Your end of tax year checklist

Make the most of your tax-free allowances 

As the year ends, it’s natural to reflect on the past 12 months and look ahead to a fresh start. While many of us will be setting new year’s resolutions to improve our health or habits, it’s worth taking a moment to focus on something equally important: your financial wellbeing. 

With the tax year ending on 5th April 2025, there’s still time to make the most of your annual tax-free allowances. By taking advantage of these opportunities, you can increase your savings, reduce your tax liabilities, and set yourself up for a more secure future. 

Here’s a breakdown of the key allowances you should know about – and how to use them to your advantage over the next few months. 

1. Annual pension allowance 

The annual pension allowance is the maximum amount you can pay into pension schemes each year before income tax applies. For the 2024/25 tax year, the limit is set at £60,000 or 100% of your earnings, whichever is lower(1).  

If you’re a higher earner, note that the allowance narrows for those earning over £260,000 (including pension contributions). For every £2 earned above this threshold, the annual allowance reduces by £1, down to a minimum of £10,000. 

The good news? The lifetime allowance – which previously capped how much you could save into pensions tax-free across your lifetime – has been abolished as part of the Finance Act 2024. This change gives you even greater flexibility to grow your retirement savings(2). 

How to take advantage: Consider topping up your pension contributions using your exclusive Shared Cost Additional Voluntary Contribution (Shared Cost AVC) employee benefit scheme before the tax year ends to make full use of your allowance.*  

Our “End of tax year approaching – act now” webinar covers this in more detail. 

2. Annual ISA allowance 

Individual Savings Accounts (ISAs) are a tax-efficient way to save or invest your money. For the 2024/25 tax year, you can contribute up to £20,000 into ISAs, and any gains within the account are completely free from income tax or capital gains tax(3). 

If you’re married or in a civil partnership, you can effectively double your savings by each using your allowance – giving you a combined total of £40,000 to invest tax-efficiently. 

How to take advantage: Open an ISA or a Junior ISA (capped at £9,000 p/a) for your children to start building a tax-free savings pot. It’s a simple, flexible way to grow your wealth over time. 

Plus, our “Understanding ISAs” webinar explores the basics of ISAs, offering information for smarter savings decisions. 

3. Capital Gains Tax allowance 

The capital gains tax (CGT) allowance lets you make tax-free profits when selling certain investments or assets. For 2024/25, the CGT allowance is set at £3,000, meaning no CGT is paid if the gains for the year are under this amount(4). 

If you’re planning to sell stocks, shares, or other assets, this is the perfect time to review your portfolio and take advantage of any tax-free gains available. More information can be found on gov.uk. 

How to take advantage: Sell investments strategically to use your allowance before the tax year ends. This can help you avoid unnecessary tax liabilities and make the most of your profits. 

Find out more at our “Understanding Capital Gains Tax” webinar. 

Next steps: Act now 

With three months left until the end of the tax year, now is the time to act. Here’s how you can get started: 

1. Top up your pension pot using the benefits available to you: Make additional contributions to take advantage of your annual allowance using your Shared Cost AVC benefit. 
   

2. Consider opening or contributing to an ISA: Take advantage of the tax-free savings and investment opportunities available. We cover this and more on our new “Use it or lose it” webinar set run in February and March. 
   

3. Review your investments: Use your capital gains tax allowance wisely to optimise your returns. 

   
   

By being proactive and making the most of your allowances, you can boost your savings and set yourself up for long-term financial success. 

*A Pension is a long-term investment; the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rate and tax legislation. 

You will need to consider what investment product is suitable for you. Please speak to an independent financial adviser if you require financial advice. 

Shared Cost AVCs are available to active LGPS members. You should consider your affordability before making or amending your Shared Cost AVC plan.  

Please note, Shared Cost AVCs cannot be accessed until age 55, rising to age 57 from 2028. 

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

Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of and reliefs from taxation are subject to change. 

Sources: 

1. Tax on your private pension contributions, 2024, gov.uk, https://www.gov.uk/tax-on-your-private-pension/annual-allowance  

2. Finance Act 2024, 2024, legislation.gov.uk, https://www.legislation.gov.uk/ukpga/2024/3/contents/enacted  

3. Top cash ISAs 2024/24, 2024, Temi Sogbuyi, Chris Collier, https://www.moneysavingexpert.com/savings/best-cash-isa/ 

4. What is the Capital Gains Tax allowance for 2024/25?, 2024, Louise Cunnah, https://www.wealthify.com/blog/how-much-is-the-capital-gains-tax-allowance