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Why pay more tax than you have to?

The UK government offers individuals a series of investment and regular savings plans that reduce their tax as a way of encouraging them to save for the longer term. Pensions offer individuals a tax credit at their marginal rate up to a maximum investment of £40,000 per year. (The government contributes to your pension.) Every new born child has a 20% tax credit up to a maximum of £3,600 per year. Individual Savings Accounts have a current allowance of £15,000 on which there is no further liability to income or capital gains tax. Venture Capital Trusts enable an individual to offset a maximum of £60,000 against their income tax. Investment Bonds enable individuals to defer tax until a later date. Over a period of time the savings are significant.