⚠️ Heads up, state pensioners! With state pension payments set to rise by 4.8% next April thanks to the triple lock, it might push some into a higher tax bracket. ⚠️
Chris Ball of Hoxton Wealth is suggesting pensioners take a close look at their taxable income and make the most of their allowances. Each person has a personal tax allowance of £12,570 annually, meaning couples can earn up to £25,140 tax-free together.
Top Tips:
1. **Maximise Tax-Free Allowances**: Ensure you and your spouse make full use of your personal allowances to manage your tax efficiently.
2. **Diversify Income Sources**: Don’t just draw from your pension. Consider using ISAs, which are totally tax-free, including any interest or growth.
3. **Plan to Stay in a Lower Tax Band**: If your income exceeds the personal allowance, you’ll pay 20% tax on it up to £50,270 and 40% on income between £50,271 to £125,140.
Pensioners, keep in mind that most forms of income are taxable, including the state pension, personal and workplace pensions, and any rental income. With a budget announcement coming in November, it’s critical to plan ahead!
🔍 Review finances as a whole—look at all your assets together. Want help navigating? A financial adviser could be your best mate in keeping your contributions as efficient as possible.
Avoid surprises and a potential 40% tax rate—be proactive with your tax strategy! 🌟