Why Tax Allowances Matter
Providing easy-to-understand financial advice.
The end of the 2024/25 tax year is just around the corner, and with it comes a crucial opportunity: are you making the most of your tax allowances before they reset? Every year, valuable tax-efficient opportunities disappear on April 5th. If you don’t use them, you lose them—potentially missing out on thousands in tax savings and investment growth.
Your Key Allowances Before April 5th:
ISA Allowance – £20,000
You can invest up to £20,000 into an ISA completely tax-free.
Once the tax year ends, this allowance is gone—you can’t roll it over.
ISAs can be cash-based (for savings) or Stocks & Shares ISAs (for investing).
Pension Contributions – Tax Relief & Carry Forward
You can contribute up to £60,000 (or up to your earnings) and receive tax relief.
Higher-rate taxpayers can get up to 40% relief, making pensions one of the most tax-efficient ways to save.
If you haven’t used your full pension allowance in the past three years, you might be able to “carry forward” the unused amounts and contribute even more this year.
Capital Gains Tax (CGT) Allowance
If you're selling investments, property, or assets, you can make £3,000 in gains tax-free.
The allowance was £6,000 last year, and it's now much lower—so using it wisely is even more important.
Dividend Allowance
If you earn dividends outside of an ISA or pension, the first £500 is tax-free.
Anything above this is taxed at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate).our income more efficiently.
Lifetime ISA (LISA) Bonus
If you're aged 18-39, you can put up to £4,000 a year into a LISA, and the government will top it up by 25% (£1,000 bonus).
This is a great tax-efficient way to save for your first home or retirement.
The Cost of Doing Nothing
Many people put off financial planning, assuming they have time. But when April 6th arrives, any unused allowances vanish. I’ve seen clients realise too late that they could have made simple decisions to reduce tax and build their financial future.
Case Study: How One Client Saved Thousands
A business owner I worked with had surplus cash in their company but hadn’t considered making pension contributions. By moving £20,000 into their pension, they saved corporation tax, reduced personal tax liability, and boosted their retirement fund—all in one simple move before the tax year-end.
What Can You Do Now?
Review your current savings and investments.
Use your ISA and pension allowances before they expire.
Check if you qualify for ‘carry forward’ on your pension.
Speak to a financial adviser to ensure you’re making the right choices.
The deadline is closer than you think, but there’s still time to act. If you’re unsure about what’s best for you, let’s have a chat. At Thrive Together Financial Planning, I help people like you make smart, confident decisions about their money—so you can protect and grow your wealth in the most efficient way possible.
Book a free consultation today: www.thrivetogetherfp.co.uk/contact
⚠️ This blog is for informational purposes only and does not constitute financial advice. Tax rules depend on individual circumstances and are subject to change. Always seek personalised advice before making financial decisions.
