Money tips as one tax year ends and another begins

Welcome… four days to go!

Good afternoon, and welcome to our blog. There are just four days to go until the end of the tax year, when some of your 2024/25 tax-free allowances will disappear forever.

With the tax burden at historic levels, it is more important than ever to take advantage of tax-efficient tools like your ISA and pension. We’ll be live blogging some tips to make the most of your finances. Stick with us.

We need to talk about ISAs

An Individual Savings Account (ISA) is one of the most straightforward tools you can use to reduce your tax bill. There are lots of different types of ISAs on the market, but the general gist is that adults can stash £20,000 in an ISA each tax year and it will be shielded from income and capital gains tax.

Check out our ISA guide for the basics on how an ISA works, and the different types available, including:

• Cash ISA: This is the best way to protect your savings income from the taxman.
• Stocks and shares ISA: A vehicle which shields your dividends and capital gains from tax.
• Lifetime ISA: A tool which helps you save for your first home (or retirement), offering a valuable government bonus of up to £1,000 per year. The allowance on this ISA is lower, at £4,000 per year. This allowance is included within the £20,000 limit.
• Junior ISA: A savings and investment vehicle for under-18s. The limit on this account is £9,000. Adults can contribute to this on behalf of a child without using up a portion of their own £20,000 allowance.
• Innovative finance ISA: A tool which allows you to engage in peer-to-peer lending and enjoy tax-free returns. This type of ISA can come with bigger risks.

ISAs: cash vs stocks and shares

Around 14.4 million Brits have a cash ISA, according to the latest HMRC figures, while 4.2 million have a stocks and shares ISA. Despite this, stocks and shares ISAs are worth a lot more – around £430.1 billion, versus £294.3 billion.

This can partly be explained by the fact that the average investor puts around £7,200 per year in their stocks and shares ISA. Meanwhile, the average saver puts around £4,300 in their cash ISA.¹

It can also be explained by the stock market’s long-term outperformance.

Investment returns almost always beat cash over the long run, provided you are willing to ride out some short-term volatility. See our analysis on saving versus investing. A minimum investment horizon of three-to-five years is usually recommended.

¹Based on average subscription amounts between 2008 and 2023, sourced from the latest HMRC report.

How much more can you make in a stocks and shares ISA?

Analysis from investment platform AJ Bell shows that if you had invested £1,000 per year in the IA global sector since 1999 (the year the ISA was launched), you would have made around £49,000 more than the average cash ISA return.

Investing in the North America sector would have delivered you around £86,000 more.

Meanwhile, a cash ISA wouldn’t have even kept up with inflation.

“That’s not to say that everyone should ditch cash and bonds, as safe havens have a key role to play in people’s portfolios,” says Laura Suter, director of personal finance at the platform. “Some people prefer the security of knowing their money is safe from market fluctuations, while others need short-term money or easy-access savings.”

“But it shines a light on the missed wealth opportunities for those who are defaulting to cash and not taking that first step into investing. Being in cash should be a conscious decision, rather than unthinkingly hoarding it,” she adds.

^{Source: AJ Bell/Bank of England/FE. Data from 30th April 1999 to end of December 2024. Based on a £1,000 investment every year from April 1999.}

Top funds for your stocks and shares ISA

If you are a last-minute ISA investor looking for some inspiration, it could be worth having a look at a best funds list. Several investment platforms compile these, using their own research to highlight a selection of products across regions, asset classes and styles.

These lists can be helpful, as they offer investors “a snapshot of the top funds, trusts and ETFs in each of the main sectors chosen by our research teams as well as a smattering of options with ESG strategies,” says Jason Hollands, managing director at investment platform Bestinvest.

“Deciding which actively-managed funds qualify as ‘best’ is a process that relies on the expertise of our investment specialists. They not only meet the fund managers on a regular basis to understand their philosophy and approach, but also carefully assess the type of market environment that might benefit from a certain manager’s style,” he adds.

“The risk management process, the size or liquidity constraints of the fund, the longevity of the manager and how scalable a fund is are other considerations.”

If you still aren’t sure which funds to select or don’t have much experience with DIY investing, you might be better off opting for a managed ISA or SIPP, where an investment professional selects funds on your behalf based on a predefined risk profile.

