£10,000 still up for grabs from the Government before tax year end

There is only one week to go until the end of the tax year but it is not too late for investors to make use of six variations of pensions and ISAs that could net them almost £10,000 from the Government.
29 March 2017

Tom Selby, senior analyst at AJ Bell, comments:

“Pensions and ISAs offer a simple way to shelter savings from the tax man and in many cases offer generous contributions up-front from the Government.  As well as the core pension and ISA allowances people can use variations of the products to save for their children, grandchildren and spouses, as well as for a deposit on their first home.  All in, there is still almost £10,000 a person could claim from the Government if they are lucky enough to be able to use all the allowances available to them.

“Most trading platforms will allow applications to be made online right up to midnight on 5 April 2017, at which point these pension and ISA allowances will be lost forever.”

Last minute pension and ISA checklist


Personal contribution

Government contribution

Individual Savings Account (ISA)



Junior ISA / Child Trust Funds



Help to Buy ISA






Spouses pension



Junior Pension






Individual Savings Account (ISA)

“ISAs are one of the most flexible ways of shielding savings from the tax man.  £15,240 can be contributed by 5 April and whilst there is no upfront incentive from the Government, there will be no tax due on any income or investment growth made within an ISA.  This is particularly attractive now the dividend allowance is being reduced from £5,000 per year to £2,000 per year on 5 April.”

Junior ISA / Child Trust Fund

“The bank of mum and dad is relied upon more than ever to help fund the cost of university and to get on the constantly rising housing ladder.  Junior ISAs or Child Trust Funds are the ideal way to do this in a tax efficient manner. £4,080 can be invested by parents or grandparents in either product by 5 April and like the main ISA all income and investment growth is tax free, providing a nice little nest egg on the child’s 18th birthday.

Help to Buy ISA

“Whilst it is too late to open a new Help to Buy ISA and get the Government bonus this tax year, a quirk in the rules means it is still worth opening one by 5 April if you are saving for a house deposit.  The 25% Government bonus is only available on funds over £1,600 and because the most that can be invested in the first month is £1,200, it will not be possible to reach that level this tax year.  However, Help to Buy ISA funds can be transferred into the new Lifetime ISA next tax year and still qualify for the same 25% Government bonus, without eating into next year’s LISA allowance.”


“Pensions offer by far the most generous Government incentive to save but because it is so generous it is often under review.  Anyone who wants to supplement their workplace scheme or doesn’t have access to a workplace pension should consider contributing as much as possible while that incentive still exists. 

“For a basic rate tax payer, every pound that goes into their pension will only cost 80p so someone contributing the maximum £40,000 this year would pay in £32,000 themselves and get £8,000 from the Government in tax relief.

“A higher rate taxpayer would be able to reclaim an additional £8,000 via their tax return and an additional rate taxpayer would be able reclaim an additional £10,000. There are complicated rules that govern how much you can contribute to a pension if you earn over £150,000 a year which need to be considered by people in that situation.”

Pension for a spouse

“As well as contributing to your own pension it is also possible to put money into a pension for a non-earning spouse or civil partner and benefit from tax relief.  Non earners can contribute up to £2,880, with the Government adding £720 in tax relief so that a total of £3,600 is paid into the pension in any one year.”

Junior pension

“Much is made of Junior ISAs but perhaps less well known is the fact that you can contribute into a pension for your child.  This has the added benefit of tying the money up until they are aged 55 if you are worried about them blowing it when they are 18.  A parent or grandparent can contribute up to £2,880 into a pension for each child, with the Government adding £720 in tax relief, making a total contribution of £3,600.”

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