Financial Planning Week is the brainchild of the Chartered Institute for Securities & Investment (CISI) and this year it runs from 27 January to 2 February.
Designed to celebrate our profession and the value expert financial advice can add, the week aims to raise awareness and help you, the consumer, get the expert help you need.
It’s help that’s more important than ever as we head into 2025. With global conflict impacting stock markets, and a new Labour government making significant tax changes at home, a robust plan could prove vital.
Keep reading for your look at Financial Planning Week and the checklist you’ll need to help you get end of tax year ready.
1. Check in on your emergency fund
Your long-term plan is adaptable, robust, and based on the Life Roadmap Report we have produced for you. We review your finances regularly to ensure your plan remains on track and this reassurance is a key part of the service we offer.
Even with a carefully considered plan in place, though, the unexpected can still strike. With the new year upon us, and Financial Planning Week just around the corner, now is the perfect time to check in with your emergency or rainy day fund.
We recommend that it’s sufficient to cover around six months of household expenditure, so ensure it remains fit for purpose. You never know when you might need it to tide you over.
2. Make pension top-ups if you can afford to
Your pension is an incredibly tax-efficient way to save for your future so be sure you’re making the most of the tax advantages it offers.
Except where you are a high earner or have already accessed pension funds using certain Pension Freedoms options, you have an Annual Allowance of £60,000 (for 2024/25). This is the amount that you can contribute to your pension in a tax year without becoming liable for an additional tax charge.
Make top-ups before tax year end if you can afford to and remember that you can carry forward unused Annual Allowance up to three years.
3. Top up your loved ones’ pensions too
Once you’ve topped up your pension, do the same for your loved ones by contributing to their pensions (up to the Annual Allowance) too.
4. Make the most of your ISA Allowance
Your ISA savings and investments are also tax-efficient. You don’t pay tax on the interest you earn in a Cash ISA while gains in a Stocks and Shares ISA are free of Income Tax and Capital Gains Tax (CGT).
You can pay up to £20,000 into the ISAs you hold during the 2024/25 tax year (although different limits apply for Junior ISAs and Lifetime ISAs). Doing so means you’re maximising your ISA’s tax efficiency so check in with your provider and make a top-up now if you can afford to.
If you have opened a JISA for your child, the JISA Allowance stands at £9,000 for the 2024/25 tax year, so consider paying into this too.
5. Consider gifting to lower your estate’s value
If you’re worried about leaving an Inheritance Tax (IHT) liability when you die, you might opt to lower the value of your estate through tax-efficient gifting during your lifetime. Several HRMC exemptions allow for this.
The annual exemption is £3,000 for the 2024/25 tax year. You can gift this amount tax-free and any unused amount can be carried forward from the previous tax year. The £3,000 is individual to you so if you and your partner didn’t use your exemption last year, you could potentially gift a combined £12,000 before the end of this tax year.
6. Factor in Autumn Budget changes
January is a good time to revisit your finances and consider what your plans look like for the year ahead. Rachel Reeves’ Autumn Budget introduced some changes that you might want to think about.
From 30 October 2024, the rates of Capital Gains Tax (CGT) increased, for example. If you plan to make asset disposals before the end of the tax year, you’ll need to calculate whether any gains will exceed your annual exempt amount (which stands at just £3,000 for 2024/25). We can help you think about the timing of asset disposals and whether you might be able to use some of your partner’s unused exempt amount.
The chancellor also used her Budget to make significant changes to the IHT treatment of pensions, due to come into force from April 2027. You can read about them in our latest blog, ‘Why a knee-jerk reaction to Budget pension changes could cost you in retirement’, so be sure to get in touch if you have any questions.
7. Revisit your will and update if necessary
Another financial housekeeping task that can be easy to put off or forget about entirely is managing your will. If you don’t have one in place, make it a priority this Financial Planning Week.
Even if you do have one, when was the last time you checked in with it?
Life milestones and events, like marriages, divorce, and births, can change your priorities and mean that changes need to be made. A will is the best way to make your wishes on death known, so be sure this important document reflects those wishes.
Get in touch
If you’re looking for an independent financial adviser in Milton Keynes or Olney to help you prepare for the end of the tax year and beyond, look no further. At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
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