As the end of the tax year draws near, it’s time to put your financial house in order. While it might feel like a bit of a chore, getting your finances in shape before the tax year end is not only smart—it can also save you a significant amount of money. In this blog, we’ll walk you through some top tips for financial planning and why you should pay attention to the tax year-end deadlines. Think of it as a spring clean for your finances!

Why Is the Tax Year-End Tax Planning So Important?

In the UK, the tax year runs from 6th April to 5th April the following year. The end of the tax year marks a crucial point in time when your financial situation is assessed, and the actions you take before the 5th of April can have a huge impact on your tax liabilities.

So, why should you care? Well, making sure your finances are in order could help you reduce your tax bill, boost your savings, and ensure you’re maximising the allowances available to you. Plus, it’s a chance to take stock of your overall financial health—something we can all benefit from!

Top Tips for Financial Planning Before the Tax Year-End

1. Use Up Your ISA Allowance

Individual Savings Accounts (ISAs) are a fantastic way to save tax-free, so it’s important to make sure you’re using your full allowance. For the 2025/26 tax year, the ISA allowance is £20,000 per person. If you don’t use it by the 5th of April, you’ll lose it—so why not make the most of this opportunity?

You can choose between a Cash ISA, Stocks & Shares ISA, or an Innovative Finance ISA, depending on your financial goals and risk appetite. Just be mindful of the deadline, and don’t leave it until the last minute!

2. Consider Contributing to Your Pension

One of the best ways to reduce your taxable income is by contributing to your pension. Pension contributions come with tax relief, so if you’re looking to reduce your tax liability, this is a strategy worth considering. You can contribute up to £60,000 per year into your pension (or 100% of your earnings, whichever is lower), but be aware of the rules around annual allowance and the carry-forward option if you haven’t maximised contributions in previous years.

The end of the tax year is a great time to boost your pension pot if you’ve got the means to do so. After all, you’re not just saving for your future, you’re saving on your taxes, too!

3. Make Use of Your Capital Gains Tax Allowance

Every tax year, you’re allowed to realise up to £3,000 worth of capital gains before you have to pay any tax on them (for the 2025/26 tax year). If you’ve made any profits from selling investments, property, or other assets, consider selling them before the tax year-end to make use of your annual exemption. You could also think about transferring assets to a spouse or civil partner, as they have their own allowance.

By carefully planning your asset sales, you can reduce your overall capital gains tax bill and keep more of your hard-earned money.

4. Review Your Tax Code and Check for Errors

It might sound tedious, but reviewing your tax code can help you avoid paying more tax than necessary. Mistakes happen, and your tax code could be wrong without you realising it. If you think something’s amiss, get in touch with HMRC before the year ends to get it sorted. The sooner you spot an error, the quicker you can rectify it and avoid overpaying.

5. Charitable Donations: A Win-Win

If you’re feeling generous, making charitable donations before the end of the tax year can also be a clever way to reduce your tax bill. Donations to charity are tax-deductible, and if you’re a taxpayer, you can claim Gift Aid on top of that.

You could donate to a cause close to your heart, and at the same time, benefit from a reduction in your taxable income. It’s a win-win!

Other Tips

Keep Track of Your Business Expenses

For those running a business, the tax year-end is a great time to take stock of any business expenses you’ve incurred. Be sure to claim all allowable expenses for the year, as they will reduce your taxable profit and, therefore, your tax bill. Think office supplies, travel expenses, or any work-related purchases. Keeping detailed records throughout the year will make this process far easier when it comes to tax time.

Organise Your Documents

As you prepare for the end of the tax year, it’s crucial to get your paperwork in order. Gather all relevant documents, such as your P60, P45, payslips, bank statements, and receipts for any business expenses. Having everything in one place will help you stay on top of your finances and make filing your tax return much smoother.

Start Early: Avoid the Last-Minute Rush

As tempting as it is to put things off, starting early can save you a lot of stress in the long run. Procrastination can lead to missed deadlines, rushed decisions, and potentially lost opportunities. Set aside some time each week leading up to the 5th of April to ensure you’re on top of everything.

Final Thoughts on Year-End Tax Planning: Get Ahead of the Game!

The end of the tax year is a great opportunity to reassess your financial situation, maximise your allowances, and reduce your tax bill. By following the tips above, you’ll not only be better prepared for the year ahead but also take advantage of opportunities to save money.

Financial planning doesn’t have to be overwhelming—just a little organisation can go a long way. So, why not get a head start and make sure you’re ahead of the game before the 5th of April? Your future self will thank you!

Do you have any tips for making the most of the tax year-end? Share your thoughts in the comments!

