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Financial Planning for the 2024/2025 Tax Year

By April 19, 2024No Comments

The new tax year is upon us and, although midnight on 6th April might not have been accompanied by champagne and fireworks like the new calendar year, it’s really important to be aware of what it means for you and your family.

So how can you make sure you’re prepared for the 2024/25 tax year and make the most of your finances?

Conduct your own mini ‘audit’

The start of a new tax year is the perfect time to take stock of your finances. What are your monthly incomings and fixed outgoings? How much money do you have in savings accounts, and are you getting the best interest rate available? How much money do you have in different pension plans, and do you know where they all are?

Getting a clear picture of your current financial position is the best starting point for making sure you’re getting the most from your money.

Create a comprehensive household budget

Once you’ve figured out your household income and necessary monthly expenditure, create a household budget so you know exactly what you have left over. This should be as comprehensive as possible. Does anyone in the family do something each week that costs a few pounds? Include that too.

This budget will then make it much more clear what you can save or invest each month, whether it’s topping up your pension, putting more or less money into a cash ISA each month, or investing in stocks and shares.

Make the most of the tax-free ISA allowance

Every adult in the UK will be able to put £20,000 into a cash ISA tax-free for the 2024/25 tax year—the same limit as in the previous year. The limit for stocks and shares ISAs is also £20,000, but just £4,000 for the Lifetime ISA (LISA).

Make sure you’re taking advantage of this tax free allowance and not leaving money sitting in your current account earning zero interest.

If you have children under the age of 18 you can also consider setting them up with a Junior ISA (JISA). The tax free savings limit on JISAs for 2024/25 is £9,000.

Consider topping up your pension

If you use a private pension provider, either as part of the Workplace Pension scheme or one you’ve set up yourself, it might be worth considering topping up your contributions—particularly if you’ve maxed out your £20,000 ISA savings limit.

The limit an individual can save in their pension pot for the next financial year before paying tax is £60,000 or 100% of earnings, whichever is lower. Note that you might also be able to carry forward any allowance you didn’t use from the previous three tax years.

Make sure you’re claiming all the support available to you

If you’re a working family there might be income support programmes that you’re eligible for, especially if you have children.

This might be in the form of Child Tax Credits, Universal Credit or tax relief via the Marriage Allowance. The best way to identify what might be available to you is by using the government’s Benefits Calculator.

Consider working with a professional accountant

The best way for individuals to minimise their tax bill each year is to seek the services of experienced accountants, such as the team here at Warr & Co. 

We’ve been helping high net worth individuals, as well as typical working families, to make the most of their finances for decades, and in that time we’re established an unrivalled reputation for our tax planning services.

If you’d like to book a free, no obligation consultation with one of our experts please don’t hesitate to reach out. Alternatively, if you’ve simply got a question about one of our services, you can give us a call or send us an email.

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