As the 2020/21 tax year end is fast approaching, it is a good time to consider if you are being efficient with your savings and investments. For the purposes of this article and our investment clients the two key areas we will focus on are:
– Annual ISA allowance of £20,000
– Annual Pension allowance of £40,000
Both ISA’s and Pensions provide a tax efficient way for individuals to save and accumulate wealth. The ISA allowance is very straightforward in the sense that it is a case of ‘use it or lose it’. There is no option to carry forward any of your previous years unused allowances – so if you miss the tax year end deadline that allowance will be lost. Getting in the habit of regular annual subscriptions to ISA’s can be extremely beneficial in ensuring you have access to tax free capital or income later in life.
The pension allowance is slightly more complicated and can be based on who is making the contributions, your level of income and/or your previous 3 years’ contributions. Making full use of your pension allowance is encouraged and to find out your own personal allowance and options please feel free to contact us on 01489 668280 or enquiries@southernwealth.co.uk.
For more information on saving and investing in a tax efficient manner please visit the resources section of our website where you will find numerous useful key guides.
