Endorsed by Which? and Boring Money for over 5 years
“It's a great way to save for my future. I just wish I’d invested earlier in my life!”
Why the tax year matters
Making the most of your tax-free annual allowances will help give you the best chance of investment success.
And investing at the start of the tax year can turbocharge your returns over time.
It’s all thanks to the power of compounding. This is when you earn returns on your returns, as well as on the money you invest. This can help your investments grow more quickly over time.
You have until 11.59pm on 5 April 2027 to make tax-efficient investments this tax year.
Make the most of your allowances
Stocks and Shares ISA | Personal Pension | Junior ISA | General Account | |
|---|---|---|---|---|
Annual allowance | £20,000 | £60,000 or your income, if it's less. £3,600 if you do not earn anything. | £9,000 | Unlimited |
Tax relief on contributions | ||||
Tax-free withdrawals | 25% – the other 75% is taxable income | Tax-free, when the child is 18 | ||
Carry forward allowance | Previous 3 tax years | |||
Investing early can earn you a lot more
Invest £10,000 at the start of the tax year and you could earn nearly £24,000 more over time.
£501,134
Worth after 25 years
Invested on 6 April 2026 and at the start of every tax year
£477,270
Worth after 25 years
Invested on 5 April 2027 and at the end of every tax year
This scenario is for illustrative purposes only and does not represent a particular investment or its expected returns. It assumes annual returns of 5% after fees. Balances reflect the value at the end of each period. Any projections should be regarded as hypothetical in nature and do not reflect or guarantee future results.
Source: Vanguard calculations
Why it's smarter to invest than save
Long-term returns
Investing can be a powerful way to build wealth over time. In the long term, shares deliver higher returns than saving cash.
How your wealth grows
Compounding is when you earn returns on the money you invest as well as on the returns themselves. It can have a big impact on your wealth.
Checklist for saving tax
Top up your accounts – even a little bit helps
- ISA – pay in up to £20,000 tax-free per year
- Junior ISA – pay in up to £9,000 tax-free per year
- Pension – pay in up to £60,000 tax-free per year (includes personal and employer contributions)
Use your Capital Gains Tax allowance if you have a General Account – £3,000 tax-free per year
Consider a bed and ISA, which means moving investments from your General Account to your ISA
Make life simpler – and reduce costs – by bringing your investments together in one low-fee account.
Transfer your investments to us
Learn about transferring an account to usWhy Vanguard?
Over 50 years of experience
We’ve been taking a stand for investors for over 50 years. Now over 50 million clients worldwide invest with us for their future.
Value
Our funds are good value, which means you can keep more of your returns.
Straightforward
Our range of over 85 funds gives you a low cost and easy way to diversify. And opening an account takes just 10 minutes.
Insights from our experts
What is a stocks and shares ISA – and why should I open one?
We explain how a stocks and shares ISA works in the UK, the tax benefits and whether you should open one in 2026.
SIPP benefits: How a SIPP can support your retirement plans
Thinking about opening a SIPP? We explore the key benefits, reasons to open one and how a SIPP can support your long-term retirement plans.
What is ‘bed and ISA’ and ‘bed and pension’?
‘Bed and ISA’ or ‘bed and pension’ means moving investments from a general account to an ISA or pension. We discuss how it works and whether it’s worth doing.