Get in touch here if you could benefit from the expertise of a friendly financial adviser.

The post Financial Planning and Year-End tax planning: A Guide to Getting Organised appeared first on Alice Douglass.

It reminded me of one of the main reasons people use financial planners: peace of mind. Having a planner who knows what pensions you have and who the providers are could be a huge weight off your mind at such a stressful time.

According to research by Royal London, people who work with a financial planner felt more prepared to deal with life’s shocks than those who didn’t. While peace of mind is a valuable benefit, it can be one that some people overlook.

So, if you’re wondering: “what are the benefits of working with a financial planner?”, read on to discover six that you may not have thought of.

1. A planner takes a holistic view of your wealth

Knowing every aspect of your wealth is at the heart of good financial planning. While you probably have an objective in mind, a planner considers how your goal dovetails into other areas of your finances.

For example, while certain types of investment might help boost your wealth, they could also increase your tax liability. A planner will be able to confirm whether this is a risk and could provide other options that may help you achieve your goals in a more tax-efficient way.

2. Planners could help you pass more wealth on to loved ones

In 2025/26, Inheritance Tax (IHT) is typically charged at 40% on the value of your estate above the nil-rate bands. This could significantly reduce the amount of money you pass on to loved ones. A financial planner may be able to reduce or even negate any tax liability your estate has, using gifting and careful planning.

Depending on your circumstances, the nil-rate bands might allow you to leave up to £1 million to your family before IHT is charged. Furthermore, as financial planners have a detailed understanding of your wider wealth, they can ensure that all your assets are accounted for and passed on to loved ones.

According to the Independent, £15 billion worth of inheritance has not been claimed because loved ones don’t know what assets and savings the deceased had.

3. A planner makes sure you’re taking the right amount of risk

While taking too much risk could be bad for your wealth, so could not taking enough. This is because growth typically comes from the higher-risk assets within your investments or pension pot, such as stocks and shares.

Not exposing your savings to enough risk may significantly reduce their long-term growth potential. A financial planner will assess how much risk is right for you and make sure your money is exposed to as much potential growth as possible while maintaining a level of risk you’re comfortable with.

4. Financial planners provide peace of mind

Working with a financial planner can help you feel more comfortable and less stressed about your finances. They are on hand to answer any questions you may have about your wealth or investments, and can help you understand whether your money’s on track to meet your financial goals. If it’s not, a financial planner could provide options that might help achieve them.

This dovetails into the above-mentioned research by Royal London, which showed that working with a financial planner could help improve emotional wellbeing. This is because those who do, tend to feel more in control of their finances and less anxious about money, something highlighted in the following illustration, which is taken from the study.

Source: Royal London

5. A financial planner could help you save the planet

While this is the least obvious benefit of all, working with a financial planner really could help you do your bit for the environment.

According to Pensions Age, placing your money into sustainable investments, which are today known as “Environmental, Sustainable and Ethical” (ESG) funds, could be 40 times more powerful in tackling climate change than switching to a renewable energy provider.

A financial planner can help find the right ESG for you, and explain the potential benefits and risks of investing in one.

6. Planners could help you protect your wealth in volatile times

According to Royal London’s research, working with a financial planner could give your wealth a significant boost. It pointed to a study that looked at those who worked with a financial planner between 2001 and 2006 and those who didn’t, and then compared the groups’ wealth 10-years later.

Those who had taken advice were on average £47,000 better off. What’s particularly interesting about the findings though, is that the period assessed includes 2008, a time when the world was gripped by a financial crisis.

This suggests that working with a financial planner when the global economy and stock markets are uncertain, as they are in 2025, could help you protect your wealth.

Get in touch

If you would like to discuss the benefits I could provide for you and your finances, ESG funds or investing more generally, please email a.douglass@grosvenorconsultancy.co.uk or telephone 01793 766 123.

Alternatively, call my mobile on 07525 177 046. Please note that while I offer high standards of service and ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.

The post 6 lesser-known and positive reasons a financial planner is good for your wealth appeared first on Alice Douglass.

If you have children who have asked for cash, or are likely to receive it from family members, it might be an ideal opportunity to teach them about being savvy with money. Discover 10 lessons that you could teach your children or grandchildren using the cash they receive as presents, or existing savings.

1. Teach them responsibility

Allowing your child to make decisions about the cash they receive will help build financial responsibility and boost their sense of pride. While you can encourage and advise them by talking to them about their options, give them the freedom to say how they use the money. This will help develop their confidence around finance.

2. Budgeting is essential

Chat to them about budgeting with their pocket money. You might want to encourage them, for example, to commit to buying something regularly out of their pocket money, such as a magazine. They will then get into the habit of using what’s left for other things they may want. This teaches your child the concept of budgeting for a commitment and saving for the pleasures in life.

