Aegon Financial Planning

Ways to maximise your ISA savings before tax year end

As 5 April rapidly approaches, the countdown to the end of the tax year is well underway. This is the perfect time for investors to make the most of their Stocks and Shares ISA contributions.

Why is this so important? Not only can you use your full annual £20,000 allowance for the 2024/25 tax year, but by doing so, it also maximises the long-term benefits of compounding returns.

The power of Stocks and Shares ISAs

Stocks and Shares ISAs offer a highly tax-efficient way for UK investors to grow their wealth. These accounts shield your investments from Capital Gains Tax and Income Tax on returns, giving you the freedom to focus on growing your portfolio. With a wide range of investment options available, they are a flexible and valuable tool for anyone looking to build their financial future.

The “use it or lose it” principle

One key aspect of Stocks and Shares ISAs is that any unused portion of your annual allowance does not roll over to the next tax year. Once April 5th passes, your opportunity to contribute up to £20,000 tax-free is gone. Therefore it’s important not to let this valuable tax allowance slip through your fingers.

Why timing matters

Investing sooner rather than later isn’t just about meeting deadlines – it’s about giving your money more time to grow. Historically, markets have shown upward trends over the long term.  Whilst past performance is not guaranteed and you may get back less than you originally invested, the earlier you start, the better your chances of benefiting from compounding returns.

Take, for example, an investment of £20,000 at a 5% annual return. In one year, that would generate £1,000 in returns. Leave that in place, and in year two, you’re earning returns on both the original investment and the £1,000 you earned the first year. The longer your money has to grow, the more powerful this compounding effect becomes.

How can you maximise your ISA savings?

There are several strategies to make the most of your Stocks and Shares ISA before the 5 April deadline:

  • Top up your ISA – If you haven’t used your full £20,000 allowance, consider adding more funds before April 5th. Even small contributions can make a big difference over time.
  • GIA to ISA transfers – if you hold investments in a General Investment Account (GIA), you could consider transferring them into your ISA to shelter them from future tax liabilities. Please speak to your Aegon Financial Planning Manager today to discuss this further.
  • Transfer existing ISAs – consolidating your existing ISAs into one place can make them a lot easier to manage and potentially more cost-effective. If you have ISAs scattered across multiple providers, transferring them into one account could help you maintain a clearer overview of your portfolio.
  • Contribute to others’ ISAs – if you have used your own allowance, you may wish to make payments into an ISA for a spouse, civil partner or family member.
  • Children under age 18 also have a £9,000 junior ISA allowance, and those aged 18 to 40 can open a Lifetime ISA up to £4,000, which the government will boost up to £5,000. This makes ISAs an excellent way to save more for your family’s future.
  • Review your investments – it’s important to regularly review your financial goals and ensure your investments align with your risk tolerance and long-term objectives.
  • Seek financial advice – if you’re unsure about how to manage your ISA contributions or transfers, a financial adviser will help you make informed decisions tailored to your own circumstances.

 

Speak to us today

The end of the tax year is closer than you think, but there’s still time to take action. By fully utilising your ISA allowance and exploring strategies like transfers and consolidations, you can position yourself for long-term growth in a tax-efficient way.

If you’d like to chat about how to make the most of this year’s ISA allowances, or your other investments you hold with Aegon Financial Planning, we’re love to hear from you. Please give us a call at 0800 464 3079*, and let’s discuss your options.

Call charges vary. Lines are open Monday to Friday between 8.30am and 5.30pm. All calls are recorded for business purposes. Afp091. Exp 01/26

Related News & Insights

Download a copy of our brochure

This will close in 0 seconds

Download a copy of our brochure

This will close in 0 seconds

We use cookies on this website, you can read about them here. To use the website as intended please…

We use cookies on this website, you can read about them here. To use the website as intended please…