With the tax year-end less than a month away, this is a good time to consider topping up your pension and individual savings account (ISA). You have until 5 April to make the most of this year’s allowances before they are reset for the 2024-25 tax year.

Making the most of ISAs and pensions could be especially important right now, as 6 April will bring further cuts to the tax-free allowances for those who invest outside these tax-efficient accounts.

Here’s an essential 10-point checklist to get you started:

1. Maximise your 2023-24 ISA allowance 

Investing in an ISA can help you save for your future and save on tax at the same time. This is because any returns you make are tax free. Currently, you can invest up to £20,000 in ISAs each tax year. This is a ‘use it or lose it’ allowance, which means you can’t carry forward any unused portion into the following tax year. So, consider sheltering your investments from tax by using as much of your 2023-24 ISA allowance as possible, before it disappears.  

2. Consider topping up your pension

Pensions are a really effective way of saving for retirement because of the tax relief you get on pension contributions. For every £80 you contribute to your pension, you’ll get a top-up of £20. If you’re a higher-rate or additional-rate taxpayer, you can claim back an additional £20 or £25, respectively, via your self-assessment tax return.

There are limits on the amount you can contribute to pensions each year and still get tax relief. In general, this is the lower of £60,000 or your gross relevant earnings1 (including tax relief). For those with higher incomes, the £60,000 may be reduced2. Those without earned income can still contribute £3,600 per year (including tax relief). 

3. Make the most of employer matching

Under current rules, employers must pay at least 3% of an employee’s ‘qualifying earnings’into a company pension, while employees must pay 5% (which includes tax relief). This makes for a total minimum of 8%. Some employers will match additional voluntary contributions made by employees. It’s usually capped but it’s a free boost to your pension savings, so should usually be fully used before contributing to other pension schemes.

4. Think about opening a SIPP

Around one in 11 people change jobs every yearwhich means each of us could end up with several pensions. This is where having a self-invested personal pension (SIPP) could help, as you can use it to bring all your pensions together. Bear in mind that not all pensions may be suitable for transfer – least of all defined benefit (DB) schemes, which pay a guaranteed income. If in doubt, ask a financial adviser.     

There’s even less reason not to have a SIPP if you’re self-employed, as you might otherwise be left relying on just the state pension later in life. 

5. Track down your old pensions

While you’re at it, why not begin tracking down old pensions, by contacting your old pension provider or former employer or using Vanguard’s free pension tracing service? According to the Pension Policy Institute, unclaimed pension pots totalled £26.6 billion in 2022. Tracking down long-forgotten pensions could make all the difference in making sure you have enough money to retire on. 

6. Consider using the national insurance reduction to boost your pension

The cut to employee national insurance (NI) contributions in January may have resulted in a small, albeit welcome, increase in your take-home pay. But if you don’t need the extra cash, why not consider using it to boost your pension? 

For an employee on the national average salary of £35,400, January’s NI cut resulted in a tax saving of £450 a year5. NI will fall again from 6 April, which means an average employee’s total tax saving will be £799 in the 2024-25 tax year. For higher-rate taxpayers, this increases to £1,3206.

It might not seem like a lot, but if you added this to your pension, you’d receive basic-rate tax relief and see those annual amounts increase to £998.75 and £1,650, respectively. It could be a great way of maximising your NI savings while putting extra money towards your retirement.

7. Don’t forget your children’s investments

If you’re the parent or guardian of a child and you have been planning on giving them money as a gift, now may be the time to open a junior ISA for them or bump up their existing junior ISA savings. The junior ISA allowance currently stands at £9,000 and, once you’ve opened an account, other relatives can gift contributions too. Plan well and you could help give your children a strong start to adult life or even help them fund themselves through higher education. 

8. Check what you’re paying for your investments

Costs can have a major adverse impact on your long-term wealth. Whether it’s the cost of the investment platform you use, the ISA or SIPP you invest through, or the funds you invest in, the differences can build into huge sums over time, as this earlier article demonstrates. So, check what you’re currently paying and consider how much you could save by switching provider or fund manager. 

9. Don’t get caught out by tax on investments

The tax-free allowances for those who invest outside an ISA or pension are becoming less generous for the second year in a row. In 2024-25, only the first £3,000 of profits on capital gains you make will be tax free, down from £6,000 in 2023-24. Meanwhile, the amount of tax-free dividends you can earn will be halved to £500.

It’s even more reason to ensure your investments are sheltered from tax within an ISA or pension. So, if you currently have investments in a general account, now may be a good time to consider moving these into an ISA or SIPP. 

10. Check how much cash you’re holding

Cash savings rates may look more attractive now than they did in the past, but there is no guarantee that they will remain this high as markets start to anticipate lower rates in the medium term. Although investments go down as well as up and you may get back less than you invested, history shows that shares have delivered higher returns than cash over the long term.

If you leave your excess savings in cash, you won’t be giving your money the same potential for long-term growth as you would from investing in the stock market. It’s another reason to consider investing in a stocks & shares ISA or pension as the tax year-end draws nearer.


1  For more on what counts as ‘relevant earnings’ that can earn tax relief when used to fund a pension, see the HMRC Pensions Tax Manual.

2  To work out if you have a reduced (tapered) annual allowance, see HMRC’s website.

3  Qualifying earnings are earnings between a lower and upper limit in a given tax year. For the 2023-24 and 2024-25 tax years, qualifying earnings are between £6,240 and £50,270.

4  The Analysis of job changers and stayers report concluded that on average, around 9% of people changed jobs each year between 2000 and 2018, ranging from a post-recession low of around 5.7% in 2010 to a high of around 10.9% in both 2017 and 2018.

5  Gov.uk

6  Source: Vanguard calculations.

Vanguard Personal Pension

Learn more about saving for retirement.

Investment risk information

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

Eligibility to invest in a Vanguard Personal Pension depends on your individual circumstances. Please be aware that pension and tax rules may change in the future and the value of investments can go down as well as up, so you might get back less than you invested. You cannot usually access your pension savings or make any withdrawals until the age of 55.

Your pension transfer will be sent to us as cash. During this period you will be out of the market (not invested) so you could miss out on any increase in the value of your pension fund should the market rise.

The eligibility to invest in either ISA or Junior ISA depends on individual circumstances and all tax rules may change in future.

Any tax reliefs referred to are those available under current legislation, which may change, and their availability and value will depend on your individual circumstances. If you have questions relating to your specific tax situation, please contact your tax adviser.

Important information

Vanguard Asset Management Limited only gives information on products and services and does not give investment advice based on individual circumstances. If you have any questions related to your investment decision or the suitability or appropriateness for you of the product[s] described, please contact your financial adviser.

This article is designed for use by, and is directed only at persons resident in the UK.

The information contained herein is not to be regarded as an offer to buy or sell or the solicitation of any offer to buy or sell securities in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information does not constitute legal, tax, or investment advice. You must not, therefore, rely on it when making any investment decisions.

Issued by Vanguard Asset Management Limited, which is authorised and regulated in the UK by the Financial Conduct Authority.

© 2024 Vanguard Asset Management Limited. All rights reserved.