In a declining and volatile market, whether you are running a business or concerned about your own individual finances, it is important to “live first but plan for tomorrow”.
That’s the advice from Steve McKnight of Aberdeen-based wealth management firm, McKnight Associates Wealth Management.
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The end of the tax year on April 5 has been well documented, but as we enter the start of a new financial year this month it is even more important to plan ahead and make use of allowances. Many people and businesses wait until the last minute in the run-up to year-end, but as you will discover from the experts at McKnight Associates, taking time to plan carefully could pay off, literally.
Financial advice is a key tool to help you achieve your goals in life – as you will find out below. Or at least, that’s the approach from McKnight Associates, a Principal Partner Practice of St. James’s Place Wealth Management that’s been helping its individual and business clients make the most of their money for nearly three decades.
With wealth management advice you can put the wheels in motion on your dream life to help you have the money you’ll need to get there – and you might just get there quicker.
Below we hear from the experts at McKnight Associates about the five ways we can ensure we get the new tax year off to the right start…
1. Re-assess where you are – and invest
Principal partner Steve McKnight advised: “Once you have recalculated your expenditure for the year, taking energy costs and inflation rising, then you can look at what to do with the surplus. If you invest in an ISA regularly, then you take advantage of pound-cost averaging. Are you making best use of tax allowances in terms of capital gains?”
2. Create a roadmap for the future
“Hopefully this year people are planning for things like holidays – for me it’s about living first but planning for tomorrow. So the start of the new tax year this year is a good time to review your income and expenditure, analyse where you are and create a road map for the future. Seek wealth management advice – at least 10 years before your retire – and take that on board,” added Steve McKnight.
3. Try not to avoid the falls – as you may miss the gains
“Be fearful when others are greedy and be greedy only when others are fearful,” said Warren Buffett, and financial consultant Zyg Krukowski at McKnight Associates agrees.
Zyg explained: “In equity markets we are often told that the best time to buy is at times of greatest pessimism and uncertainty, yet there is always the temptation to wait for things to get better. Historically some of the best returns have been achieved by investing when the decision feels most difficult, but this will not always be the case.
“It’s only natural to be concerned about short-term fluctuations in stock markets. The only certainty is that it is impossible to be sure how the markets will move. The sharpest falls and the largest gains are often concentrated into short periods of time. If you try to time the market to avoid the falls, you’re highly likely to miss the gains.”
4. Make the most of your ISA
Gary MacFarlane, partner at McKnight Associates, says we should give our ISAs the best chance of success, he explained: “Generally, the longer we leave our money invested, the more potential you have of achieving better returns. So, why are we often inclined to leave it until the end of the tax year to make use of our annual ISA allowance?”
5. Remember pensions tax relief – and carry over
With the dividends tax rising from 7.5% to 8.75%, it will have an impact on personal and company pensions.
But McKnight Associate’s Sean Mills revealed there are benefits: “Employer contributions to pensions can be used as a method for extraction of profits from your limited company. They are deemed as an allowable business expense.
“Meanwhile, personal contributions are allowed per annum up to £40,000, or 100% of your UK Relevant Earnings, whichever is lowest. You are able to carry back any unused allowance from the three previous tax years. Therefore there is the potential to contribute £160,000 to your retirement account and receive tax relief on this contribution at your marginal rate.”
Need advice?
So as the new financial year gets under way, the above advice should provide guidance on how to make the most of your money and the 12 months ahead. Financial advice is not restricted to wealthy businessowners or those with a massive income or pension, it is for everyone and anyone who wants to make the most of their money – and for those who do, McKnight Associates is available.
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. Past performance is not indicative of future performance.
The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends generally on individual circumstances.
Any tax relief over the basic rate is claimed via your annual tax return.
If you, your family or your business are seeking financial advice, then contact McKnight Associates Wealth Management. The firm has online resources, weekly e-briefing and a host of useful information on its website.
McKnight Associates Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website at www.sjp.co.uk/ products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.