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February 14, 2022

Other ways to show you care on Valentine’s Day

Love heart lollypops

It’s mid-February again, and that means one thing: Happy Valentine’s Day!

Valentine’s Day is big business with over 140 million Valentine’s cards being sold across the UK*, and ardent lovers shelling out £1.45 billion on presents and wining and dining their ‘significant other’. We spend £261m on flower bouquets, £85m on chocolates and confectionery, and even £27m on presents for our pets!

This year card makers have extended the festival beyond true romance, making it a family occasion, with cards wishing a happy Valentine’s’ Day to mum, dad and gran. (No wonder a quarter of us have given up celebrating the holiday, because we believe it’s become too commercialised!)

The gift of financial wellbeing

Why not consider an alternative way of ‘showing the love’ by giving the gift of financial wellbeing this Valentine’s Day? 

With some thought to financial planning, there are a few ways you can show someone you care in an altogether different way to roses and chocolates.

What’s mine is yours

Taking advantage of marriage allowance is a great way of giving your finances an extra boost. If either of you earn less than £12,570 per annum, and the other a basic rate tax payer, the non-tax payer can transfer £1,260 of his or her personal allowance to their spouse. This can result in income tax savings of up to £252 in the current tax year.

You can even back-date a marriage allowance entitlement from any of the last four tax years too. 

Looking after your nearest and dearest

How would your other half cope financially in the event of your premature death or inability to work due to severe illness or disability? It is worth periodically reviewing what financial protection you have in place (and who you may have nominated) with your adviser, for peace of mind that your nearest and dearest would not need to worry about money in either event.

Will you?

Wills are really important. 

There can be no better way to ensure your family’s financial future than making your will. 

This sets out exactly how you wish your wealth to be divided when you die, but make sure you tell people where the will can be found.

Equally important is to update your will, as your circumstances change: the arrival of a new child, divorce or re-marriage.

Unmarried partners and couples who have not registered a civil partnership cannot automatically inherit from each other unless there is a will. 

For those married or in a civil partnership, without a will in place the laws of intestacy apply which dictate how money, property and possessions should be allocated. This could potentially result in your assets not being passed entirely to your intended beneficiaries.

It’s the thought that counts

Remember that you can gift up to £3,000 per tax year and can also carry forward some or all of last year’s gifting allowance, if it wasn’t used. 

Alongside that, it’s possible to give smaller gifts of up to £250 to as many people as you like, as long as they haven’t already received your £3,000 annual exemption. Wouldn’t a £3,000 gift to your child be the perfect way to send them off to university, or to help with a deposit for their first house?

You can also give a gift for a wedding or civil partnership, up to £5,000 for your child, £2,500 to your grandchild, or £1,000 to anyone else.

Gifting in this way can be good for your financial health, too: they take money out of your estate, reducing any potential future liability for inheritance tax that may be calculated against your estate.

For it is in the giving that we receive

You could also give a nice Valentine’s Day present to a local charity or amateur sports club using Gift Aid. This allows them to claim back 25p for every £1 you donate. There are, however, qualifying limits to how much you can donate which relates to the amount of tax you have paid in the corresponding tax year.

However, it is worth remembering that higher rate tax payers can reclaim a further 20% on any donation made – either through self-assessment or contacting HMRC directly to amend your tax code.

These are just some of the alternative ways you can show you care this Valentine’s Day. Perhaps not as exciting as a romantic meal, but a lot more long lasting and valuable we think!

*Statistics by Statista/Evolution Money/Ocean Finance/BobBooks

February 14, 2022