In this conversational financial guidance session aimed at NHS doctors and other healthcare professionals, the hosts walk through a comprehensive tax‑efficient savings and investment plan. They begin by reviewing the £20,000 annual ISA allowance, breaking down the three main ISA types – Cash ISA, Stock & Shares ISA, and Lifetime ISA – and explaining how each shields interest, dividends and capital gains from tax. They advise using a Cash ISA for a 3‑6‑month emergency fund and allocating any remaining allowance to a Stock & Shares ISA to avoid capital‑gains and dividend tax. The discussion then shifts to workplace pensions, highlighting the typical employer contribution (~23.7% of salary), the need to monitor personal pension input, and a simple formula for tracking remaining pension allowance. A key focus is the “60 % tax trap” that hits earners over £100k when the personal tax‑free allowance (£12,570) is tapered away, effectively raising the marginal tax rate to 60 %. The hosts promote a checklist and guide to avoid this trap. They also cover capital‑gains tax rates (18 % for basic‑rate, 24 % for higher‑rate taxpayers) and the “bed‑and‑ISA” strategy of selling assets held outside an ISA and repurchasing them inside to eliminate future CGT. Additional points include the Personal Savings Allowance (£500 for higher‑rate taxpayers), premium bonds as a liquid emergency‑fund option, upcoming reductions to the Cash ISA limit (£12k from April 2027), junior ISA limits (£9k), and the ability to inherit an unused spouse/partner ISA allowance for up to three years, effectively doubling the annual ISA capacity. Throughout, the tone is instructional and supportive, urging doctors to act now to protect their earnings from inflation and tax erosion.
Chapters
If you go back like 100 years, the dollar and the pound have lost 95% of their values. What that means is that what £100 could buy, you probably need like 95 extra firepower to buy the same thing. If you put money in your Cash ISA, there's no tax on it at all. Any interest you gain is not taxed. Now, if you want to save your emergency fund, which is usually 3 to 6 months worth of your living expense, then you might want to put that in your Cash ISA. Okay, but if you already have your emergency fund, you haven't spent it, and you're focusing on investing, you might want to take the whole 16 £10K and put in your stock and shares ISA. If you invest outside the stock and shares ISA in things like a general investment account, then you might pay up to 24% if you're a higher rate taxpayer. In a stock and shares ISA, you invest through a stock and shares ISA, so you don't have to pay capital gains. And if you take any dividends, you don't have any dividends to pay. Adassa, is there a way of seeing the pension input on monthly basis? It would have been perfect, right? But for some reason, because the technology should be available, it's not like rocket science. For some reason we can't see that. You have to request it from your pension administrator. And if you were able to see it on monthly basis, that will make things easy. But most time you have to get a pension statement from them to know what has already been used. And we've done this with some people in the mastermind. They write their pension administrator, they get back, and then you can see how much allowances you've already used. Um, how much does your employer contribute? So currently, last time I looked, it was 23.7% of your salary that employer contributes. So if you pull out your, out of the workplace pension, they don't have to contribute anything, right? But if you're working, let's say you're earning $100K, you're contributing 12.5%, that's $12,500, and your employer's contributing $23,700. That's almost double what you're contributing. And then there's inflation adjustment. You know, and all that goes into pension growth. Um, there's a formula which I'll share in the group as well for calculation— calculating pension growth. All you want to know is what was my pension input amount, what was my pension growth in this tax year, so I'll know how much more that I can use and how much of my allowance is still left. Good, right? Are we— I think we're ready now for the other allowances. Okay, should we, should we move ahead to look at the other allowances?
Yes.
Okay, good. Sunday. So bring out your, your checklist again. We've looked at pension allowance, which is brilliant. We know ISA allowance, I've talked about it so much, I'm sure you're blue in the face now from talking about ISA and hearing me talk about ISA. It's £20,000. You're allowed £20,000 in a tax year. It's individual, so everyone has got their own. If there are 2 adults, as long as they're above 18, you can get your, um, 16, I think Well, let's just say it's adult stock and shares ISA. You can put up to £20,000 in an ISA. For ISA, you need to get to 18, but cash ISA, I think you can be younger. I think this is relevant, especially because I don't think anyone in this group is between 16 and 18. But if you are, okay, you've gone really quickly through medical school and gotten to this point. Congrats. But ISA allowance is £20K. What's the big change coming? Cash ISA. Previously, you could just take £20K, dump it into your Cash ISA, especially if you didn't know how to invest. For me, I feel like it's more like killing the money. It's like a terrible way because basically inflation is just slashing it. It's an installment loss. Um, again, I gave an example that what £100 could buy in 2015, you now need £100, almost £140 to buy it. If you go back like 100 years, the dollar and the pound has lost 95% of their value. So What that means is that what £100 could buy, like let's say in the year 1916, you probably need like 95 extra firepower to buy the same thing. That's how inflation works. So if you just leave your money in the account, you're not investing it. That means you're inevitably losing money. You already know that bit. But the cash ISA is for saving money and that's the whole point of it. If you put money in your cash ISA, there's no tax on it at all. Okay. Any interest you gain is not taxed. Okay.
Here's how to avoid the 60% tax trap as a doctor or healthcare professional. This could actually literally save you thousands of pounds because you could be unknowingly paying an effective tax rate of 60%. Now, many doctors think that the most tax they pay is 45%, but that's not right. You may have fallen into the 60% tax trap due to a sneaky rule about personal tax allowances. Now let me tell you how it works. Everyone, especially in UK, Northern Ireland, England and Wales, has a personal tax-free allowance of £12,570. Once you exceed £100K in income, you start to lose that tax allowance. And by the time you hit £125K, it's almost like you're punished with this sneaky 60% tax because your effective tax rate becomes 60%. You've lost all your tax allowance. Now I've done a guide that will tell you step by step how this works, a checklist to check if you are falling into it and how to avoid it. Thousands of medics have already used this guide to save thousands of pounds and secure their financial future. Don't miss out. Download the guide with the link in the description and I hope it helps. Let's jump right back to the episode.