3. Help them understand the value of saving

Encourage them to save their money, perhaps by encouraging them to put it towards a more expensive item that they want. Make sure you don’t buy it for them, as the aim of the exercise is to develop the habit of saving. This could ensure they build an emergency fund when they’re older or avoid getting into debt just to have what they want immediately.

4. Teach them how debt works

Teach your child about “good” and “bad” debt. You could do this by explaining the difference between a mortgage to buy a home that could increase their net worth, and debt created by overspending. The latter is expensive and probably won’t increase their net worth.

One way of doing this could be to charge interest on any money your child borrows from you, so that they understand the cost of borrowing and having debt.

5. To spend, you need to earn

Helping children to understand that money is earned is fundamental. It not only teaches your children a work ethic, but also an appreciation of the value of money. You can do this by encouraging them to do jobs around the home for their pocket money or taking a Saturday or weekend job if they’re older.

The app Gimi offers a pocket money and chores manager, as well as education around earning, saving, and spending.

6. Virtual money is still money

An important lesson to teach your children is that payment apps and online accounts still require money in the first place. One way to help them understand this could be to let your children buy things when they have their own bank account, so they can see the balance reduce and then go up again as they deposit money into it later.

7. Compound returns can work for or against you

Albert Einstein is said to have called compound interest “the eighth wonder of the world”. While compounding can help boost your money’s growth, it can also result in debt mushrooming. Teaching your children to understand the principle of compounding is key, as it could help them make better decisions when they’re older.

8. Introduce older children to investing

As your children get older, consider teaching them about investing. One way of doing this is to open a Stocks and Shares Junior ISA (JISA), which allows you to invest £9,000 in the 2025/26 tax year. An additional advantage of a JISA is that your child cannot access the money until they reach age 18. This could be an effective lesson in long-term financial planning as well as how the stock market works.

9. How to handle a bank account

If your child or grandchild is older, encourage them to open a bank account so that they get used to running one. Teach them to regularly check the balance and what monies are coming into and leaving the account. This will develop a habit of knowing what their financial situation is at any given time, enabling them to make better and quicker decisions about money.

10. The importance of getting professional help

If you use a financial planner, explain to them why you use a professional to help you make better decisions with your money. You might also want to let your children see you talking to your planner so that they can fully understand the value of taking professional advice.

Many financial planners are committed to the financial education of youngsters and will be happy to explain key aspects of finance and investing to your children. This could help take the mystery out of investing.

Get in touch

If you would like to discuss your wealth, or ways you could help your children financially, please email me at a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

The post 10 powerful money lessons to develop your children’s financial skills appeared first on Alice Douglass.

Despite this, a recent study by Schroders Personal Wealth reveals that 80% of families don’t have a strategy for passing wealth to loved ones. If you’re one of them, you may not realise that a strategy could allow you to leave more money and reduce the chances of paying unnecessary Inheritance Tax (IHT).

So, if you’re wondering: “how can I reduce my Inheritance Tax liability?”, read on to discover how an intergenerational wealth strategy and financial planner could help. Before you do though, we need to look at how IHT works.

It’s the tax on your worldly belongings when you die

As IHT is typically charged at 40% it could significantly reduce the amount you leave to beneficiaries when you die. That said, it’s not all bad news, as the government allows you to have an amount in your estate on death that is not liable to IHT.

Known as the “nil-rate band” (NRB), in 2025/26 you could have £325,000 as an individual and £650,000 if you’re married. If you’re also entitled to the residence nil-rate band (RNRB), you could have up to £1 million in your estate before the tax is due, but this depends on your circumstances.

Always speak to a financial planner to confirm how much you could have in your estate before IHT is due. In October 2024, the chancellor froze the NRB and RNRB thresholds until 2030, so if your property and investments continue to rise in value during this period, you may face a higher IHT liability.

Reducing your wealth could reduce your IHT liability

If you have wealth above your threshold, it’s typically going to be liable to IHT. By reducing the value of your estate, you should reduce the amount of tax your estate will be charged. In fact, if you decrease your estate down to within your threshold you will normally not be liable to IHT.

One way you could do this is by using several gifts the government allows you to make every tax year. For example, in 2025/26, you could gift £3,000 to an individual or split the amount between many beneficiaries.

A financial planner can explain all the gifts you may make, and which ones may be right for you.

You could use a potentially exempt transfer (PET)

If you have a substantial amount above your threshold that is likely to be liable to IHT, you may want to consider a PET. This allows you to gift any amount to as many people as you want.

