You’re probably sick of hearing how important it is to save for your retirement. But if you are still working, it usually makes sense to pay the maximum you can afford into your company pension scheme. Not only because of what your employer pays, but also because of the generous tax breaks.
Many employers will at least match your contributions (some even contribute a certain percentage of your salary into a pension, even if you don’t).
Utilise share options
Do you have the opportunity to join a Save-As-You-Earn (SAYE) share options scheme? This could be a good method of allowing you to save towards buying discounted shares in your company without the risk of losing a heap of cash if your company’s share price falls.
SAYE share option schemes basically enable you to put away up to £250 a month over a period of three, five or even seven years. When the scheme matures, you can use the money you have built up to buy shares at the pre-determined discount.
Use your tax allowances
HM Revenue & Customs don’t give you much for free, so make use of what you have. |
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Have you optimised your tax planning by making full use of the various annual reliefs and allowances available? Everyone under the age of 65 (including children) has a personal income allowance of £4,895 in the 2005/06 tax year, as well as an annual capital gains tax allowance of £8,500.
Married couples could make the most of their individual allowances by putting cash deposits and investments in the name of the lower-rate or non-tax-paying spouse rather than keeping them in joint names.
Use your ISA allowance
The deadline for investing in your 2005/06 ISA is 5 April 2006. If you haven’t already used up your ISA allowance, you will need to act soon. The crucial thing to remember is that once the deadline has passed, you can’t retrospectively use this allowance.
Make a Will
This may be a morbid topic, but it is something everyone should think about to ensure the right people benefit from your assets on your death, and also to avoid paying excessive inheritance tax (IHT).
Levels and bases of, and reliefs from, taxation are subject to change. |
