The 6 smart money moves to make before you die to save THOUSANDS & 2 tricks to shield your cash from the taxman

THEY say that you can’t take your money with you when you die, but making smart moves now will make you – and your family – thousands of pounds better off. Our top money experts explain how to save thousands of pounds during your golden years in retirement, and leave cash for your family to inherit too. Retiring is about enjoying life in your golden years, but it’s important to keep on top of your finances Credit: Alamy Our tips can help you boost your cash AND leave some money over to your loved ones too Credit: Getty You might not think it, but keeping your finances in check after you’ve retired is just as important as it is when you’re younger. That’s because the amount of money you need to afford your retirement continues to creep up as the cost of living soars and we’re all living longer. Nearly two thirds of adults are worried about running out of cash, according to research from financial services firm LV=. “Making smart money moves in your golden years can make life a little bit easier for yourself, and those you leave behind later on,” says Sarah Coles from the investment platform AJ Bell. Use our checklist to keep your finances on track. 1. Hack to get an income for LIFE… for your spouse too An annuity is a great way to buy peace of mind over your finances during retirement Credit: Getty An annuity is a financial product you can buy that gives you a guaranteed income for life until you die. Many people usually buy one with savings they’ve built up in their pension. They are a great option if you want peace of mind over your finances and don’t want the hassle of managing a pension pot. If you’re close to – or are even in – retirement, investigate if it’s worth buying one. It’s a good time to buy one – rates on annuities have improved in recent months, which means that you get a better income. For example, someone who bought one with a £50k pension pot in March would be paid £3,653 a year. Now, the same pension pot would bag you £3,653 a year – £106 MORE. If you’re worried about leaving your spouse behind with no cash, you could consider a joint-life annuity. This means that when you die, your partner will continue to get your payments. Some annuity companies will also pay out to dependants after your death, such as a child. Keep in mind though that you’ll get less cash per year to live on. Someone who bought a joint-life annuity with a £50k pension pot would get around £3,300 a year. 2. How to track down £31,600 in 3 minutes Track down lost pension pots or savings accounts – you could boost your cash back £31k Credit: Getty It’s easy to forget an old pension plan or savings account. Roughly £2.5billion worth of lost and unclaimed savings was returned to households by firms including JP Morgan and Standard Life in JUST the first half of this year. On average, households got an average £31,647 back. Use sites like Gretel and My Lost Account, which can help you find out if you have any lost money – the checks take just three minutes. Coming up to retirement? Check you’ve filled in your National Insurance record, which is used to calculate how much state pension you can get. If you fill in a missing year, you can boost your pension by around £350. Check if you can fill it in for free with credits for being an unpaid carer, on Universal Credit or even if you were on jury service. Also check whether you could claim for Pension Credit. This tops up your weekly state pension income to a minimum of £238 for single people and £363.25 for couples. Pension credit also unlocks other benefits such as a free TV Licence if you’re aged 75 or above, council tax discounts, cold weather payments and housing benefit for ground rent or service charges. 3. Clever savings tax trick for married couples If you’re a married couple make the most of your Isa – it can help your money work harder Credit: Getty Make sure you’re making the most of your Isa allowance. An Isa is a fantastic account where there’s no need to pay ANY tax on the money you make from investments or interest you earn from your savings. This means your cash can grow faster. You can save up to £20,000 in an Isa each year. Did you know that when you die, your spouse will see their Isa allowance boosted? A spouse or civil partner can receive a one-off Isa allowance equal to the total value of your Isas – even if you don’t leave your Isa savings to them. So if you had £2,000 in your Isa, your spouse would see their Isa allowance boosted to £22,000 for just that year – £2,000 more. To get this additional Isa allowance you have to claim within three years of the date of death, or within 180 days of the completion of the administration of the estate, whichever is later. Claim the boosted tax allowance by applying through your Isa provider. 4. Vital document YOU need – or risk losing £1,000s A Power of Attorney is a vital document that can help your loved ones look after you if you are not longer able to make decisions Credit: Alamy Power of Attorney (LPA) is a really important document – but lots of people don’t have one. This allows you to choose someone you trust to make important decisions for you if you are no longer able to. There are two kinds: one for financial decisions and one for health and welfare. Setting up a power of attorney can save you thousands of pounds in the long run. If you don’t have one set up and you lose mental capacity – for example, you fall ill with dementia – you will end up having to apply for a “deputyship” which can be a lengthy and complicated process. Applying for a deputyship costs £432. If the court decides you need a hearing, then you will need to pay £266. Once you’ve been appointed as a deputy, you must pay an annual supervision fee of £230 and a £100 assessment fee if you’re a new deputy. Meanwhile, your loved ones cannot access your bank accounts or make decisions about your medical treatment. It could mean that you could fall behind on paying bills or you’re unable to pare for any care that is needed. Setting up an LPA costs £92 (£184 for both financial and health) to register – much less than if you wind up in the courts. You can fill the forms out yourself. Be sure to follow the instructions carefully – you may have to re-do the