Our ...March Newsletter 2014
This month we are very excited on 2 counts: this is the first of our freshly re-designed newsletters, created especially to complement our second big excitement of the month – our brand new website which we launched on 10th March!
With thanks to all our loyal clients – those who followed us to JJFS and those who have joined us subsequently – the firm is now 5 years old and we decided it was high time to update our look to reflect where we are now and the progress we have made since we first opened our doors in 2009.
As the current tax year draws to a close, we have included 2 articles as a timely reminder of the tax mitigation opportunities available to you until 5th April.
Lastly, Simon Jackson has taken leave of his senses and is partaking in the Wolf Run in April. He’s raising money for Parkinsons UK in memory of his late father. Details below.
In this issue:
- 5 reasons to pay into a pension this year
- Have you used this year’s ISA allowance yet?
- Introducing our new website!
- Simon Jackson – running wild with the Wolves…
We hope you enjoy reading the articles.
5 reasons to pay into a pension this year
The end of the tax year will soon be upon us but there’s still time to take advantage of a number of opportunities to boost your pension whilst reducing your tax liability.
1. Play catch up
Higher rate tax payers can take advantage of the carry forward rules which enable you to use up any unused pension allowances in previous years, (currently back to 2010/11) by making additional contributions this year. This is particularly useful if your income fluctuates from year to year.
2. £10,000 reduction
From next month the annual pension allowance will reduce to £40,000 so it’s worth making the most of the £50,000 limit before it ends on 5th April. There could be further reductions in years to come.
3. Recover your personal allowance
Higher rate payers can reduce their taxable income by making additional pension contributions that will bring them down to within the threshold of re-instating their personal allowance. For some this can equate to an effective rate of tax relief at 60%.
4. Avoid the child benefit tax charge
Additional pension contributions that reduce your taxable earnings to below £60,000 could give you the double benefit of avoiding the child benefit tax charge whilst benefiting from higher rate tax relief on the contributions. This can be worth as much as 64% in tax relief for a family with 3 children.
5. Sacrifice your bonus to boost your pension
If you can afford to sacrifice your bonus for an employer pension contribution, the savings in both employer and employee NI contributions could also be added to boost your pension pot, giving you more in your pension for every £1 lost in take-home pay. This can also have the added benefit of potentially avoiding the child benefit tax charge and even recovering your personal allowance.
The above are just 5 options currently available but there may well be other strategies that could work for you. Please call us on 01926 651122 for further assistance.
Note: The above points are suggestions only and, as always, we strongly suggest you speak to your financial adviser before taking any action.
Have you used this year’s ISA allowance yet?
Each year the Government gives us all a tax free savings allowance which is a great opportunity to protect your hard earned cash from the tax man. Savvy savers can build up significant portfolios by utilising their full ISA allowance year in, year out and investing their funds into the various ISA products available.
The current allowances are £11,520 in a Stocks and Shares ISA (that’s a total of £23,040 per couple) or up to £5,760 in a Cash ISA with the balance in a Stocks and Shares ISA. From 6th April these will increase to £11,880 for individuals or £23,760 per couple.
As well as being tax free, you won’t have to pay any capital gains tax on the profits from these investments either, so there’s no need to mention them on your tax return.
You can use the money in your ISA as you wish but remember, any funds you withdraw from your ISA will immediately lose their tax free status. So, if you wish to switch ISA providers this must ALWAYS be done as a transfer directly from one ISA account to the other.
It’s important to review your ISAs regularly as some of the cash products particularly, will lure the consumer in with high introductory rates which plummet once that introductory period ends. As always we strongly suggest you speak with your financial advisor to help you make the best choice for you.
Your children have a tax free allowance too
You can also invest up to £3,720 in the current tax year into a Junior ISA for each of your children over and above your own allowances. This will rise to £3,840 from 6th April. Anyone can contribute to the ISA, making it a great alternative for birthday gifts, and the fund cannot be accessed until the child is 18. For more information click on Junior ISAs.
Remember you have until April 5th each year to utilise your ISA allowance.
Introducing our brand new website!
Over the past few months we’ve been busy developing our new website and we’re delighted to announce that the new site is now live! We have a number of useful downloads which we’ll be changing as the financial year progresses to ensure they remain topical and relevant.
Please take a moment to browse through the new website – our aim is to create a website that you find useful as well as informative and any feedback will be warmly received.
We‘d like to thank Tom Walton and his team at Emblime who have done a fantastic job for us on both the website and newsletter.
Simon Jackson – running wild with the Wolves…!
Our very own Simon Jackson has taken leave of his senses (either that or it was one beer too many!) and will be taking part in the Wolf Run on 26th April. Not for the faint hearted, this is a hardcore 10k run across raw natural terrain, including woodland, lakes and lots and lots of thick mud. Each runner must tackle a series of obstacles designed to test their mental and physical strength, skill and stamina. Simon will be running, climbing, jumping, wading, crawling (definitely) and swimming his way through a course designed to challenge every participant to the max.
He has been busy training and running on top of his usual gym workouts in anticipation of this extremely challenging event. However, the main reason for taking part is to raise money for Parkinson’s UK in memory of his late father, and he has set up a Just Giving Page for the charity. Please click through and we’d be delighted if you would join us in sponsoring him for what will no doubt prove to be a highly entertaining afternoon for the spectators.
Sign up for our
Stay up to date with important issues that affect your finances
Esssential reading if you are considering accessing the funds in your pension
Auto Enrolment for
What is auto enrolment and what are employers required to do?