BBC Radio 4 interview with Forrester Boyd Wealth Management Adviser Chris Gray

At the beginning of the month, our Adviser, Chris Gray, appeared on BBC Radio 4’s Money Box Live to represent Forrester Boyd Wealth Management.

In a special episode recorded at the Waterside Centre in Lincoln, Chris spoke to presenter Felicity Hannah about the end of the financial year and the tax changes that will affect us all over the next 12 months.

The episode covered:

• What you need to know before the start of a new tax year
• What to do if you are struggling with household bills
• The tax changes introduced on April 6
• Allowances you’re entitled to

If you missed Chris during the original broadcast on April 4, you can listen to the interview here, or you can listen to the full show on BBC Sounds here. Chris is on from around 14 minutes.

There is also a full transcript of the interview below.

Full transcript

Felicity Hannah: Of course it’s not just energy and household bills that are going to affect our personal finances. In just a few days time, we will enter a new financial year. And there are also some tax changes that you ought to know about. Chris Gray is an independent financial adviser from Forrester Boyd Wealth Management based in Lincolnshire, and he’s just sat down to join me at the Waterside Centre in Lincoln. Chris. Good morning. Okay, quite a lot of changes going on. People need to pay attention.

Chris Gray: Absolutely. There’s going to be some winners and some losers from the Autumn Statement and from the budget, which was a couple of weeks back.

FH: So good for some bad for others, bit of a mixed bag. Okay, let’s go through some of them. Firstly, a pretty big change for high earners.

CG: Yep. That’s right. So the point at which someone will pay additional rate tax is moving from £150,000 down to £125,140 might seem like an odd number. But that’s the point where people would see their personal allowance tapered under the current rules anyway. If you’re earning £150,000 a year, you’re gonna be paying about £1200 more in tax each year.

FH: Okay, then there are some big changes to pensions, but this mostly affects people with big pension pots.

CG: Yeah, that’s right. So lifetime allowance. That’s the biggest change, and probably the most complicated one to explain. The lifetime allowance is currently £1,073,100. And it does two things: it restricts the amount of tax-free cash that someone can take to 25% of that figure. That’s not changing when we get to the new tax year. What is changing is the tax charge that somebody would have suffered on their benefits over that lifetime allowance. So previously, depending on circumstances, someone might have paid 25% or 55% tax and from 6th April, that’s going so some people will save an awful lot of money.

FH: Okay, what about people with smaller pension savings?

CG: Okay, yeah, so money purchase annual allowances is changing as well, the MPAA. Currently, that’s £4,000, and it’s moving to £10,000. Now, what does that mean? So the money purchase annual allowance restricts the amount that you can pay into your pension, if you’ve already accessed your pension benefits. So someone who’s maybe taking a career break started drawing a pension. Today, they’re restricted to £4,000. If we go back to work, that might create an issue, they can’t really rebuild a pension savings. Come 6th April, that’s going up to £10,000 so they can get more money back into their pensions, either from theirself or their employer.

FH: So there is some good news there. Now, as I said, there are still actually a few days to the end of the financial year. It’s not too late to make the most of this year’s allowances. What should people be thinking about right now?

CG: Okay, so the usual things. ISAs, its use it or lose it, you’ve got until Wednesday evening to get your £20,000 into your ISAs. Pensions, not quite the same but your carry forward from the 1920 tax year will drop off. But we need to be mindful as well about capital gains tax. The exemption is reducing from £12,300 down to £6,000. So this is going to be one of your last opportunities to crystallise some capital gains on things like shares or property.