The months leading up to the end of the tax year (5 April) are an ideal moment to get organised. A little focused planning now can support both your wellbeing today and your long-term financial goals, from building financial independence to future-proofing your family’s security.
Why this time of year matters
Each tax year provides a range of allowances, reliefs and tax-efficient opportunities that disappear if not used. Once the deadline passes, so do many of these benefits and it’s not unusual for people to lose out simply because life gets busy.
Now’s the time to take stock and make sure you’re using what’s available before allowances reset.
ISAs: flexibility, growth and tax efficiency
Individual Savings Accounts (ISAs) remain a powerful tool for building wealth without the drag of tax. For the 2025/26 tax year, the annual ISA allowance is £20,000. Any money you place into an ISA – whether Cash or Stocks and Shares – grows tax-free.
If you have children, using a Junior ISA (JISA) is a simple way to support their future with up to £9,000 invested tax-free each year. For many families, this becomes a long-term gift – supporting education, first homes or future independence.
Pensions: the quiet engine of long-term wealth
It’s easy to view retirement as something far off, but your pension is one of the most powerful drivers of long-term financial security. Contributions benefit from tax relief, employer payments and compounding – meaning early action can make a meaningful difference.
If you’re at the stage of life where you’re building momentum in your earnings, this is a smart time to review contribution levels and check how your pension is invested. Even small adjustments increased by employer contributions may significantly shape your future financial freedom.
The Annual Allowance for pension contributions is currently £60,000. However, you can’t use the full Annual Allowance where ‘relevant UK earnings’ are less than £60,000, although your employer still could. You may be able to carry forward unused allowances from the past three years, provided you were a pension scheme member during those years. For every £2 of adjusted income (total taxable income including all pension contributions) over £260,000, an individual’s Annual Allowance is reduced by £1 until the minimum Annual Allowance of £10,000 is reached.
Capital Gains Tax (CGT): reducing future costs
If you hold assets outside ISAs or pensions, such as general investment accounts, using your annual CGT allowance can reduce future tax exposure. The current allowance is £3,000 and any unused portion doesn’t carry forward.
If your assets are owned jointly with another person, you can use both allowances, which can effectively double the amount you can make before CGT is due.
If you are married or in a civil partnership, you are free to transfer assets to each other without any CGT being charged.
Using your Dividend Allowance
The Dividend Allowance is £500 for the current tax year. This is lower than in previous tax years and is set to remain at £500 for 2026/27.
From April 2026, Dividend Tax rates are increasing – the basic rate rises from 8.75% to 10.75%, the higher rate rises from 33.75% to 35.75% and the additional rate remains at 39.35%. This change only affects dividends outside tax-protected exempt accounts such as ISAs or pensions. Dividends held within these are fully tax-free, allowing investors to grow their savings without additional liability.
A practical moment to pause
The end of the tax year isn’t just an administrative deadline – it’s a chance to strengthen your financial foundations and reduce future uncertainty. With a little planning, you can enter the new tax year feeling more organised, more confident and more in control.
If you’d like support understanding which steps matter most for you and your family, your Finli planner is here to help you build a plan that feels clear, sustainable and aligned with your goals.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.