We’ll experience several coronavirus-like market shocks in our lifetimes – but although such volatility can be un-settling, these are beyond our control. As with business planning, we’ll give ourselves the best chance of achieving our personal financial goals if we focus on what we can control: including how and where we invest our money, the size of our retirement fund, and how much tax we pay.

Here are some ways in which you can use the start of the year to get your plans back on track!

Simple and readily accessible, it’s no surprise that ISAs have become one of the most popular ways to save. However, as UK interest rates are lower than ever, money being held in Cash ISAs is failing to achieve the very basic objective of keeping pace with inflation. Therefore, savers who invest their ISA allowance for the long term – in assets offering the scope for attractive levels of income and capital growth – have a better chance of maximising the tax-saving opportunities on offer.

Saving into a pension is a particularly appealing prospect at the moment, as there’s much greater freedom for taking benefits, tax relief on pension contributions, and pension savings can be more easily left as part of a tax-efficient inheritance. Those wishing to make their retirement plans a reality should consider fully utilising their annual allowance for this tax year to make the most of the tax breaks on offer. Plus, unused allowances can be carried forward from the three previous tax years.

Inheritance Tax
With some careful planning, you can legally reduce your Inheritance Tax bill – or possibly pay nothing at all. You could look at reducing your taxable estate by topping up a child’s pension or Junior ISA – this could go a long way to providing them with an invaluable head start in life. The Junior ISA allowance rose from £4,368 to £9,000 on April 6th 2020. Also, make this year’s £3,000 gifting allowance count – and carry forward last year’s, if you haven’t used it already.

New year, new strategy?
After a turbulent 2020, it’s easy to see how business owners who are laser-focused on their company might not be paying enough attention to their own finances. But, as we can see, making the most of valuable reliefs and allowances can help to create long-term financial security for ourselves and our family – and now’s the perfect time to do so.

What’s more, I’d recommend
considering using the allowances at your disposal before the Chancellor starts to explore ways the government can recoup some of the costs from dealing with the pandemic – in case tax reforms appear on the menu.

If you have a question about tax allowances, or would like more infor-mation about my services, please contact me today!

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested. An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief generally depends on individual circumstances.


Samantha Kaye, Chartered Financial Planner & Adviser
Wellesley House, 50 Victoria Road, Burgess Hill, West Sussex RH15 9LH

01444 849809 / samantha.kaye@sjpp.co.uk

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