4th January 2017Financial resolutions for a happy new year

I will save as tax-effectively as possible
At some time in our lives we’re all going to be glad to have savings to fall back on. With the Individual Savings Account (ISA) limit for 2016-17 set at £15,240 and due to increase to £20,000 from April 2017, it makes sense to shelter as much money as you can in these accounts. From April 2017, the ISA range will be expanded by the addition of the Lifetime ISA, so arguably there’s an ISA account for everyone. In an ISA, you don’t pay tax on income or capital gains, and the Help to Buy and Lifetime ISA accounts offer attractive government bonuses too.

I will face the fact that I am getting older
It’s been nearly two years now since the introduction of sweeping changes in pension legislation that transformed the way in which those in defined contribution pension schemes could plan for their retirement years. In addition, there have been major changes to the State Pension. So, if you haven’t reviewed your pension plans for a while, this could be a good time to take stock of how they are progressing. With figures from the Office of National Statistics now showing that on average workers reach their peak earnings at the age of 38, it’s never too early to prepare for your later years.

The tax incentives offered by pensions are too good to pass up; because of tax relief on contributions, it costs the basic rate tax-payer only £80 to make a £100 contribution to their pension, while a higher-rate tax-payer only pays £60 for the same effect.

I will plan for my family’s financial future
This is a good time of year to take stock of your financial goals and to consider your options for the future. This can include succession planning for a family business, thinking about your income needs in retirement, or getting some good advice on how to minimise your estate’s Inheritance Tax liabilities.

I’ll make sure my Will is up to date and consider writing a Power of Attorney
Family dynamics can and do change over time, meaning that a Will written a few years ago might not reflect your current wishes about how your wealth should be apportioned on your death. So, you may want to review and update its provisions.

Similarly, everyone should plan for a time when they might not be able to handle their own financial affairs, or deal with decisions about their care. Lasting Powers of Attorney (LPAs) enable you to choose the person or people who would take charge of making important decisions which affect you if you are not able to do this for yourself.

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