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Your money-saving strategy for the new tax year – why you shouldn't wait to maximise your allowances

New tax year initiative concept
Being a frontrunner comes with great advantages...

Welcome to the new tax year, which commenced on the 6th of April. While this fiscal period won’t end until spring next year, taking early initiative can bring great advantages.

Sensible tax planning can help to reduce the amount of tax you pay and safeguard your wealth for the future.

It's likewise important to ensure you are in the best place possible when it comes to your investments and pensions.

So, as we get settled into the 2024/25 tax year, now is the perfect time to reassess your financial arrangements. Below, we’ll break down the key new tax year strategies and steps you can take today which could help you to optimise your financial outcomes in the short and long-term.

Let’s get started…

Step One: Investment planning and making regular contributions


With many competing expenses, setting money aside to save or invest can be challenging. Drawing up a budget and establishing a regular pattern of contributions can help you to avoid frivolous expenditures and to keep moving towards your long-term savings and investment goals.

Did you know that investing earlier in any given tax year can offer several benefits?


For example…

💡 It gives your investments more time to grow tax-free or tax-deferred, benefiting from compounded returns

💡 There is time to spread your contributions throughout the tax year, making budgeting easier

💡 It can help you avoid a last-minute rush to make contributions before the end of the tax year, which can lead to missed opportunities or mistakes.


Step Two: Pension tax breaks – know your 2024/25 tax year entitlements


Using your yearly tax allowances, such as your ISA allowance, can help you to avoid paying unnecessary tax. If you’re a UK taxpayer, in the 2024/25 tax year you can get tax relief on pension contributions of up to 100% of your earnings or a £60,000 annual allowance, whichever is lower. In simple terms, the tax relief you receive on pensions means some of your money that would have gone to the government as tax goes into your pension instead.


The higher inflation is, the more any savings you hold are at risk of losing their value over time, you could consider investing additional lump sums. Redirecting any savings into your pension may mean you will be able to enjoy more of the good things in life when the time comes to retire.


Alternatively, some of us have seen our income reduce during the last couple of years and have seen increased expenditure due to rises in the cost of living, which has affected our existing financial commitments. For example, having to reduce contributions to our pensions. If you are self-employed, your income will almost certainly vary from year to year, sometimes reducing the amounts you are able to contribute to your pension and your allowable tax reliefs.


However, whether you find yourself with more, or less to save, you can take advantage of any unused allowance from the previous three tax years, subject to allowances and limits. Commonly referred to as ‘carry forward' relief, this allows unused annual pension allowances from previous tax years to be carried forward and added to the annual allowance for the current tax year.

(Questions about carry forward? Speak with one of our advisers.)


Step Three: Understand the latest tax reliefs and allowances


Recently, a number of changes to fiscal policy have been introduced which could impact UK investors. While some may not be relevant to you, others may present an opportunity to grow your financial prospects or prompt you to adjust your current arrangements. Some notable changes which have come into effect include:

National Insurance Rates


The rate of National insurance was cut at the start of the year. Since 6 January, millions of employees have been paying 10% on their earnings between £12,571 and £50,270. They previously paid 12%. From 6th April 2024, this was cut further from 10% to 8%.


Therefore, the average saving for an individual earning £35,000 p.a. is around £900 per year.


Child benefit payments


Also with the new tax year, a host of new Child Benefit payment rules came into effect. Under this fresh set of regulations, a parent earning £75,000 could gain £16,000 in Child Benefit payments by increasing their pension contributions by £400/month.

This means that by increasing their pension contributions, parents could benefit in three ways:

💡  Receiving more in child benefit payments

💡     Better readiness for eventual retirement

💡 Taking advantage of the favourable tax relief available

If you wish to explore the ways that you and your family could optimally benefit from tax allowances and reliefs, please contact our team.

Dividend & Capital Gains Tax (CGT)


First announced in the autumn budget of 2022, dividend and CGT allowances available to individuals have continued to halve year on year, as below:




Current Tax Year



CGT Allowance




Dividend Allowance





In addition to this, the Chancellor announced a cut in the top tax rate for CGT, which applies to the disposals of residential property. From 6 April 2024, the higher rate will drop from 28% to 24%. The 18% rate for gains on residential property disposals that fall within the basic rate band will remain unchanged.


Lifetime Allowance (LTA)

It was announced in 2023 that LTA tax charges has been removed as of 6th April this year. Originally, if a person’s total pension provision exceeded £1,073,100 they would have been liable to LTA tax charges at a rate of 25% or 55% under specific circumstances or events.


Now, tax free cash is capped at 25% of £1,073,100 but LTA tax charges have been removed.


There are, however, considerations surrounding two new allowances: Lump Sum Allowance and Lump Sum and Death Benefit Allowance. Given the complexity inherent to this area of financial planning, it is advisable to consult with a professional financial adviser before making any financial decisions.


If you feel you may be affected by any of the above changes and would like to speak with an adviser, please contact our team on 0161 764 9944 to arrange a meeting.




Tax treatment varies according to individual circumstances and is subject to change. Tax planning is not regulated by the Financial Conduct Authority.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited 29.5.24



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