Alastair Blyth: 'Use it or lose it' as end of the tax year approaches

THE annual Individual Savings Account allowance now sits at £10,200 (for those aged 50 or over by 5 April 2010) with up to £5,100 in a cash ISA, and at £7,200 (£3,600 cash ISA) for everyone else. At the time of writing, most instant-access cash ISA rates are not particularly attractive, although some better rates are available if you are willing to tie your money into a fixed-term account.

When considering adding to your stocks and shares ISA, it is always worth reviewing some of your older ISA or Personal Equity Plan holdings to see if these are still performing well or matching your current attitude to risk. Remember, the value of your investment can go down as well as up and you may not get back the full amount invested. Investments in stocks and shares do not have the same degree of capital security offered by a deposit account.

Additional individual pension contributions should also be considered, especially for higher-rate tax payers. While not everyone can afford to contribute the maximum allowance of 100 per cent of earnings, an extra lump-sum contribution can not only be used to eradicate your exposure to higher-rate tax on your income, it can negate or reduce the need to pay additional marginal tax on any bank interest or dividend income.

Special rules now apply to those with relevant income of more than 130,000 per annum regarding additional pension contributions, so please seek professional advice from a suitably qualified adviser to ensure you do not inadvertently attract a tax charge rather than obtain tax relief. However, do try to ensure that you don't miss the opportunity to maximise the higher-rate relief that is currently available, whilst it still exists.

For those considering taking retirement benefits before the new minimum retirement age of 55 comes into force on 6 April, time is marching on. If you are looking to consolidate a number of different plans prior to drawing benefits, be aware that some providers can take a number of weeks to transfer your funds into any new contract, and any delays may mean that you miss the time window. This is all the more relevant if you are considering an annuity purchase, as more time is needed to conclude this type of business. Remember that taking pension benefits early or at a relatively young age (50-55), will have an effect on the amount of money that will be left for later life.

With the current rate of capital gains tax set at only 18 per cent, it can make sense to invest for growth rather than pure income and then utilise the individual's annual exemption to CGT, currently 10,100, when taking partial withdrawals to generate an income stream. While the total of any combined gains above the 10,100 exemption will be taxed at 18 per cent, this is still lower than if they were taxed at 20 per cent or 40 per cent for income, or the extra 22.5 per cent on dividends for higher-rate tax payers. (Future tax rates and reliefs may vary.)

Finally, remember that with the Easter weekend falling at the start of April this year, Thursday 1 April will be the last working day of the tax year for many firms, so don't leave things to the last minute or you may miss out.