The only stipulation is that you must live for seven years after making the gift for it to fall outside your estate and not be liable to the tax. If you don’t survive seven years, the gift could be liable to a sliding scale of IHT depending on how long you’re alive for.

Creating an intergenerational wealth strategy could help

So, if you are wondering “how can I pay less Inheritance Tax?”, you’ll probably be pleased to learn that an intergenerational wealth strategy could help. This is a strategy you develop that helps you plan the best way to pass your wealth to beneficiaries, taking into consideration:

• IHT
• The gifts you could make
• Your future financial security
• Any tax implications.

Starting your strategy as soon as possible is critical for the following three reasons.

It could provide more time

If you start your strategy as early as possible, it could provide more time to reduce the value of your estate to within the NRB threshold. For example, if you start your strategy aged 65 and use a PET, you’re more likely to survive for seven years than if you’re 85 when you do it.

You could also use the annual gifts the government allows you to make for more years, helping you reduce your estate further.

Provide money when your family needs it more

Gifting when you and your family members are younger could mean the money has more value when they receive it.

Leaving money when you die could mean you pass it to loved ones when they’re already financially secure. If, instead, you give money when they’re younger, and potentially trying to support a young family while paying a mortgage, your money could be much more helpful to them.

Give you more control

Gifting while alive means you can have a say about how your wealth is used. For example, if you want it to help your grandchildren buy a first home, but are worried they’ll instead buy a sports car, you can take action.

By talking to them, or setting up a legal trust, you could ensure they understand how you would like it to be used, and create a legal framework to ensure that’s what they do. Gifting while you’re alive could also stop arguments within the family when you die, as they will be clear about who receives what and why.

Remember to back your wishes up with a bona fide will. And, as trusts can have complex tax rules, always speak with a financial planner to ensure they are right for you.

Get in touch

If you are asking yourself: “do I have an IHT liability?” and would like to discuss how you might reduce it, please contact me. My email is a.douglass@grosvenorconsultancy.co.uk or call my office on 01793 766 123. Alternatively, call my mobile on 07525 177 046.

While I offer high standards of service and will work with you to ensure any plan is right for you, I’m also a busy mum, so work Mondays and Tuesdays only.

Please note:

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The post 3 powerful reasons intergenerational planning is vital for your family’s wealth appeared first on Alice Douglass.

As a new mum to be myself, here I go through each financial aspect I think you should investigate when you are expecting.

Maternity Pay

 The first thing to find out is how much you will receive while on maternity leave.

In terms of Statutory Maternity pay, you are entitled to up to a year of maternity leave from your employer, but this doesn’t mean you will get paid for the full time. You will be eligible for 39 weeks’ pay as follows:

First 6 weeks               90% of your average weekly earnings before tax

6-39 weeks                  £187.18 (2025/26) or 90% of your weekly earnings (whichever is less)

39-52 weeks                Unpaid

In order to qualify, you need to earn at least £125 per week (2025/26) and have been with your employer for at least 26 weeks.

Your partner will also be entitled to Paternity pay.

Your employer may pay more in terms of maternity pay. To find out if this is the case, you will need to have a conversation with your employer or HR department. This may well dictate how long you can afford to take off work when your little one arrives.

If you are self-employed (sole trader), you cannot get Statutory Maternity Pay. You may however, be entitled to Maternity Allowance. You could get:

• £27-£187.18 a week for 39 weeks (2025/26)

To find out more, click here.

Budget

Next, budget. Not only for everyday spending but also for that all-important baby paraphernalia.

In terms of everyday budget, once you know what your maternity pay will be calculate all you monthly income considering any reduction in maternity pay after a period of time and any benefits you may be entitled to (see below).

Then, look at your current outgoings – include everything from insurance to pet food. Once you know what your current spending is, you will then need to estimate additional baby expenses such as nappies, milk formula, baby clothes and so on. You will then have an idea of how much income you need to sustain your new lifestyle.

You may need to start saving some of your current income to support you whilst on maternity leave.

It would also be a good idea to think beyond maternity leave. You may need to consider nursery/child-minder costs for when you return to work.

For the big one-off expenses, such as a new travel system investigate what you want and the cost of these. Tot these up and see if they are affordable. Sometimes excited grad-parent to be will want to help.

If new items are not affordable, look at second-hand sources. We bought a lovely travel system (excluding Car Seat) from Ebay – good as new. £900 new, we paid £100. Do note, some things are advised not to be bought second hand e.g. Car seats and mattresses.

Don’t get into debt just to buy the newest and best – all baby needs are love and to feel safe.

Child support

 On having a baby, everyone is entitled to claim Child Benefit.

