pension is the greatest benefit we have, as it is index-linked for life.
You can ensure yours is maximised by obtaining a forecast from HMRC, via your Government Gateway account. It will predict your pension and retirement date, by calculating how many years’ national insurance contributions you have made. The process takes less than 10 minutes to complete and if you have any gaps in your payment history, you can work out what it will cost to fill them.
Income tax reliefs and allowances
Currently, no one pays tax on the first £12,500 they earn a year and this means those without a salary over the age of 55, can withdraw the same amount tax free from their pension.
If you don’t have sufficient income to use all of your personal allowance, you can transfer up to 10% to your spouse, resulting in a £250 annual saving that can be backdated to April 2015.
Employees who pay higher rate tax don’t typically fall into the self-assessment regime, but this means the relief you should receive against pension contributions may have been overlooked. With expert advice, it is possible to reclaim this for the previous three years, so don’t hesitate to contact me if you think you could be eligible.
Capital gains tax
Again, we each have an annual capital gains tax allowance of £12,000. If you have investments that fall outside tax efficient wrappers, such as ISAs and pensions, it makes sense to ensure you’re using it to the full before this tax year ends.
We carry out these checks – and more – for Belmayne clients, as part of our financial reviews. If you think your savings and investments could do with an overhaul, why not call into the free drop-in sessions held at our Dronfield office every Wednesday, from 1-7pm? We’ll discuss your situation over a cuppa and may even be able to suggest some simple changes that could have a positive effect on your financial future.
To find out more, call me on (01246) 298181 or email: firstname.lastname@example.org