23/24 Tax Year – What You Need To Make Use Of 

 

The 23/24 Tax Year starts on 6th April 2023 – Here’s what you need to make use of.

 

Ahead of the new tax year starting, the government announced the allowances that are available for the 23/24 tax year.

 

Now, whilst many people feel the latest budget announcement didn’t offer much change, there was a huge focus on Pension allowances which is important for you to know.

 

The 3 important changes to Pension allowances that can help you in the 23/24 tax year:

 

Pension Annual Allowance:

 

What it was in the 22/23 tax year

 

Last year, the maximum that could be paid into a Pension each year was £40,000.

 

What it will be for the 23/24 tax year

 

This year, the limit will be increased to £60,000, which is an increase of 50%.

 

This means you can choose to pay more from your business, or from your savings, into your Pension. This will help you build up a larger pension pot that can be used to better support your income in future.

 

Pension Lifetime Allowance:

 

What it was in the 22/23 tax year

 

Last year, the maximum that could be held in your pension throughout your lifetime was limited to £1,073,100. Any amount above this would be taxable up to 55%.

 

What it will be for the 23/24 tax year

 

This year, the Pension Lifetime Allowance has been removed completely meaning no tax charge will apply.

 

This means you can choose to hold more in your pension which can be used to better support your income needs in future. It also gives you an opportunity to use pensions to pass on your wealth to beneficiaries in a controlled way, free from Inheritance Tax.

 

Money Purchase Annual Allowance:

 

What it was in the 22/23 tax year

 

Last year, the maximum that could be paid back into your pension AFTER you have drawn an income, was limited to £4,000.

 

What it will be for the 23/24 tax year

 

This year, the limit will be increased to £10,000, which is an increase of 150%.

 

This means if you have drawn taxable income from your pension previously and you wish to now pay money back in, you can choose to pay more from your employer, business or personal savings.

 

This is good news when it comes to Pensions. 

 

However, as Financial Planners, we wouldn’t be doing our job if we didn’t make you aware of everything.

 

Whilst there will be no taxable upper limit to how much can be held in your pension, the maximum that can be drawn tax-free will remain at £268,275 AND be frozen at this level.

 

This means if you want to access these larger pension pots, more is likely to be subject to income tax.

 

This is why we would always recommend independent, planning-focused advice to best navigate these changes.

 

Other resources you can make use of in the 23/24 tax year

 

Here at 8FP, we will always keep you informed when it comes to your finances. However, we feel that in order to be good financial planners, we need to be doing more than that.

 

This is why we have put together various resources for you to use throughout the 23/24 tax year to help you on your journey to financial freedom.

– Our monthly newsletter

 

Once a month, we send the best finance tips, lifestyle hacks, recommendations and exclusive announcements straight to your inbox.

 

Plus, by signing up, you get access to our library of free resources.

 

You can sign-up here.

– Free downloadable resources

 

Speaking of resources, we are constantly creating new resources to help you on your journey to financial freedom. We have released 5 so far; you get access to all of them when you sign up for our monthly newsletter.

 

Our 5 free downloadable resources are:

 

• The Top 7 Things To Consider When Planning Your Retirement!

• The Ultimate Guide For Saving Money And Feeling Better in 2023!

• The 6 Hacks For Successful Self-Employment!

• 8FP Bucket List

• A Cheatsheet For Your Initial Meeting With A Financial Planner

 

You can find out more about all of our resources here.

– Online and in-person events

 

We have started hosting our own events to help support business owners and those approaching retirement. These events are designed to help you get a better understanding of your finances and how to use them.

 

To find out when our next ones are, join our monthly newsletter.

– Client-only resources

 

We like to do all we can to help everyone on their journey to financial freedom.

 

Our clients will always be our main focus though which is why we have lots happening for them throughout the year, such as:

 

• Quarterly client-only lifestyle events – The idea is that we can try new experiences together. It’s not just their finances we want to take care of, it’s them too. In April, we are doing a pottery workshop, followed by a meal and some drinks.

 

• We use our position to offer different areas of support – Being a financial planner is a privileged position that allows us to discuss various, personal aspects of their life. This means we are able to offer lifestyle coaching alongside financial coaching. 

 

• We have started an ‘Introduction To’ series for our client’s children, grandchildren, nieces and nephews – These are webinars on certain financial topics that we don’t normally learn about unless we choose to engage with a financial planner. The idea here is we can help educate our client’s families and help them feel empowered when it comes to finances.

 

• We’ve made partnerships – When it comes to their wellbeing, we want to make sure that’s a priority too. We’ve partnered with Headspace to offer our ongoing advice clients free access to their full range of meditation and mindfulness tools. 

 

– I’m a Financial Planner – Ask Me Anything!

 

The most recent Financial Conduct Authority (FCA) report states that only 8% of UK adults have access to regular financial advice!

 

This matters. Independent, client-focused advice can change people’s lives. 

 

We have helped clients understand their finances, clear their mortgages and be protected correctly within their business. We also help clients retire earlier and spend more in retirement. 

 

As we continue to grow, we want to do more to help business owners and those approaching retirement, which is where “I’m a Financial Planner – Ask Me Anything!” comes in.

 

This will allow you to book a meeting online or in person and literally ask us anything! This could be as simple as describing how a pension works, decoding a recent pension statement, providing guidance to those who have recently become business owners, to more in-depth questions about retirement and support for existing business owners. 

 

What we promise: No costs, client-focused financial guidance and no obligation to work with us or follow our guidance.

 

These will be held once a month and you can book one here.

 

There you have it. What You Need To Make Use Of in the 23/24 Tax Year

 

As always, if you have any questions, or want more information on anything we’ve talked about, get in touch. We’re here to help.

 

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Why are we called 8 Financial Planning? Find out here.