Alternatively, you could benefit from investment advice. This can be expensive but is often a good option for those with significant assets to invest. A robo-advisor could be a cheaper option than speaking to a person for those with a smaller pot, or more straightforward affairs.

Don’t feel under pressure to make a decision at five to midnight on the eve of the tax year-end. As long as you transfer your cash into the ISA account before midnight, it will count towards this year’s allowance. You can then select your investments at leisure.

What is “Bed and ISA” and should you do it?

“Bed & ISA” – it’s a strange name but a useful transaction. It involves selling investments held in a regular investment account and repurchasing them within an ISA wrapper. Some investment platforms will manage the process on your behalf if you fill in a form.

Carrying out a “Bed & ISA” transaction will use up some or all of your annual ISA allowance, but the upside is that any future income or capital gains will be protected from the taxman.

“It makes sense to try to ensure that all your gains in any one tax year fall within the annual capital gains tax allowance – which is only £3,000 this tax year – so there’s no tax to pay on your profits,” says Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown.

“If you’re married or in a civil partnership, you can also give assets to your spouse without triggering a tax bill, so you can both realise gains up to the allowance and then shelter up to £20,000 each in an ISA. This is sometimes known as Bed & Spouse & ISA.”

Just remember that the Bed & ISA deadline often comes a few days before the end of the tax year. This is because it takes some time to exit your original investments and repurchase them. The deadline varies from provider to provider.

See our round-up of Bed & ISA cut-off dates for major investment platforms.

We're signing off for the evening but will be back tomorrow with further tips and analysis as we approach the end of the tax year, starting with a focus on pensions. Should you top up your pension as 5 April approaches?

In the meantime, take a look at our end-of-tax-year checklist.

Good afternoon, and welcome back to our end-of-tax-year live blog. Yesterday, we wrote about ISA allowances but now we are going to turn our attention to pensions. Is there an annual pension allowance and should you top up your workplace pension, personal pension or SIPP before 5 April?

Is there an annual pension allowance?

Unlike ISAs, you can put as much money into your pension as you like each year – but there are limits on how much tax relief you will receive. Pension tax relief is only available on up to 100% of your earnings or £60,000, whichever is lower.

Pension tax relief is effectively a rebate you get on pension contributions, where HMRC “refunds” the income tax you would otherwise have paid on the money when you earned it. For example, if you are a basic-rate taxpayer and contribute £80 to your pension, HMRC will gross it up to £100.

Not everyone is entitled to the full £60,000 allowance. If you have already accessed your pension pot to withdraw taxable money, you may have triggered something called the money purchase annual allowance. Once this has happened, your annual allowance drops to £10,000.

Similarly, high earners have a lower allowance. You lose £1 of the allowance for every £2 of adjusted income you earn over £260,000. “Adjusted income” is your total income plus the amount your employer pays into your pension.

The annual pension allowance renews each year at the start of the tax year. You can carry forward unused allowances from the past three years.

Cost of retirement – how much will you need?

The cost of a comfortable retirement has soared in recent years, driven by inflation. Singles now need £43,100 per year to retire comfortably, according to the Pensions and Lifetime Savings Association (PLSA), while couples need £59,000 per year.

This falls to £31,300 and £43,000 respectively for singles and couples looking to enjoy a moderate retirement, and to £14,400 and £22,400 respectively for those content with a basic retirement.

You can see what each standard of living includes by looking at the PLSA website, but it is worth pointing out that a basic retirement doesn’t even include the cost of running a car. None of the categories include housing costs – so expect to pay significantly more if you are still renting or paying off your mortgage in retirement.

Analysis from wealth management company Quilter, conducted last year when the PLSA figures were published, found that a single person would need a pension pot worth £738,000 to pay for a comfortable retirement. A couple would need £929,000 jointly.

For a moderate retirement, these figures fall to £459,000 (singles) and £514,000 (couples).

For a basic retirement, singles would need a pension pot worth £63,000, while couples could rely on their state pension alone, provided both qualified for the full amount.

Tips to boost your pension before the end of the tax year

High retirement costs, combined with widespread undersaving, mean many are at risk of running out of money in old age – particularly now that people are living longer than ever before. It means savers need to prioritise their pension from a young age.