whole process otherwise. Name one or two people who you trust to make decisions on your behalf and have access to your money. Then send it to the Office of the Public Guardian so they can register it. 5. Get married to swerve the taxman Getting married is surprisingly tax-efficient – we explain how you can make the most of the benefits Credit: Getty Tying the knot with your partner is not just romantic – it’s super tax-efficient. Firstly, it can mean you could start claiming the marriage allowance. This can make you £252 a year better off, but only married couples can claim it. It works by letting you transfer £1,260 of your annual personal allowance (which allows workers to earn £12,570 tax-free before they have to start paying income tax) to your spouse or civil partner. This reduces their income tax bill by up to £252. You can reclaim the tax back for up to four years, meaning the benefit could be worth more than £1,000 in total. You can only claim though if your other half is a basic rate taxpayer. HMRC estimates approximately 4.2 million couples qualify for the tax break, yet only 2.1 million have claimed it. You can apply for marriage allowance online at gov.uk. Getting married also means you can slash – or completely avoid – paying inheritance tax. Inheritance tax (or IHT) is charged on money, property, and possessions you leave behind. It is charged at a rate of 40 per cent. Families usually pay the tax bill by using money from the estate. Everyone gets a tax-free allowance – there’s no tax to pay on the first £325,000 of your estate. If your estate is worth £2million or less, you get an extra £175,000 allowance, which can only be used to leave your home to a direct descendant, like a child or grandchild. This means one person can potentially leave £500,000 tax-free. But if you are a married couple, you can pass over MUCH more. If you’re leaving everything to your spouse, there is NO IHT bill to pay. Your partner also inherits ANY of your unused tax-free allowance. This means a married couple can pass on up to £1 million IHT-free. That’s exactly what comedy star Ricky Gervais is doing. He announced last week that he will marry his long-term partner Jane Fallon to avoid an IHT bill on his huge £141million fortune after his death. Get FREE tax guidance about inheritance, property and capital gains worth £250 * If you click on this link we will earn affiliate revenue Are you sick of handing over your hard-earned cash to the taxman? You could slash your tax bill legitimately with the right planning, from inheritance tax on your home to savings and pensions. Award-winning financial advice firm Kellands Chartered Financial Planners are offering Sun Money readers a free one-hour consultation with their experts worth £250. Claim your free session today Kellands (Hale) Limited is authorised and regulated by the Financial Conduct Authority. FCA Firm Reference No: 193498 6. Easy ways to leave your finances in ship shape Make sure you leave all your bills in order including information on how loved ones can access your accounts Credit: Getty When you die, it is up to your loved ones to sift through your finances and pay off any bills or debts from your estate. This is called “death admin”, and research shows that 4 out of 5 people find it difficult. A will is crucial for mapping out the distribution of your money and assets, your preferred funeral arrangements and making other important decisions that impact family and loved ones. A DIY will can cost as little as £25 but if you get a solicitor to help it could be more like £200-£300. If you opt for the DIY version be sure to do it correctly or it could be invalid. You must sign and date the will in the presence of two independent witnesses (or one witness if you are in Scotland). Next, compile a list of all your accounts and savings and the provider names and account numbers. Include access information that will be needed for your loved ones to access your online bills and banking. List any life insurance, investments and pension plans again with names of the companies they are held with and account numbers. Gather property deeds and DVLA paperwork for cars. You should also make a list of your digital life which means providing your email and social media logins. If you have debts, compile a list of loan agreements or debt obligations so that your executors can easily see what needs dealing with. Find a secure space to store all this information and tell a trusted person where to find them. Taking these steps now saves your family from stress and confusion during a difficult time. Simple money mistake lost me £20k before my husband died NICKY Wake’s life as she knew it was over when her husband Andy’s doctor told her: “I’m sorry, but your story doesn’t have a happy ending.” Andy had suffered a series of heart attacks that had left him brain-damaged, and there was no hope of him ever getting better. But not only did Nicky have to deal with the heartbreak of seeing her “wonderful, artistic and creative” husband become a “shell of a man”, it was also the start of a three-year-long money nightmare, too. What she didn’t realise was that her husband’s condition meant she had lost access to at least £20,000 worth of life savings locked in the couple’s joint bank account as a result of a simple money mistake they had made. That’s because they had not got an important document called a Lasting Power of Attorney (LPA) in place. If you don’t have an LPA set up and you lose mental capacity, a family member will have to apply to the Court of Protection to appoint a “deputy” who can take control of your affairs. Going through the Court of Protection to become a deputy was the three-year-long agonising ordeal that Nicky had to go through to get control of Andy’s money. Nicky ended up paying more than the average amount to become a deputy because her case was complex, as it involved personal savings and business funds, too. When she finally became a deputy and gained access to Andy’s finances two years later, the whole process ended up costing £20,000 in legal fees. Sadly, Andy died three years later in 2020 from Covid. She says: “The amount of money I wasted and sleepless nights I went through was heartbreaking – I don’t want anyone else to go through what I did.” Read Nicky’s full story HERE.