A recent report (Barclays, 2024) estimates 13

The beginning of the new tax year is the perfect opportunity to take control of your finances and set the tone for the months ahead. 

By implementing a thoughtful financial plan, you can make the most of your money, achieve your goals and ensure financial peace of mind. Here are just a few key considerations to help you build a solid plan:

Maximise tax-efficient opportunities

The new tax year brings fresh allowances and reliefs potentially available to reduce your tax liability:

• Use your ISA allowance – Save or invest up to £20,000 (the current annual limit) in an Individual Savings Account (ISA) to grow funds tax-free
• Pension contributions – Maximise pension contributions to benefit from tax relief as well as potentially lowering your taxable income
• Capital Gains Tax planning – Make use of your annual exemption to avoid unnecessary tax liabilities. 

Build a solid financial plan for a stronger financial future

Why not take time to reset and refocus on your financial goals? With clear objectives, smart tax planning and disciplined financial habits, you can start the new tax year strong and lay the foundation for long-term financial success.

*The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

million UK adults are sitting on £430bn

of cash savings. The report, titled ‘Empowering retail savers to engage with investing’ suggests savers are “missing out” on earning better returns over the long term.

The research highlights three reasons why savers are reluctant to invest:

•  Too many options: One in five (21%) people with savings don’t think they have the knowledge to choose what to invest in, while 24% think investing is too complicated
• Not confident with comparing investments: Nearly three quarters (74%) need help to determine which type of investment is suitable for them, while two-thirds (63%) want assistance in comparing investment products
• Too worried about risk: Almost half (43%) of savers think investing is too risky and could mean they “lose all their money.”

What is the long-term cost of saving instead of investing?

Financial software firm Oxford Risk believes choosing saving over investing carries a high cost, with savers missing out on up to 5% a year in lost returns. The firm is also concerned that a growing number of UK adults are choosing to ‘sit on the sidelines’ by keeping their money in cash.

What can be done to close the investing gap?

The Financial Conduct Authority (FCA) has made addressing cash holdings a strategic priority and Oxford Risk has urged, ‘More needs to be done beyond just raising awareness of the issue to drive the vital change in investor behaviour.’ 

Holding a proportion of your wealth in cash is worthwhile for liquidity, emergencies and short-term needs. However, history has shown that over the long term, investing yields higher returns than holding cash, although not guaranteed. The key is balance: keep enough cash for security but invest the rest to build wealth over time. Diversification to spread the risk is important.

*The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.