Pension Tax Year End Checklist 2025/26: 8 Actions Before 5 April 2026

The UK tax year ends on 5 April 2026, and for anyone in or approaching retirement, the coming weeks represent an important window. Several pension allowances, reliefs, and planning opportunities either reset or expire permanently on this date.

This guide covers the eight key actions that many people in drawdown or approaching retirement consider before the tax year closes — alongside the deadlines that matter most.

1. Use Your Annual Allowance (and Check Carry Forward)

The pension annual allowance for 2025/26 is £60,000 (or 100% of your earnings, whichever is lower). Any unused portion from previous years can be carried forward — but only for three tax years.

This means unused annual allowance from 2022/23 expires on 5 April 2026 and cannot be rolled into the following year. If you contributed less than £40,000 (the then-allowance) in 2022/23 and haven't used that carry forward headroom, the opportunity closes.

For higher earners, the tapered annual allowance may reduce your limit. For those who have already accessed drawdown flexibly and triggered the Money Purchase Annual Allowance (MPAA), contributions to defined contribution pensions are capped at just £10,000 per year — with no carry forward available.

Many people consider maximising pension contributions before tax year end if they have spare cash, particularly as pension contributions attract tax relief at your marginal rate.

2. Review Your Drawdown Income Level

If you are already in pension drawdown, tax year end is a natural moment to review how much income you have drawn in 2025/26. Key questions many retirees ask include:

• Have you stayed within your personal allowance (£12,570 for 2025/26)?
• Have you accidentally crossed into the higher rate tax band (income over £50,270)?
• If you are close to crossing a tax threshold, could you adjust withdrawals before 5 April?
• Have you drawn enough to make full use of your personal allowance?

The personal allowance is a "use it or lose it" relief — it does not carry forward. If your pension income plus other income (including the State Pension) falls below £12,570, the unused portion cannot be claimed in a future year.

In 2025/26, the full new State Pension is £11,502.40 per year. Combined with even modest drawdown withdrawals, many retirees can end up close to or above the personal allowance threshold.

3. Consider Your ISA Allowance (£20,000)

The ISA allowance for 2025/26 is £20,000 and resets on 6 April. Unlike pension carry forward, the ISA allowance cannot be rolled over — it expires each year. Many people in drawdown find it useful to hold liquid cash savings in an ISA to complement pension income, since ISA withdrawals are tax-free and do not count as income.

This tax year is also the final year before proposed changes to Cash ISA limits (from April 2027, the cash ISA limit may fall to £12,000 for under-65s, with the remainder directed to stocks and shares ISAs). This makes 2025/26 and 2026/27 the last opportunity to shelter a full £20,000 in cash, under current rules.

For those in drawdown who want to reduce their taxable income, coordinating ISA savings with pension withdrawals is a strategy many financial advisers discuss.

4. Check for Emergency Tax Overpayment on Pension Withdrawals

If you took a lump sum or flexible withdrawal from your pension for the first time in 2025/26, HMRC may have applied an emergency tax rate — often significantly higher than your actual rate. This is a common issue with pension freedoms withdrawals.

Many people do not realise they may be owed a tax refund. HMRC provides three reclaim forms:

• P55 — if you took a partial pension withdrawal and have not taken the full fund
• P53Z — if you took the entire pension pot as a lump sum and have other income
• P50Z — if you have stopped work and taken the full pension fund and have no other income

You can submit these forms during the tax year rather than waiting for self-assessment. If you have a P800 (tax calculation) from HMRC, that will arrive after the tax year ends. With the tax year ending in weeks, now is a good time to check whether emergency tax was applied to any withdrawals made in 2025/26.

5. Review Pension Inheritance Tax Planning

From April 2027, most unused pension funds will be brought into scope for inheritance tax (IHT). The rules are not yet fully confirmed, but the direction of travel is clear: pensions will no longer sit outside estates for IHT purposes for most people.