There are several steps you can take to boost your retirement pot before the end of each tax year:

1. Top up your pension to take advantage of tax relief on contributions worth up to £60,000. “You get tax relief at your marginal rate which means that, for a higher-rate taxpayer, that £60,000 contribution costs you just £36,000,” says Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown.
2. Boost a loved one's pension. If you have maxed out your own allowances, consider helping a family member. “You can contribute up to £2,880 into the SIPP of a non-working spouse/partner or into a junior SIPP for your child,” Morrissey explains. “They receive tax relief from the government, bringing the contribution up to £3,600.”
3. Make sure tax relief is claimed. Depending on the type of pension scheme you are in, the correct amount of tax relief might not be applied automatically. If you are in something called a “relief at source” scheme, the 20% basic-rate tax relief will be applied automatically, but you will need to claim the remaining 20 percentage points or 25 percentage points by filing a tax return, if you are a higher or additional-rate taxpayer. You won’t need to do this if you are in a “net pay” scheme. You can find out what type of scheme you are in by contacting your provider.
   

Can you boost the amount of state pension you receive?

The amount of state pension you receive depends on your National Insurance record. To qualify for the full new state pension, you need 35 years of National Insurance contributions. The full amount for the 2024/25 tax year is £221.20 per week.

If you have fewer years on your record than this, you will receive less money. For example, if you only have 20 qualifying years on your record, you will get 20/35ths of the full amount – so £126.40.

Those who don’t have enough qualifying years for the full amount are able to boost their NI record by buying extra credits. Under normal rules, you can only fill gaps in your record for the past six years but, under a special concession, the government is currently allowing people to fill gaps going back to 2006.

There are just days left to do this, as the deadline is the end of the tax year – but with long waitlists on the phonelines to the Department of Work and Pensions (DWP), the government has said people will still be able to claim as long as they log an online call back request by 5 April.

Boosting your state pension – is it worth buying voluntary NI contributions?

For some people, buying voluntary NI credits can be a good use of money. It currently costs around £900 to top up your record by one year. In return, you could receive £330 extra per year in state pension income, based on 2024/25 amounts. In other words, the credit would have paid itself off in three years.

It doesn’t make sense for everyone, though. Groups who may not want to top up include those who are young, those who are in poor health, and those who are on Pension Credit. We take a closer look in: “Reasons not to top up your state pension”.

“It is crucial before paying voluntary NI that you check this is a sensible course of action,” says Tom Selby, director of public policy at investment platform AJ Bell. “If you are young, for example, you will likely build up the required 35-year NI record naturally through work. Equally, it is possible to claim free NI credits from the government if you care for children or elderly relatives.”

“The first port of call should be to review your NI record to see if there are any gaps to fill. From here, you can then consider if it’s likely to be beneficial or if there are alternative ways, such as claiming free NI credits, to boost your state pension entitlement,” he adds.

Thank you for following our live blog today. We are signing off for the evening but will be back tomorrow, taking a closer look at inheritance tax rules and gifting allowances. Join us then!

Good afternoon and welcome back to our end-of-tax-year live blog. Today we are going to kick off by talking about inheritance tax planning. Is it something you should consider before the end of each tax year?

Inheritance tax has been under the spotlight recently after measures announced by chancellor Rachel Reeves in her Autumn Budget. As well as extending the freeze on inheritance tax thresholds from 2028 to 2030, Reeves announced that inherited pension pots would be brought inside the inheritance tax net from April 2027.

Rising asset values and frozen tax-free allowances (known as nil-rate bands) mean the government has been collecting record amounts in inheritance tax in recent years. Last year, the taxman collected an all-time high of £7.5 billion.

There are some strategies you can take to reduce your family’s inheritance tax liability, such as giving gifts in your lifetime, but there are strict rules around this – which is where our end-of-tax-year tips come in. We’ll be delving into these now.

How does inheritance tax work?

As we explain in our inheritance tax (IHT) guide, when you die, IHT is charged on the total value of your assets over a certain threshold. It is charged at a rate of 40%.

Some tax-free allowances are in place, which mean not everyone will fall into the inheritance tax net.

