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Spring 2023The financial habits to make 2023 less taxing

Good money management habits are at the heart of personal financial wellbeing. They make us feel more confident and in control of our finances, as well as keeping us on track to achieve our long-term goals.

Getting into good tax and financial habits help make your life so much easier. The key is to form new habits that make your good intentions stick, so they become second nature.

Atomic Habits (by James Clear) is a brilliant book that really helped me personally and professionally define and understand my own habits, both good and bad. 
Here are a couple of tax-smart habits to get into this year:

Make the most of your allowances

Making the best use of your tax allowances helps to make your money go further. Many of us have ISAs, but there are other possibilities that are sometimes overlooked and left unused.

Make sure you’re not missing out on the allowances that you can benefit from. Are you using what you’re entitled to, such as ‘carry forward’ on your annual pensions allowances, or your gifting allowance?

Did you know for example that, in addition to the maximum £40,000 tax relief allowance on pension payments, HMRC will let you carry forward any unused allowances from the three previous tax years – starting with the earliest tax year first.

Or that you can make up to £3,000 worth of gifts in a single tax year that won’t be counted as part of your estate when it’s time to pay inheritance tax? 
Find out what’s available and what you could benefit from. You don’t want to miss out on a real tax-saving opportunity.

Speak to a financial adviser on a regular basis

If you’re not already taking financial advice, this is perhaps the best habit to get into. Financial advice helps you stay on track for your long-term goals, and gives reassurance as well as practical, clear advice in more challenging economic times like the present.  Financial advice could be the step that will help you drive other good financial habits.

A regular check-in with your adviser will give you the momentum to keep on top of everything. They help guide and support your decisions, remind you of your options, and ask the questions you need to think about.

This year set some good money habits that will become second nature to increase your financial wellbeing, and stand you in good stead for the future.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
 

About the writer
As director of Front Row Financial, Steven Worrall provides a truly holistic approach that demystifies financial advice and puts you in control, with tailored solutions and ongoing support to help you achieve your financial and lifestyle goals.