Time to get your financial house in order

Scotsman Money asked a range of experts for their views on making the most of your money.

Valerie Wilson, chartered financial planner at PWM Scotland, sets out some key points to consider, saying: “ISA allowances renew and this is the final tax year under-65s will be able to contribute £20,000 to a Cash ISA. From the 2027/28 tax year, this will be reduced to £12,000. Any interest, dividends, or capital gains are tax free within an ISA, both while it is invested and when you make withdrawals.

“If you are between the ages of18 and 40, you can also open a Lifetime ISA which can be contributed to until age 50. The allowance for this is £4,000 and you receive a 25 per cent government bonus on top. It is important to remember that this £4,000 counts towards your overall ISA allowance. Access is more restricted than other ISAs – you can access when buying your first home or from age 60.”

Lucinda Frostick, director of Remember A Charity, comments: “The end of the tax year is a great opportunity for people to reflect on their wider financial planning and get their affairs in order – and that often includes writing or updating a will.

“People often assume that leaving a gift to charity in their will is only for those with significant wealth, but that’s not the case. In fact, almost one in three adults over 40 who have written a will now choose to include a charitable gift.”

According to Richard Watkins, certified financial planner at Continuum Financial Services, arranging financial affairs in a prudent and tax-efficient way, while having enough to fund your lifestyle and plan for the future, is a tricky task requiring a lot of planning and thought.

He says: “It’s easy to get lost in the fiscal maze. Fiscal drag is snaring more people into tax – Income, Capital Gains, and IHT – so the fight is on to preserve your wealth.”

Some areas he recommends people consider are maximising personal pension and ISA contributions; funding pensions for grandchildren and/or children – £1,800 a year will get topped up by the government to £3,600; Venture Capital Trust investment, and using the Capital Gains Tax annual exemption of £3,000.

Tony McPhee, senior partner at Foster Denovo, says: “Pensions moving into the IHT net from next April means now is a good opportunity to review your estate plans. Spending a bit more time to understand how unused pensions will be treated will give you a more rounded picture of where you stand with IHT.”

Steve Watson, director at NatWest Cushon, observes one way to boost a pension is by using salary sacrifice, and says: “If your income is near £100,000, you may start to lose your personal allowance, creating an effective 60 per cent tax band. Increasing pension contributions via salary sacrifice can reduce your taxable income, potentially restoring your allowance while also saving on National Insurance.”

Steve Rowntree, chartered financial planner, Amber River Johnston Financial, concludes: “The start of a new tax year can be a useful prompt to take stock of your finances. Taking time each year to review savings, investments and retirement planning can help ensure long-term financial plans remain on track.

“This is where a financial planner can add real value, as they can model different scenarios using long-term projections based on reasonable assumptions to check whether the current approach is likely to deliver the desired outcomes.”

Chris Henderson, save and pay director at Tesco Bank, on the money admin to undertake now for a financially-savvy 2026/7:

Catch up with your budget

A regular review is a great idea to get a grip on your finances. Why not start with a quarterly check-in, to help you see if you’re still on track to reach your goals, or if you need to adjust anything. You may realise your finances have improved and can increase the amount you save. Alternatively, it might alert you to excess spending which needs to be cut back.

Put goals in place

Having a wish list is a great place to start when it comes to saving money. What do you want to achieve, by when, and how much will it cost? Being able to put a figure on a savings goal gives you a clear picture of what you need to do to achieve it.

Make the most of your tax-free allowance Shop around for the best rates to make your savings work their hardest. Review your bills and subscriptions Automated payments and direct debits let you set and forget your outgoings. They are a great way to ensure bills get paid, but they also mean you can lose track of the services you’re paying for.

Remember to look through your bank statements for any recurring payments and ask yourself whether you still need them or – crucially –if they have become more expensive!

Pay yourself first

A common, and successful, budgeting habit is the importance of paying yourself first. This means that you prioritise important payments such as bills, mortgage/rent, any outstanding debt, and essentials like food. After this, you then pay yourself by investing into a savings product to help reach your financial goals.

Clare Moffat, pensions and tax expert at Royal London, has put together a handy check list for people to consider, particularly at this time of year:

Spend a little time doing life admin

Spending just a little time reviewing your finances can result in significant long-term savings and peace of mind.

Tax band increases could mean you stay within its limits

Effective from 6 April, 2026, the Scottish starter rate tax band (19 per cent) will be extended. Previously, this band applied to income between £12,571 and £15,397. From the new tax year, it will cover earnings from £12,571 up to £16,537. The basic rate band of 20 per cent is also being widened. Instead of covering income between £15,398 and £27,491, the band will now apply to earnings from £16,538 to £29,526. The intermediate rate (21 per cent) will be applied to income starting at £29,527. For example, if you earn £30,527, only the £1,000 above £29,527 will be taxed at 21 per cent. It is important to remember you only pay the higher rate of tax on the portion of your income that exceeds each tax band.

Can your pension help you save tax?

This is a time of year when you may get a pay rise, and that can move you into a new tax band. But remember that your pension is taken off your pay before it is taxed. So, you might think you will be a higher-rate taxpayer and paying 42 per cent tax, but actually your pension contributions mean you are still an intermediate taxpayer.

ISA and pension allowances

If you have been using the full amount of your ISA and pension allowances then the start of a new tax year means that you have new allowances to use.

IHT

You might be gifting money to family or friends every year using the annual gifting allowance of £3,000 as a way to reduce IHT payable and help family out during your lifetime. This renews on 6 April too.

Do you live together and are not married?

From a financial planning point of view, it makes a lot more sense to be married or in a civil partnership as there is no IHT to be paid when you leave money to a spouse or civil partner, and then on the second death, allowances from both people can be used.

Are you over State Pension age?

On 6 April there will be an increase in State Pension – good news. But it means that the full new State Pension will be less than £30 below the personal allowance of £12,570 – it’s more important than ever that people understand what tax they may have to pay.