• Nil-rate band: Everyone can pass on an estate worth up to £325,000 tax-free. This is known as the nil-rate band.
• Extra allowance for the family home: Those who leave the family home to a direct descendant (a child, grandchild, etc.) qualify for an additional £175,000 allowance known as the residential nil-rate band.
• Combining nil-rate bands: Married couples and civil partners can combine their nil-rate bands to potentially pass on an estate worth up to £1 million if they leave the family home to their children or grandchildren (£325,000 + £175,000 + £325,000 + £175,000).

This gives a broad brush of the rules, but it is worth pointing out that there are some caveats. For example, the residential nil-rate band starts to taper off once your estate is valued at £2 million. You lose £1 of the tax-free allowance for every £2 over the limit.

It is also worth pointing out that no inheritance tax is due when married couples or civil partners leave their assets to their spouse, but cohabiting couples do not qualify for the same treatment.

As introduced previously, there are some steps you can take to reduce your inheritance tax liability, which we will delve into next.

What are gifting rules – and why do they matter at the end of the tax year?

One way to reduce your family’s inheritance tax liability is to give away assets in your lifetime – but this isn’t always straightforward.

Firstly, knowing how much to give away can be difficult to judge. Nobody knows exactly how long they will be alive. Don’t leave yourself short in old age, and factor in the possibility that you will need to pay for care costs.

Secondly, strict gifting rules are in place to tackle tax evasion. It is important to familiarise yourself with how these work so you aren’t landed with an unexpected tax bill.

• Annual gifting allowance: Anyone can give up to £3,000 of their assets to loved ones each tax year (in total) without that sum becoming liable for IHT. If you didn’t use the allowance last year, you can combine it and pass on £6,000.
• Special occasions: You can give £5,000 to your children for their wedding, £2,500 to your grandchildren or great-grandchildren, and £1,000 to any other person.
• Small gift allowance: You can give as many gifts of up to £250 per person as you want each tax year, as long as you haven’t already used another allowance on the same person.
• Gifts out of regular income: You can make regular payments to another person without any limits, for example to help with their living costs, as long as the gifts are made out of your regular income (rather than capital) and don’t alter your standard of living.
• Seven-year rule: You can make further gifts as you please, but if you die within seven years of making the gift, IHT will be payable on a sliding scale known as taper relief.

Inheritance tax: how does the seven-year rule work?

As introduced previously, you can give away as much of your estate as you like during your lifetime, and no inheritance tax will be due provided you outlive the gift by seven years. If you die before the seven years are up, you could qualify for a lower rate of tax under taper relief rules.

An important caveat is that you can’t give away a gift and still benefit from it. For example, if you sign away your house to a relative but continue to live there without paying market rent, it will be classified as a “gift with reservation” and will still count towards your taxable estate.

“You might be persuaded to consider one of the schemes that will put your home into a trust in an effort to get around the rules, but there are real risks here,” said Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown.

“There’s no guarantee it’ll work, because the taxman may consider these schemes to be tax avoidance. And at the same time, you have to pay to set it up – and could get an immediate tax bill – so you could waste money on a failed tax wheeze,” she added.

Should you maximise your annual gifting allowance?

“Gifting now, for example to make use of the main £3,000 allowance or a potentially-exempt transfer under the ‘seven-year rule’, will reduce your taxable estate and benefits loved ones, so this is something grandparents in particular might consider,” said Jason Hollands, managing director at investment platform Bestinvest.

He also points out that some may want to reconsider how they will use large pension pots, given the impending changes to how they will be treated on death.

Have a good evening... and don't panic!

We are about to sign off for the evening but, before we do, a quick line on markets for those who are concerned about topping up their stocks and shares ISA before the end of the tax year in light of recent market movements.

Donald Trump's so-called "Liberation Day" tariffs have wreaked havoc today. In Asia, the Nikkei 225 (Japan) fell 2.8% during trading hours, while the Hang Seng (Hong Kong) fell 1.5%. In Europe, the CAC 40 (France) closed 3.3% lower, the Dax (Germany) closed 3.1% lower, and the FTSE 100 (UK) closed 1.6% lower. US markets are still open, but the S&P 500 is down 3.6% at the time of writing.

