Financial planners are urging families to review their use of allowances and reliefs before the deadline. The message, according to advisers, is that inaction could mean missed opportunities to protect income, savings and estates.
As the 2025/26 tax year closes, attention is turning to how effectively individuals have structured their finances. Emma Sterland, chief financial planning officer at Evelyn Partners, said the approaching deadline should serve as a prompt for reassessment. “As the 2025/26 tax year draws to a close, it’s important to reflect on whether current allowances and reliefs are being well utilised,” she said, according to reports.
She added that it is also necessary to consider whether financial strategies remain appropriate in light of taxation changes arriving this April and next.
Frozen Allowances Increase Tax Exposure for Pensioners
The broader concern centres on frozen tax thresholds, which are increasing the overall burden without changes to headline rates. According to Ms Sterland, the freeze on allowances and reliefs means families must ensure they are making the most of their earnings, savings and investments.
She advised that keeping taxable income on the “right side” of the next tax band can be a sensible step where possible. There are, she said, relatively straightforward measures available to reduce taxable income, though these depend on individual circumstances.
Pension contributions are one area of focus. Ms Sterland warned there is no guarantee that the higher annual allowance or carry forward provisions will remain indefinitely. In her view, prioritising pension saving can help individuals retain more earned income while building wealth in a tax-efficient way.
She also highlighted the importance of asset allocation between spouses. Ensuring that assets are held by the partner who pays the lower rate of tax can reduce household exposure. Large cash holdings, she noted, may be unrewarding unless sheltered within a cash ISA.
ISAs themselves come with a firm deadline. “Annual ISA allowances cannot be carried forward if not used,” Ms Sterland said, underlining the significance of acting before the tax year ends on April 5.
Lifetime Gifting and Inheritance Tax Considerations
Inheritance tax is another area drawing attention. According to Ms Sterland, one of the most straightforward ways to ensure loved ones benefit from accumulated wealth is to gift assets during one’s lifetime.
Gifts are generally not subject to inheritance tax unless the donor dies within seven years. Many families, she said, have chosen to begin that seven-year period, effectively “starting the clock ticking” in an effort to reduce future liabilities.
The warning reflects concern about the potential impact of inheritance tax bills on family businesses. In some cases, Ms Sterland cautioned, an unexpectedly large liability could jeopardise a firm’s future and the jobs it supports if sufficient liquid assets are not available to meet the charge.
The combined effect of frozen thresholds and inheritance tax exposure is reshaping financial planning for pensioners. With the April 5 deadline approaching, advisers are encouraging households to review their arrangements carefully, making full use of available allowances before they expire for the year.
