How to Prepare Your Finances for the 2024 UK General Election
The 2024 General Election is coming up fast. Here are five simple steps to get your finances ready.
1. Use Your Capital Gains Tax Allowance
Taxes on investments have gone up a lot recently. If you’ve made gains on investments outside an ISA or pension, think about using your capital gains tax allowance now. Plan how and when to realize these gains over a few years.
2. Shelter Your Investments in an ISA
The best way to protect your investments from taxes is by using an ISA. Investments in an ISA are safe from UK income and capital gains tax. You can also move existing investments into an ISA using a share exchange, up to the £20,000 limit for this tax year.
3. Remember Your Pensions
The annual pension allowance is £60,000 for most people. This is the most you can add to your pension each year without extra taxes. Pension contributions can come from you, your employer, or anyone else, plus tax relief from the government. Higher earners should make the most of this allowance.
4. Don’t Forget Your Family
The Junior ISA allowance is £9,000 a year. This is a great chance to save for your children’s future and keep their money safe from tax. Junior ISAs offer the same tax protections as standard ISAs.
5. Consider Your Savings
With tax thresholds frozen, more people will pay higher tax rates. This reduces their personal savings allowance. A Cash ISA can help. It protects your cash from tax, even if the government changes the personal savings allowance.
Final Thoughts
Taxes are a big topic in elections. We might not see immediate tax cuts, but it’s smart to prepare now. These steps can help ensure you don’t pay more tax than necessary, no matter who wins the election.
This is not personal advice. If you’re unsure, seek financial advice. Remember, ISA, pension, and tax rules can change, and benefits depend on your circumstances. You usually can’t take money out of a pension until age 55 (rising to 57 in 2028). Investments can go up or down, so you could get back less than you invest.
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