"It’s important that during times of volatility, eyes are kept on long-term investment horizons," said Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown. "Investors should ensure they are well diversified, without too much concentration on a particular market, and with money spread across different asset classes and geographies."

"Time in the market and diversification have consistently been the foundations of successful investing strategies. For investors owning quality companies over the long term, big bumps in the road are part of the journey," she added.

If you haven't yet used up your ISA allowance, but are nervous about putting money into the stock market during turbulent times, remember that you don't necessarily have to invest your full allowance all at once. You could add the money to your stocks and shares ISA as cash before the 5 April deadline, and then slowly invest it over time.

"The strategy of drip-feeding investments by gradually allocating funds can also help mitigate risks and can pay off in uncertain times," Streeter explains. "It means investors may be able to take advantage of lower prices and benefit during a recovery, to help smooth out sharp market movements over the longer term."

Good morning and welcome back to our live blog. There’s just one day to go until the end of the tax year. Your 2024/25 annual allowances will expire at midnight tomorrow, 5 April. What do you need to do to get your finances in order? We’ll be running through some top tips. Stick with us.

ISA early birds catch the worm

Lots of people will be rushing to top up their ISA before their annual “use it or lose it” allowance disappears at midnight tomorrow. If you are a last-minute Larry this year, consider changing tact going forward. It could prove lucrative.

How much more could you make by investing on the first day of the tax year versus the last? Investment platform Hargreaves Lansdown crunched the numbers, using the Legal & General International Index as an example investment. This is a global equity tracker.

• Early bird: Someone who invested the full £20,000 on the first day of the tax year every year for the past decade would have seen their investment grow to £357,168 (total return).
• Last-minute Larry: Someone who left it until the last day of the tax year would have seen their investment grow to £322,855.
• The cost of procrastination: The difference between these two sums is a whopping £34,313. In other words, the early bird catches the worm.

“The earlier you use your ISA allowance in the tax year, the better, because your investments have longer to grow, and are protected from tax straight away,” explains Sarah Coles, head of personal finance at Hargreaves Lansdown.

“The early investors aren’t sitting pretty every tax year, and at times of market falls, those who got in towards the end of the tax year will have dodged the drops earlier on. However, the fact that the early birds do so much better over time shows how these years are more than made up for by average stock market performance,” she adds.

Of course, not everyone has a big lump sum sitting around that they can invest all in one go. But even an investor who spread their allowance evenly over a full year would have £18,585 more than the last-minute investor over a 10-year horizon, according to Hargreaves Lansdown’s calculations.

How many ISAs can you have?

Historically, ISA savers and investors weren’t able to pay into multiple ISAs of the same type within a given tax year. For example, you weren’t allowed to pay into two different cash ISAs and three different stocks and shares ISAs within the space of 12 months.

The rules changed from 6 April 2024, and you can now open more than one of the same type of ISA each year, and pay into it.

The exceptions are lifetime ISAs and junior ISAs. While you are allowed to hold more than one lifetime ISA, you can only pay into one account each tax year. Meanwhile, under-18s are only allowed to hold one junior cash ISA and one junior stocks and shares ISA.

The new multiple ISA rules were intended to offer greater flexibility. For example, some cash savers might want to open one easy-access ISA and one fixed-rate ISA within the same year. There is a catch, though.

The change is not mandatory and many major savings providers have decided not to offer the reforms. It is worth finding out whether your provider of choice offers this service before opening an account.

See our round-up of the savings providers and investment platforms that have embraced the new multiple ISA rules – plus those that haven’t.

New tax year: summary of key changes

A series of changes will come into effect at midnight on 5 April – some welcome, and others less so. We will see a series of tax hikes, but also an increase to things like the state pension and child benefit payments. Here’s a round-up.

