Newspaper article Evening Gazette (Middlesbrough, England)

What Better Time to Act on Your Finances? Anthony Platts Suggests a Financial Spring Clean

Newspaper article Evening Gazette (Middlesbrough, England)

What Better Time to Act on Your Finances? Anthony Platts Suggests a Financial Spring Clean

Article excerpt

WITH the British economy still fairly fragile many households will be eager to give their finances a spring clean.

For starters, get yourself an action plan. Dig out your financial records, including: savings, bonds, insurance plans, both general and life, pensions and mortgage statements.

If you have debts, use it to repay them. Borrowing rates may be low, but savings rates are lower still. It is more than three years since the Bank of England cut Base Rate to just 0.5% and so it makes sense to repay debt now while rates are at rock bottom.

Spring-cleaning your finances is not just about cutting back - it is also about making the most of what you have. Check whether you had an account that offered a bonus a year ago. If you did, that bonus has probably disappeared and so you may find your rate has fallen off a cliff. If so switch to a better paying account.

Statistically, most savers leave it until the last minute to open an Individual Savings Account (ISA) but it makes financial sense to invest at the beginning of the tax year, not the end. Early bird savers who invest in an ISA at the start of the tax year can be thousands of pounds better off in the long run because of compound effect - getting a return on the return from your original capital.

It makes even more sense this year as new ISA limits mean you have never been able to save as much in the tax-efficient shelter. This tax year you can invest pounds 11,280 in an ISA, with a maximum of pounds 5,640 allowed in cash.

It is the same with pensions. The more you put in the more you get back from the Treasury. High earners paying the top rate 50% tax should maximise their pension contributions to get the 50% relief. They could also take advantage of the 22% tax gap between CGT and income tax to increase capital return from investments.

Some investors might be interested in the new Seed Enterprise Investment Schemes. …

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