UK: What is different about the turn of the tax year in 2021?

LONDON (Capital Markets in Africa) – Tax year end in 2021 comes after a year like no other. Financially, every household will have been impacted differently. While some have experienced a loss in income, many will have decreased their outgoings and then either reduced personal debt or increased savings. In both scenarios, it is worth noting that the financial planning objectives might have changed. Longer-term plans put in place more than a year ago are likely to have been based on very different circumstances to those that people find themselves in today, factoring in markedly different assumptions.

Where financial planning meets retirement and later life, there have been some major changes to the landscape. Many people have been forced to consider delaying their much planned-for retirement or changing their target investment returns to match their desired lifestyle. Might an investor’s appetite for risk, and their willingness to accept volatility, have changed? Are clients’ investments flexible enough to access savings across later life or in a sudden emergency? Do they require any additional assistance in areas directly affected by COVID, such as thinking about planning for the possibility of long-term care? Is there a need to now give intergenerational wealth planning more impetus with people’s heightened awareness of mortality?

All of these questions may well have a different answer to this time last year and indeed we can always expect further change. However, this month’s budget froze a number of personal tax rates and thresholds for the next five years. After a year of uncertainty and understandable caution, as tax year end approaches, advisers could be minded to use this apparent stability to help their clients take proactive financial planning steps that they might have been putting off.

By Matt Dickens, Senior Business Development Director at Ingenious