Are you prepared for any upcoming tax rises and price increases

27 September 2024

5 minutes

At a glance

• You may think that you’ll only need financial advice if you’re fortunate enough to come into a lot of money, or if you’re a higher rate taxpayer. Especially since the government has already flagged a ‘painful Autumn Budget’ ahead to bridge the £22bn ‘black hole’ it inherited.
• Staying on track with your long-term financial goals is even more challenging if prices rise too, and you need to dig deeper to pay the bills.
• Financial advice helps you control your spending in a short-term squeeze, and make sure you’re set for a more comfortable financial future in the longer term.

Financially, it’s been a difficult few years for households, across all income brackets. As a result, many families focused down on day to day costs, at the expense of longer term investing and pension saving. Now, the government is widely reported to have its sights on raising certain taxes too, particularly those that protect personal assets, and affect our longer-term planning. And although the overall economic forecast is now more positive, the withdrawal of the Winter Fuel Allowance coupled with predicted energy price rises and possible tax rises may mean many families aren’t out of the woods yet.

What role can, and should, financial advice play, in these situations?

You might think that financial advisers can’t do much to help. But it’s during the hard times that expert advice can really come into its own. Both for your peace of mind, and your family’s financial wellbeing.  

Here, we explain how financial planning and expert advice can help you protect your short- and long-term financial security.

What’s the real purpose of financial planning?

In a nutshell, financial planning helps you manage your income and assets in the best way, aiming for you to achieve your life goals and see your family thrive.

You may think that it’s only worth talking to us if you have a specific goal in mind, such as early retirement, or to manage the impact of a big financial event such as
divorce or deciding what to do with a large lump sum.

Although that’s an important part of the role of a financial adviser, the ‘job description’ is much broader and can involve several generations of your family.  A financial adviser can help you plan the best way to manage all aspects of your financial life. This can include:

• Managing your money on a day-to-day basis.
• Making smart use of credit, investments, insurance policies, tax reliefs and financial products to help you ride out rising prices tax efficiently.
• Being financially resilient enough to deal with the unexpected.
• Planning how to leave more of your legacy to your family and pay less Inheritance Tax.
• Protecting your assets for future generations of your family.
• Having someone knowledgeable and non-judgmental to talk to about all aspects of your financial life – in both the good and the bad times.

That final point is, for many, one of the key benefits of having a financial adviser. Taking expert advice from someone you trust can be invaluable – especially in challenging times.  

Talking money when times are tough

Talking about money – especially with other family members – can be a challenge in itself.  Those conversations can escalate to emotional exchanges and arguments. No wonder many of us would rather not bring up the subject of money until we absolutely have to.

We’re known for expert financial advice. But we’re also known for helping people to have better conversations about money. This is especially true when ‘things are tight’. Involving an adviser who’s one step removed and can explain all the options to all parties can help resolve conflict.

Starting a conversation about how you’re going to manage, or how worried you are, is the first step towards feeling better about it.
It’s also the first crucial step to getting your finances back on track.

Making a financial plan for good times and bad

You may already have a ‘financial plan’ – even if you call it a ‘budget ‘rather than a plan – that helps you reach your goals. This could include careful household budgeting, saving into ISAs, monthly contributions to pensions or investments, or insurance policies. All tried-and-tested, prudent strategies.

But, if prices rise along with inflation, as we saw in 2021 and 2022, some of these best-laid plans can fall apart. You might start to feel you can’t keep up with regular pension contributions or savings, when you’ve got to reach deeper into your pocket to meet day to day outgoings. It’s tempting to put those longer-term objectives on hold while you deal with the short term.

Tax regulations around pensions, inheritances or capital gains can change too, and your plan needs to adapt to keep you on track.
We spend every day creating specific, actionable plans to help people achieve this, based on realistic calculations of how much they’ll need. We can tweak and fine-tune these so that people who may feel they cannot afford to save for retirement, for example, can continue to do so.

Helping you to work through financial worries

As well as being a sounding board for your financial concerns, we can accurately assess what impact any changes to tax regulations might have on your longer term plans.  

Whether it’s the best way to protect an important asset that you want to pass on, or whether to sell some shares or property to help fund your retirement, or long term care,
we can provide an accurate forecast – and then work out a specific action plan.  

Once you’ve got an accurate picture of your personal situation in context, the picture might not be as bleak as you think.

That’s when financial advice can become invaluable advice.  

Get in touch with us to start a conversation.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.  You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

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