How financial advice can help you be tax efficient

Getting your finances in order can feel like a daunting task, particularly when tax rules are changing. But, as the saying goes, a problem shared is a problem halved. Our qualified financial advisers always take tax allowances into account when making their recommendations to help you make sure you’re on track for the future you want.

What is the difference between financial advice and financial guidance?

We have a dedicated team of experts who offer restricted financial advice and financial guidance. But what’s the difference – and how do you know which is right for you?

With our restricted financial advice service, you’ll get a tailored financial plan based on our analysis of your income and your spending habits. It can help you structure your finances to support you through significant moments in life:this includes helping you grow your wealth, and building an investment strategy to make sure you’re saving enough for the retirement you want.

We also consider how to help you maximise your UK tax allowances – but if you need specialist tax advice, then we recommend speaking to an expert for comprehensive guidance.

What do we mean by 'restricted' financial advice? Well, simply that the plans and solutions we build for our clients are based on our own products and services, not those available outside of Nutmeg. Our financial advice service is available for a one-off fixed fee of £575 (including VAT), and you can book a free, no obligation consultation with an expert when you're ready.

“I am right alongside people during, or after, significant life events that can be overwhelming to navigate,” says Holly Graham, one of our financial planners. “Understanding their needs and goals, I can then act in their best interest to provide recommendations. And I love when I hear from my clients that they have achieved the goals that we planned together,” she continues.

Not everyone needs financial advice, but wherever you are in your investment journey as a Nutmeg customer, you can use our free financial guidance service. With advice, you pay for a plan to follow, whereas financial guidance can help you understand your options, our different investment styles, choose which wrappers may suit your objectives, or navigate volatile markets.

We’re on hand when you need us, ready to help you feel confident and in control when it comes to investing in your future.

Do I need financial advice?

As well as helping you map out your financial journey, and putting a structure in place for you to achieve your goals, our friendly team can help you get a better understanding of what tax allowances & exemptions & reliefs are currently available to you. You may be thinking about investing for your children, how to make sure your pension lasts throughout retirement, or leaving a legacy to loved ones.

One area where our team may be able to add significant value is making sure your investments are set up as efficiently as possible. As FCA regulated, qualified advisers, they can evaluate your circumstances and help you make sure that you’re making the most of your annual allowances and using the UK tax wrappers in the right way, so your investment strategy is tax-efficient.

Perhaps you have existing investments in different places (like multiple stocks and shares ISAs, or workplace pensions) and want to make sure they're complementary. Or maybe you’re thinking of consolidating your investments – but want to make sure you do so in a way that will preserve as much of your wealth as possible.

A little bit of advice about your tax allowances can go a long way. It can help you stay focused on the big picture – and the goals that matter. What's more, when you receive advice from Nutmeg, you'll always be looked after by the same person – so they can get to know you, your wealth, and your goals – and tailor your strategy accordingly.

We can help you make the most of your tax allowances

When the new tax year starts on the 6th of April, the way some investments are taxed will change.

Notably, the annual allowances for capital gains tax (CGT) and dividend income will fall. You can estimate how muchtax you owe on any shares, second properties, and other taxable assets for the 2023/24 tax year using our CGT calculator.

If you think you might use all of this year's ISA and pension allowances, are conscious of exceeding CGT or dividend tax allowances, have existing investments that you think could be impacted (or feel that you would benefit from professional advice) our team may be able to help. Depending on your circumstances, for instance, you may wish to consider a different investment vehicle or strategy, or evaluate your holdings before deciding what to do next.

Making the most of your allowances and following a tax-efficient investment strategy can help you reach your goals faster. By preserving as much of your wealth as possible, it has a greater chance of benefitting from the power of compounding and keep your money working hard for you.

“Growing and maintaining wealth isn’t just about numbers on a screen, but a path to fulfilling your goals, whether that be achieving a dream retirement or purchasing a first home,” says Paul Hillis, one of our senior wealth managers. “It’s a privilege to help people get into a better position to meet their goals in the future.”

Risk warning

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Tax treatment depends on your individual circumstances and tax rules may change in the future. If you are unsure if an ISA is the right choice for you, please seek financial advice.

A stocks and shares Lifetime ISA may not be right for everyone and tax rules may change in the future. You must be 18–39 years old to open one. If you need to withdraw the money before you’re 60, and it’s not for the purchase of a first home up to £450,000, or a terminal illness, you’ll pay a 25% government penalty. So you may get back less than you put in. Compared to a pension, the Lifetime ISA is treated differently for tax purposes. You may be better off contributing to a pension. If you choose to opt out of your workplace pension to pay into a Lifetime ISA, you may lose the benefits of the employer-matched contributions. Your current and future entitlement to means tested benefits (if any) may also be affected. If you are unsure if a Lifetime ISA is the right choice for you, please seek financial advice.

To open a Nutmeg JISA, your child must be under the age of 16 and funds cannot be withdrawn until your child turns 18. Tax treatment depends on your individual circumstances and may be subject to change in the future. If you are unsure if a Junior ISA is the right choice for you and your child, please seek financial advice.  

Tax treatment depends on your individual circumstances and tax rules may change in the future. If you are unsure if a pension is right for you, please seek financial advice.