We are now in the 2021/2022 tax year and so check out this simplified guide to help you understand what your income, savings and pensions allowances are. Take a look at the below and think about putting together some goals to help you make the most of these allowances and right at the end, I share my goals for the new tax year. You can chat through your own goals in the free Financielle community.
UK Personal Allowance
The Personal Allowance is the amount you can earn before paying any income tax. For the new tax year, the UK Government (excluding Scotland) has set the following thresholds:
Basic Rate Tax: 20% on income between £12,571 and £50,270
Higher Rate Tax: 40% on income between £50,271 and £150,000
Additional Rate Tax: 45% on income above £150,000
Scottish Personal Allowance
For the new tax year, the Scottish Government have set the rates as follows:
Starter Rate: 19% on income between £12,571 and £14,667
Basic Rate: 20% on income between £14,668 and £25,296
Intermediate: 21% on income between £25,297 and £43,662
Higher Rate: 41% on income between £43,663 and £150,000
Additional rate: 46% on income over £150,000
The Tax-Free Dividend Allowance remains unchanged for the 20211/2022 tax year remains at £2,000.
The dividend tax rates for the new tax tear remain unchanged at:
- £2,000 tax-free dividend allowance
- Basic Rate taxpayers pay 7.5% on dividends
- Higher Rate taxpayers pay 32.5% on dividends
- Additional Rate taxpayers pay 38.1% on dividends
Individual Savings Accounts
- The adult ISA limit for the new tax tear remains unchanged at £20,000.
- The junior ISA limit for the new tax year remains unchanged at £9.000.
The amount you can pay into a personal pension tax-free remains at £40,000, with the lifetime allowance also remaining at £1,073,100.
The auto-enrolment requirements also remain unchanged:
|Date effective||Total minimum contribution||Employer minimum contribution||Employee contribution|
|Current||8%||3%||Up to 5%|
With the above in mind, what are your goals for the new tax year?
As Financielle Co-Founder, I feel it only right I share with you transparently my 2 specific investing-related goals for 2021/22:
- Continue to contribute 15% of income to my pension – we are loving Pensionbee* at the moment for the simplicity of transfer and the positive feedback from Financielle community members.
- Max the ISA allowance of £20,000 by 31 December 2021, which I am doing using a Stocks and Shares ISA with Interactive Investor*.
Join the free Financielle community to watch as I document my journey.
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