Financial Planning for Couples & Singles: A Valentine’s Day Guide

By David Burrell, Financial Planner at Wise Investment

 

Valentine’s Day is all about celebrating love and commitment, but have you ever thought about how financial planning can strengthen your future together? Whether you’re just starting out, already building a life as a couple, or planning for retirement, making informed financial decisions can lay the foundation for long-term stability and success. And if you’re single, smart financial planning is just as crucial for securing your independence and future wealth.

 

Maximising Tax Benefits as a Couple

If you’re married or in a civil partnership, you might be able to benefit from the Marriage Allowance. If one of you earns less than the personal allowance (£12,570), you can transfer £1,260 of unused allowance to your spouse, reducing their tax bill by up to £252 each year.

For higher earners, pension planning as a couple can also be tax-efficient. Making pension contributions for a non-earning or lower-earning spouse can help maximise allowances while boosting overall retirement savings.

 

Newlyweds & Aspiring Homeowners

If you’re newly married or looking to buy your first home together, family gifts could give you a valuable financial boost. Gifts from family members can serve a dual purpose: reducing their estate for inheritance tax (IHT) purposes and helping you take that first step onto the property ladder.

Have you considered a Lifetime ISA (LISA)? If you’re under 40, you can save up to £4,000 per year towards your first home, and the government will top it up with a 25% bonus. That’s up to £1,000 of free money each year!

 

Managing Your Mortgage Wisely

Already a homeowner? Staying on top of your mortgage is key to financial security. Do you know your current balance and interest rate? Could you make overpayments to reduce the term and save on interest? Regular mortgage reviews help ensure you’re on the best deal.

While Wise Investment doesn’t offer mortgage advice, we take your mortgage arrangements into account when looking at your overall financial picture. And if you need expert mortgage advice, we can introduce you to a trusted adviser.

 

Protecting Your Family’s Future

If you have children, ensuring their financial security is vital. Are you making full use of their Junior ISA (JISA) allowance? Friends and family can also contribute, making it a great way to save for their future expenses, from university fees to a first car.

Beyond savings, do you have the right protection in place? Life insurance and income protection can ensure that your family is financially secure if the unexpected happens. If an illness or injury prevented you from working, would your family be provided for? Planning ahead can offer peace of mind.

 

DINKs: Planning for a Comfortable Retirement

If you’re a Dual Income, No Kids (DINK) couple, you have a unique opportunity to build wealth. With fewer financial dependents, you can focus on maximising your ISA and pension contributions.

Have you considered:

• Topping up your pension contributions to take advantage of tax relief?
• Investing in tax-efficient savings and investments to grow your wealth?
• Setting financial goals for the future, whether that’s early retirement, property investment, or travel?
• Taking small, strategic steps now can make a big difference in your financial freedom later.

 

Reducing Inheritance Tax (IHT) for Retirees

Looking to reduce your estate’s value for inheritance tax purposes? Tax-efficient gifting allows you to pass on wealth while minimising tax liabilities.

Key allowances include:

• The Annual Gift Exemption (£3,000 per year, tax-free).
• Small gifts of up to £250 per person per tax year.
• Wedding gift exemptions (£5,000 for children, £2,500 for grandchildren, £1,000 for others).
• Strategic gifting ensures your loved ones benefit while reducing the burden on your estate.

 

Single & Financially Independent? Here’s What to Consider

If you’re single, financial planning is just as important. Without a partner to rely on, it’s crucial to build a robust financial safety net.

Are you:

• Maximising tax-free savings? Making the most of your ISA and pension allowances can help grow your wealth efficiently.
• Building an emergency fund? A solid emergency fund (typically 3-6 months’ expenses) ensures financial security in times of uncertainty.
• Planning for retirement? Without a partner’s pension or assets to supplement your future, ensuring adequate pension savings is key.
• Protecting yourself? Consider income protection or critical illness cover, so that an unexpected event doesn’t derail your financial future.

While financial independence offers flexibility, careful planning ensures long-term security and success.

 

Stronger Together: Things to Consider

Financial planning is about creating a vision for your future. Whether you’re managing your finances as a couple or single, setting clear goals, maximising tax efficiencies, and protecting your wealth can help you achieve financial stability and peace of mind.

If you’d like personalised financial advice tailored to your circumstances, let’s start the conversation.

 

Disclaimer: All investments carry a degree of risk. The value of investments can go down as well as up, and you may get back less than you invested. Past performance is not a reliable indicator of future results. Wise Investment is authorised and regulated by the FCA (230553).