Why acting before 5 April matters
With the tax year-end approaching, acting before 5 April could make a real difference to your financial wellbeing. Key allowances on ISAs, pensions and inheritance tax reset at midnight, and planning early helps you avoid last‑minute pressure while keeping your financial goals on track.
Every spring, the UK tax year quietly reaches its finish line, marking a natural pause in the financial cycle. However, it’s crucial not to leave it until deadline day to review your financial planning.
Certain allowances and opportunities reset on 6 April, and if you don’t use them by 5 April they’re gone. Knowing what those opportunities are – and acting with purpose rather than with haste – could make a clear difference to your financial position now and in the future.
Visit our Tax Year End hub
Make the most of your allowances before the tax year ends. Our hub brings together the key deadlines, opportunities and insights to help you feel confident about your financial decisions.
Use it or lose it
One of the most well-worn phrases in year-end planning is “use it or lose it”. It sounds obvious, but its implications can easily be overlooked.
Take ISAs for example. Every UK adult has an annual ISA allowance of £20,000 that allows you to save or invest without paying income tax or capital gains tax on any returns you make. Unused ISA allowance can’t be carried over, so if you haven’t used your full allowance by midnight on 5 April, you lose the unused portion for that tax year, although a fresh £20,000 allowance becomes available on 6 April.
It’s a similar story with capital gains. The annual capital gains tax (CGT) exempt amount for individuals is currently £3,000 per tax year. Any unused part of that exempt amount can’t be carried forward, so it expires at tax year‑end, and a new exempt amount applies from 6 April.
Pensions and gifting allowances also reset each tax year, though the rules differ. For pensions, you have an annual allowance, but what you can contribute is limited by your UK relevant earnings. You may also be able to carry forward unused annual allowance from the previous three tax years, if you meet the conditions.
For inheritance tax planning, some exemptions can be carried forward and others can’t. The £3,000 annual gift exemption can be carried over for one year, while the £250 small‑gifts exemption cannot be carried forward and applies per recipient each tax year.
Not all allowances roll over. ISAs and the CGT exempt amount, for example, are strictly “use it or lose it” each year. Understanding which allowances reset and which can be carried forward can help you make the most of the run‑up to 5 April.
Improve tax efficiency
Tax planning is about working within the rules to keep and grow what you earn. By putting money into tax-efficient wrappers such as ISAs or pensions before 5 April, you’re choosing the most favourable environment available in the current year to help reduce your tax burden.
For pensions, contributions made before the tax year ends may benefit from tax relief, boosting the amount that goes into your retirement savings. ISA subscriptions don’t attract tax relief, but adding money before 5 April makes full use of your ISA allowance, which can’t be carried forward.
What works one year may change as circumstances evolve. So, the earlier you look at these allowances, the more time you have to make considered decisions about your financial planning, rather than reactive ones.
Avoid last-minute pressure
Most financial advisers, providers and platforms start issuing reminders around March, and cut-off times vary for different actions such as ISA transfers or pensions submissions.
Waiting until the last days of the tax year to act can create stress, or rushed decisions that increase the risk of mistakes or just not having enough time to weigh up your options properly.
While 5 April marks the end of the tax year, waiting until the last minute can mean missing out. Adviser conversations, decision‑making and processing times all take time, so acting early gives you the best chance to make the most of your allowances.
Review your financial plans
The end of the tax year is a nudge in the financial calendar to take stock of where you are relative to where you want to be.
Your goals may have changed since the last time you looked at your finances, and your appetite for risk may have shifted. Life events such as moving home, growing your family, or changing career can make a big difference to your financial position and goals. So, revisiting your overall strategy as the tax year ends is important to ensure that your financial plans are on the right track.
Ultimately, it is not simply about being tax-efficient; it’s a holistic, joined-up view of your financial portfolio – from investments to pensions, from insurance to cash. It may mean you reconsider your investment strategies, adjust your pension contributions, or rethink your savings goals. By taking a holistic view, you can take proactive action rather than make reactive adjustments.
Act now for choice and flexibility
Acting before 5 April could help you make the most of your savings, bring you closer to your future financial plans and may help reduce anxiety about your finances.
If you’re unsure how to maximise the opportunities of the current tax year in your situation, a conversation with your adviser may help prioritise what makes sense for your goals and circumstances.
While there’s no one-size-fits-all answer, it is worth planning carefully and avoiding the stress of that last-minute scramble. Good financial planning is about building confidence in what lies ahead.
Important information
This article is for information purposes only. It is not intended as tax advice or a recommendation.
Fees and charges may apply.
Tax treatment depends on your individual circumstances and may be subject to change in the future. In this article we refer to the tax rate and thresholds set for England and Northern Ireland, these may differ for the devolved nations of Scotland and Wales.
Schroders Personal Wealth does not provide personal tax advisory and tax compliance advice, however we can introduce you to a relevant specialist. Schroders Personal Wealth might receive a referral fee from some of the partners we introduce to you.
The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors might not get back their initial investment.
The retirement benefits you receive from your pension plan depend on a number of factors including the value of your plan when you decide to take your benefits which isn't guaranteed and can do down as well as up. The benefits of your plan could fall below the amount(s) paid in.
