Tax Year End Checklist: ISA and Pension Contributions Before 5 April

Most tax allowances don't roll over. They simply expire at midnight on 5 April, and nothing arrives in the post to remind you. The ISA allowance and the pension annual allowance are the two biggest examples — and for many households, the last few weeks of the tax year are when a couple of hours of admin is worth more than a month of careful budgeting. What follows is a working checklist: the limits, what has to happen before the deadline, and the order to do it in.

Know your two allowances

Almost everything else on this list follows from two numbers.

The ISA allowance is £20,000 for the tax year. It's per person, not per household, and you can split it however you like between a cash ISA, a stocks and shares ISA and an innovative finance ISA. A Lifetime ISA is different: you can put in up to £4,000, and that £4,000 sits inside your £20,000 rather than on top of it.

The pension annual allowance is £60,000 for most people, covering your contributions, your employer's contributions and tax relief combined. It tapers down to as little as £10,000 for people with very high incomes, and it drops to £10,000 if you've already flexibly accessed a defined contribution pension — the money purchase annual allowance. If either of those sounds like your situation, check before you pay in.

Junior ISAs are separate again, with their own £9,000 limit, and don't touch your allowance.

The ISA checklist

• Check what you've already used. Contributions can be spread across several providers, and it's easy to forget a regular monthly plan set up years ago. Add up the year-to-date figures before you pay in anything else.
• Understand who holds the deadline. A subscription normally counts on the date the provider receives cleared funds — not the date you clicked "transfer". Bank transfers can take a day or more. Don't leave it to 5 April.
• Allow time for dealing. If you're investing rather than holding cash, check your platform's cut-off for trades placed near the year end. Some accept an instruction on 4 April; others won't.
• Watch the Lifetime ISA. Withdrawals that aren't for a first home or retirement normally carry a 25% charge, which claws back the bonus and a little of your own money. Fund it only if the money can stay put.
• Use both allowances if you're part of a couple. Two adults means £40,000 of ISA space between you, and transfers between spouses are generally free of capital gains tax. Funding the lower earner's ISA is often more tax-efficient than over-funding one account.

Small things that catch people out

Transferring an ISA from one provider to another doesn't use any allowance, provided you use the official transfer process rather than withdrawing the money and paying it back in. Withdrawing and re-depositing counts as a fresh subscription unless the ISA is a flexible one — and even then the replacement has to happen within the same tax year.

If you hold investments outside an ISA, "bed and ISA" — selling and rebuying inside the wrapper — can move future growth into a tax-free home. It uses your capital gains tax annual exempt amount, so run the numbers first.

Pension contributions: where the bigger numbers are

Pensions are less flexible than ISAs — your money is locked away until at least 55, rising to 57 in 2028 — but the tax treatment is more generous. Contributions attract relief at your marginal rate, so the same £1,000 costs a higher-rate taxpayer considerably less than a basic-rate one.

Two limits matter. First, you only get relief on contributions up to 100% of your relevant UK earnings, or £3,600 if that's higher. Second, everything going in — yours, your employer's and the relief — has to fit inside your annual allowance.

With relief at source schemes, the provider claims basic rate relief automatically. If you pay higher or additional rate tax, you claim the rest through self-assessment. That claim is worth checking rather than assuming.

Carry forward is the most underused rule in pensions

If you didn't use your full annual allowance in any of the previous three tax years, you may be able to carry it forward. The rules: you must have been a member of a registered pension scheme in the year you're reaching back to (membership, not a contribution), you have to use the current year's allowance first, and you use the oldest years before the newer ones. It's a useful tool if your income has jumped or you've had a lump sum to invest, but the calculation is fiddly. Get it checked.

A sensible order of operations

1. Confirm the figures — what you've paid into ISAs and pensions since 6 April.
2. Make sure you have cash for the next few months before tying money up.
3. Clear expensive debt. Paying off a high-rate card usually beats any tax wrapper.
4. Collect any employer pension match. It's the best return on offer.
5. Top up the ISA, prioritising long-term investments over cash you'll need soon.
6. Consider a pension contribution, especially if you're a higher-rate taxpayer.
7. Record the dates, the amounts, and any carry forward you've used.

Five mistakes worth avoiding

• Assuming an ISA allowance rolls over. It doesn't.
• Leaving a transfer until 5 April and finding the money arrived on 6 April.
• Missing employer pension contributions by not opting in or not raising your own contribution where a match applies.
• Paying into a pension after flexibly accessing one without checking the reduced allowance.
• Assuming you're within the annual allowance when the tapered limit applies to you.

A workable plan for the final fortnight

Book twenty minutes this week. Log in to every ISA and pension you hold, write the year-to-date totals on one sheet, and compare them with your allowances. Decide what you can sensibly add without touching your emergency fund. Then act with at least three working days to spare — enough time to fix a failed bank transfer or a rejected trade.

If your affairs are straightforward, this list will carry you through. If you have a tapered annual allowance, several pension pots, a business, or you're weighing carry forward against a large one-off contribution, the sums get complicated quickly and the tax charge for getting it wrong is real. Speak to a regulated financial adviser or tax professional before the deadline, not after. This is general information rather than personal advice, and rules and limits change — always check the current position before acting.

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