Tax hikes

• National insurance hikes for businesses: From 6 April, employers’ National Insurance contributions will increase from 13.8% to 15%. The threshold at which businesses begin paying the tax on an employee’s salary will also drop from £9,100 per year to £5,000.
• Capital gains tax changes on business assets: The government has certain tax reliefs in place to incentivise entrepreneurship – known as Business Asset Disposal Relief (BADR) and Investors’ Relief (IR). These are set to become less generous. The tax rate on gains will increase from 10% to 14% on 6 April 2025. It will then rise further to 18% from 6 April 2026.
• Holiday let tax changes: Furnished holiday lets used to qualify for favourable tax treatment, but this is being abolished from 6 April. Owners will now have to pay tax in the same way as other landlords.
• Non-dom status will be abolished: The non-dom system will be replaced with a system based on tax residence from 6 April. “If you lived outside the UK for at least 10 years, there will be a four-year exemption period, but after that, all your earnings outside the UK will be subject to tax here,” explains Sarah Coles, head of personal finance at Hargreaves Lansdown.

The above is a summary of the main changes that will come into effect on 6 April, but it is worth pointing out that some other changes already came in earlier this month. These included a drop in stamp duty thresholds (meaning many buyers will now pay more tax when purchasing a property), and widespread council tax hikes.

Financial boosts

• 4.1% increase to state pension: Recipients of new state pension who have a full National Insurance record will see their weekly payments increase from £221.20 to £230.25. This increase is thanks to the state pension “triple lock”, which uprates payments each year in line with inflation, wage growth, or by 2.5% – whichever is highest. This amounts to a £470 increase overall this year.
• 4.1% increase to pension credit: Pension credit, a standard minimum guarantee for low-income pensioners, will also increase by 4.1% from 6 April. This means an annual increase of £465 in 2025-26 in the single pensioner guarantee and £710 in the couple guarantee.
• 1.7% increase to child benefit: From 6 April, families will receive £26.05 a week for the first child and £17.25 a week for other children. If you or your partner earns over £60,000, you will not qualify for the full amount. You lose 1% of child benefit for every £200 of income you earn over £60,000.
• Increase to National Living Wage: On 6 April, the National Living Wage (for those aged 21 and over) will increase by 6.7%, taking it from £11.44 per hour to £12.21 per hour. The government has said this is equivalent to a £1,400 annual pay rise for an eligible full time worker.
• Other wage increases: The National Minimum Wage (for those aged 18-20) will increase from £8.60 to £10 per hour, while the apprenticeship rate (for those aged 16-17) will increase from £6.40 per hour to £7.55.

Already maximised your own tax-free allowance?

If you have already maximised your own ISA allowance, you could consider topping up a family member. For example, you can pay up to £9,000 a year into a junior ISA on behalf of a child. This won't count towards your own annual ISA allowance.

"Junior ISAs build up, free of tax, on investment income and capital gains made until your child reaches the age of 18, when the funds can be either withdrawn or rolled over into an adult ISA. Your relatives and friends can also contribute to the junior ISA, providing the £9,000 limit for the tax year has not been reached," explains Wesley Harrison, head of financial planning at wealth management business Benchmark Capital.

If you are thinking about going down the stocks and shares route, see our round-up of the best junior ISA investment platforms. This could be a better option than a junior cash ISA, given your child has a long investment horizon (provided you open the account several years before their 18th birthday). Stocks and shares almost always beat cash returns over the long run, provided you take a sensible approach and invest in a broadly-diversified basket of companies. A minimum investment horizon of three-to-five years is typically recommended.

Thank you for following our live blog today. Remember, the tax year will end at midnight tomorrow, Saturday 5 April. We will be back on Monday with a summary of the key things you need to know for the 2025/26 tax year – plus, how to file a tax return for those who want to get their paperwork done early.

Happy new tax year!

Good afternoon and welcome back to our live blog. The 2025/26 tax year has begun. Here's what’s new:

• State pension payments have gone up by 4.1%, in line with triple lock rules. Recipients of the full new state pension will now receive £230.25 per week, up from £221.20.
• Pension credit, the standard minimum guarantee for low-income pensioners, has also increased by 4.1%.
• Child benefit payments have gone up by 1.7%.
• The National Living Wage has risen by 6.7% from £11.44 per hour to £12.21 per hour.
• The National Minimum Wage (for those aged 18-20) has also increased, from £8.60 to £10 per hour.
• The apprenticeship rate (for those aged 16-17) has increased from £6.40 per hour to £7.55.
• Employers now have to pay higher National Insurance contributions. The rate of contributions has increased form 13.8% to 15%, and the threshold at which contributions begin has dropped from £9,100 per year to £5,000.
• Annual tax-free allowances have renewed. Learn more about ISAs, pensions, capital gains allowances, dividend allowances and IHT gifting allowances.
• There have also been a range of other tax changes – from the abolition of non-dom status to holiday let tax changes.

