Protect your pennies from the tax man:

Fed up of seeing Mr Taxman plunder your wage each month? Us too!
But all is not lost – there are a few things you can do to claw that money back and lay the groundwork for sound financial and tax planning.

Make the most of your income tax allowance and tax bands.
The personal allowance increased to £11,000 this year, and will increase again from April 6th 2017 to £11,500. That’s £500 extra per person protected from Mr Taxman! If you are married and hubby/wifey pays less tax than you and you have savings that provide you with an income, move the savings into their name to make full use of their allowances, thus saving money!

Invest in an ISA
Use an ISA to protect your savings and investments from tax. With no income or capital gains tax on cash held in ISAs, they are one of the most tax efficient ways to save. You can unvest up to £15,240 into an ISA this tax year. From April 6th, this increases to £20,000.

The NEW personal savings Allowance
Arrange your taxable interest bearing savings to make the most of this one (including using ISAs).
The new personal savings allowance means that the first £1000 of savings interest is tax free for basic rate tax payers (£500 for higher rate tax payers) –
And your bank will now you pay you interest without tax deducted.
You will have to pay tax on interest above the personal savings allowance – so arrange things accordingly!

Use your pension allowance wisely!
The tax relief on pension savings boosts your funds enormously – pension contributions get up to 45% tax relief.
Let’s say you invest £1000 into a personal pension. This fund benefits from £250 basic tax rate relief added automatically. Higher rate tax payers can claim up to a further £250.
Assuming you are under 75 and not drawing from your pension, generally you can contribute as much as you earn (capped at £40,000) to pensions each tax year!

Pension for non earning hubby/wifey
The government are currently feeling generous and this a great way to maximise your personal allowance.
Non earners can contribute £2880 to a pension, and the government will add £720 even if the person pays no tax.
From the age of 55, 25% of the fund can then be taken out as tax free cash, with the balance being taxable.
Keep further withdrawals within your personal allowance each year however – and these will also be tax free.

Love, Miss Piggy Bank xx

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