People are being advised to look at steps they can take over their savings and investments – including ISAs – with just 24 hours until the Budget.
Chancellor Rachel Reeves will be taking to Parliament tomorrow, October 30, in Labour’s first Budget in more than a decade.
With Sir Keir Starmer issuing warnings of the “pain” it will hold, many Brits have made hasty decisions in the hopes of protecting their finances from any tax rises or policy changes.
While experts are urging families to keep a calm head when weighing up their options, especially with 24 hours until the announcement, one expert has highlighted the changes Brits can take that will likely have the best outcome.
Rachel Wyatt, Wealth Planning expert at Arbuthnot Latham, explained 4 steps you could take to keep your finances on track regardless of what the Chancellor could announce.
Savings and investments
For those looking to secure a financial future, the expert assured saving and investing are still the ideal starting blocks. However, investments are intrinsically linked with risk and it is possible to lose everything you put in.
With major changes expected tomorrow, Rachel recommended investors focus on the horizon five years away rather than right now to “ride out short-term market fluctuations.”
Tax allowances
Countless experts have shared a range of predictions around what taxes could be raised, lowered, scrapped or tightened tomorrow with a variety of claims circling.
Rather than acting on one individual’s predictions, Rachel recommended simply utilising all of the tax allowances currently available to you, in case they are shifted tomorrow. For example, she recommended potentially maxing out your ISA allowance, which is £20,000 per person per tax year.
Additionally, the expert urged couples utilise the allowances they have due to their relationship, for example transferring assets to reduce tax liability, and she suggested “making the most of” your pension tax benefits now.
Insurance
Rachel recommended people look into safeguarding their wealth for the long-term, not just in light of the budget, by getting the appropriate insurances and protections. This includes mortgage protection, life insurance, income protection and critical illness cover.
Mortgage protection is almost like an income protection but specifically guards your mortgage payments, helping to pay them if you become unemployed under certain circumstances. Income protection on the other hand can support your standard of living during unexpected unemployment.
The standard life insurance is pretty self-explanatory but the expert recommended ensuring your policy is up to date and appropriate. Finally, critical illness cover helps to maintain your income if you need to take time off work for treatment, add extra expenses to your cost of living and help you focus on your health and recovery instead of worrying about your finances.
Inheritance tax
Many households are concerned about the potential inheritance tax changes many experts have alluded to, but Rachel recommended starting with the basics which won’t change regardless of the Chancellor’s announcements. This includes ensuring your will is up-to-date and accurate.
She added: “Proactive inheritance tax planning can help you pass on more of your wealth to your heirs by minimising tax liabilities. Consider making use of tax-efficient gifting strategies, such as annual gift allowances, or setting up trusts to manage how your assets are transferred.”
