Nikki Walding and Jonathan Crowther

We wish all our clients and contacts a very Happy New Year.   

As this is the season for new year resolutions that usually involve health matters, Jonathan Crowther and Nikki Walding list 8 of their best personal financial planning tips for anyone looking for some inspiration on how to improve their financial health in 2011.

1.      Tax Return and Tax payments deadline 31 January 2011

The tax return deadline is 31 January 2011 and if you haven’t filed it yet you should be ashamed.  The Return must now be filed electronically and if you don’t plan to use an Accountant, make sure you are registered for online filing as this process can take up to 7 days.  Any final tax liabilities for 2009/10 are also due on 31 January 2011 so ensure your payment is sent in good time to avoid any interest charge.

2.      ISA Savings Allowances to 5 April 2011

You can save up to £10,200 during this tax year in a tax free ISA.  If you have stocks and share investments and especially if you are a higher rate taxpayer, you might consider transferring some of these investments into an ISA and this applies individually to husband and wife.  Watch out for CGT on disposals outside the ISA wrapper and any transaction charges but in many cases it will be worthwhile.  If you only have building society investments and don’t want to invest in shares you can put up to £5,100 during this current tax year into a cash ISA.    Do also check the interest rate you are receiving on your cash ISA and shop around for the best deal.

3.      Personal Pension Contributions before 5 April 2011

Now is the time to consider topping up your pension payments for 2010/11.  For higher rate taxpayers this can achieve excellent tax breaks but if your total contributions this year exceed £20,000 you must seek advice from an IFA as complex limits apply and you might face an unexpected tax charge.  The good news is that for contributions after 5 April 2011 the system is simplified for contributions up to £50,000.

4.      Where is your Pension Fund invested?

In the course of our work as a tax accountants,we are constantly amazed at how many clients don’t know where there pension money is invested.  Just putting money into a pension fund and never thinking about it again until you are getting ready to retire may be a disaster.  There is a huge variation between the best and worst pension fund and everyone should check their funds at least once a year to make sure your choices are at least satisfactory.  It is really easy to change the funds your money is invested in!  IFA’s are the paid professionals who can help you choose the right funds or if you want to do it yourself there are many free sources of performance tables such as and

5.      Credit Cards, Loans and Mortgages

Interest rates are currently very low and most economists expect these low rates to continue throughout 2011.  Are you making the most of this opportunity?

  • if you are paying interest on credit cards shop around for the best deal.
  • if possible pay off the credit cards or take out a consolidated loan usually at a much cheaper interest rate.
  • if you have equity in your home consider remortgaging to include your other loans as the interest will be much cheaper.
  • even if you have no other loans, it is worth checking your mortgage rate.  Many brokers say if you have more than 15% equity and are paying over 4% you can do better!
  • whenever you are looking to take out new loans or mortgages it is worth checking your credit rating and clearing up any errors or redundant details of old loans.

6.      Check your Insurances are adequate

We agree it is a very personal decision whether to spend money now on providing assurance that benefits will be paid in the future should bad things happen.  However, this type of protection does have its place even if just to provide peace of mind that you and your family are secure.  Types of cover that might be considered are:

  • Term life policies to pay off loans or pay taxes should you die.
  • Mortgage protection that pays the mortgage payments if you are sick or made redundant.
  • Permanent Health Insurance that pays out a regular income if you are unable to work.
  • Personal Accident and Sickness is similar but pays a lump sum.
  • Private Medical Insurance will cover the cost of private treatment should you fall ill.

7.      Are you able to minimise Inheritance Tax?

If you are not taking advantage of IHT annual exemptions, now is the time to start thinking about it because IHT is charged on death at 40% on all assets over the £325,000 threshold (2010-11) – and there are plenty of people with properties worth more than that!  Don’t worry if you are leaving everything to your spouse or civil partner as there is no tax to pay, on the first death, and you can also pass on to your spouse any unused portion of your £325,000 nil rate band. Also consider:

  • You can give away £3,000 a year plus any number of individual gifts of up to £250 to any number of people free from IHT.  If you don’t use your £3,000 annual exemption it can be carried forward for one year only. 
  • Capital gifts of cash above these levels are given as Potentially Exempt Transfers (PETS) and will be free of IHT provided you live for 7 years after making the gift.
  • One of the most valuable IHT concessions is the ability to transfer any amount of income that doesn’t substantially reduce your standard of living free of IHT.  The money gifted is immediately outside your estate for IHT purposes and this gift does not count against other capital lump sums. 

We carry out IHT planning for clients as every situation is different and it is essential to understand the aims of each individual before jumping in with any general advice.  For many clients we will work alongside an IFA who advises on investments and a Solicitor who will deal with the Wills, property matters and any Trust work that may be required.

8.      Is your Will up to date?

The last New Year’s resolution must be to make a Will if you haven’t done so already.

Even if you have a Will, check it does what you want it to do and make sure your beneficiaries are properly listed.

Marriage or divorce invalidates any will so check that yours is up to date.

Jonathan Crowther and Nikki Walding offer to carry out a financial planning healthcheck for a fixed fee agreed in advance starting from £250 plus VAT.  Full details of this service can be obtained by contacting us on 01386 552644 or email