Hartlepool-born Harrison Smith is a financial adviser based in his hometown’s Greenbank business centre and is associated with Emerald Associates. Harrison offers an insight into money matters in an exclusive monthly column for North East Connected.
March is typically a busy month for me. Without fail, it is the same each year. The tax year end is looming, and it is a case of what remaining allowances are there for clients to use to boost their investments.
Tax year allowances have become a hot topic this year, with recent speculation on Cash ISA limits to £4,000 moving forward. Speculation remains high on this matter ahead of the chancellor’s first Spring Budget on March 26, 2025.
We will discuss the outcomes of that budget in the next column. But, for now, the allowances remain the same. With the end of the current tax year approaching on April 5, individuals, entrepreneurs and their families are considering their own steps … what should they do before this deadline?
In the UK, if you haven’t already read the countless articles, publications on this topic in recent months, the allowances we are referring to are typically related to pensions, ISAs and capital gains.
For clarity, these allowances sit currently at £60,000 annually for pensions, £20,000 for ISAs and £3,000 for capital gains.
The ISA allowance remains the same regardless of circumstance, but pension and capital gains allowances can be dependent on an individual’s circumstances.
In my role as a financial adviser, I would always advise to use as much of these allowances as you can, however, it is only important to only use these under the strong caveat of it being appropriate to your own financial situation.
I often find that clients have an air of desperation or panic when the tax year end approaches.
The rhetoric at this time of the year can certainly make you feel like that because there is an expectation you should be doing something.
For my clients, I want the tax year end to be the opposite of that.
There is a reason it is a tax ‘year’, because the allowances can be used at any time throughout those 12 months, not just in the final week when you think you should act.
Like anything, as we have mentioned in multiple columns before, achieving an outcome comes down to robust planning.
Planning means using what you have at the right time, and that might not necessarily be the last week of the tax year.
Building an effective financial plan would allow you to see more clearly when it is appropriate for you and by how much. This might mean an occasional lump sum contribution can be made or it could be a series of ongoing contributions.
It is not a one size fits all and that approach means not relying on dealing with your circumstances in isolation and not what elements people may be speculating on.
There’s an old British Army adage that my dad has always banged on about and that is
‘Proper Planning and Preparation, Prevents Piss Poor Performance’.
Excuse my language there, but that, otherwise known as the 7ps, is also an appropriate way to what I have described above.
There’s no point in looking too far into the future without having the right plans in place and, to quote another old pre-war message, just remember to ‘Keep Calm and Carry on’ when you do have a bit of direction with your finances.
*To contact Harrison check out his adviser hub https://linktr.ee/harrisonsmithea [linktr.ee] [linktr.ee [linktr.ee]