March Financial To-Do List

VIDEO: Your financial to-do list for March has just one item on it: use up your annual pension and Isa allowances, as it's use it or lose it

Holly Black 2 March, 2021 | 11:29AM
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Holly Black: Welcome to Morningstar. I'm Holly Black. And this is your March financial to-do list. Each month, we're trying to help you narrow down which areas of your finances to focus on. 

Now, March is the end of the tax year. So, I have just one item for your to-do list this month, that is to use up your annual allowances. So, let's just go over what that means. It's the end of the tax year. The tax year for some reason runs from April the 6th to April the 5th. And in that period, every year, we have an allowance that is set that we are allowed to put into our pensions and into our ISAs tax free. So, every year, you can put £40,000 into your pension, you can put £20,000 into ISAs and you can put £9,000 into a junior ISA for a child or a grandchild, so pretty generous allowances. I'd say for the most part most of us are not really going to be using those up, maxing those allowances out each year, but that doesn't mean that this isn't a good time to start thinking about whether we do have some spare cash lying around in our bank accounts that could be put to better use elsewhere.

So, experts call March and this time of year ISA season because there is this glut of money that goes into ISA accounts and pensions accounts as people are using up those allowances. So, the trick here is just to get your money in the account. If you're panicking that you've only got a couple of weeks till the end of the tax year and you haven't decided which funds or shares you want to invest in, that doesn't matter. The key bit is to get the money into a tax-free account, into your ISA or pension before midnight on April the 5th for it to be counted in this year's allowance. You can then take all the time in the world over your investment decisions and working out where to actually put the money. Now, if you don't actually have an account yet, if you haven't got a pension setup or an ISA setup, you should get moving because the paperwork can take a couple of weeks.

So, that's it for March for your financial to-do list. One thing – use up your annual allowances. We'll see you next month for more.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Holly Black  is Senior Editor, Morningstar.co.uk