If You Only Do One Thing Before The UK Tax Year End Do This

Happy Sunday fellow financial freedom seeker,

It is less than a week before the end of the UK Tax Year FY24/25 (ends on 5 April 2025).

This means it’s your last week to get your financial affairs in order.

71% of Brits have some kind of savings, so if there is one thing you do before the tax year end it most likely revolves around this.

Your One Simple Step this week is to…

Make Sure Your Money Is In The Right Place Before The Tax Year End

Let’s break this down for you:

1. ISA allowance (£20,000 dropping to £16,000 if you have put £4,000 in a Lifetime ISA in the tax year)

   Your ISA allowances cannot be carried forward, it resets each tax year so you either use it or lose it. Any interest payments on this are tax free. Whereas, any interest you make on savings you have outside of ISAs are taxable if the interest paid in the tax year is over £500 (if higher rate tax payer) or £1,000 (if basic rate tax payer). So it is important to check where your savings are and put them in the most tax optimised place that works for you.

2. Pension contributions (£60,000 which includes employer contributions, with any unused allowance being able to be carried forward 3 years)

   Unlike your ISA allowance any unused pension allowance can be carried forward for 3 tax years, but its important to try to use the allowance when you can as that’s just a longer time horizon of compounding returns.

• IMPORTANT NOTE: Many savings and investment platforms say it can take time for the transfer of money to come into them. So don’t assume it will be an instant bank transfer. Spend the time today to get your finances in order and make sure your money is where you want it to be so you don’t miss deadlines and don’t have a last minute panic.

Til next week,

Pernia | Your Finance Travel Buddy