Preparing for the tax year's end

With just over a month until the 2025/26 tax year ends, your opportunity to make smart saving decisions is getting smaller. 

But don’t worry – this isn’t about rushing into anything complicated. It’s simply a chance to pause and make sure you’re making the most of the options available to you. 

Whether you’re looking to save on tax, boost your retirement savings, or feel a little more in control of your money, here are the key things to consider before midnight on 5th April. 

Because small steps today could make tomorrow feel a whole lot easier. 

1. Make your pension work towards your ideal retirement 

Your pension is one of the most important saving tools you’ll ever use. It helps build the income you’ll rely on later in life. 

If you’re a member of the Local Government Pension Scheme (LGPS), you already have a valuable workplace pension. However, there’s a limit to how much you can contribute directly into your main LGPS benefits. 

That’s where a Shared Cost Additional Voluntary Contribution (AVC) can help. 

A Shared Cost AVC is a simple way to top up your pension alongside your main LGPS benefits, that gives you the flexibility to add more to your retirement regularly. It works a bit like an automatic monthly payment – taken directly from your salary before tax and National Insurance is calculated. That’s then added straight into your pension pot. 

Here’s where it gets powerful. 

If you choose to add £100 to a SCAVC, around £139* could go into your pot every month. That’s because you save on Income Tax and National Insurance with tax relief, and the full amount goes towards your retirement.  

It’s a bit like giving your future self a pay rise – adding more to your future for less. 

*The figures we’ve used are based on our current understanding of basic rate tax payer savings, and these are subject to change.  

How much should you be contributing to your pension? 

There’s no one-size-fits-all answer. What you can afford and the retirement that you're striving towards depends on your individual circumstances. 

By contributing to your LGPS, 1/49^th of your pensionable pay is put into your pension account every year. That gives you a guaranteed income during retirement for your life after work.  

How does that look like for LGPS workers in retirement? 

The below graphic shows the average pension income, split between genders, for LGPS workers in retirement – and then how much a person typically needs in retirement via Retirement Living Standards.  

Although the above figures do not incorporate The State Pension, which can add around £11,973 to your annual pension income during retirement. This will be changing to £12,546.60 from 6^th April 2026.  

There’s a clear gap between the average LGPS pension income and what you may need in retirement.  

How can you fill the gap? 

A Shared Cost AVC scheme can be really beneficial to help you save more into your pension pot. With a greater retirement income, the possibilities for your future can only get better. 

If you contributed £100 into a Shared Cost AVC scheme per month, that would add around £139* into your pot due to tax relief. Those monthly contributions then have the potential to grow over time and that would look like†: 

£100 contributions for 10 years - £19,424 total pot 

£100 contributions for 20 years – £45,634 total pot 

£100 contributions for 30 years - £81,000 total pot 

You can see the value that a Shared Cost AVC scheme could bring to your retirement. Helping you fund a better, more comfortable future.  

Being so close to the end of the tax year, now is the perfect time to take a step towards the retirement you want. Will you fill the gap? 

Apply for a Shared Cost AVC

Manage my current contributions

†The forecasts included are not guaranteed or a reliable indicator of future performance. They assume an annual growth rate of 3% after charges, and are based on current basic rate taxpayer savings, which are subject to change. 

Just bear in mind that your Shared Cost AVC scheme can take up to three months to set up, and your contributions will only be taken once your plan is active.  

It’s important to remember that you typically can’t access your pension until age 55 (rising to 57 from 2028), so what you contribute now, can only help your future.  Shared Cost AVCs are available to active LGPS members and may not be suitable for everyone. If you’re unsure, you can speak to a financial adviser or book a 1:1 session with a Financial Education Coach for guidance. 

Shared Cost AVCs are flexible to you 

Life changes and your Shared Cost AVC scheme savings can change too. 

Whether you get a pay rise, your monthly expenditure increases with bills, etc, or anything that affects your monthly income – your Shared Cost AVC plan can change with you.  

You can: 

• Contribute from as little as £2 

• Increase or decrease whenever you choose (within limits) 

• Cancel easily if you need to.  

