Four things to do before the end of the tax year: If you're an investor aged 40-54
The end of the tax year is on the 5th of April so time to get your skates on to make sure you’re using every trick in the book to keep tax low and spring clean your finances.
Many people in the 40-54 age bracket are both working and looking after either the kids and/or their parents too, so time can feel in short supply. And while investment confidence is typically a bit higher than it was in earlier years, truly confident investors are still a small minority.
Expert Sam Secomb says at this time of year, it's all about planning ahead - so you don't end up scrambling to use up any allowances in the final days before they run out.
I think the biggest difference between how the savvy investors manage the end of the tax year compared to others is that they actually focus on using the available tax allowances on the first day of the new tax year. Rather than the stress of scrabbling around trying to use the allowances before they expire at the end of a tax year, they’ve been invested for a year already and are just waiting for 6th April to arrive so they can go again! It can add up to a lot of extra loot in ISA and pension pots too because more of your money stays in your investment rather than gets lost to tax.
If you're a saver or investor aged between 40-54, I've whittled down some top end-of-tax-year tips for people like you. Here are four things to consider this year:
1. Top up your Stocks & Shares ISA
If you already have a Stocks & Shares ISA, you have a £20,000 allowance you can pay in every year. Boring Money research shows that If we look at every male investor between the ages of 40 and 54, the most commonly held sum of money is £38,500- outside of their workplace pension. The most convenient and tax-efficient home for this is usually an ISA. If you don’t have a Stocks & Shares ISA yet, it’s never too late to get cracking – our 2025 Best Buy Awards will help you choose the right one. If you do have one but wonder if you’re paying too much, hop over to our comparison table, enter the amount you want to invest, and compare fees and charges across the top ISA providers on the market.
2. Get a state pension forecast
Retirement will feel like a mix of being really far away and also a bit closer than it used to! Most people in their 40s and early 50s feel like they haven’t done enough for their retirement savings, so don’t be alarmed if that’s you. But you can’t plan if you don’t know where you’re going or where you are today. A good starting point is to log onto HMRC and get a State Pension forecast. For most of us this will be the foundation of our retirement income, so it’s crucial to work out what this might be. And then we can panic about the other bits!
3. Set up a personal pension if you don’t have one already
Opening a Self-Invested Personal Pension (called a SIPP) online is quick even if you’re not a pensions expert. We reckon it takes about 15 minutes, Our 2025 Best Buy Pension winners are all good options. But why do it? There are two main reasons: first, you get tax relief on contributions – which means you get extra top-ups from the government that can really turbo-charge your retirement savings.
You can currently claim income tax relief on contributions of up to the higher of £60,000 or your net earnings for the year. You can also use unused allowances from previous years. Restrictions start to come in if you earn more than £200,000.
And second – and this is particularly interesting as tax thresholds are currently frozen – pension contributions lower your taxable income. This is really worth understanding for parents where the highest earner has an income just above the new cutoff point of £60,000 for Child Benefit. For someone earning £100,000 or over, it can bring them below the limit where they start to lose their Personal Allowance.
If this ability to lower your taxable income gets you out of a tax band you’d rather not be in, do some more digging because a small pension contribution can sometimes make a big impact for multiple benefits.
As the tax year wraps up, don't miss the chance to review and boost your pension contributions. This smart move can lower your tax bill today and secure a more comfortable retirement tomorrow. Why does this matter? You can use tax relief by increasing your pension savings and enjoying tax benefits at your highest Income Tax rate. Plus, you can carry forward any unused allowances from the past three years to contribute more and gain extra tax relief. If in doubt, engage with a financial planner to tailor your pension strategy, ensuring it fits your unique situation and future aspirations. Making the most of your pension contributions now is a powerful way to enhance your financial well-being both today and in retirement.
4. Talk to your parents
This might sound very un-British, but if you have ageing parents, a bit of planning could be in order. Most of us tend to leave these conversations too late and then our hands can be forced. Do your parents want to relocate? Have they mentioned leaving you anything? Do they have plans to leave anything to their grandchildren?
There are options – using the annual gift allowance of £3,000 is a good starting point. You can also discuss ‘potentially exempt transfers’ - we have seven years to make gifts of any size without it being subject to Inheritance Tax (IHT). This year the government is on course to pocket a record £8 billion in IHT receipts.[1] This is a sensitive subject and tricky to navigate - but it can save heartache further down the line.
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[1] Irwin Mitchell, December 2024
