new tax year

With the 2022/23 tax year here, you have new, fresh tax allowances to make the most of. This tax year, you can invest:

  • £20,000 in an ISA
  • £9,000 in a Junior ISA
  • Up to £40,000 in a pension (or potentially more using pension carry forward!)

Why use your 2022/23 tax allowances early?

When you invest at the start of the tax year, your money has more time to grow tax-free, which means you could end up with more in the long run. This applies to investments in stocks and shares ISAs, junior stocks and shares ISAs and, of course, pensions, where – depending on your age – your money is squirreled away for a very long time.

Investments benefit from time because of the power of compounding, which sees investment gains earning more gains over time, causing a snowballing effect.  

Watch our video to learn more about compounding. 

Lump sum versus regular saving

If you haven’t got a lump sum of money to invest at the start of the tax year or would rather not invest in one go, have you considered setting up a regular savings plan? Investing monthly has many benefits – in particular, it’ll help you get into the savings habit and drip-feeding money into investments can help you ride out the ups and downs of markets.

Find out more about regular saving.

Need help with your investments? How about a free coaching session?

If the start of the tax year has inspired you to ace your investments, did you know we offer free coaching from qualified professionals? Whether you’re a rookie investor or a seasoned pro, our coaches can give you tips for your investment strategy at no cost to you.

Book now.

And finally, don’t forget the £12,300 capital gains tax allowance

This allowance is often referred to as the forgotten allowance but it can be very useful if you are selling (or giving away) certain assets where there is capital gains tax to pay such as investments or jewellery. Everyone has an annual exempt amount, which is currently £12,300, and using this can be a beneficial way to create tax-free returns.

https://www.bestinvest.co.uk/news/the-new-tax-year-is-here-make-the-most-of-your-202223-tax-allowances

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