Are your finances ready for the new tax year?

As the seasons change, and the days get longer, many of us feel a sense of regeneration and a desire to make changes in our lives. Can you extend the urge for spring cleaning and freshening up your home into other aspects of life, such as your finances?

Signs of spring often spark an urge for change and reinvention as we start cleaning and decluttering our homes. In the UK, it’s also a perfect time to spring clean your finances as it coincides with the start of a new tax year and while this year it won’t coincide with a Spring Budget like previous years, it’s worthwhile reviewing the changes from the last Budget in October if you’ve not done so already, to ensure your finances are in good shape.

So, what should you be considering to freshen up your finances this spring? We outline the best places to start.

Set your goals

Do you have overarching financial ambitions or goals and, if not, should you think about setting some? What do you want most from life – for yourself and your family? Maybe to help your children or grandchildren through education, or to buy their own homes. Or you may have plans to travel or relocate. Perhaps you’d like to build philanthropy into your goals? If you’re unsure where to start, map out some short, medium, and long-term goals. Then you need to take stock of your savings, investments and pensions to make sure they reflect these goals.

Get your paperwork in order

First things first, are all your official documents – wills, lasting powers of attorney and certificates – together where they can be easily found when necessary? If you don’t have a will, or it’s not up to date with your current situation, this should be a top priority. Important digital assets may also need a review.

Use this as an opportunity to sit down and evaluate your incomings and outgoings. Are you paying for services or subscriptions you don’t use? Are there areas that you could cut back on? Could you free up more cash to put towards your financial goals?

Pensions

Now is a good time to review your pension savings – are they in line with your plans for retirement? With the maximum you can save into a pension and receive tax relief standing at £60,000 per annum in the UK, they continue to be great way to help meet retirement goals for many. Like in many previous Budgets, governments tend to tinker with pensions, and the Autumn budget was no different with the Chancellor announcing that pensions will be subject to inheritance tax from April 2027. While there is still time before these changes occur, it is certainly worthwhile starting to consider your next steps on your pension savings.

Tax matters

The personal allowance and tax thresholds remain frozen until April 2028, with your personal allowance standing at £12,570, the 40% higher rate tax threshold at £50,270, and the additional 45% at £125,140. This means you could tip into a higher or additional rate tax band if your earnings have increased, so it’s worth exploring options, such as increasing your pension contributions.

It’s also important to take advantage of any tax allowances you’re entitled to. Are you using your annual ISA allowance in full? Are you claiming tax relief against charitable donations and professional subscriptions? As always, you should seek independent tax advice based on your own situation before making any financial decisions.

Plan for life

Many of us think about leaving an inheritance to our children, or others, but are you making the most of your wealth while you’re still around to enjoy it? Have you, for example, dreamt of living somewhere else – escaping the city or moving closer to family? Or gifting from your assets or surplus income to benefit your loved ones when they need it most? Or supporting a favourite cause? Why not revisit these ideas and consider your work-life balance. Are you happy, or could you be doing more?

Examining many areas of your life – from finances to family matters – can feel daunting, but sitting down and talking about it will almost always pay dividends in the long run.

If you’d like to start a conversation, please get in touch. Our experienced team can work with you to create a personal wealth plan that can help you achieve your financial goals now and for the future.