Brits have been issued a "last change" pension warning as the tax year comes to an end. Michele Tieghi, Financial Expert and Founder of psyfi money told savers to top up their pots before April 5. She said: "Money that you put into a pension doesn’t count as taxable income, and the Government will top up your pension by 20%. For example, if you contribute £80 to your pension, then the Government will add £20, meaning you instantly gain free money.
"Another example is that if your annual salary is £60,000 and you put £10,000 of that into a pension, you’d only be taxed as if you earned £50,000. Less income means less tax.
"This next week is your last chance to reduce your tax bill, as you only get the tax benefit before April 5th. Anything after this date will count towards next year instead."
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In addition, Ms Tieghi said Brits should use tax-free allowances, including the ISA Allowance, which allows account holders to deposit up to £20,000 per tax year.
"This means you will pay no tax on interest, dividends or capital gains, so maximising your ISA will increase your savings," the specialist said.
"The Capital Gains Tax Allowance allows you to make a profit up to £3,000 tax-free from selling investments. This includes shares, crypto or property (not your main home). If you haven’t already maximised this, then it would be wise to sell some assets.
"Each year, you’re also entitled to up to £500 in Dividend Allowance. This allowance has shrunk massively in recent years, but it is definitely worth maximising.
"Finally, you have your personal savings allowance, which offers tax-free interest on your savings depending on your income. Basic rate taxpayers (20%) get a £1,000 allowance, higher rate payers (40 per cent) get £500, and additional rate payers get no allowance."
Moreover, the expert highlighted that there are different family and household tax benefits that you can ultilise in order to save money, and advised people with an extra income to note down what they have earned this tax year.
"If you earn over £1,000, you must declare it," Ms Tieghi warned.
Finally, she said: "Before the end of the tax year, ensure that you have all of your important financial documents in one place. This will help you know if you owe tax, claim everything you’re entitled to, and avoid missing income.
"These documents can include your P60, P45, payslips, P11D (work benefits), bank statements, side income statements, pension contributions, and expenses (travel, work-from-home costs, and subscriptions, which can reduce your tax bill)."