A New Tax Year, A Great Time to Focus on Your Finances
In our personal lives, tradition dictates that the beginning of the New Year is a great time to focus our resolve on those things we wish to achieve in the coming year. Similarly, the new financial year, which starts on 6th April, is a great time for us to consider the goals in our financial lives to ensure that we are on track to meet our expectations and dreams.
From the good housekeeping of ensuring that we consider the use of various annual allowances at the earliest opportunity, as well as looking at the potential of maximising the tax relief, particularly for those paying higher rates of income tax, the benefits of regular annual reviews means that we have a far better chance of remaining on track by putting best practices in place early in the tax year rather than the annual rush not to miss deadlines which is such an unfortunate feature of the financial advice industry.
A strong financial review is about ensuring that we have the right money in the right place at the right time.
Protecting ourselves and our loved ones is always the first consideration of a solid financial plan. Only by having a firm foundation on which to base our financial objectives can we ensure that our plans are achieved should misfortune strike.
Reviewing one’s position in terms of the “what happens ifs” is something we should perform regularly. The potential of job moves, particularly following the pandemic, means the protection we thought we had provided through our employers may have changed significantly. Making sure that our financial provision is robust enough to deal with the potential loss of income caused by a long-term sickness or the financial shockwave caused by an unexpected dread illness and in the worst-case the financial devastation of premature death are, considered, discussed and costed and suitability of current provision is assessed and renewed where necessary.
Another side effect of the pandemic is the increase in the number of people venturing into self-employment or starting their own small businesses. By implication, the historical comfort blanket of employee benefits provided by traditional larger employers is now far less protective to many and the need to review protection is something which can easily be missed through the hectic days of starting out on such business ventures. There are tax efficient methods of protecting people in their own businesses which may well have been missed. A financial review can ensure that we remain up to date with such opportunities.
Away from this important, yet often shied away from area of protection, regular assessment of the existing investment and pension holdings is a huge benefit of regular reviews. Assessment of an individual’s current ‘attitude to risk’ for specific objectives as well as looking at the charging structures and benefits provided by existing policies, is a valuable part of the review process. I have lost count of the number of people who are invested in pension and investment funds that were initially chosen many years ago when the investor was at a very different stage of life than they are today. By regularly assessing an individual’s risk tolerance and reviewing the appropriateness as well as performance of one’s holdings, we should be in a far better position to plan and achieve our retirement and other investment objectives.
In summary, the benefits of a regular review with an independent financial adviser can be seen as ensuring our provision against the worst is up to the job whilst vastly increasing the chances of achieving the financial goals and dreams we have worked so hard for.
As an independent adviser I will conduct a fair and unbiased analysis of the market in relation to your personal needs should the need arise. There is no time better than the New Tax Year to start to plot the course for our financial futures.
Happy New (Fiscal) Year!!!
Neil Walker, Independent Financial Advisor
Please note, the value of investments can fall as well as rise and you may not get back the amount originally invested. The FCA does not regulate tax planning.