Hello, I'm Judith Fraser, Head of Customer Marketing at Standard Life.
I'm here to share some simple steps that can help improve your financial wellbeing.
As April gets closer, you'll hear a lot about the end of the tax year. But what does that really mean, and how could it affect your finances?
The tax year runs from 6 April to 5 April the following year. Tax year end is the last day to make financial decisions that count towards that tax year, including making pension contributions, topping up your ISA, or claiming any tax relief.
The deadline is the same every year – 5 April.
The final day of the tax year can sometimes fall on a weekend, so it's best to check what the date is now, plan ahead, and not leave taking any action too late.
Income tax is what you pay to the government on your salary, savings, investments, and other income like rental properties. If you put some of your income into a pension, you can get tax relief. That means the government adds the tax that you'd normally pay into your pension instead. This amount is based on your tax rate.
5 April is your last chance to make pension contributions, claim any tax relief, and use up any unused pension annual allowances for that tax year. Miss this deadline and you could miss out on a valuable boost to your pension.
Say, for example, you're a basic-rate taxpayer. If you put £80 into your pension before the 5th of April, the government will add £20 on top of that.
If you're a higher-rate taxpayer, you may be able to claim back more by submitting a self-assessment. If you wait until after 5 April, that contribution counts for the next tax year, and that means you might miss out on this year's tax relief.
There are a few ways that you can get ahead of the deadline, and it's important to remember that some actions can take a bit of time, so planning ahead is vital.
First, you could check how much you've added to your pension this year. You could also consider topping up your pension before 5 April to maximise your tax relief. You can usually do this through your pension provider's app or your online account.
You could also check with your employer if they offer salary sacrifice or matching contribution options for your pension.
Remember, if you're not sure, speak to a financial adviser, or check your provider's deadline for contributions.
Finally, remember to always look ahead and plan what's coming. For example, from April 2029, pension contributions made through salary sacrifice above £2,000 a year will no longer be exempt from National Insurance.
Planning ahead now could help you make the most of the current rules.
