Have you maximised your allowances ahead of the tax year-end?
The current tax year comes to an end this weekend, with investors encouraged to make the most of their tax-efficient investment allowances before they reset.
The 2024-25 tax year ends on 5 April, still giving investors a bit of time to ensure that their savings and investments remain as tax efficient as possible.
That includes maximising your individual savings account (ISA) allowance, which allows savers to shelter up to £20,000 a year tax-free, in cash or investments, such as stocks.
Data released by the Bank of England on Monday showed that households deposited an additional £3.6bn into ISAs in February.
"The surge in cash ISA deposits in February was encouraging as it signals that more savers are aware of the importance of ensuring savings are as tax efficient as possible," said Alice Haine, personal finance analyst at investment platform Bestinvest by Evelyn Partners.
Read more: Seven ways to maximise your allowances before the tax year ends
"The future of the cash ISA has since been called into question, with the government confirming in the spring statement that it will consider reforms to ISAs to achieve the right balance right 'between cash and equities'."
It has been speculated that the reforms could see a cap on the amount that can be saved into a cash ISA.
"Remember, this is still speculation, and no change is happening this financial year," said Haine. "Savers can still take advantage of this tax year's £20,000 ISA allowance before tax-year-end at midnight on Saturday by simply opening a new ISA or topping up an existing account and funding it with as much as they can afford to."
'Whatever the decision is made about ISAs in the future, remember that a cash ISA might work well for short-term savings goals, but investment ISAs are more suited for long-term savings targets with a time horizon of five years or more — that's a long enough period to ride out short-term volatility in the financial markets," she added.
In addition, parents can also help ensure their children's savings are as tax efficient as possible, with the Junior ISA (JISA) offering an annual allowance of £9,000.
Have you maximised your personal allowances ahead of the tax-year end? Vote in the poll below.
Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers.
Read more:
How to protect over £370,000 in savings from tax
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