You can claim child benefit if you have a child who is under 16 or 20 in Full time education. It is £26.05 per week for the first child and £17.25 for an additional child (2025/26).

The benefit may be taxed if you or your partner earn over £60,000 per annum and if either of your earnings are over £80,000 you will have to pay back 100% of your entitlement (2025/26).

If you are not working or you do not earn enough to make National Insurance Contributions, and your child is under 12, Child Benefit gives you National Insurance Credits. These could towards the State Pension, so you do not have gaps in your record.

If you would like to claim Child Benefit – follow this link.

Don’t forget, you also get free NHS dental care and free prescriptions while you are pregnant and for a year afterwards.

To find out more about Financial Help if you have children, click here.

Protection

Reviewing your protection

Even if you have life cover and critical illness cover in place, it is worth reviewing this when you are expecting a child. You may wish to consider the following:

• Is the current level of cover enough if something should happen to you or your partner? Will the amount of cover in place cover lost income/childcare/enough peace of mind that you can spend time with your children without worrying about finances should the worst happen?
• Does your critical illness cover include Children’s Critical Illness cover? Many modern policies will now include cover for children as an optional extra providing c£25,000 worth of cover should a child be diagnosed with a certain Critical Illness.

If you have no protection

If you do not have any protection in place, it is worth thinking about what you would do if you/you partner:

• Were unable to work for a prolonged period due to illness, accident or injury. How would you pay the bills? Such as the mortgage, electricity, food and so on. Even if you have savings, how long realistically would they last?
• Died – would the surviving partner be able to maintain their current standard of living and afford to pay the mortgage and bills? Keep the family roof over your head. If the worst did happen, the last thing you would want is having to move to a new house as you cannot afford to maintain your previous lifestyle. Even if you could afford the bills, would you like to be able to reduce working hours to spend more time with the children considering their loss?
• Were diagnosed with a critical illness – would you want to be able to focus fully on recovering and spending time with family rather than worrying about finances?

To find out more about what is Life Cover, click here.

More about Critical Illness Cover, click here.

To find out more about Income Protection, click here.

If you are unsure of where to start or how much cover you might need, it is worth speaking with a financial adviser who will be able to assist.

Planning for your Child’s future

 If you want your baby to go to a fee-paying school or to university or you want to buy them a car at age 17, you would be well placed to start planning and saving for this as soon as possible. There are many savings and investment plans which could be suitable to use for these goals. It is worth starting with having a rough idea of how much you would need for each objective as this can give you an idea of how much you need to start saving today. You may also want to consider what interest you may get on your savings, or what return on investment may you get over the number of years of the investment. You should take into account how much investment risk you wish to take with the money.

This is the type of thing a financial adviser can help with, so do get in touch if I can be of assistance.

Opening a JISA

 It may be worth considering opening a Junior ISA for your baby. This can be held in either Cash or Stocks and Shares. Unfortunately, the Government no longer make payments into these however, you can save up to £9,000 each year tax free (2025/26). It is worth remembering that this will be in the baby’s name so they will be entitled to access the money from the age of 18 so you may have little control over what they spend the money on.

If you would like to find out more information about JISAs, click here.

Most financial Advisers would be happy to advise on Stocks and Shares JISAs for your child alongside your own financial planning.

Pension

Within the UK, there is a huge gap between what men save for their retirement compared to women. Among other things, one of the reasons for this is career breaks taken by women where they do not pay into pension or other retirement saving vehicles.

If you can afford to, it is worth maintaining pension contributions throughout your maternity leave.

 If you plan to be a homemaker on the birth of your baby, it is a good idea to claim Child Benefit so any gaps in your State Pension credits are plugged. It is also worth remembering that even if you aren’t earning an income, you can still pay £2,800 net, £3,600 gross (with £720 tax relief) into a pension (2025/26).

It is worth reviewing your pension to ensure that you understand the implications of reducing or stopping pension contributions on when you may be able to retire and the income you may generate in retirement.

To find out more about pensions, click here.

Writing your will

 It is really important that you review and update or write your will if you have a family. This will enable you to stipulate what you would like to happen should you die in terms of your finances and also, should something happen to both of you, guardianship for your baby.

Financial Planning when having a baby – checklist 

These are the key things to make sure you review when looking at your financial planning when having a baby:

• Check maternity pay entitlement
• Do a budget planner
• Claim Child Benefit
• Understand other benefit entitlement
• Review or set up protection
• Plan for your baby’s future
• Open a JISA
• Review your pension and retirement planning
• Review or write your Will

Financial Planning when having a baby

There are so many things to consider when you are having a baby. But don’t forget to add Financial Planning when having a baby to your list.

