Is it time for your 2025 financial MOT?

Unused ISA allowances

Each year, you can add up to £20,000 to your tax-free ISA savings account.

So, if you haven’t already, you should consider using your unused ISA allowances for the 2024/2025 tax year, as well as Junior ISAs for children and grandchildren, and Lifetime ISAs for those under 40 who want to save towards their first house or for their retirement.

Ensuring these allowances are used can help maximise tax efficiency and long-term growth.

ISAs offer tax-free interest, dividends and capital gains, allowing you to shield more of your savings from tax.

Unused allowances cannot be carried forward, so if you don’t use them, you could miss out on potential tax benefits.

In addition, Junior ISAs help parents save for their children’s future, while Lifetime ISAs provide a 25 per cent government bonus for first-time homebuyers or retirement savings.

And looking just a little bit further ahead, you can also use your ISA allowance for 2025/2026 at the start of the new tax year on April 6, 2025.

Whether you deposit a lump sum, or make the first of a series of regular payments, this will give your cash more time to grow compared with leaving it until the last minute.

Pension contributions

Pension contributions are always worth revisiting every year, if only to remind yourself what you’re paying and what you’re getting for it.

You should certainly consider using up any carried-forward allowances before the end of the current tax year, assuming you have the earnings to cover them.

If you have a business, pension contributions are a tax-efficient way of extracting money from that business, especially when used in conjunction with carried-forward allowances.

You’ll also get tax relief on pension contributions of up to £3600 gross for non- earners such as children and grandchildren.

So, you may have time to get some in before the end of this tax year.

And of course, it’s never too early to start putting some away at the beginning of the next tax year.

Venture Capital Trusts

Don’t forget about Venture Capital Trusts.

These can form part of a tax-efficient investment plan, though they do tend to come with more exposure to risk, so they’re not for everybody.

They generally give you the option to support small, high-growth companies, with up to 30 per cent income tax relief on investments, as well as tax-free dividends and capital gains tax exemption on profits.

By diversifying across a range of early-stage businesses (while balancing with more conservative investments) you can attempt to spread your exposure to risk, balancing tax efficiency with increased potential (but no guarantee) for growth.

Regular savings

It’s good advice for this and any year, but it’s worth repeating – regular savings in a secure, low-risk environment tend to grow in a slow but steady fashion.

And if you don’t have the wherewithal to put away large sums in the near future, saving smaller amounts on a regular basis is worth considering in addition to larger, more focused investment sums.

Expenses

Don’t forget to check your regular expenses.

Are you still getting the best deal on your utilities, mobile phone, television and insurance rates?

Remind yourself what all those little payments on your bank statement are for – it could be that you stopped needing some of them ages ago, or they’re no longer as important as they were.

And what about pension payments and investment opportunities – could you do better this year than last year?

Your next steps

At Raymond James, Monument, we take a local and personal approach to your financial plans and investments.

Our team members have been an integral part of the North East business scene for many years, and we pride ourselves on the level of service and returns we’ve achieved for our clients.

We know one size never fits all, and once we get to know you, we’ll endeavour to help you make the right financial and investment decisions for you and your financial goals.

Get in touch for a free, no-obligation chat.

 

Raymond James, Monument

For more information about Raymond James, Monument and how its expert team could help map your financial future, email [email protected] or call 0191 303 4260.

The information in this document does not constitute advice or a recommendation, and you should not make any investment decisions on the basis of it.