The End of the Tax Year is Almost Here: Review Your ISA Contributions to Maximise Tax Relief

As the end of the tax year approaches, it’s time to make sure you’ve making the most of your finances. One of the most important things to do is review your ISA contributions to ensure you’re using as much as possible of your ISA allowance before it resets on 5th April 2025.  

ISAs are great for anyone looking to make the most of their savings or investments due to the tax savings they offer. However, each tax year, there’s a limit to how much you can contribute. For the current tax year (April 2024 – April 2025), the total ISA allowance is £20,000. 

Even if you’ve already contributed to an ISA this tax year, there’s still an opportunity to top it up for more tax-free savings. Are you close to your £20,000 limit? If you haven’t yet reached the maximum, could you contribute more? 

Key benefits of ISA Contributions

• Tax-free growth: Everything you earn within an ISA is tax-free. This means that your money grows faster compared to non-ISA accounts. 

• Flexibility: With ISAs, you have access to a wide range of investment options. Whether you prefer low-risk savings accounts or more adventurous stock market investments, you can find an ISA that suits your needs. 

• Savings targets: An ISA is a great way to save for future expenditure, such as the cost of sending your children to school or university, or for lump sums for children or grandchildren. 

• Retirement planning: Contributing to an ISA can help bolster your long-term financial goals, including retirement. Pensions are crucial, but ISAs offer additional flexibility with fewer restrictions on when you can access the money. 

• Compound growth: The earlier you start contributing to your ISA, the more you can benefit from compound growth. The longer your money is left to grow without being taxed, the more wealth you’ll accumulate over time. 

What You Need to Do Now (Before 5th April) 

• Check your contributions: Log into your ISA account and look at how much you’ve contributed so far this tax year. If you’re nearing the £20,000 limit, you might want to adjust your contributions before the deadline. Remember, if you have more than one ISA account, the ISA allowance is for all your ISA accounts added together. 

• Maximise your allowance: If you haven’t reached the full £20,000 limit, consider contributing more. Think of it as an investment in your future, as any contribution you make now will continue to grow tax-free. 

• Review your investment strategy: Is your ISA working hard for you? Review your portfolio and consider if you need to rebalance your investments to align with your goals. A good strategy now can set you up for success in the coming tax year. 

• Take advantage of any remaining unused allowances: If you’ve only used a portion of your ISA allowance, now is the time to make additional contributions. You don’t want to miss out on the chance to shelter more of your money from tax. 

So, take a few moments today to review your ISA contributions, adjust if necessary, and make sure you’re not leaving any valuable tax relief on the table.  

Our experts are here to guide you every step of the way when you’re looking at how to make the most of your ISA. Take control of your financial future and get in touch with KGJ today on 01384 390909  or via our contact form.