Put right plans in place for a happy new tax year

There is also the political landscape to consider. Take up tax concessions now rather than wait for the next government which may be forced to cut them. Last Wednesday's Budget is in no way binding on the next Chancellor.

This also applies to borrowing. Markets dislike uncertainty and polls suggesting a hung Parliament have caused wholesale money markets to raise the cost of borrowing. If your property is mortgaged on a tracker or variable rate, secure a capped or fixed deal urgently, ideally going for 10 or more years.

Before choosing how to invest in the new tax year, review your

financial position in terms of:

n geographical spread;

n sector range (such as technology and utilities);

n level of risk prepared to take;

n timing: when will money be required?

It is best to carry out such a review with an independent financial adviser who can steer appropriately. For example, if deciding that more money should be invested in continental Europe, a good adviser would reveal that the misleadingly titled Fidelity European Opportunities has over 27 per cent invested outside Europe, Neptune European

Opportunities over 24 per cent and Investec Europe almost 20 per cent.

When looking at collectives – whether an investment trust, unit trust or open-ended investment company (OEIC) – concentrate on their performance and quality of management rather than charges.

Two very tax-efficient ways to invest are through either a venture capital trust (for a minimum five years) or enterprise investment scheme (held for at least three years). They attract 30 per cent income tax relief up to 200,000 and 20 per cent up to 500,000 respectively.

They should be viewed as long-term investments with the best returns often generated over eight to 10 years. If you withdraw money within the two stated time periods, tax relief is lost.

Both carry fairly high levels of risk as your money is largely providing finance for small, start-up companies. With a VCT, at least 70 per cent must be invested in a spread of small unquoted trading companies within three years.

Don't overlook starting or increasing your pension. Tax relief at 20 per cent is automatically added to your contribution but higher rate taxpayers can claim additional relief.

Many do not realise that up to 3,600 a year can be put into a pension for children, grandchildren and non-working spouses with full tax relief. This means that you only write a cheque for 2,880.

Use such incentives now. Labour has already restricted tax relief for investors with income of more than 130,000 and, if re-elected, will probably abolish higher rate tax relief altogether – a policy advocated by LibDems.

The Conservatives talk about the need to reinvigorate the savings culture. They prefer to move away from bribes – such as tax relief – to encourage everyone to save. They are looking at other ways to make pensions appealing, such as abolishing compulsory annuitisation and giving early access to pensions.

The Individual Savings Account or ISA is the main personal investment wrapper. There are two forms: deposit (maximum 5,100 for next tax year) or stock market (using the whole 10,200 from April 6 or up to half if the full deposit ISA element is used).

ISAs were introduced in 1999 and by investing with top interest-paying deposit providers, over 46,000 could have been built up by now. Using their full allowance, a basic rate taxpayer would be 2,900 more in pocket than the investor who used an instant access account, according to website, Moneysupermarket. A higher rate taxpayer would have earned 12,622 interest – almost 6,000 more than one using a non-ISA instant access account.

There are several special offers. NFU Mutual, as part of its centenary celebrations, has no initial fee – saving three per cent – on ISA lump sums of 1,000 or more until May 31. New regular savers with 100 monthly qualify for a discount voucher which can save 100 when insurance is taken out or renewed for such areas as motor or home cover.

With derisory ISA deposit rates on offer, if income is sought, opt instead for a bond or equity income fund or even a commercial property fund which also brings the prospect of growth. For the latter, consider both Threadneedle UK Property (concentrating away from south-east England) and L&G UK Property Trust.

With near zero interest rates and falling corporate bond yields, it is hardly surprising that total dividend payments in the UK fell 10bn last year. If seeking interest, rather than growth, look for a specialist fund with past success, such as Neptune Income which increased its total distributions from 5.97p per share in 2008 to 6.77p in 2009.

Take care if choosing a tracker ISA which seeks to replicate the constituent parts of a published index. Many are based on the FTSE100 whose performance is too heavily weighted in banks and in lacklustre stocks like Vodafone (whose 80bn value is one-third of a decade ago). This index is too concentrated with 10 bluechips accounting for 45 per cent of its value.

The FTSE250 is more representative with financial equities (like investment trusts) making up the major group even though average dividend yield at 2.4 per cent is lower than the 3.3 per cent of the FTSE100.

A self-select ISA is ideal for those with time and knowledge. For others, if seeking growth, look at Allianz RCM BRIC Stars, which invests largely in the equity markets of Brazil, Russia, India and China although up to one-third can be invested outside these countries.

Another idea is HSBC's GIF (standing for Global Investment Fund) Indian Equity which rose 138.5 per cent in 12 months to end of February and by over 185 per cent over five years.

If you currently hold little in continental Europe, consider Ignis Argonaut European Alpha, managed by Barry Norris, who is optimistic about the strong rebound in corporate profits in Europe which is not widely appreciated or factored into valuations.

Finally, with a new 50 per cent tax rate next month (for those earning 150,000) and the withdrawal of the personal allowance (for 100,000 earners and above), consider sacrificing some salary in return for most tax-efficient benefits such as childcare vouchers or using a leased car.

The tax-efficient way to save

Doug Fern, a semi-retired pharmacist from Alwoodley in Leeds, uses a Self-Select ISA offered by Saga for his tax-efficient savings. Saga makes no administration charge for its ISA wrapper and only charges for share dealing.

Doug consolidated his holdings into the Saga ISA, which he opened in May 2006. For each online trade, Saga charges 9.75 or 12.50 by telephone (11.50 and 14.75 respectively if less than 10 trades per quarter).

Before making an investment decision, Doug likes to consider a share's history through the charts. He saves mostly through investment trusts, Venture Capital Trusts and corporate bonds.

"I find Saga competitive on price and like the ability to ring them if I have a query. They are most helpful," says Doug.

Doug, 62, is married to Felicia. He enjoys table tennis, bridge and being trustee of a local community centre.