Spring into Action and Save Tax

It pays to look ahead when making provision for your retirement and this is the time year when we think about tax.


The tax year comes to a close at the end of the first quarter of 2020 and, although we haven’t yet seen the back of 2019, you should be thinking about this now. So, be sure to get in touch with your Reeves client account manager before the end of the tax year. We have a hotlist of people we’re contacting to make sure they make the best use of their allowances. Speak to your account manager to ensure you’re included.

At Reeves, we will be looking at ways in which we can use everybody’s allowances to their maximum benefit. This applies to pension contributions, ISA contributions, capital gains tax and income tax.

At the time of writing, we’re in the middle of a general election campaign, but, while there is political uncertainty, whatever the outcome of the election, there will still be tax allowances available for people to use. It’s our job to make sure you’re paying as little tax as possible and maximising the amount you get back from the taxman. Last year, for clients who took advantage of our tax planning services, we saved, on average, each one £4,500 in tax*.

We’ve pointed out before that there are seven ways to pay less tax.
  • Pay more into your pension to reduce your taxable income. This is the easiest way to pay less tax. Contributions made into your pension receive income tax relief at your marginal rate. While interest rates are so low, it’s well worth investing any spare cash into pension funds to take advantage of the 25% boost (if you’re a lower rate tax payer) that the taxman will give your savings, a return you’ll be highly unlikely to earn anywhere else.
  • Make a salary sacrifice agreement with your employer. This may allow you to pay more into your pension without reducing your take home salary at all.
  • Withdraw 25% of your pension pot as a tax free lump sum.
    Recycle your tax free lump sum back into a new pension. There are strict rules on recycling, so you’ll need to take advice on this.
  • Maximise your use of personal allowances and don’t forget your spouse’s personal allowances.
  • Start pensions for your children or grandchildren. You can pay £2,880 into each every year and the government will apply tax relief to raise this to £3,600 and the transfers won’t be subject to inheritance tax, so long as they are made at least seven years before your own death.

Not all allowances can be carried forward, so use them while you can. Also, some allowances that you may have been able to carry forward, may be about to expire, so make sure you don’t lose those. Remember, if you want to minimise your tax bill and maximise your savings, get in touch with your client adviser.

Also in the first quarter, for every client who is retired and has a drawdown policy, we’ll be conducting the usual twice yearly review (the second being in quarter 3), looking at their income needs and where the income will come from. At the same time, we also review the products that we manage and assess whether they’re still suitable for each client and judge whether their investments are still on track to help them achieve their retirement goals. This helps to focus clients on their retirement plan and gives them a view of their income over the coming years. It helps us to keep up to date with clients’ changing circumstances and perhaps identify other areas where we can help.

In the meantime – have a merry Christmas and a happy and prosperous New Year.

*Based on average saving from clients that requested end of tax year advice.
The financial conduct authority does not regulate tax and estate planning.

Reeves Independent offers a free review of your pension situation. Click the button below to get started.


These articles are for information only. These articles are based on specific clients and their situation may be different from yours. No advice should be conferred from the articles. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.

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