If you would like assistance with this, I can help with your budget planning, protection, planning for your baby’s future, opening a JISA and reviewing your pensions and retirement planning so do please get in touch.

The post Financial Planning when having a baby appeared first on Alice Douglass.

When buying a house

When you are in the process of buying a home, you should speak to a financial or mortgage adviser. An adviser in this situation can help find the most suitable mortgage for your circumstances.  Whether it be repayment, interest only, fixed or variable interest rate, an adviser will ask suitable questions to find the best fit. They will also have knowledge of which providers consider certain circumstances. Such as someone with one year’s accounts, a zero hour’s contract or a job offer only for example. This would save you time in searching the market yourself.

An adviser will also help you to consider how you would continue to pay the mortgage should anything happen to you.  For example; inability to work, being diagnosed with a critical illness or if you should die. They would be able to recommend suitable protection products to insure against these eventualities. This is something that people often overlook. But imagine if the worst happened and then you had to leave your home because you could no longer pay the mortgage.

You may also want to consider talking to a Financial Adviser if you are considering a buy to let investment. Due to tax changes, this isn’t as attractive as it once was and other alternatives may be more suitable to your requirements.

On marriage or when a baby is born

When you get married or have children, due to the change in circumstances, you may wish to provide an element of family protection. You may already have cover in place to protect your home – as detailed above. Family protection could provide additional insurance so that if anything should happen to you or your spouse, there would be either a pot of money or an amount each year or month to replace the lost income and provide breathing space.

You may also wish to talk to an adviser regarding planning for your child’s future and investing money for school fees or university fees. The sooner you start, the better.

It is also wise at this stage to talk to a Solicitor or Will writer to write your Wills.

On Divorce

So, you’ve just got married and now you’re getting divorced! Of course, none of us enter marriage thinking about divorce however, it does happen. Naturally, those getting divorced will speak to a solicitor however, it may also be wise to talk to a financial adviser. It is often the case that during divorce proceedings, the separate parties argue over certain assets. An adviser can help look at income requirements and cash flow to work towards a suitable and fair settlement rather than looking at assets alone. If the divorce involves pensions, an adviser can work with either party to get a fair amount for the recipient or to build the pension back up for the settlor.

When planning for retirement or have another specific goal or objective

When looking towards retirement, it is an important time to seek financial advice. However far off it is. If you don’t know what plans you have got, where these are invested, and what its worth or if it is going to meet your requirements in retirement, you should consider speaking to an adviser. They will help you arrange your plans so that they are structured and invested appropriately. They will also advise on the contributions required to meet your goals.

If you haven’t reviewed your pensions for 1-2 years or more, I would suggest that you do so. It is important to review financial plans regularly as legislation and regulations change as do personal circumstances. It would also be wise to speak to an adviser if and when you leave employment or change jobs.

At retirement

When you are approaching retirement or thinking about taking money out of pensions or investments, it would be wise to speak to a financial adviser. Although you may have in mind what you wish to do, this is a complex area and talking to a financial adviser could open up different avenues that you hadn’t considered and could save you money in the form of tax.

Death

When a loved one dies it is often the most difficult time in someone’s life. By talking to an adviser, following the death of a close relative, it can provide peace of mind. There may also be some important financial decisions to make such as what to do with an inheritance or making a death claim and how to generate an income from the proceeds.

Conclusion

Although not exhaustive, this blog has considered the question When should I talk to a financial adviser? If ever in doubt about your financial plans, speak to an adviser, it won’t hurt.

Tax rules, rates and allowances are all subject to change and are dependent on individual circumstances. The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The value of investments and the income from them can fall as well as rise and you may not get back the full amount you invested.

The post When should I talk to a financial adviser? appeared first on Alice Douglass.

Cash savings

If you’re looking to save money in cash using products such as savings accounts, cash ISAs or fixed rate savings bonds, you can use comparison sites to find the best rates and deals available. You don’t need to get financial advice for cash savings and some advisers’ won’t actually advise on these types of products. These can usually be easily bought directly from the providers.

It may however, be worthwhile talking to an adviser regarding your options. They may be able to help with saving tax efficiently and talk to you about other options, especially if you will be saving the money over a long period of time.

Investments

If you have some money to invest and you are thinking of investing into the stock market, this is also something that you could do yourself. This can be more risky however, due to the nature of investing and they type of products that you will be investing into and as with most investments in the stock market you could lose money.

You could buy a product that’s not suitable for you or invest in areas that are very risky and therefore you may lose money.