While the changes do not take effect until April 2027, the planning window is now. Some considerations that many financial advisers are discussing with clients include:

• Whether to accelerate pension withdrawals now while they remain IHT-free (noting the income tax cost)
• Gifting strategies, given the seven-year rule for gifts outside estates
• Nomination of beneficiary forms — keeping these up to date with your pension provider
• Expression of wishes — ensuring your pension provider knows who you want to benefit

The April 5 deadline does not directly change IHT rules, but a new tax year is a useful prompt to review beneficiary nominations and estate planning intentions.

6. Use Your Capital Gains Tax Annual Exempt Amount

The capital gains tax (CGT) annual exempt amount for 2025/26 is £3,000. This is significantly lower than in previous years (it was £12,300 as recently as 2022/23). Like the ISA allowance, it does not carry forward.

For those in drawdown who hold investments outside an ISA or pension, realising gains up to £3,000 before 5 April is a strategy some investors consider to manage their CGT position. Gains above this threshold are taxed at 18% (basic rate) or 24% (higher rate) for residential property, or 18%/24% for other assets from October 2024.

Some investors also consider "Bed and ISA" — selling investments, crystallising gains, and repurchasing within an ISA wrapper to shelter future growth. This requires care around timing, costs, and tax thresholds.

7. Review State Pension Voluntary National Insurance Contributions

April 5, 2026 has previously been a deadline for buying back National Insurance (NI) years at a favourable rate. The rules around voluntary NI contributions change periodically.

Anyone who has gaps in their NI record (from career breaks, self-employment, or time abroad) may be able to plug gaps by making voluntary Class 3 NI contributions. A full new State Pension requires 35 qualifying years, with at least 10 years needed to receive any State Pension at all.

The cost of buying a missing year varies, but for many people the return on investment from a single purchased NI year is significant compared to the lifetime State Pension income it unlocks.

If you have gaps in your NI record, it is worth checking your State Pension forecast via the government's Check Your State Pension service before the tax year ends.

8. Confirm Your Self-Assessment Tax Return (if Required)

Those in drawdown who have drawn taxable income from their pension during 2025/26 may need to complete a self-assessment tax return. The online submission deadline for the 2025/26 tax year is 31 January 2027 — but gathering information is easier closer to the tax year end rather than months later.

Self-assessment is typically required if your pension income (plus other sources) exceeds a certain threshold, or if you have untaxed income such as rental income, dividend income above the dividend allowance, or interest income above the personal savings allowance.

If you have received an emergency tax deduction on a lump sum withdrawal and submitted a P55/P53Z/P50Z reclaim, this may affect whether a full self-assessment return is also required. A tax adviser or financial adviser can help clarify your position.

Key Deadlines Summary

What About the Spring Statement on 3 March 2026?

Chancellor Rachel Reeves delivers the Spring Statement on 3 March 2026, alongside updated OBR forecasts. While major pension policy changes are not widely expected at this event (the Autumn Budget is typically the vehicle for pension reform), the Spring Statement may include:

• Updated fiscal forecasts that could signal future pension tax changes
• Any adjustments to public finances that affect benefit and pension uprating
• Potential consultation announcements on pension reform areas

The big pension changes already confirmed for the coming year include the State Pension rising to £12,547.60 from April 2026, the planned inclusion of pensions in IHT from April 2027, and the increase in the normal minimum pension access age to 57 in 2028.

The Bottom Line

Tax year end is not just an administrative deadline — for people managing pension income in drawdown, it is an opportunity to review several planning areas before allowances reset, expire, or are lost. The most time-sensitive item in 2025/26 is the expiry of unused 2022/23 annual allowance carry forward on 5 April 2026.

Whether you are still contributing to a pension, drawing down flexibly, or planning for the post-2027 inheritance tax changes, the weeks before April 5 are a useful planning checkpoint.

Disclaimer: This article is for informational and educational purposes only. It does not constitute financial advice. Tax rules are complex and individual circumstances vary significantly. Speak to a qualified financial adviser before making any decisions about your pension, tax planning, or retirement income.