Pound to £5k Challenge

Week Fifteen - New Year Takeover

WEEK FIFTEEN

There may not have been fireworks across the world yesterday, but 6 April did mark an important moment in the financial calendar

6 April 2024 marked the start of the 2024-2025 tax year, which brings a large number of changes with it which will likely impact your finances

So this week’s email contains a heavy focus on the key things that you should be thinking about when it comes to looking ahead

THE MAJOR CHANGES TO ISAs

Whether you use your ISA to earn interest on your savings or you are investing for the future inside a Stocks & Shares ISA, there has previously been a certain rigidness that meant you could only have 1 type of each ISA per tax year

From yesterday, this has stopped and now means that you can have various ISAs with different providers in the same tax year and pay into them

TIME TO OPEN YOUR NEW ISA

If you are staying with your current provider or planning to open an ISA with a new one, now is the time to start thinking about getting those new accounts set up and contributions coming into them

With the option to now pay into multiple ISAs per tax year, I think that we will be able to take advantage of a LOT of new sign up offers when it comes to cashback for opening new Stocks & Shares ISAs

I am yet to do my research into these as there is obviously no rush, but this is in my sights for the coming weeks but here are some easy wins right out of the gate:

TAX-FREE EARNINGS CHANGES

We should always look at maximising the amount of income we keep and utilising the tax-free allowances is crucial to this

As of yesterday, we have a number of changes:

• Dividend Allowance reduces to £500 per year (down from £1,000)

• Capital Gains Allowances reduces to £3k per year (down from £6k)

MORE CASH IN YOUR POCKET

We have also seen some changes which will mean a great deal for the majority of workers in this country:

• National Minimum Wage increased to £11.44 per hour for those aged 21 and over

• It also increased to £8.60 to those aged 18-20, increased to £6.40 for under 18s AND apprentices

• From yesterday we also saw national insurance rates drop to 8% from 10% on earnings between £12,570 and £50,270 for employees

• For the self-employed it falls from 8% to 6%

NEW YEAR, NEW YOU?

Whilst you might have opted to start the gym in January, perhaps a New Tax Year Resolution could be to think about investing

Whether you have £1 to start with £100,000, investing has been proven to be one of the best ways to build wealth over the long-term and it has never been more attainable than now

If you haven’t invested before, I have written a free investing guide to help you understand the jargon and think about why it could be good for you!

Capital is at risk when investing