Brits could save up to £7,000 a year in tax by following a few simple tips, according to a financial expert. With the UK Chancellor John Healey refusing to rule out tax increases in the upcoming Autumn Budget in October, Michele Tieghi, founder of Psyfi Money, shared five money moves that could help people keep more of their cash.
Boost pension contributions
Mr Tieghi said maximising pension contributions is “one of the most effective ways” to be more tax efficient, as the money you put in can benefit from tax relief.
He said: “As an example, if you earn £60,000 a year, £9,730 of your income falls within the higher tax rate of 40%.
“If you instead make a £9,730 contribution to your pension, you could receive a tax relief on your contribution worth £3,892 in total. This means putting £9,730 into your pension could instead cost you £5,838 after you receive the tax relief.”
Make use of an ISA
His next tip is to make use of an ISA (Individual Savings Account). Every tax year, you can save or invest up to £20,000 across all ISAs, with all capital gains protected from tax. Even if you are putting away a small amount each month, an ISA can protect your savings and help them grow over time.
“For example, if you invested £20,000 and it grew to £30,000, you will have made £10,000 on your investment. If this were invested with a Stocks and Shares ISA, you wouldn’t pay the tax on the £10,000 return.”
From April, the tax-free allowance on Cash ISAs will drop from £20,000 to £12,000 for under-65s, making it important for those affected to use this year's allowance while they still can.
Use capital gains allowances and claim tax relief
Mr Tieghi also suggested utilising your Capital Gains Tax exemption and dividend allowance. For the 2026/2027 tax year, investors have a £3,000 Capital Gains Tax exemption and a £500 dividend allowance.
Another recommendation was to claim tax relief on work expenses, if eligible. He said: “If you’re self-employed, you can deduct certain business expenses from your income before your tax bill is calculated. Allowable expenses can include costs such as office supplies, business travel and professional fees.”
“If you’re not self-employed, you may still be able to claim tax relief on certain work-related costs when you are not reimbursed by your employer. This can include professional memberships, uniforms or using your own vehicle for work-related journeys.”
Make use of the Marriage Allowance if you can
Mr Tieghi’s last trick was to claim the marriage allowance to reduce your income tax bill, if you can.
He said: “If you’re married and earn below the Personal Allowance, you can transfer £1,260 of your allowance to your spouse, reducing your tax bill by up to £252 a year. These claims can potentially be backdated.”
