With April 5th fast approaching, now is the time to consider whether some last-minute tax planning could boost your financial situation. How can you make the most of your annual allowances? Is there anything that you could be doing to reduce your tax bill this year? 

Here are three important considerations to think about before 5th April 2022.


  1. Have you maxed out your ISA allowance?

Each tax year, you get an Individual Savings Account (ISA) allowance of £20,000 in either a Cash or a Stocks & Shares ISA, or both.

Using your ISA allowance can be a highly tax efficient way to save or invest your money as your returns are exempt from Income and Capital Gains Tax.

A Stocks & Shares ISA can be particularly useful, as your money can be invested in diversified Portfolios. This means your money has the opportunity to beat inflation, rather than losing value when left as cash. Growth in a Stocks & Shares ISA will be exempt from Income and Capital Gains Tax, helping you to do more with your money.

If you do not use all your ISA allowance before the end of the tax year, it will be gone. You cannot carry forward any unused ISA allowance from one year to the next- you either use it or lose it.


  1. Have you topped up your pension?

There are limits to the amount that you can tax-efficiently pay into your pension – this is known as the Annual Allowance.

The annual allowance for 2021/22 Pension contributions is typically £40,000 or 100% or your earnings – whichever is lower. For example, if you earned £50,000, you can usually invest £40,000 and if you earned £35,000 you can usually invest £35,000. If you put more than this into your pension, you won’t receive tax relief on any amount over the contribution limit.

Unlike the ISA allowance, the pension annual allowance can be used in multiple tax years through a process called ‘carry forward’. This allows you to use up any unused allowance from three previous tax years, as long as you held a pension in those years.

As well as protecting your money from tax, contributions into a pension attract government tax relief of 20% (more if you are a higher or additional rate taxpayer).


  1. Have you invested for your children?

If you have children or grandchildren, a Junior ISA can be a great way to save for their future in a tax efficient way.

Annual contributions are limited to £9,000 and this account has the same tax benefits as an adult ISA, although there can be multiple contributors. There can be no withdrawals before the child reaches 18 years of age, and once again if you don’t use it, you lose it.


It’s not too late and never too little.

Don’t worry if you can’t max out your allowances before 5th April, every pound that you can invest could make a difference to your future. And, as you’ve seen, with annual allowances it’s “use it or lose it”.

There is still time left to make use of the valuable allowances that are available. With our impulseSave® technology you can top up an existing ISA right up until midnight on 5th April.

With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. Past performance is not a guide to future performance.



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