Some people love investing themselves however it may be worth considering:

• How much money you can afford to lose
• How much risk you wish to take
• Do you understand financial products and their tax implications
• If you have the time to do the research
• Your experience, knowledge or skills when it comes to investing
• Are you comfortable taking the responsibility if things go wrong

If the answer to any of these is ‘No’ then the answer to the question Do I need financial advice? Would be yes.

Pensions

If you’re looking to invest into a personal pension, to review your existing pensions or consolidate several existing pensions it’s usually best to get advice unless you really understand how pensions work. Many older style plans will have guarantees that could be lost on transfer for example.

Insurance or mortgages

Some insurance products and mortgages can be purchased using price comparison websites, or bought directly from providers.

However, Financial Advisers will discuss your requirements and find the product to best suit your needs and they might be able to get you a better plan to suit your needs.

Conclusion

This article has looked at the types of products you may be considering when asking Do I need financial advice? In some circumstances you may be better off speaking to a financial adviser, in others, you may be able to “go it alone”.  The choice is really yours.

To understand more about the benefits of financial advice, read What is the Value of Financial Advice and The Value and Benefits of Financial Advice

In the next blog on Thursday, I will look at “When should I talk to a financial adviser?” which will look at the different stages and events in life that may be assisted with financial advice.

Tax rules, rates and allowances are all subject to change and are dependent on individual circumstances. The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The value of investments and the income from them can fall as well as rise and you may not get back the full amount you invested.

The post Do I need financial advice? appeared first on Alice Douglass.

A general investment account (GIA) is a “tax wrapper” with no overt tax advantages.

A GIA is just like any other form of investment. All investments whether it be an ISA, a pension, a bond, or a general investment account all work in much the same way apart from their tax status. This is why they are often called “tax wrappers”.

Whatever tax wrapper you put your money into, it will be “invested” in much the same places whether it be cash, government or company loans, commercial property, or company shares. Your money will be “pooled” with other investors’ into funds that hold a mixture of these “assets” based on your attitude to risk, term of investment, and a number of other factors. The only difference is that funds within a GIA will have had some tax deducted.

A general investment account is often utilised where other allowances – such as the pension’s annual allowance and the ISA allowance have been used. It does not provide tax relief but there are very few restrictions – there is no restriction on the amount you can invest or the amount you can withdraw. On wrap and platforms, General Investment accounts (sometimes called personal portfolios and OEICs) can be used to “feed” ISAs and Pensions each tax year, thus moving money into more tax-efficient environments.

Monies within a GIA can be used to utilise the capital gains tax allowance – a tax allowance that is rarely used. The CGT threshold is £3,000 (2025/26) meaning that gains of this amount can be made each year without incurring tax. If you hold shares within the GIA which pay dividends, you can also use the GIA to utilise your dividend allowance. Any gains or dividends above your allowance will be subject to tax.

If you would like to review your financial plans, contact me for a complimentary, no-obligation initial meeting.

The post What is a General Investment Account (GIA)? appeared first on Alice Douglass.

After all the pre-budget talk of reducing tax relief on pensions, the government introduced “bonuses” on ISAs available from April 2017. But what is a LISA? And how does it compare to a pension?

 What is a LISA?                     

• You can save up to £4,000 a year into a LISA
• At the end of the tax year, the government will add a 25% bonus to the LISA based on contributions in that tax year e.g., if you save £1,000 you’ll receive a £250 bonus, if you save the full £4,000 you’ll receive a £1,000 bonus
• Bonuses are paid from the age of 18 to 50
• Anyone aged over 18 and under 40 can open an account
• The £4,000 will be counted against the annual ISA savings allowance – £20,000 (as at the 2025/26 tax year). If fully subscribing, the remaining £16,000 will not receive bonuses
• The Lifetime ISA is designed for two specific purposes:
  • for first-time buyers to use towards a residential property,
  • To take out and use in retirement after age 60 The LISA can be accessed from age 60

 Using the LISA to save for retirement

• It doesn’t have to be taken all at once and partial withdrawals can be taken
• Withdrawals from a LISA are all tax-free

 There are penalties if the money is taken before 60 and is not used to purchase a first home: 

• the government bonuses will be lost along with any interest that these have accrued
• There will be a 5% penalty on the amount withdrawn

It’s a horrible circumstance, but there is a provision in the Lifetime ISA rules that allows you to access the cash as a tax-free lump sum if you’re terminally ill, provided that you have 12 months or less to live.

If you die, and you’re married or have a civil partner, your Lifetime ISA allowance passes to him/her to invest your Lifetime ISA savings as well as their own. This is on top of their usual ISA allowances. However, the funds in the Lifetime ISA do form part of the estate for inheritance tax purposes.

Pensions Vs LISA 

So, how does a LISA compare to a pension?

