Financial Planning for Couples: How to Make the Most of the Tax Year
- 1 day ago
- 3 min read
Planning your financial future as a couple can be one of the most effective ways to build long-term wealth and protect your joint goals. From maximising tax-efficient allowances to aligning your savings and retirement plans, there are several opportunities that couples can take advantage of before the end of the tax year.
At Cleveden Park Wealth, we know that smart financial planning isn’t just about big figures - it’s about making sure every pound works as hard as possible for you both.
1. Use Your Individual Tax Allowances Efficiently
Every individual in the UK has a personal allowance - the amount of income you can receive each tax year without paying income tax. When you plan together as a couple, you can make sure both allowances are fully utilised.
For example, if one partner has unused personal allowance or lower earnings, you might structure income-producing assets so that more of the income is taxed at a lower rate. This can help reduce the total tax paid by you both.
2. Split Investments to Maximise Tax-Free Growth
Stocks and shares, rental income, dividends and interest can create taxable income. However, by holding assets in each partner’s name, it’s possible to make better use of both personal tax allowances and dividend allowances.
For example:
Each spouse can hold their own £2,000 dividend allowance (reducing to £500 in recent tax years), so holding shares separately may help reduce tax liability.
Both partners have their own personal savings allowance (up to £1,000 for basic-rate taxpayers), helping shelter interest from tax.
Strategically allocating investments between you can help keep more of your returns.
3. Use Your ISA Allowances Before the Tax Year Ends
ISAs remain one of the most tax-efficient savings and investment vehicles available:
Each partner can contribute up to £20,000 into an ISA this tax year - that’s up to £40,000 per couple if both allowances are used.
Growth within an ISA is free from UK income tax and capital gains tax, and no tax is payable on withdrawals.
Working together to use both ISA allowances before April 5th can be a straightforward way to shelter assets from tax permanently.
4. Think About Pension Contributions
Pension contributions continue to be one of the most powerful tax-efficient ways to save for the future:
You each have an annual allowance (typically up to £60,000 or 100% of earnings, whichever is lower).
Higher-rate taxpayers can benefit from tax relief equivalent to their marginal rate on contributions.
Even if one partner isn’t currently in paid work, contributing up to £3,600 annually to a pension can still attract tax relief, making it an attractive option for long-term planning.
Bear in mind you usually can’t access pension funds until age 55 (rising to 57 in 2028), so pensions are best used for long-term retirement saving.
5. Consider Marriage Allowance Where Applicable
If one partner earns below the personal allowance and the other pays income tax at the basic rate, you may be able to transfer part of the unused allowance between you:
You can transfer up to £1,260 of personal allowance to a basic-rate taxpayer spouse - potentially saving around £252 in tax.
This can be backdated for up to four previous tax years, offering the opportunity to unlock further savings.
This isn’t relevant for higher-rate taxpayers, but it’s worth checking if it applies to you.
6. Review Your Financial Protection Together
Protecting your financial future as a couple is also about managing risk. If one partner relies on the other’s income, it’s sensible to consider:
Life insurance to protect against loss of income
Income protection in case of illness or injury
Critical illness cover for significant health events
Making sure both partners are appropriately protected underpins all other planning strategies.
7. Don’t Forget Gifting and Estate Planning
If you have surplus cash or assets you may want to pass on during your lifetime, consider:
Using your annual gift allowances to make tax-efficient transfers.
Contributing to a Junior ISA if you have children - each parent can use their ISA allowance for this purpose.
Reviewing your estate plans and wills to reflect your current wishes.
These steps can help reduce your taxable estate and ensure your legacy is aligned with your intentions.
Plan Together, Plan Effectively
Financial planning as a couple is about much more than just putting money aside - it’s about understanding your joint goals, making the most of available tax allowances, and protecting what you’ve built together.
By reviewing your circumstances before the end of the tax year, you may be able to unlock significant tax-efficient opportunities and strengthen your long-term financial future.
At Cleveden Park Wealth, we help couples across Glasgow and beyond bring clarity to their financial planning. Whether it’s maximising tax allowances, structuring investments, or creating a long-term retirement strategy, our advisers can guide you every step of the way.
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