Do you know how you can use your savings to reduce your personal tax bill? Find out more by reading below.
What should I do with my savings?
You should be reviewing where you put your savings because it is important to measure how they are performing to maximize your tax-efficiency.
Personal savings allowance
You can earn up to £1,000 of interest each year without paying any tax from your personal savings.
If you are a higher-rate taxpayer then this amount is reduced to £500, but the amount is unavailable for additional-rate taxpayers.
The more you earn from other income such as wages or pension, the less your starting rate for savings will be.
What are ISAs?
You should know that another saving option on your savings are tax-free up to £20,000.
There are many different types of ISA such as:
• Stocks and shares
• Innovative finance ISA’s
• Lifetime ISA
• Junior ISA’s for under 18’s.
There is the option to put all of your savings in one type of ISA or it is possible to split them across several items.
You should know that some products only allow you to contribute a certain maximum annual amount.
You should make sure that you priorities your financial planning with Brexit approaching, if you need any advice then please get in touch and we can help you.
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