Get ahead with your tax return

Although the 2024/25 tax year has only just ended, early birds might want to get ahead with their paperwork and start working on their self-assessment tax return.

It isn't due until 31 January 2026 (or 31 October 2025 if you file a paper return instead of online), but last year, HMRC reported that almost 300,000 people filed their tax return in the first week of the new tax year. Almost 70,000 people filed their return on the opening day (6 April 2024).

If you haven’t filed a tax return before, the first thing you need to do is register with HMRC. You will also need to do this if you registered with HMRC in previous years, but didn’t complete a tax return last year.

Tips to "turbo charge" your pension this tax year

ISAs always get a lot of attention as one tax year ends and another begins, but it is worth showing your pension some love too. Pensions are actually a more valuable savings tool in many ways, on account of the employer contributions and tax relief you get on the way in.

"As we enter the new tax year, it’s worth taking the time to think about what you can do to make the most of your pensions. Even taking relatively quick actions like checking how much you are contributing and whether you can afford to increase it can make a big difference over time," said Helen Morrissey, head of retirement analysis at investment platform Hargreaves Lansdown.

You might be surprised to learn just how much you will need. A moderate retirement costs £31,300 per year for a single person and £43,100 per year for a couple, according to the latest figures from the Pensions and Lifetime Savings Association (PLSA). These figures don't including housing costs, so expect to pay significantly more if you are still renting or paying off a mortgage.

Hargreaves Lansdown data shows only 36% of households are on track for a moderate retirement income.

Some top tips to boost "turbo charge" your pension include:

1. Using your annual allowances: "You can contribute whichever is the lowest of your annual income or £60,000 to your pension every year and receive tax relief," Morrissey explains. You can also carry forward any unused allowances from the past three years.
2. Claim tax relief: If you are in a "relief at source" scheme like a SIPP or some workplace pensions, you will only receive 20% tax relief automatically. Higher and additional-rate taxpayers need to claim the rest back by filing a tax return. This will allow them to receive the full 40% or 45% they are entitled to.
3. Boost your pension contributions: Under auto-enrolment rules, most working people automatically contribute 5% of their salary, with their employer contributing a further 3%, taking total pension contributions to 8%. Boosting your contributions is a good idea, if you can, as some employers will match this up to a certain level. The more you contribute now, the more you should have when you come to retire. Starting early is a good idea as it gives your money longer to grow once invested.
4. Track down any lost pension pots: "It’s easy to lose track of a pension. We move jobs or change our address and before we know it, we’ve forgotten all about it. This can blow a huge hole in your retirement planning," Morrissey adds. See our piece on how to track down lost pension pots.

State pension approaches tax-threshold – will you have to give some back?

The full new state pension now comes to £11,973 per year, which is perilously close to the £12,570 personal allowance. Pensioners who have any additional income on top of their state pension may already face a tax bill in retirement. How long before those who rely on the state pension alone have to pay some of it back?

Triple lock rules increase the state pension each year in line with inflation, wage growth, or by 2.5% – whichever is highest. The measure helps protect the value of the state pension from being eroded over time, but we could soon have a situation where the government is giving with one hand and taking with the other.

The Office for Budget Responsibility has forecast that the state pension will rise by 4.6% in April 2026, which would take it to £12,524 per year – just £46 shy of the tax threshold.

"What was intended as a mechanism to protect pensioners from poverty is now colliding with fiscal drag," said Jon Greer, head of retirement policy at wealth management firm Quilter.

"This situation is the result of the triple lock producing some significant increases in the state pension due to high inflation and earnings figures, while the government has failed to uprate tax thresholds in tandem."

This, combined with the sheer cost of the triple lock, means a review of the state pension looks "inevitable", according to Greer.

"The state pension is the single largest area of welfare spending and a vital source of income for millions. But if Labour is serious about building a fairer and more sustainable system, it cannot ignore the long-term pressures the triple lock presents," he added.

We take a closer look in: "State pension rises by 4.1% but hundreds of thousands face being taxed".