Emma Simon
AUTHOR Emma Simon| CREATED 17 May 2016
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How an adviser helps… you become more tax efficient

Death and taxes might be life’s only certainties but a financial adviser can at least help you to mitigate one of those!

No, they won’t be able to offer you the secret of immortality but they’ll certainly help with making your savings and investments more tax efficient.

Don’t worry. This isn’t about evading tax. It’s simply about making the most of the tax relief and allowances currently available. Unfortunately, most people don’t do this and shell out millions a year unnecessarily.

An adviser will help you make sure you don’t make this mistake, so more of your money is invested for your future and less ends up lining the pockets of the taxman.

Tax needn’t be taxing

Patrick Connolly, a financial planner with Chase de Vere, says one of the first things an adviser will do is ensure clients are making best use of pensions and ISAs. Too many people don’t exploit these basic tax wrappers, he says.

Advisers will do more than simply recommend moving existing savings into an ISA. If your circumstances change, or if the tax rules do, they will look at how this will affect your finances.

“For example, at the moment they will be looking at forthcoming changes to tax on dividends and savings – and proposed changes to pensions,” he says. “If their customers need to take action to avoid paying additional taxes, they will let them know.”

Beyond the basics

It’s not just about where and how you invest your money. An adviser will also ensure that when you sell your investments or take money out of your pension, you don’t get hit with an unexpected tax bill.

For example:

  • Under the new pension rules, people can cash in their pension from the age of 55.
  • But you can only take out a quarter of the fund as a tax-free lump sum.
  • If you take the rest in one payment it could push you up into the next income-tax bracket, meaning you’ll lose up to 40% or 45% of these savings. Hardly the sort of news to help maintain a youthful glow.

An adviser can suggest ways to stagger these payments to reduce your tax bill. They can also offer advice on planning your inheritance, so more of your hard-earned savings go to your children or grandchildren and less gets swallowed up in death duties. Find an adviser using our search tool.


Emma Simon

financial journalist freelance

Emma Simon is an award-winning consumer journalist with 18 years’ experience writing about money, property, travel and business. She is a former personal finance editor of the Sunday Telegraph, deputy money editor of the Daily Telegraph and personal finance correspondent at the Press Association. She writes for a number of national newspapers, including the Sunday Times, Guardian Online and Mail on Sunday. She has recently written a guide to retirement for the Rough Guide series, and has put together reports and publications for major companies and consumer organisations including Alliance Trust, Fidelity and the British Bankers’ Association.