The current tax year ends on 5 April 2026 – and with it, so will this year’s opportunities to be tax efficient.
Are you making the most of the allowances currently available?
With some significant changes scheduled for April 2027, taking action now could make a meaningful difference to your long-term financial picture.
Keep reading to find out more about key areas to consider before the tax year ends. Or to talk in more detail contact our financial advisers now.
Make the most of pension contribution allowances
Pension contributions remain one of the most tax-efficient ways to save for the future.
Currently, individuals can contribute:
- Up to £60,000 per year into a pension, or
- 100% of your annual salary if your earnings are below £60,000.
These contributions benefit from tax relief, meaning the government effectively boosts the amount you invest for retirement.
If you haven’t used your full allowance this year, it may be worth reviewing whether additional contributions could help reduce your tax liability while strengthening your retirement savings.
Use your ISA allowance
Individual Savings Accounts (ISAs) remain a cornerstone of tax-efficient saving and investing.
The current allowance is:
- £20,000 per UK adult, per tax year
Any interest, dividends, or investment growth within an ISA is completely tax free, making them an effective way to grow wealth over time.
Importantly, the allowance does not roll over! If you don’t use it before the tax year ends, that allocation is lost.
But with changes on the horizon, maximising both this year’s allowance and next, could be particularly valuable…
ISA changes coming from 6 April 2027
From the 2027/28 tax year, new rules will change how ISA allowances can be allocated for many savers.
The total annual ISA allowance will remain £20,000, but there will be new limits for those under the age of 65.
For savers under 65:
- Up to £12,000 per year can be placed in a cash ISA
- The remaining £8,000 could go into a stocks and shares ISA
- Or any combination, provided:
- Cash ISA contributions do not exceed £12,000
- Total ISA contributions stay within the £20,000 overall limit
For savers aged 65 or over:
- These changes do not apply. Individuals in this age group will continue to be able to use the full £20,000 allowance across any ISA type.
What this means right now
These changes only apply to contributions made from 6 April 2027 onwards.
This means there is still time to take advantage of the current flexibility. For both this tax year and the next, you can still place up to £20,000 entirely into a cash ISA if that suits your financial strategy.
Importantly:
- Money already saved in ISAs will remain protected
- Existing funds will continue to earn interest tax free
- The Junior ISA allowance remains unchanged at £9,000 per child per tax year
Higher tax on savings interest from April 2027
Worth also noting that, separate to the ISA changes, the income tax you pay on interest received from savings (over your personal savings allowance and outside of ISAs) will also increase from April 2027.
For interest earned above your personal savings allowance, the new rates will be:
- 22% for basic-rate taxpayers
- 42% for higher-rate taxpayers
- 47% for additional-rate taxpayers
Time to review your finances?
Worried you’re not maximising your money’s potential? Want to be confident you’re making the most of every opportunity to be tax-efficient? Then now is the ideal time to get in touch with the team.
A Rigby Financial, our experienced financial advisers are on hand and ready to help you put personalised financial planning in place.
Small actions now, can make a big difference later. Let’s talk.