How to Use Your ISA Allowance Before April 6

Your £20,000 ISA allowance resets on April 6 each year, and whatever you do not use is gone permanently. There is no carrying it forward and no claiming it back later, which makes March one of the most important months in the financial calendar.

If you cannot save the full £20,000, the order of priority matters. Start with the Lifetime ISA bonus if you qualify, up to £4,000. After that, a Stocks and Shares ISA is usually the right home for money you will not need for a long time, because the tax-free growth compounds in a way a Cash ISA cannot match. Use a Cash ISA for your emergency fund or short-term goals.

The trap people fall into is thinking they need to invest the whole lot at once, or not at all. You do not. Even putting in a few hundred pounds in March protects that money from tax on any growth it earns, permanently.

If you are part of a couple, you each have a separate £20,000 allowance, so together you can shelter up to £40,000 combined in a single tax year. Parents can also contribute up to £9,000 per child in a Junior ISA, which sits outside your own allowance entirely.