As the tax year draws to a close, now is the time to review your finances and make use of any allowances before they reset. Here are three last minute options to make use of allowances and / or benefit your future pension.
1. Top Up Your Pension Contributions
Contributing to your pension is one of the most tax-efficient ways to save for retirement. The annual pension allowance for most individuals is currently £60,000, but you can also carry forward any unused allowance from the past three tax years. Not only do pension contributions benefit from tax relief at your highest rate, but they also reduce your taxable income—potentially keeping you below key tax thresholds.
2. Make Charitable Donations
If you’re feeling generous, donating to charity before the tax year ends can provide a tax advantage. Under Gift Aid, charities can claim an extra 25% on your donation, and if you’re a higher-rate taxpayer, you can claim additional tax relief through your Self-Assessment. This could lower your tax bill while supporting a cause close to your heart.
3. Update Your National Insurance (NI) Record
This year, there’s an important deadline to be aware of. Until 5th April 2025, you can make voluntary National Insurance contributions to fill gaps in your record going back to 2006. This is particularly relevant if you have missing years that could impact your State Pension entitlement. Checking your NI record now and making any necessary top-ups could boost your future pension income.
Act Now to Make the Most of Your Allowances
Time is running out to take advantage of these opportunities before the 2024/25 tax year begins. Reviewing your finances and acting before the 5th of April could mean tax savings, better retirement planning, and improved financial security.
If you need advice on tax-efficient planning, our expert team at Liles Morris Accountants is here to help. Get in touch today to ensure you're making the most of your allowances!
#TaxPlanning #PensionSavings #CharitableGiving #NationalInsurance #EndOfTaxYear
.png)