AJ Bell Money & Markets Deep Dive #1: How to protect your money from the rising tax tide
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Feb 17, 2025 Carl Emmerson, Deputy Director of the Institute for Fiscal Studies, and Tom Selby, Director of Public Policy at AJ Bell, delve into the UK’s escalating tax burden, projected to hit 38.2% of GDP. They explore practical strategies for individuals to safeguard their finances from rising taxes, highlighting the merits of ISAs and the value of pension schemes. The duo also addresses the potential risks of over-investing in cash ISAs and offers insights into tax-efficient options like VCTs, ensuring listeners are equipped to navigate the intricacies of personal finance.
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Record Tax Burden
- The UK's tax burden, the percentage of GDP paid in tax, is projected to hit a record 38.2% by 2029.
- This surge is largely driven by increases in personal and capital taxes, impacting individuals and assets.
Dividend Tax Hike
- Dividend tax rates increased in April 2022, impacting income from investments outside tax wrappers.
- Consider the implications for your investment strategy.
Capital Gains Tax Changes
- Capital gains tax (CGT) rates rose and the allowance was cut, impacting profits from asset sales.
- Be mindful of CGT when making investment decisions.