Act now to make the most of this year's allowances

There’s no need to wait until the end of the tax year, on 5th April 2024, to start making the most of the tax allowances on your savings and investments. Instead, start planning now.

Here are some of your main considerations.  

Build an ISA nest egg

You can invest up to £20,000 this year in an ISA, building up a nest egg free of UK Income tax and Capital Gains tax.

The same tax benefits are available with Junior ISAs, which you can use to build up a pot of money for a child, which they can’t touch until they’re 18 years old. The maximum Junior ISA contribution is £9,000 this year.

At NFU Mutual, we have a range of products including ISAs and pensions for you or a child and can offer expert financial advice on finding the right ones for you. 

Top up your pension

There is an annual allowance on pension contributions – that’s the limit on the amount you can contribute to your pension each year and still receive tax relief. For 2023-4, the vast majority can still pay in up to the level of their earnings, capped at £60,000 each tax year.

It’s useful to know too that you can carry forward unused allowances from the previous three tax years. 

There are complex 'taper' rules that restrict the amount high earners can pay into their pension. Those with incomes over £200,000 and adjusted income (broadly income plus employer pension contributions) of £260,000 or more are impacted.

Don’t forget Inheritance Tax planning

It’s wise to take a long-term view to inheritance planning, so you don’t pay more tax than you need to.

One way of doing this is to make gifts to your loved ones, taking advantage of an annual £3,000 gift allowance. Larger gifts are exempt from Inheritance Tax (IHT), as long as you live more than seven years from when you make the gift.

Tax planning is complex, so talk to an NFU Mutual Financial Adviser. Together they’ll review your financial goals and help you to understand your options.

The value of investments can fall and you may get back less than invested.

The tax treatment of pensions and value of tax benefits of ISAs depends on individual circumstances and may change in the future.

Please note that Inheritance Tax advice is not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

NFU Mutual Financial advisers advise on NFU Mutual products and selected products from other providers. We’ll explain our advice services and charges.

Financial advice is provided by NFU Mutual Select Investments Ltd.