Our top tips for 2020
While we won’t be going on holiday this year, we can use this time to focus on our other financial goals – like saving towards home improvements or putting away regular installments into a pension. Our advisers can help you get the most out of your money, so your hard-earned cash can work harder. John Greene, a Wren Sterling financial adviser based in our Glasgow office, shares the main topics he’s been talking about with his clients.
Thinking about the future
“This year we’ll be glad of the Government’s move to alter the tapered annual allowance, which will affect many NHS pensions.
There has been huge pressure to solve this puzzle for talented staff approaching retirement, as they were better off financially by reducing their hours. While the annual allowance remains at £40,000 this year, the tapered annual allowance means the number of people affected by the tapering of this allowance is greatly reduced.
“Those with taxable income, including earnings, between £150,000 and £200,000 have been taken out of tapered annual allowance territory. This will change how much they will be able to contribute to their pensions this year without incurring additional tax. The chancellor said this will take 98 per cent of consultants and 96 per cent of GPs out of the taper altogether.”
Thinking about family
“As we’re unable to physically visit our loved ones, our thoughts turn to them more than ever. Grandparents and parents who are looking to minimise their inheritance tax (IHT) liability could consider contributing to a Junior ISA to give their children a head start. It’s a good time to consider increasing contributions to a Junior ISA as the limit more than doubled this year, from £4,368 to £9,000.”
Spring clean your plans
“Spring is your chance to set goals for next year, and fine tune your plans to account for anything that has changed since you last spoke to your adviser. For example, if you’re concerned you may have missed out on your annual pensions allowance, your adviser can help you make the most of rules like ‘carry forward’ which may allow savers to benefit from any unused relief from the previous three tax years.
But we don’t just mean updates from the government. “For those who have changed jobs recently, it’s time for a protection review. With workplace critical illness or life insurance, and other ‘in service’ benefits, its easy to think you and your family are protected sufficiently – when you may not be. If you’re thinking about cancelling any plans you have, make sure to talk to your adviser, and keep up your regular payments until you do.”
Talking about your finances
“A yearly review with your financial adviser is a good time to talk about your options and any uncertainty. We can’t predict the future, but we can help you prepare for it. We have curated a group of partners who can provide specialist guidance for other aspects of your life including making a Will, funeral planning, mortgages and equity release. We also encourage you to talk about your plans with those they affect. Involving your family in these discussions can remove confusion and worry about the future.”
If we can’t convince you here, we’d like to recommend an article from Alex Holder, author of ‘Open Up: Why Talking About Money Will Change Your Life’ earlier in this magazine.
“Speaking to your adviser now will give you a chance to think about more long term goals and make sure you’re set up for this financial year.
Get in touch with your adviser and book a time to talk about your plans. It’s a good time to make the most of your allowances – especially if you own a business. You may have money left in the pot, and ideas about how you’d like to use it this year. Make sure you have plenty of time to talk to your adviser, as this is a busy time of year, and we don’t want you or your employees to miss out.”