How last-minute money moves could help your end of year tax planning
As we approach the end of the tax year, it’s a good moment to pause and ask a simple question: is your money working as tax efficiently as it could be? In this piece, Castlefield adviser Helen Tandy explains how simple, well-timed moves — from using your ISA allowance to reviewing excess cash — can cut tax and help your money work harder.
Many of us have benefited from higher savings rates over the last couple of years. On the surface, that sounds like a win, but there’s a sting in the tail. Since savings interest is now paid gross, more people are finding themselves breaching their Personal Savings Allowance and paying tax on cash without realising it.
This makes the end of the tax year a particularly valuable checkpoint.
Often, it’s less about complex strategies and more about making full use of the allowances you already have.
Questions worth asking before 5 April
Before looking at allowances and numbers, it’s worth stepping back and asking a few bigger picture questions:
- Do you really need that much in cash savings?
- Is some of this money earmarked for the long term and could therefore be invested instead?
- Have you fully used all of your available tax allowances this year?
Key end of tax year allowances to review
Here’s a high level reminder of the main UK allowances many people review before the tax year closes:
Personal Savings Allowance (PSA)
- £1,000 for basic rate taxpayers
- £500 for higher rate taxpayers
ISA Allowance
- £20,000 per tax year (can be split between Cash ISAs and Stocks & Shares ISAs)
Capital Gains Tax Allowance
- £3,000 per individual
Pension Annual Allowance
- Up to £60,000 (subject to income and tapering rules)
Dividend Allowance
- £500 per individual
Not everyone will use all of these, but missing them entirely can be costly over time.
Let’s look at a straightforward example to show how this plays out in real life — this is something I have looked at with a few clients in previous years.
Scenario 1: £100,000 held entirely in a standard savings account
- Savings balance: £100,000
- Interest rate: 4%
- Annual interest earned: £4,000
Assuming the individual is a basic rate taxpayer:
- Personal Savings Allowance: £1,000 tax free
- Taxable interest: £3,000
- Tax at 20%: £600
Net interest after tax: £3,400
Even though the headline rate is 4%, tax quietly reduces the real return.
Scenario 2: Using the ISA allowance across the tax year boundary
Now let’s assume the same £100,000, but with a small planning tweak.
£40,000 is moved into a Cash ISA, split as:
- £20,000 just before the end of the current tax year
- £20,000 in April, using the new tax year’s ISA allowance
- The remaining £60,000 stays in a standard savings account
- Interest rate remains 4% across all accounts
Interest breakdown:
Cash ISA (£40,000 at 4%)
- Interest earned: £1,600
- Tax payable: £0 (ISA interest is tax free)
Standard savings (£60,000 at 4%)
- Interest earned: £2,400
- Personal Savings Allowance: £1,000
- Taxable interest: £1,400
- Tax at 20%: £280
Total tax paid: £280
Total net interest: £3,720
The difference planning can make
- Holding £100,000 entirely outside an ISA resulted in £600 of tax.
- Using ISA allowances reduced the tax bill to £280.
That’s £320 saved every year, simply by moving money into a tax efficient wrapper — with no increase in risk and no change in interest rate.
And this saving repeats year after year. My question as the adviser would be checking if so much was needed in cash, do you have any costs due in the next 5 years and how much emergency savings do you want to retain in cash.
A few well timed moves before (and just after) 5 April can make a meaningful difference — not just this year, but for years to come.
Final thought
Tax year end planning doesn’t have to be dramatic or complicated. Often, it’s about:
- Reviewing how much cash you actually need, in cash, make sure longer term money isn’t sitting unnecessarily in cash
- Using as many of the allowances that work for you as they disappear if you don’t use them
- What about adding cash to a Stocks and Shares ISA or Pension.
A few well timed moves before (and just after) 5 April can make a meaningful difference — not just this year, but for years to come.
If this feels complex, speak to your financial adviser or get in touch with Castlefield for guidance.
Written by Helen Tandy
Information is accurate as of 18.02.2026. Opinions constitute the adviser's judgement as of this date and are subject to change without warning. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.