The clock is ticking - the tax year ends at midnight on Thursday 5 April.
So this could be a good time to ensure you’re making the most of your money and saving tax, rather than paying tax.
Here are four ways you can maximise this tax year’s allowances:
1. Use up your personal ISA allowances
Each tax year, you can save up to £20,000 free from UK tax in an ISA (Individual Savings Account). Although it’s best to invest for the long term, you can withdraw money from an ISA whenever you need to. There are different types of ISA available - Stocks and Shares, Cash, Innovative Finance, Lifetime, and Lifetime (with a £4,000 limit) ISAs. You can have each of these, but you can only pay into one of each type, each tax year.
Find out more about Lifetime ISAs »
Remember, you can’t carry any of your allowance into the next tax year. If you don’t use it, you lose it.
2. Top up your workplace pension
Putting money away in your pension is one of the most tax efficient way to save.
Most people are able to invest 100% of their earnings up to £40,000 in their pension each year and the taxman will add an extra 20% (basic rate tax relief). If you are likely to hit that limit this year, but haven’t in previous years, you can use ‘carry-forward’ to top-up previous years contributions to the maximum. If you pay tax at the higher rate or additional rate, you can claim additional tax relief via your tax return. Pension and tax rules can change and tax reliefs depend on your circumstances.
You can make a one-off contribution into your pension whenever you like, online or over the phone. But remember that money in a pension is usually not accessible until age 55 (rising to 57 in 2028).
Pension limits and allowances can be complicated, there’s lots more information here.
If you wish to top up your pension, please make sure you read the Pension key features first (including the contribution checklist).
Make a one-off contribution to your pension »
3. Contribute to children’s ISAs
Children have their own tax free ISA allowances too. Up to £4,128 can be saved for each child this year. And friends and family can contribute to your children’s savings too.
Your child will get access to their nest egg when they turn 18, and can use it for whatever they want – maybe their education, a house deposit or travelling the world.
Download our Junior ISA guide »
4. Contribute to your children’s and partner’s pension pots
All UK residents under 75 can add money to a self-invested personal pension (SIPP), even children and those not in employment.
You can invest up to £2,880 each year in a Junior SIPP for children under 18, or a SIPP for those not earning. And the taxman will add another 20% tax relief on top. That means a maximum of £3,600 will be invested.
Find out more about Junior SIPPs »
This article isn’t personal advice. If you are at all unsure whether an investment is right for you please seek advice. The value of investments will fall as well as rise, so you could get back less than you invest.
Any questions?
Call our friendly expert Helpdesk on 0117 314 1795 or email invest@hl.co.uk - we’re open 6 days a week including evenings.