Keep calm and carry on growing savings: Use tried and tested pensions and Isas

By Rachel Rickard Straus

Updated:

Keep calm and keep saving: It will likely be weeks until the first Budget

Keep calm and keep saving: It will likely be weeks until the first Budget

Right, can we have some answers now, please?

Looking after our personal Finances is supposed to be about long-term planning and careful budgeting. But that's so much harder when we are building plans on shifting sands.

Will inheritance tax allowances get stingier? Will capital gains be clobbered? Will pension tax relief get an overhaul?

Labour's manifesto was noticeably lacking in answers. And we will have to wait even longer for certainty: it will likely be weeks until the first Budget and, even then, there could be reviews and consultations before Labour shows all of its cards.

But that doesn't mean we have to just hold tight and wait and see.

Using your tax-free allowances and making use of pensions and Isas now offers great protection against any future changes.

These are essential steps to take that should stand you in good stead.

After all, they are tried-and-tested tools that have helped prudent households manage their finances through countless onslaughts. Because, let's face it, our wealth and savings have been under attack for decades and by successive governments.

Worried about an attack on inheritances? Well, it's been going on since 2009, when the amount that you could pass on to your loved ones tax-free was frozen in time at £325,000.

Had the allowance risen with inflation, it would have surpassed half a million pounds by now.

Worried about an attack on your savings? The taxman is already expected to help himself to £10billion from savers' nest eggs this year - up from £1billion just four years ago.

Worried about a Labour raid on capital gains? Your allowance has already been pulverised - falling from £12,300 to £3,000 within just two years.

The answer to these ongoing attacks is the same as any new ones coming down the line: pensions, Isas and using every allowance still going.

But I would think very carefully before going beyond that and making changes to your finances based on what you think Labour might do.

For example, it may be tempting to sell a much-loved or profitable second home based on a hunch that Labour has its eyes on landlords' profits.

Such a move may pay off - but it could also leave you full of regret if your suspicion proves incorrect.

As Laura Newman, head of premier financial planning at NatWest, told me: 'You can try to pre-empt things, but if you make a move based on that and it doesn't happen, it can have a detrimental effect on your finances.

'You can only make decisions based on current legislation and the situation as it is at the moment.'

So, don't gamble. Instead, as Laura wisely puts it: 'Keep calm and carry on. But stay informed. And review regularly.'

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