Your 10-minute tax-saving toolkit

Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

The current tax year ends at midnight on Saturday 5 April, but it’s not too late to take advantage of the potential tax savings available. This is also an ideal opportunity to review savings and investments to check they still meet broader savings goals — whether you are putting money aside for retirement, building a rainy-day fund, or hoping to pay for the holiday of a lifetime.

Time is of the essence, so below is your 10-minute toolkit for the tax year-end, setting out the key things you need to know about ISAs, SIPPs and Fidelity’s Select 50 to help you make the most of your money.

So what are you waiting for? It’s time to get your money working harder for you.

• Can’t decide where to invest? Secure your allowances in cash, choose your investments later
• See our current offers to help make your money go further

Make the most of your ISA allowance

Everyone has a £20,000 ISA allowance, which can be invested in cash, a stocks and shares ISA or a combination of both. This is a use-it-or-lose-it allowance, so it pays to save what you can into these tax-efficient savings plans each year.

There is no upfront tax relief on contributions, but ISAs offer a tax-free wrapper to grow your savings. For cash ISAs, there’s no income tax on interest earned; for stocks and shares ISAs, there is no capital gains or income tax due when you take money out.

Stocks and shares ISAs can be used for medium-term saving but are also a useful tool as part of your wider retirement savings. Investors can choose from a wide range of underlying funds covering different all asset classes, sectors and geographical regions. This gives ISA investors the opportunity to tailor their ISA portfolio to their savings goals and risk profile.

• Open an ISA
• Add cash to my ISA

Boost the value of your SIPP

A SIPP is a flexible personal pension wrapper that can help you take control of your retirement savings. With a SIPP, you can choose where your money is invested by selecting different investment funds covering various assets, geographical regions and investment styles.

Like any other pension, contributions benefit from tax relief. For a basic-rate taxpayer, this means contributions are effectively boosted by 20%, with higher and additional-rate taxpayers able to claim further tax relief through their self-assessment return.

This makes pensions highly tax-efficient, although you cannot access these savings until the age of 55 (rising to 57 in 2028). At this point, you can take out 25% as a tax-free lump sum, with the rest subject to tax at your marginal rate on withdrawal.

People can contribute up to £60,000 into a pension each year (or the equivalent of their annual salary if this is lower) and qualify for tax relief on these contributions. There is also the option to carry forward unused allowance from the previous three years. For obvious reasons, most of us do not save anywhere near these limits, so for many of us there is scope to boost contribution levels into these tax-efficient savings plans. Remember. the more you save the bigger your pension pot is likely to be in retirement.

• Open a SIPP
• Add cash to my SIPP

Dealing with stock market volatility

Given the economic uncertainty at present and associated stock market volatility, many people may feel hesitant about making a large one-off payment into their SIPP or ISA.

One option is to invest in a cash fund and then drip-feed your money into equities, bonds, or other investments over time. Fidelity, for example, offers the Legal & General Cash Trust on its Select 50 list of recommended funds, which currently has a distribution yield of 5.3% — beating the returns available on many savings accounts. Please note this yield will fluctuate and is not guaranteed.

By investing your money in a cash fund, you can secure your SIPP or ISA allowance for this tax year and ensure you are getting a good return on your money. It also gives you more time to decide on a longer-term investment strategy, moving money into equities or bonds at a time of your choosing.

• Read: Investing cash in a Stocks and Shares ISA: the basics

Reviewing your fund portfolio

The end of the tax year is an ideal time to review the underlying funds in both your SIPP and various ISA holdings.

This might involve checking the longer-term performance of these funds, and looking at the overall composition of these investments, to ensure you have a well-diversified portfolio.

It helps to think about your overall time horizon, attitude to risk, and savings goals when reviewing funds and making decisions about moving money. Have your circumstances changed since you opened your SIPP or ISA? Are you nearing the time when you hope to access these funds? Have some funds seriously underperformed over a period of time? If so, you may want to make adjustments to your portfolio.

Remember, if you are investing for the long term (10 years or more), you can generally afford to take more risk with your money.

• Read: Tools that can make you a better investor

Select 50

SIPP and ISA investors can choose from hundreds of different funds, including active and passive options and a variety of investment styles.

For some investors, the sheer choice can seem overwhelming — particularly when making a decision to a deadline. But the Fidelity Select 50 can help. This is a curated list of funds chosen by investment experts to help you build a diversified portfolio. Funds are selected based on research and performance metrics, making it easier for investors to find high-quality options for their SIPP or ISA.

The list covers active and passive funds, as well as investment trusts and exchange-traded funds (ETFs). These funds span all major asset classes — including the above mentioned L&G cash option—along with different geographic regions and sectors, so there are options for investors with different savings goals and risk profiles.

As well as offering a targeted list of funds, there is also the option to invest in the Fidelity Select 50 Balanced Fund, a single fund combining a carefully chosen selection of investments, predominantly from this Select 50 range.

• Read: Tariff impact: how to invest during stagflation
• Read: Ten for 10: funds to buy and hold for a decade
• Read: ISA ideas: low-cost index tracker fund options

Final checklist

• Maximise contributions – if you can, make sure you use your full ISA allowance and consider topping up your SIPP to benefit from tax relief.
• Review your portfolio – are your investments meeting your longer-term savings goals? Make adjustments if necessary and invest in a diversified portfolio of funds.
• Act now – the tax-year deadline is almost here, so make the most of these tax-saving opportunities while you can.