As the end of this tax year approaches fast, financial advisers across the UK are deep in discussions with clients about how to make the most of the final weeks of the tax year. From maximising pension contributions to strategic gifting, this is the time for clients to ensure their finances are in order. Here’s what advisers should be focusing on according to a range of industry experts.
Pensions: Making the most of allowances
Pensions remain one of the most effective ways to reduce taxable income, and the annual pension allowance of £60,000 should be fully utilised where possible. Gareth Davies, Pension Specialist at Scottish Widows, stresses the importance of maximising allowances: “It’s not just about the current tax year. Allowances change over time, so clients should consider how they can fully use their available contributions before any further government adjustments”.
Additionally, the carry-forward rule allows clients to use any unused pension allowances from the previous three years, potentially increasing additional available contributions to £180,000. Justin Corliss of Royal London highlights how business owners in particular can benefit: “It’s often beneficial for business owners who may not benefit from automatic enrolment to make a contribution to a pension plan, even if it’s just a small amount, to ensure carry-forward is an option later”.
Another key consideration is Salary Sacrifice, which enables employees to exchange part of their salary for employer pension contributions, reducing both their taxable income and National Insurance contributions.
ISAs and investment considerations
With ISA allowances remaining at £20,000 per person, clients who haven’t maxed out their contributions should act fast. Adrian Boulding from Dunstan Thomas urges advisers to remind clients that “ISAs are not just about avoiding tax; they’re about long-term financial security”.
For those considering investment strategy shifts, it’s also an opportunity to discuss capital gains tax (CGT) liabilities. The CGT exemption is set at just £3,000, and Andrew Bennie of Brooks Macdonald advises clients to consider realising gains strategically: “Given the continued reduction of the CGT allowance, clients should be planning their disposals carefully to minimise unnecessary tax”.
Corporation tax and business planning
For business clients, corporation tax planning is a critical end-of-year discussion. With tax rates rising for some businesses, Karl Leitelmayer of Premium Credit highlights the benefits of spreading tax bills: “Making tax payments a manageable monthly outgoing rather than a single large sum can free up cash flow and reduce stress”. Many SMEs are now exploring financing options for Corporation Tax and VAT bills, helping them manage their working capital more effectively.
Gifting and estate planning
Gifting remains one of the simplest ways to reduce inheritance tax (IHT) liabilities, yet it is often overlooked. Quilter Cheviot stresses that advisers should remind clients about the £3,000 annual gifting allowance, which can be carried forward one year if unused.
Additionally, strategic gifting of assets to children and grandchildren—such as Junior ISAs or pension contributions—can be highly effective. As Richard Hulbert from Defaqto notes, “This is an easy win for clients looking to reduce their estate size while providing financial security for their family”.
The changing landscape of inheritance tax and pensions
One of the biggest talking points this year is the proposed application of IHT to pension funds from April 2027. James Floyd of Alltrust Services warns that “while pensions have long been an effective IHT planning tool, the potential inclusion in estates means advisers need to start preparing alternative strategies now”.
Justin Corliss echoes this concern, suggesting that some clients may choose to withdraw more from their pensions now to avoid future tax liabilities: “For those who have been using pensions as an estate planning vehicle, it might be time to consider drawing down funds and gifting them to family members before changes take effect”.
Long-term planning and the UK investment landscape
With changes in government policy, there is also a renewed focus on investing in UK-based assets. Adrian Boulding points out that “The government’s push for pension funds to invest more in UK businesses could change the way we think about long-term investments”. This could open up opportunities for clients looking to align their investments with UK growth initiatives.
Future financial considerations
While the immediate focus is on tax year-end strategies, advisers should also encourage clients to plan for the next financial year. This could include:
- Diversifying investment portfolios to mitigate risks.
- Ensuring adequate life insurance coverage in light of changing tax laws.
- Reassessing financial goals and making strategic adjustments to long-term savings plans.
Financial advisers play a crucial role in ensuring their clients don’t just meet deadlines but also make informed decisions that align with their broader financial goals.
Seizing the final weeks
The end of the tax year is a crucial time for financial planning, and advisers must ensure clients take advantage of all available allowances and reliefs. Whether it’s maximising pension contributions, optimising ISAs, planning for inheritance tax, or managing corporation tax efficiently, now is the time to act.
As Andrew Bennie puts it, “This is not just about minimising tax—it’s about optimising financial health for the long term”. By having these conversations now, advisers can help clients navigate the complexities of tax year-end planning and set them up for a more secure financial future
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