The UK tax year runs from 6 April to 5 April. Each new year resets ISA, pension and CGT allowances - using them early can compound into thousands of pounds over a working life.

Key takeaways

  • ISA allowance: £20,000 for 2025/26 (HMRC).
  • Junior ISA allowance: £9,000 for 2025/26.
  • Pension annual allowance: generally £60,000 (HMRC, subject to taper).
  • CGT annual exempt amount: £3,000 (HMRC).
  • Dividend allowance: £500 (HMRC).

Why act early?

Investing on day one of the tax year gives funds an extra ~12 months of growth, dividends and tax-free compounding.

Order of operations

Cover emergency cash, then maximise pension match, ISA, CGT planning, then GIA top-ups.

Common mistakes

Forgetting JISA contributions, missing Lifetime ISA Bonus deadlines, and over-paying into pension breaching the annual allowance.

What this means for UK investors

Front-loading allowances tends to outperform last-minute panic in March. The earlier you invest in the tax year, the more time the money has to work.

Risks to watch

  • Subscribing beyond allowances (HMRC penalties).
  • Pension tapering for high earners.
  • Lifetime ISA Withdrawal penalties.
  • Tax-year rule changes at the Budget.