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Welcome To The New Financial Year
Words Elizabeth Boampong
For many of us, March indicates the end of the financial year where we scurry to get our finances, expenses and taxes in order. As overwhelming as this can seem, there’s a bright side that we tend to ignore: The New Financial Year!
Resolutions are made in January, but for the women here at WOTC, the work doesn’t really kick off until the beginning of the new financial year and here are all the perks to starting your year in April rather than in January.
Time To Reflect
At midnight on 5th April 2022, we officially enter a new year. All financial targets are reset and you get a fresh start in making this your most profitable year yet, but the only way to do this is if you recognise what state your current finances are in. The great thing about starting the financial year in April rather than January is the time you can spend on evaluating how your revenue and other forms of income were either utilised or squandered.
If you haven’t already, note all your areas of expense and label them under ‘necessary’ and ‘unnecessary’ in relation to a goal, for example, saving up for a Holiday Fund. This is a quick and easy way to generate a snapshot into your finances to better understand your habits (even the ones we swear we don’t have!).
Invest In An Accountant
Many women tend to shy away from acquiring an accountant because they don’t feel they make enough money or if you’re an employee, you may assume that because you don’t have a business with additional taxes to file, that an accountant isn’t necessary. This couldn't be further from the truth as the benefits of managing your finances well is that you could potentially save money where without an accountant’s advice, you’re more inclined to losing it.
For those that are under a company’s payroll, you would naturally assume that the experts the company has hired will do a good job of managing your salary, your pension contributions, your student loan (if any), your national insurance contributions and your taxes. Most of the time, you will find that all your numbers seem to add up, however, having an expert take a second glance over, can make the difference in correcting not-so-noticeable mistakes and earning you money you didn’t know you had lost out on. Likewise for business owners, there are a number of tax allowances and tax reliefs available to you, that you may not be immediately aware of that an accountant could alert you to.
Stay Clued Up
A number of changes will be taking place in the the new financial year which include, but are not limited to the following:
Increase to National Living Wage and National Insurance: The rate will still depend on your age and whether you’re an apprentice or employee, with the highest rate being paid to those aged 23 and above, moving from a minimum of £8.91 to £9.50 an hour.
Increase in State Pension: Those that are retired will receive up to £289 more from their State Pension this year. This translates to a rise; from earning £9,339 a year to approximately £9,629.
Council Taxes to increase: In using up their yearly allowance, capped at 3%, Councils are predicted to be raising tax costs by 2.8% meaning you may have a sudden spike in bills across the board to prepare for.
Paper £20 and £50 notes will no longer be legal tender: This change will take place at the end of September 2022. After this date, you’ll be able to deposit these notes into your bank account but they will no longer be expensed so be aware of the notes you receive from merchants during this time.
As always, a number of these changes are more financially beneficial than others but as Women Of The City, we pride ourselves on not being afraid of what’s to come, especially when there is still ample time to prepare for it. So… in light of International Women’s Month, I ask that you all enjoy the process of becoming more acquainted with your financial behaviours and also make note of the new habits you would like to take on, in this new year.
Resolve to stay on top of your finances and your finances will resolve to give back to you.