So the allowance for the ISA is £20K. Okay. The allowance for ISA— but ISA is not just that. You can't just put 20K everywhere. You can put 20K in your cash ISA, or you can put 20K in your stock and shares ISA. But there's lifetime ISA, which is basically either for buying your first home or for retirement. The maximum you can put into your lifetime ISA is how much to get the full tax relief? 4K. Good. So you can put 4,000 in your lifetime ISA if you've got one, as long as you've opened it before you turn 40. After 40, you can't have a lifetime ISA. So you can put £4,000 there. So some people do the strategy where they put £4,000 so that they can get the full £1,000, 25% on whatever money is in LISA, and then they can allocate the remaining £16,000 between their Cash ISA and Stock and Shares ISA. Now, if you want to save your emergency fund, which is usually 3 to 6 months worth of your living expense, then you might want to put that in your Cash ISA, okay? But if you already have your emergency fund, you don't— you haven't spent it and you're focusing on investing, you might want to take the whole £16k and put in your Stock and Shares ISA Because with your Stock and Shares ISA, any capital gains or dividends is never taxed. Okay, if you invest outside the Stock and Shares ISA in things like a general investment account, then you might pay up to 24% if you're a higher rate taxpayer. You might pay up to 24% in capital gains. Okay, some of you have followed the story why I said I sold all my shares when the new Labour government was going to increase capital gains. I sold all my shares that were outside an ISA and then I bought them back inside an ISA. We'll call it bed and ISA, um, breakfast and ISA, whatever. Is when you sell it and you buy it back to an ISA. If you haven't, but that means you have to use up some of your ISA allowance. So what happens that if I sell it and I've generated capital gains, that means the value of the money has gone up from when I invested it, I have to pay capital gains tax. That's clear. Good. And that capital gains tax is based on what type of taxpayer I am. If I am a basic rate taxpayer, it's 18%. If I'm a higher rate taxpayer, it's 24%. If you watch my video of the Halloween budget on my YouTube channel, October— you don't have to, but if you wanted to get me when I was upset about it and talking about it, when it was raised, basic rate taxpayers from 10% to 18%, and then higher rate taxpayers went up from 20% to 24%. That happened in October 2024, more than a year before my book came out. Okay. So in my book, I've updated all the— if you have a copy of the book, you'll see that the current tax rates are there as at till now, unless they make any changes in the future. Right. So that means that you want to save your money in a tax efficient way. A cash ISA, no tax. If you want to do premium bonds, it's not really a bond per se, but it's almost like a government raffle draw where you might win £100 or you might win a million. The maximum you can put in premium bonds is £50,000. The minimum you can put is £25. So that's just one way some people save their emergency funds, because your emergency fund is money that you can get back as as you want. I like, I like 24 hours, so I don't put, don't put your— I don't put my emergency fund in a fixed anything. It's got to be flexible. There's no money for investing. Money I get back ASAP if I want it within 24 hours to deal with emergencies that come up. Boilers, like I came in and I'm like, oh, what's happening with the boiler? If you need to fix your boiler, I need to fix your car, you don't want to be selling your investment. So you can save it in a cash ISA. It's really important Because if you save it in a regular bank account, you can generate a lot of interest. If you generate interest above your PSA, that's another allowance. And of course, you guys know I'm not talking about Poste Specific Antigene. If you generate above your Personal Savings Allowance, maybe. Yeah, I'm not talking about Poste Specific Antigene because if I say PSA, among financial advisors and accountants, they already know what I'm talking about. And if I If I say it means something else to doctors, some get puzzled, except those that have had their PSA checked. But for doctors, PSA means prostate-specific antigen. But what I mean here is personal savings allowance, which is another allowance. Your personal savings allowance is £500 if you're a higher rate taxpayer. That means you can generate as much interest in your account up to £500, and after £500, you've got to pay a tax on it. And that tax is rising in April. Okay, how is that taxed? It's added to your income, your self-assessment. Nowadays, HMRC could actually go directly and take it by changing your tax code. Okay, so that's why you save in a cash ISA. In a stock and shares ISA, you invest through a stock and shares ISA, so you don't have to pay capital gains, which I've just described. And if you take any dividends, you don't have any dividends to pay as well. Okay, so that's allowances As at that point, ISA allowances is £20K. You're allowed £4K in your lifetime ISA. From April 2027, cash ISA allows only £12K. And you still have your junior ISA if you've got kids and you want to, you know, start investing or saving for them. You're allowed £9,000 in their junior ISA. ISA has some strange rules. Unfortunately, even in a sad situation that a partner, your husband or wife or partner, dies, and you can actually get their ISA allowance. You inherit their ISA allowance, not their ISA contributions. Of course, that's a different discussion. You might inherit that. I mean, their £20K, if they haven't used it, you can use it for the next 3 years. So that means your ISA allowance goes up to £40,000 instead of £20,000. I'm sure most of you are like, really? Yeah, it's there. It's all there. Yeah. But obviously not the happiest of circumstances. I remember it with inherited ISA, that's why I call it, it's not the official name, but your ISA allowance is £20K. But if you lost a partner, you could actually get that £20K allowance. That means you can contribute extra. In some cases, it's useful if you've got like children and you're trying to do a bit more investment for them now, it's tax-free and you've got the money, you can use up £40K in a tax-free for the 3 years. Okay, right.