• Auto Enrolment means for the employed, employers have to make minimum contributions into a pension on employees’ behalf. They don’t have to do so into a LISA.
• Higher-rate taxpayers get tax relief at 40% on contributions into a pension
• LISAs can affect your benefit entitlement whereas pensions do not
• Money can be taken from a pension from age 55 (57 from 2028); the minimum age is 60 to withdraw from a LISA without penalty.
• Money invested in a pension is outside of the estate for inheritance tax (IHT) purposes whereas money within a LISA will form part of an individual’s IHT allowance (the IHT threshold is currently £325,000)
• 100% of your earned income or £60,000 per annum (whichever is lower) can be paid into a pension each year and receive tax relief
• Business owners can make payments into their pensions as a business expense – they cannot into LISAs
• On bankruptcy, Pensions cannot be taken to pay creditors whereas ISAs can
• Tax relief is applied to pension contributions immediately whereas, with a LISA, the bonus is not received until the end of the tax year
• Pension contributions paid via salary sacrifice into an employer scheme, are not subject to national insurance. This is not the case with a LISA

However:

• On taking money out of a pension, 25% of it is tax-free– the rest is taxed as income. Money can be withdrawn entirely tax-free from a LISA. Having said that, the tax rates on pensions, encourage individuals to take it as income so that they do not breach tax bands thus providing retirement income
• The LISA is more flexible with the option to withdraw the money before age 60 (with penalties) but again will this mean that individuals may not make adequate retirement provisions if they are tempted to withdraw their money before age 60?
• Apart from situations of critical illness and death, money cannot be withdrawn from a pension early, but if prepared to pay a 5% penalty money can be withdrawn from a LISA.

So, is this the start of a new pensions ISA?  Is the LISA the new way to plan for retirement? It could form part of your plan and it’s a good idea to have a plan for retirement!

The information contained within this document is correct as at 2017/18 tax year and is based on current government legislation. This can change.

The post What is a LISA? appeared first on Alice Douglass.

An ISA or Individual Savings Account is a tax-efficient savings/investment vehicle.

An ISA is just like any other form of investment with certain tax advantages. All investments whether it be an ISA, a pension, a LISA, a bond, or a general investment account all work in much the same way apart from their tax status. This is why they are often called “tax wrappers”.

Whatever tax wrapper you put your money into, it will be “invested” in much the same places whether it be cash, government or company loans, commercial property, or company shares. Your money will be “pooled” with other investors’ into funds that hold a mixture of these “assets” based on your attitude to risk, term of investment, and a number of other factors.

In essence, you could hold the same funds within your ISA as in your pension.

 What does the ISA tax wrapper mean for your investment?

1.  Your investments grow free from tax

Within an ISA there is no tax on income or interest. What does this mean?

Any growth within an ISA is not taxed*

2. There is no Capital Gains Tax on ISAs

This means that when you sell funds within your ISA, any gains made from the proceeds of the sale will not be taxed

3. Any income or withdrawals taken from an ISA are tax-free

This means that when you take money out of your ISA, there is no tax to pay

4. ISAs do not need to be included on your tax return

ISA restrictions

Due to the tax advantages of an ISA, there is a restriction on the amount that can be paid in each tax year – currently £20,000 (2025/26). This can be held in cash or Stocks and Shares, or a mixture of both.

It should be noted that ISAs do form part of the deceased’s Estate for Inheritance Tax purposes which means that money held within an ISA could be subject to Inheritance Tax. This is unless the ISA is invested in AIM shares that have been held for 2 years and are held at the date of death.

Age limits and Junior ISAs

ISAs can be held for any period of time – there are no restrictions on when you can access your money (unless you invest in a fixed-term deposit within an ISA). Any UK resident aged 18 or over (16 for Cash ISAs) can invest in an ISA and there is no upper age limit.

There are also junior ISAs for those under 18 years. This could be a Cash Junior ISA or a Stocks and Shares Junior ISA. The maximum that can be invested into a Junior ISA is £9,000 (2022/23). However, a little-known fact is that 16-18-year-olds can open a Cash ISA and a junior ISA in the same year, meaning they’re able to save up to £29,000 a year tax-free.

Please note:

Tax rules, rates, and allowances are all subject to change and are dependent on individual circumstances. The Financial Conduct Authority does not regulate tax advice and some forms of offshore investments. The value of investments and the income from them can fall as well as rise and you may not get back the full amount you invested

* “Net” funds can be held within an ISA, if this is the case, income on dividends will still be taxed at 10% – this cannot be reclaimed. Most providers have gross funds in which the income is not taxed.

The post What is an ISA (including a little known fact)? appeared first on Alice Douglass.