Millions of people across the UK face paying more tax than necessary by simply failing to take advantage of key allowances and reliefs before the current tax year concludes.
With the 2025/26 tax year ending on April 5, 2026, savers and investors have roughly two months remaining to act.
This deadline marks the point at which unused allowances for ISAs, pension contributions and other tax-efficient measures reset, meaning any benefits not claimed will be permanently lost.
From savings interest and ISAs through to pensions, investments and family finances, seemingly minor decisions taken or overlooked before April can significantly affect tax liabilities for years to come.
Government figures suggest 2.64 million people will face tax on their savings during the current tax year. Higher interest rates have pushed many savers beyond their Personal Savings Allowance thresholds, while frozen income tax bands have dragged others into higher brackets, reducing or eliminating their tax-free allowances entirely.
Laura Suter, director of personal finance at AJ Bell, warns that the approaching deadline demands attention. “With the end of the tax year fast approaching, millions of people are at risk of paying more tax than they need to simply by overlooking key allowances and reliefs,” she said.
“Small decisions made or missed before April can have a lasting impact on your tax bill. We’ve picked out some of the most common end-of-year tax mistakes and the simple steps savers can still take to protect their money.”
Government figures suggest 2.64 million people will face tax on their savings during the current tax year
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GETTYThe annual ISA allowance of £20,000 operates on a strict use-it-or-lose-it basis, with any unused portion vanishing permanently once 6 April arrives.
Couples can shelter up to £80,000 between them over the coming weeks, while children each have a £9,000 Junior ISA limit, creating substantial tax-free potential for families.
Those with savings earning top easy-access rates of 4.5 per cent would breach the basic-rate taxpayer’s £1,000 Personal Savings Allowance with just £22,200 in their account, making Cash ISAs an increasingly vital shelter.
The annual ISA allowance of £20,000 operates on a strict use-it-or-lose-it basis
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GETTYPension contributions offer another powerful route to reducing tax bills before the deadline.
Basic-rate taxpayers receive 20 per cent tax relief on contributions, while those paying higher and additional rates can reclaim a further 20 per cent or 25 per cent respectively through self-assessment.
For higher-rate taxpayers, this means every £1 deposited into a pension effectively costs just 60p.
Strategic contributions can also help those hovering near earnings thresholds that trigger the loss of tax breaks or government support, such as childcare assistance, by lowering their effective income.
The capital gains tax-free allowance now stands at just £3,000 per person
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GETTYThe capital gains tax-free allowance now stands at just £3,000 per person, with basic-rate taxpayers facing 18 per cent on gains above this threshold and higher earners paying 24 per cent.
Investors holding profitable assets outside an ISA can crystallise gains up to this annual limit and transfer the proceeds into their ISA wrapper through a process known as Bed and ISA.
Further pressure looms from April 2026, when dividend tax rates rise to 10.75 per cent for basic-rate taxpayers and 35.75 per cent for higher-rate payers.
