Your Year-End Financial Planning: 5 things to consider over the festive period

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A lot can happen in 12 months and, if anything, the last two years have taught us to plan for the unexpected! Like everything in life – financial plans must be revisited and updated. Preparation is the key to financial success and the end of the year is a good time for a budget reset and to establish new goals.

Although the tax year end isn’t yet upon us, there are always opportunities to make valuable changes to your existing arrangements. Here are five considerations to help you move into 2022 feeling confident about your financial well-being:

Review your expenditure

It is essential to regularly evaluate your expenditure – a great exercise for helping spot areas where you can save money! Review your 2021 spending and then create a 2022 spending budget.  

If you are already drawing down from your pension, assess how these withdrawals have impacted your fund – are you at risk of exhausting your pot too soon? The Income Drawdown calculator on the Tideway website can model various scenarios to help visualise how long your fund is projected to last ( If you are in any doubt please speak to your adviser.

With three months remaining in the current tax year, it is important to think ahead and incorporate new tax scenarios within your planning, as these may impact your take home ‘pay’ from April 2022.

As part of measures to fund the costs of social care and the NHS, there will be a 1.25% increase to dividend tax rates from April 2022. These changes will sit alongside the raise on National Insurance Contributions (NICs), also by 1.25%, by way of a new Health and Social Care Levy.

Here are a few 2022/23 tax allowances to be aware of:

      • Basic Personal Income Tax Allowance £12,570 (Reduced by £1 for every £2 of income over £100,000)

      • Personal Savings Allowance £1,000 (£500 for higher rate and £nil for additional rate taxpayers).

      • The £2,000 Dividend allowance will continue to be available and dividends received by ISA’sand pensions will not be subject to further tax.

     Monitor your portfolio positioning

    In summary, this is a matter of ensuring that your portfolio still reflects your attitude to risk, investment time horizon, and your specific goals.

    Overall, it has been a strong year in the financial markets, although future interest rates and inflation expectations remain the focus of many.

    Amid such unknowns, together with renewed pandemic uncertainty, it’s important to work with your adviser to confirm your portfolio exposure and investment strategy aligns with your specific plans.

     Boost your pension and investments

    The more income tax you pay, the greater the tax relief on pension contributions. If you’re a basic rate taxpayer, for every £80 you pay in, the taxman will top it up to £100. If you’re a higher or additional rate taxpayer you can claim back up to an additional 20%, or 25% on top of the basic rate tax relief, via your tax return.

    For most people, tax relief is available on pension contributions of up to £40,000 per tax year, or 100% of your income, whichever is lower. The ability to carry forward allowances from three previous tax years may also be available.

    Importantly, the ISA allowance is ‘use-it-or-lose-it’– you can’t go back and make use of unused allowances from previous tax years. Do consider ‘wrapping up’ your savings, even within a cash arrangement to ensure the 2021/22 allowance is not lost – this keeps the ISA door open to transfer into investment plans in the future.

     Review your estate plans

    Making the right choices over how your estate is handled can help reduce the overall Inheritance Tax bill due when you pass away. This might involve making lifetime gifts while you are still alive, placing certain assets into a trust, as well as various other options.

    While Christmas may be a time to consider larger taxable gifts, remember the ‘freebies’ as well:

        • The annual exclusion gift limit remains at £3,000 per person.

        • Unlimited small gifts of up to £250 per person

        • Wedding gifts are tax free (limitations apply)

        • Gifts out of normal expenditure

        • Gifts to charities and political parties

      For more information on Inheritance Tax planning, please visit :

       5. Complete Important Documents

      There’s more to estate planning than simply writing a Will; your assets and wishes are likely to change over time, particularly as you move into older age. Updating any written requests and personal inventories is key to ensuring that your assets pass to the people you want.

      The Executor of your estate will be in charge of administering your will when you die. It is important that you select an individual who you trust and is responsible to make decisions. This also extends to decisions on Trustees, personal representatives and Lasting Powers of Attorney (POA).

      If you lose mental capacity without a POA in place, it will be necessary for your family to apply to the Court of Protection to have a deputy appointed to deal with everyday financial matters. This is a slow and very expensive process, costing thousands of pounds. Having a POA in place ensures that someone of your choice makes these decisions for you.

      It is also important to review your beneficiary designations, particularly if your family circumstances have changed. For example, it’s all too common to leave an ex-spouse assigned accidentally!

      This includes nominations on your pension savings, which sit outside of your estate and not covered within your Will. It’s important to review all your requests holistically an ensure they are coordinated. 

      Not sure where to start?

      Tideway can work with you to help set realistic goals as well as staying on track to achieve them. Please contact your Wealth Manger to discuss any of the issues raised above further.

      • The content of this document is for information purposes only and should not be construed as financial advice
      • Please be aware that the value of investments, and the income you may receive from them, cannot be guaranteed and may fall as well as rise
      • We always recommend that you seek professional regulated financial advice before investing