A third of Brits feel unprepared for post-pandemic tax changes
- Only 16 per cent of UK adults have planned ahead for potential tax changes
- 39 per cent of millennials say they are unprepared for future tax changes
- Barclays Wealth expert Anthony Ward shares tips for financial planning
New research from Barclays Wealth reveals the UK’s unpreparedness for tax changes.
The poll of over 2,000 UK adults revealed that a third of adults (30 per cent) feel unprepared for post-pandemic tax changes, rising to just under two fifths (39 per cent) of millennials. Only 16 per cent of UK adults have planned ahead and feel prepared for potential tax changes.
The research reveals that the UK is concerned about the knock-on effect of potential future tax changes to their wealth, saving and retirement goals. A quarter of Brits (23 per cent) are worried that a potential change to Capital Gains Tax would impact their investment goals. Over a third (37 per cent) are worried about future changes to income taxes impacting their saving and investment goals and a quarter (26 per cent) fear that a new wealth tax would impact their financial plans.
Anthony Ward, Head of Wealth Planning at Barclays Wealth, commented: “The findings make it clear that many across the UK are unprepared for the effect of future tax changes on their savings, retirement plans and investments. As the UK battles with increasing national debt due to the pandemic, further tax increases seem likely, making financial planning more important than ever.”
Anthony has also shared his golden rules for financial planning:
- Understand your financial goals - Ask yourself these questions: What would you like to be doing with your life 10 years from now? How might this vision change in 15 or 20 years? How will your income and expenditure change over time? Who else is your wealth for? By painting a picture of your future and how you want to use your wealth you can set goals and establish how much capital you might need to achieve these goals.
- Use your tax allowances - One of the easiest ways to reduce your tax bill is to shelter any returns above your allowances in an Individual Savings Account (ISA). For the 2021-22 tax-year you can put up to £20,000 into an ISA.
- Top up your pension - Retirement may seem a long way off, but it’s worth financially planning for this as soon as you can. You'll get tax relief at the basic rate of 20% on contributions made to personal and workplace pensions. So for every £80 you pay in, the taxman will top it up to £100. If you're a higher or additional rate taxpayer you can claim back up to an additional 20% or 25% through your self-assessment tax return.
- Write a will - Writing a will should be one of the cornerstones of your financial planning. Having one in place can provide valuable peace of mind that any property or assets you own will pass to who you want when you die. It may also enable you to legitimately reduce your IHT liability.
- Consider tax diversification - You can control if you have tax diversification with your wealth or if your tax risk is concentrated to a small number of products or structures. For example, a self-invested personal pension is very tax efficient, however, it would be unwise to hold all your investable assets in any one product or structure. Instead, you can achieve tax diversification by using various different structures thus giving you the flexibility to adapt to changes in tax policy or unknown life events.
- Ends -
Notes to editors:
All data, unless otherwise specified, is taken from 2,000 respondents of a nationally representative sample size conducted by Censuswide in July 2021 – all respondents were 18+.
Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.