Money Basics: 5 Essential Money Moves to Make Before the New Financial Year Starts

As April 6th is the start of the new financial year, many will be taking stock of their finances and thinking about what they should be doing to prepare for the year ahead in terms of tax allowances and savings opportunities 

With this in mind, Damien Jordan, founder of Financial Interest and Damien Talks Money, has shared his insights on the top 5 things you must do before April 6th comes around:

Deadline for voluntary National Insurance contributions: “The deadline to fill in gaps in your national insurance is fast approaching. After April 5th 2025, you’ll no longer be able to go back and fill in those missing years during times where you may have not been working. This costs £800-£900 per missing year as a one-off fee but will earn you up to £300-per-year (per missing year) in retirement, which is a great ROI, though it can be significantly less than this. As of now, you can go as far back as 2006 to purchase missing years and boost your state pension entitlement. After the deadline, you’ll only be able to go back six years, meaning this is your last chance to secure a bigger pension payout.

ISAs: “You get £20,000 to spread across all of your ISAs in a financial year, including a Stocks & Shares ISA, Cash ISA, a Lifetime ISA, and more. While you can pay more into the first two accounts, the key is to not exceed the £20,000 overall annual limit or be penalised. With the tax year ending in just a few days, it’s time to make the most of your allowance before it resets, as it’s very much a ‘use it or lose it’ situation.

Relief at Source: “Over 2.3 million savers are failing to claim all eligible taxes on their pensions. If you’re earning £50,270 a year or more and you’re paying into a pension, or more importantly, a work-based scheme called relief at source (RAS), then you should potentially be claiming back money each year. That money will land as cold, hard cash in your bank account and you can go back up to four tax years to make a claim. You can do this by filling out a self-assessment, writing to HMRC or emailing them, so make sure you’re doing this before the end of the tax year.

Partner’s Pension: “73% of people don’t know they can contribute to their partner’s pension. Even if you earn no money at all, you can pay up to £2,880 into their pension each year and then earn up to £720 in tax relief. One thing to consider is that if you’re a higher rate taxpayer and your partner is a lower rate tax payer because they’re not working or they pay at the 20% band, it might be more efficient for you to pay into your pension because of that as you get that higher rate of relief.

Marriage Tax Allowance: “700,000 couples are missing out on this. If you’re in a marriage or civil partnership and one of you earns no money, you can transfer some of your tax-free personal allowance to your partner. You can move up to 10% of it which is £1,260, which would then save them £252 in tax. You can also go back four years into the past and bring that forward if you want, so that’s £1,000 back. If you then do it this year and then again after April, that’s £1,250 back.

Child Benefit: Child benefit is tapered down, so once you earn over £60,000, you lose this benefit. Adjusted net income is the way that entitlement to child benefit is calculated and simply speaking, if you pay money into your pension, it reduces your adjusted net income. So if you fall between £60,000 and £80,000, can you put more money into your pension to bring yourself down so you can reclaim it?

When it comes to ISAs, kids get their own allowance as well, which is £9,000 for a junior ISA for each child. It is likely to be unrealistic to max out your kid’s ISA each tax year, but even smaller amounts of cash into these structures can make a huge difference to a child’s life over a lifetime. A junior SIPP is a good example of this, where you can pay £2,880 into the SIPP each year and they get tax relief on this which takes it up to £3,600. But be sure to make any additional payments within the next few days, as with regular ISA’s, it will be reset meaning any unused allowance is lost.