Because your Shared Cost AVC is set as a fixed monetary amount, it’s also worth reviewing it occasionally. If your salary increases, you may want to adjust your contribution to stay aligned with your target percentage. 

2. Don’t forget about your total pension allowance 

If you’re regularly contributing into a pension, whether it’s your LGPS, Shared Cost AVC, or even other pensions, you should consider your annual pension allowance. 

This is limit that you can invest into your pension tax free. This is currently £60,000 per year. Most people don’t come close to this amount. But it’s worth checking if you’ve: 

• Had a recent pay rise 

• Increased your pension contributions 

• Made a large one-off payment into another pension 

If your total pension savings exceed the yearly allowance within the 25/26 tax year, you could face an additional tax charge. 

Although, you may be eligible for pension carry forward, allowing you to contribute over this limit tax-free - check if you’re eligible here. If you think this might apply to you, it’s worth checking your position or speaking to a professional. Money Helper can also offer free and impartial pension advice.  

For individuals who accessed their defined contribution pension flexibly, they are subject to a money purchase annual allowance (MPAA), currently set at £10,000. This restricts the level of contributions and also prevents the use of carry forward. 

3. Make the most of tax-efficient savings 

Retirement is important – but it’s not the only goal you might be saving for. 

If you’re building up money for something you’ll need before retirement, like: 

• A house deposit 

• Supporting children 

• Home improvements 

• Strengthening your emergency fund 

You may want to consider making the most of your ISA allowance before the tax year ends on 5^th April at midnight. 

Each year, you can save up to £20,000 across your ISAs. If you don’t use it, you lose it. 

There are different types of ISAs depending on your goals: 

• Cash ISAs 

A straightforward way to save, earning interest on your money. It can be useful for shorter-term goals, although inflation may reduce the real value of your savings over time. 

You can currently save up to £20,000 per year tax-free, reducing to £12,000 in 2027 for those under 65. 

• Stocks and Shares ISAs  

Designed for longer-term growth (usually five years or more). Your money is invested, so its value can rise and fall. 

Whatever you contribute, up to £20,000 tax-free, has the potential to grow. The growth can depend on which provider you choose to invest with, your attitude to risk, and other factors. 

• Lifetime ISAs 

You can contribute up to £4,000 per year if you’re saving for your first home or later life. The government adds a 25% bonus, but withdrawals for other reasons may result in a charge. 

These ISAs can sit nicely alongside pensions to help build up a pot for other saving goals whilst your still at work. Pensions are designed for later life, whilst ISAs offer flexibility for everything in between. 

Remember, if your ISA is invested, the value can go down as well as up, and you may get back less than you put in. 

Your total £20,000 ISA allowance is a single annual limit across all ISA types, not per account. If you’re unsure, speak to a financial adviser.  

4. You don’t have to be a big spender to look after your future 

Tax year end isn’t about spending large sums of money.  

It’s about awareness.  

It’s about asking: 

• Am I making the most of what’s available to me? 

• Could I afford to increase my pension contributions by just 1%? 

• Will using more of my ISA allowance help me reach my goals sooner? 

• Is there anything small I could tweak? 

You don’t need to overhaul your finances overnight.  

Even a small increase in what you save now could make a noticeable difference over time. 

Think of it as a financial spring clean – a quick check-in before the year resets. 

Because when it comes to your future, every little bit really does count. 

Disclaimers 

This blog is not a recommendation or financial advice, and the information included is accurate as of March 2026. 

My Money Matters supports your Shared Cost AVC journey, and the fund you choose to invest into will be managed by your chosen provider. 

If you’ve been an active member of the LGPS prior to November 2021, you can still access your LGPS benefits from age 55 after the new rules come into place in 2027. 

Tax treatment is based on individual circumstances and may be subject to change in the future.  

Salary exchange involves a change to your contract of employment. It is a legally binding agreement, and you should ensure that it’s the right thing for you to do before agreeing to it.  

It’s important to remember that the fund value of investments can go down as well as up, and you may get back less than you invest. Pension and ISA eligibility and tax rules apply, depend on your individual circumstances and may change at any time.