Nine things you need to know before the end of the tax year

With the clock ticking down until tax year end, there are still plenty of things you can do to make your money work harder for you.

But for many people, the stress associated with saving and investing is getting in the way. New research from interactive investor (ii)*, the second-largest platform for private investors, revealed that half of UK adults feel stressed (53%) about their current personal finances, and a similar amount feel particularly stressed (51%) when thinking about investing for their future. 

The research forms part of the launch of a new campaign, “Tax Year Zen”, which aims to better understand the negative emotions and associations that people have when it comes to managing their investments, and also to empower savers – providing them with the knowledge and tools to make their money go further through tax efficiency.

• Invest with ii: What is a Managed ISA? | Open a Managed ISA | Transfer an ISA

Here, Myron Jobson, Senior Personal Finance Analyst at interactive investor, shares his checklist of money hacks to help you make the most of your tax allowances before the end of the tax year, without the added stress.

1) Get the most out of your ISA allowance

The annual ISA allowance resets on the 6 April 2025, and it’s a “use it or lose it” allowance. This means that until the 5 April, you can deposit up to £20,000 into an ISA tax-free.

Holding money in an ISA protects your savings and investments from income tax, dividend tax, and capital gains tax (CGT). If you have unused ISA allowance and plan to deposit more money into your ISA, make sure you do before the allowance resets.

2) Max out your pension contributions

Every year you can invest 100% of your earnings, up to a maximum of £60,000 into your pension and get tax relief on your contributions. This relief comes in the form of government top ups, which are a 20% boost for basic-rate taxpayers. Higher-rate taxpayers can claim extra relief via a self-assessment.

If you’re a higher-rate taxpayer now but expect to be a basic-rate taxpayer in retirement, pension contributions make even more sense – you get higher tax relief going in and pay less tax when you withdraw.

Unlike ISAs that have a hard and fast rule on the annual allowance, if you haven’t used your full pension allowance from the past three years, you can carry it forward and make larger contributions this tax year. So, if you have maxed out your ISA allowance and wish to save more money elsewhere, then consider using your pension to do so.

3) Use your capital gains allowance

If you’re sitting on profits from shares, property, or other investments, consider securing your gains now to use up the current £3,000 allowance. 

Bed & ISA strategies – selling assets and rebuying them within an ISA – can also help keep future gains tax free.

What’s more, if you have a spouse, it’s worth remembering that spreading assets before selling can double your tax-free allowance. Also, transfers between spouses are tax-free, making it an easy way to reduce tax when selling shares or property.

4) Make the most of your spouse’s allowances

There are three ways you can use your spouse’s allowances to take full advantage of the tax benefits.

First, you can transfer assets to make use of both ISA allowances. As couples get a £20,000 ISA allowance each, you can shelter up to £40,000 tax-free as a household each year. So, if one partner has more savings and/or investments, consider gifting assets to your spouse so they can invest in their ISA.

Secondly, both pension allowances should be used. If one partner is a higher-rate taxpayer, they can contribute to the lower-earning partner’s pension – helping to balance retirement savings and maximise tax relief.

Lastly, you can take advantage of the marriage allowance. If one spouse earns less than £12,570 a year – their personal allowance – they can transfer £1,260 of it to the higher-earning spouse, saving up to £252 in tax per year.

5) Check your state pension contributions

The state pension rules are changing and from April 2025, you won’t be able to top up missing National Insurance years going back as far as 2006. Instead, you’ll only be able to go back as far as six years.

If you’ve got gaps in your record, now’s the time to buy back years – it could be the best investment you ever make.

6) Get dividend savvy

If you invest outside a SIPP or ISA, for example in a Trading Account, your personal dividend allowance is £500, which can be paid to you tax-free.

Before making any new investments in your Trading Account, consider making them in your ISA where you have an uncapped ISA dividend benefit.

7) Claim tax relief on charitable donations

Ticking that Gift Aid box adds 25% to your donation, and higher-rate taxpayers can claim back additional tax relief.

If you’re on the cusp of a higher tax band, Gift Aid donations can help bring you back down and ensure you avoid paying tax at a higher rate.

8) Avoid losing child benefit or the personal allowance

Child Benefit starts getting taxed away from earning £60,000, due to the High-Income Child Benefit Charge (HICBC). What’s more, if you earn over £100,000, your personal tax-free allowance (£12,570) is reduced.

One solution to maintaining your full child benefit, is to make pension contributions. This reduces your taxable income, helping you stay below the thresholds and maintain more of your benefits.

9) Don’t forget Junior ISAs

Children get an ISA allowance too and they can save up to £9,000 in a Junior ISA (JISA) tax-free.

Paying into a JISA is a great way to build a nest egg for the youngest members of your family, but it can also be a way for particularly tax-savvy parents and grandparents that have already maxed out their ISA allowance to stow away extra funds.

By following these tips, you can make the most of your finances and reduce your tax burden as the tax year end approaches. More information is available on interactive investor’s website here.

*The research was conducted by Censuswide, among a sample of 2,000 Nationally representative UK respondents (Aged 18+). The data was collected between 15.01.2025 - 17.01.2025. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.