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Small adjustments that make big differences to wealth

The start of a new tax year is a great time to look at what you are saving and how you can make the most of available tax allowances. Unividual's Chartered Financial Planner, Simon Hicks, takes the time to explore what you could be saving for. Simon was ranked in the Times as one of VouchedFor's 2019 UK Top Rated Financial Advisers.

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Big Changes V Small Changes

Every person is different but depending on your situation, the start of a new tax year might be a good time to rearrange your finances. Whether you are employed, self employed, a business owner or retired, there are numerous ways you can maximise the income you receive by using a wide range of tax allowances.  Efficient tax planning isn’t just about reducing the tax you have to pay on your income, it also involves utilising your savings allowances so that you can pay little or no tax when you decide to retire.

The Power Of Our Thoughts

When it comes to savings most of us start with that big question of ‘how much can I set aside?’  but really we need to switch our focus from what we have in our pockets to what we are saving for.  A powerful change can come when we alter our thoughts to ‘what do I want to save for’ instead of ‘what can I spare’. Quite often when our clients take this action they realise they can save more than they thought.

No one person has the same savings plan and there is no universal goal for investment. However, a few common themes often crop up with my clients that might inspire you.

1. Early retirement is top of the list. Rather than expecting to work until 65 – 70, many people want to save  enough so they can retire earlier and enjoy life with the pressures of work. It’s probably no surprise to you but the sooner you start retirement planning, the easier you’ll find it to achieve this goal.

2. Something a bit more tangible. Perhaps a larger property with a big enough garden for dogs and chickens. You might want to save for a safari holiday but as you get further down the line it turns in to a wedding and a honeymoon to a remote far-away island. Your lifestyle choices change, we all grow up (and age!) but you can direct your accumulated, carefully managed portfolio towards your heart’s desire as you near the goal, no matter if it changes.

3. Giving to others. If you’re feeling generous towards friends or family, a deposit for a child’s or grandchild’s house is a common and manageable objective. With student loan debts at significant levels and the housing market demanding a high deposit level, when it comes to property purchase, setting up savings to bequeath to your nearest and dearest is a popular plan.

4. Dreams of yachts. If none of these sensible options appeal, you might just want to save up enough to buy on a boat, set sail around the world and never look back! We have a few clients who we have helped achieve that and it has even inspired some of the people in our business to work towards that goal themselves.

Make Things Happen

If you want to make things happen a Financial Planner can give you that proactive, accountable push you might need. Seeking advice from a trusted Chartered Financial Planner will ensure that you utilise the range of tax allowances available to you. Each person has a unique, complicated set of circumstances and how you will need to utilise your allowances will differ from everybody else. This is why we create a bespoke financial plan for each person or business and why our financial planning process involves finding out firstly what you want before we show you how to get there. When you know and understand your financial position and what you want to achieve it can be the difference between wishing things could be and making them happen.

If you would like to speak to Simon about your savings or indeed any other area of your finances please give him a call on 01225 427 474.

Article Date: 8th May 2019

Author: Simon Hicks, Chartered Financial Planner & Fellow of the Personal Finance Society

Editor: Cherie-Anne Baxter

Tax treatment varies according to individual circumstance and is subject to change.

The FCA do not regulate tax planning.

The value of pensions and investments and the income they produce can fall as well as rise, you may get back less than you invested.

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