Managing your money on a day-to-day basis can be challenging enough. Finding time to take a longer view can be next to impossible. But April 5^th and the new financial year are coming up fast. To make 2024/25 a prosperous new financial year, you must start preparing now.

NMTBP knows the importance of financial preparation. Here are nine important steps to consider now.

Review your budget and financial goals

You need to look back before you can look forward. Assess your current financial situation and review your budget.  The effects of inflation over the past year mean you need to look at your income, expenses, and savings. Can you cut back anywhere? It’s sensible to have a regular surplus at the end of each month to let you build up an emergency fund and start making savings or investments

Once you have a clear picture of your current finances, you can start looking at setting realistic financial goals for the upcoming year, whether it’s saving for a major purchase, paying off debt, or investing for the future

Make the most of your ISA allowance

You can currently put up to £20,000 a year in an ISA, and, once it’s in there, it’s completely free of income and capital gains tax. Whilst you may well have paid income tax on the earnings you put into your ISA, there will be no further tax to pay when you come to access your money. This tax-free environment makes Stocks and Shares ISAs an excellent vehicle when growing your wealt

Make pension contributions

Pensions might sound boring to most people, but they are actually one of the most phenomenal vehicles for growing your money. If your contributions are made via salary sacrifice then your pension contributions will be gross of income tax and National Insurance. If you’re a higher-rate taxpayer, the potential tax saving is equivalent to a 72% return on your net contribution just by putting the money into a pension. If you want to make additional contributions before the end of the tax year, you can either do this via your employer or simply contact the pension provider directly and make an ad hoc contribution

Boost yor state pension by filling gaps in your National Insurance record

You can usually pay voluntary NI contributions for the past six years to fill gaps in your NI record in order to boost the qualifying years that are used to calculate your state pension entitlement. The deadline is 5 April each year

Voluntary contributions won’t always increase your State Pension entitlement, but for those who are eligible – and depending on circumstances – a modest outlay could help top up your State Pension payments. Visit www.gov.uk to find out more or seek advice from the Future Pension Centre (if you’re below State Pension age) or the Pension Service (if you’ve reached State Pension age)

Use annual exemptions

Everyone can realise capital gains up to the annual exepmtion tax-free – £6,000 in 2023/24. The exemption is available to every individual, including minors, but any exemption unused in a year can’t be carried forward. Married couples and civil partners can transfer assets between themselves on a no gai/no loss basis and such transfers should be considered to ensure the annual exemption is used fully

It is important to note that the annual exemption will be reduced from £12,300 to £6,000 from6 April 2023 and further reduced to £3,000 from 6 April 2024

Match capital gains and losses to reduce your tax bill

If you hold stocks and shares outside an ISA, selling them can trigger capital gains: where your total gains exceed the annual exemption (see above) you will pay tax on them. If you also have investments standing at a loss, selling the asset allows you to set that loss against any gains that are taxable – either in 2022/23 or in later years (provided you claim it through your tax return). So matching gains and losses can cut your overall tax bill

If you think the loss-making shares had long term potential, you can’t buy back them back immediately (a 30 day matching rule applies) but you can buy alternative shares in companies in the same sector, or buy them through your ISA or your spouse could invest in them

Make gifts to use annual IHT allowances

Reducing the value of the part of your estate that is above the nil rate band (£325,000) will reduce the IHT payable when you die

Consider giving assets you don’t need to other family members now. Gifts to a spouse or civil partner to enable them to use up their nil rate band are tax-free and gifts to other family members can also be tax-efficient over time

Most lifetime gifts to individuals that are not covered by a lifetime exemption don’t immediately trigger IHT and become totally exempt if you survive for seven years. Whilst the gift remains in your estate, the rate of IHT applied to it on death (40%) reduces each year depending on how many years you survive after making the gift

You can give away up to £3,000 worth of gifts a year plus £250 to as many individuals as you like in a year and £5,000 to your children on their marriage

Check your tax code

Your tax code affects not just income tax, but every aspect of your relationship with HMRC – and it can be wrong. It makes sense to check your tax code each year to ensure it’s correct

Check your insurance protection

Rising prices mean that your insurance protection, including life insurance, health insurance, and home insurance, may no longer be adequate. Considering updating your policies and shopping around for more suitable deals to ensure you’re getting adequate cover