Valentine’s Day isn’t just about chocolates and roses – it’s also a great reminder to think about your financial future together.
Whether you’re a new couple, have been together for a while, or are preparing for retirement, making wise financial choices now can help ensure your future security. If you’re single, managing your finances is also key to keeping your independence and building a strong foundation.
Making the Most of Tax Benefits as a Couple
If you are married or in a civil partnership, you might benefit from the Marriage Allowance. If one partner earns less than the tax-free personal allowance of £12,570, you can transfer £1,260 of the unused allowance to the other partner. This could reduce their tax bill by up to £252 each year. If both partners earn more, consider joint pension contributions, which can be a smart way to use your allowances and enhance your retirement savings.
Newlyweds & First-Time Homebuyers
If you’re newly married or planning to buy your first home together, remember that family gifts can be more than just thoughtful; they can also help financially. These gifts lower a family member’s estate size for inheritance tax and provide you with extra support when buying a home. Another helpful option is the Lifetime ISA (LISA). If you’re under 40, you can save up to £4,000 a year for your home, and the government will give you a 25% bonus, which can add up to £1,000 in extra money every year.
Keeping on Top of Your Mortgage
If you own a home, it’s essential to manage your mortgage. Be aware of your balance and interest rate, and consider making extra payments to reduce the loan term and lower your interest costs. Regularly reviewing your mortgage helps ensure you have the best deal. I can assist with your overall finances, and if you need detailed mortgage advice, you can talk to one of our experts in the area.
Securing Your Family’s Future
If you have children, consider their future. A Junior ISA (JISA) is a good way to save for university fees or their first car. Friends and family can also help contribute. In addition to saving, ensure you have the proper protection in place, such as life insurance and income protection, to take care of your family in case of unexpected events.
Planning for Retirement – Especially for DINKs
If you and your partner earn an income and don’t have kids (often called DINKs), you have an excellent opportunity to build wealth. With fewer financial obligations, you can maximise your ISA and pension contributions. Consider:
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Increasing your pension contributions to get tax relief.
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Investing in tax-efficient savings and investments.
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Setting clear financial goals, like early retirement, buying property, or traveling the world.
Taking small, smart actions now can lead to more financial freedom.
Cutting Down on Inheritance Tax
If you want to lower the tax on your estate, strategic gifting can be beneficial. Here are some available options:
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An Annual Gift Exemption of £3,000 that is tax-free each year.
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Small gifts of up to £250 per person each tax year.
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Special exemptions for wedding gifts, like up to £5,000 for children.
Using these allowances wisely can help ensure that more of your money goes to your loved ones instead of taxes.
For the Single and Financially Independent
Creating a strong financial safety net is essential if you’re on your own. Here’s what to do:
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Use your ISA and pension allowances to help your money grow.
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Maintain an emergency fund covering 3-6 months of expenses.
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Focus on saving for retirement since you don’t have a partner’s income or pension to rely on.
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Consider getting income protection or critical illness insurance to protect yourself from the unexpected.
