Spring Forward – Prosperity and Possibilities

Written by Nila Mistry
02/03/2023

Spring is a time of renewal and new growth.

I love this time of year. The days are getting milder, and evenings are lighter. Like you, I have a new spring in my step, humming along to my favourite tunes.

As we welcome the season of rejuvenation, it’s a great time to take a fresh look at your finances. The longer days and brighter weather are uplifting. Spring is the ideal opportunity to take control of your financial life. Embrace this time of possibility; make positive and lasting changes now.

A spring clean is a perfect way to greet the return of warmer weather by sweeping away any debris. It’s an excellent time to reorganise your finances too. A little money maintenance will set you up for financial stability for the rest of the year and beyond. Spring cleaning isn’t only for your home. Get rid of old bills and receipts and update your financial records. Remember to take advantage of any unused tax-free allowance.

Prepare the ground

What do you want to achieve with your money this year?

Do you have financial goals? You may want to pay off debt, reduce your mortgage, help your children save for a deposit on a house, or add to your emergency fund.

Giving your money some meaning can help you feel clear about when you will need it. To reach your goals, you need a plan.

In England, the tax year ends on 5th April 2023. Don’t miss out on tax savings. Use it or lose it! Here are 4 key opportunities to put an extra spring in your step:

Use your ISA allowance

The Individual Savings Account (ISA) is a tax-efficient way to save and invest money. The annual ISA allowance is £20,000, and any unused allowance cannot be carried forward to the next tax year. Now is the time to call your financial planner. Check if your savings could work harder for you.

Make pension contributions

If you are a UK resident under 75, you can make tax-deductible contributions to your pension. The limit will be your annual earnings or the annual allowance, whichever is lower. The annual allowance is currently £40,000. Making contributions to your pension can reduce your taxable income. You could get up to 45% tax relief if you are a higher-rate taxpayer.

Capital gains tax planning

Review your investment portfolios if you have made capital gains during the tax year. Check if you can offset any losses. Consult a financial expert. Professional advice is essential if you have a capital gains tax liability.

Annual gifting allowances

Inheritance tax is charged at 40% on the value of an estate above the nil-rate band (£325,000 for the 2022/23 tax year). Before the tax year-end, it may be worth reviewing your estate planning arrangements. Each person has annual gifting allowances. These are the amounts you can give away without tax consequences. These sums won’t be added back into the value of your estate.

Any unused annual allowance (£3,000) from the previous tax year can be carried over. Check with your financial planner for advice about your circumstances.

Nourish and flourish

Use the spring season to invest in yourself and your future. Consider taking a course or attending a workshop. Would professional development training improve your skills and increase your earning potential?

Investing in financial assets can increase your net worth. Investing in yourself can enhance your skills, knowledge, and abilities. Both lead to personal and professional success.

A financial coach will help you pursue your personal, professional and prosperity goals.