The end of the tax year isn’t about squeezing in last-minute activity; it’s about clarity, structure and reducing future financial drag. Small, well-timed decisions now can support both your lifestyle today and your independence later in life.
Using your ISA allowance effectively
The annual £20,000 Individual Savings Account (ISA) allowance remains one of the simplest and most effective tax-efficient tools available. Cash ISAs provide flexibility and certainty, while Stocks and Shares ISAs offer long-term growth potential – especially useful for those balancing family spending with future financial goals.
There has been much discussion about ISA reform recently, but no structural changes will impact savers before 5 April 2026. In short: the existing rules still apply and clarity remains.
For many in this stage of life, splitting the allowance across Cash and Stocks and Shares ISAs provides both liquidity and long-term upside, although everyone’s circumstances are different.
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.
Pension contributions: tax relief and long-term planning
While retirement may still feel a way off, pension planning becomes more meaningful at this point. Many people are at or approaching peak earnings, which often aligns with more focused long-term financial planning.
Pension contributions benefit from tax relief and employer contributions remain one of the most powerful (and often overlooked) forms of compensation. Reviewing investment choices, contribution levels and beneficiary nominations can provide reassurance that your future financial independence is on track.
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 planning
For anyone holding investments outside tax wrappers, the current £3,000 Capital Gains Tax (CGT) allowance can be valuable. Realising gains within this allowance, which is often termed ‘bed and ISA’ or rebalancing, allows growth to continue in a more tax-efficient way. Unused allowances cannot be carried forward, so thoughtful use each year may reduce future tax exposure.
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.
Dividend and savings income: tightening allowances
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.
Looking ahead with clarity
Taking control before 5 April can be both financially smart and emotionally grounding. If you’d like guidance on which steps are most relevant to you, your Finli planner is here to support you and help you make decisions with clarity and confidence.
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.