The current financial year (for personal tax) comes to an end on April 5th, with the new year starting on April 6th!
That means it’s the time of the year we’re all thinking about tax and ISAs, and all that fun stuff.
So, what are your last minute money saving tips/habits? Let us know below
Just to kick things off - what’s the significance of the end of the financial year, when it comes to ISAs?
ISAs - if at all possible use it or you will lose it, put in as much of your allowance as you can afford , whilst interest rates are low at the moment they won’t always be this low, if you don’t use your allowance you don’t get another chance to put it in in later years and any future benefit is tax free ( at the moment )
It also used to mean the rates went up.
It doesn’t anymore
The last year I worked, the rates actually dropped
This is important - some sites say that there is no need to use your ISA allowance as you can have up to £1k interest tax free. But that is only per year, whilst the ISA is tax free for life (under the current rules). If you save over your lifetime, you will exceed the £1k interest free limit. That’s when you will be glad you filled your ISA.
and if you have a stocks and shares ISA , whilst more risky , you can get 3%+ dividend every year compounded yearly on some relatively safe stocks
ISAs are basically just away for banks to suddenly gain thousands upon thousands of pounds at the start of a tax year
There is a limit as to how much you can invest in an ISA each year tax-free (£20,000). This is reset at the start of the financial year. For the new Lifetime, ISA’s the government will add an extra 25% to your contributions up to a maximum of £1000 per year. This also resets in the new tax year.
The Lifetime ISA has an age restriction. Personally, I signed up for 1 as I was approaching the maximum age so thought I better get 1 and pay some into it. I can always pay more later now that I have it.
Plus with the LISA, this year’s 25% is paid in April, from that point forwards it’s then paid monthly (iirc)?
MoneyBox keeps nudging me to shove more money in to max out this years bonus in April
I thought the bonus was always yearly. But monthly would make more sense for buying purposes.
Skipton have told me I should get the bonus by may 4th and earn interest from day one