Published 15 March 2023.

So the Government announced its new 2023 Budget…what do I need to know?

  • Energy price guarantee: The cap on energy bills is being extended for at least three more months, until the end of June. It limits a typical annual household bill to £2,500.
  • Free childcare for under 3s: Good news for families…the Government announced it will provide 30 hours of childcare a week to parents of one and two-year-olds. This is a big boost – as families currently don’t receive any support between parental leave ending and free nursery hours starting when kids turn three.

I heard something about pensions too.

Yes, there’s some big changes to pension allowances.

  • Annual Allowance: The annual amount you can save into your pension tax-free will increase to £60,000 (up from £40,000)
  • Lifetime Allowance: It’s gone! There’s now no limit to the total amount you can have in your pension over your whole life. (It was previously a maximum of £1.07 million, before being subject to extra tax.)

Interesting. Why the changes?

The Government is looking for ways to encourage more people back to work – whether that’s parents or over-50s who are considering retirement. Putting more people to work can help boost economic growth.

Since the pandemic, many people have reduced their hours or retired early. And sometimes it’s because they’re getting close to hitting the Lifetime Pension Allowance – at which point they could get hit with a big tax bill. So the Government is sweetening the deal: keep working and get the chance to stash more money away into your pension.

Remind me, what’s so good about pensions?

A pension is just a really tax-efficient way of saving money for your retirement. When you save some of your salary into your workplace pension, you walk away with a lot of free money. That’s because whenever you contribute to your pension, you’ll get some tax relief from the government, boosting your savings significantly. Plus, when you put money into your workplace pension, your employer adds some too.

Wait…how much “free money” are we talking about?

Well, it’s different for everyone. But imagine you save £100 into your pension, you actually get £225. You’ll get £100 extra from your company (assuming they match the contribution) and £25 from the Government. Let’s say that grew at 6%. In 30 years, that could be worth £1,300. And that’s just £100…

So what should I do about my pension?

In practice, the pension changes will only impact you if:

  • You’re already saving £40,000 each year into your pension
  • You were forecasted to save over £1 million into your pensions over your lifetime

If either is true…you’ll now be able to save lots more money into your pension and increase how much you’ll have in retirement.

If you’re not sure what your retirement forecast looks like…then you can get a personalised money plan from an accredited coach at Octopus. Maybe it’s time to think about your dream retirement…and to make sure you’re on track.

There’s always some element of risk involved in investing. The associated risk can be higher or lower depending on the type of investment you choose, but it’s never zero. 

In the investing world, a low risk investment will usually be more stable and generate lower returns while a high risk investment will often be more volatile and result in higher returns. 

When the amount of profit is greater than the initial investment, your investment can be said to have given you positive returns. 

Investing is different from saving because you have the potential to earn more money in interest. The money you invest goes into things like businesses. This is what leads to profits – your money grows as the companies grow and earn money. But this might also result in losses too. 

How do you feel about how much you’re saving each month? With the cost of living rising, we all want to build up the money we’ll need for our short and medium-term goals.

In this 30-minute webinar, we’ll help you save more and save better, whatever you’re working towards.

Parenthood is exciting. And the more you can plan ahead for the impact on your money, the more you can fully enjoy all the special moments when they come.

In this 30-minute webinar we’re sharing our favourite money tips for growing families, whatever part of the journey you’re on.

Conversations about money can feel difficult – especially right now. But talking about money has been proven to improve your wellbeing.

In our 30-minute session, we’ll discuss how to talk to your family and friends about money when you feel money stress. 

How are you feeling about the rising energy costs?

In this 30-minute group coaching session, you’ll be able to get on top of what’s happening with the rising cost of energy, find out how to prepare for the changes in October and learn about what support is available to you.