3 helpful financial habits to put you on the front foot in the 2026/27 tax year
If you’re keen to start the 2026/27 tax year on the front foot, here are three simple yet effective financial habits for long-term growth and peace of mind.
Good habits can be easy to think up but difficult to maintain.
In fact, research from the European Journal of Social Psychology found that it can take anywhere from 18 to 254 days to form a new habit.
This may be the case for starting a new diet or exercise regime, or indeed, for forming good financial habits. As time wears on, life always seems to get in the way, and you might find that your well-intended financial objectives have slipped to the back of your mind.
And when these habits have a direct impact on your wealth, it’s easy to feel frustrated when you struggle to keep them up.
To help you start the new tax year on the front foot and in the right mindset, here are three easy, helpful habits that you can start developing in the 2026/27 tax year.
- Pay into your ISAs at the beginning of the tax year to benefit from compound interest
Banks and building societies often send reminders about maximising your ISA allowance – £20,000 a year across most adult ISAs – before the tax year ends. However, you could benefit more by taking a proactive approach at the turn of the tax year.
Rather than waiting until the last minute to use up your ISA allowance, you could instead deposit the full amount immediately on 6 April to benefit more from tax-efficient compound interest (the snowball effect). If you don’t have all the funds available, it’s still typically better to pay in on a monthly basis than wait until the end of the tax year to deposit a lump sum.
The longer you keep your money invested in a Stocks and Shares ISA or a Cash ISA, the more opportunity it has to grow.
This is what Bestinvest found using research from their parent company, Evelyn Partners. Assuming a 5% rate of return over 30 years, they found that an individual using up their Stocks and Shares ISA allowance at the start of the tax year, compared to the end, would be £66,439 better off.
Remember that ISAs are tax-efficient – any returns or interest you accrue using an ISA are free from Income Tax, Capital Gains Tax, and Dividend Tax. Even more reason to make sure you’re in the habit of paying into one regularly or maximising your allowance once the new tax year begins.
- Boost your pension contributions to create tax-efficient wealth
Like ISAs, pension contributions benefit from being tax-efficient – any income you pay into a pension can lower your overall Income Tax bill.
You receive tax relief on your pension contributions automatically for the basic rate of Income Tax (20%). If you are in the higher- or additional-rate Income Tax bands, you may be able to claim extra relief through Self Assessment.
Contributions up to the Annual Allowance (the lower of £60,000 or 100% of your salary) are free from Income Tax. However, any surplus cash over this limit loses relief.
If you aren’t making the most of tax-efficient pension contributions, the 2026/27 tax year is as good a time as ever to start. This is especially important if you’re self-employed, as your pension contributions are not made automatically.
You could maximise your contributions up to the Annual Allowance from any surplus income you might have so that you pay yourself first tax-efficiently, providing your future self with more wealth to retire on.
If you want to deposit an amount larger than your Annual Allowance, you might be able to take advantage of any unused relief from the previous three tax years – known as pension carry forward.
However, the rules for pension tax efficiency and the Annual Allowance can be complex, so it’s worth discussing your options with a financial planner.
- Regularly measure your assets against your emergency fund and personal protection
As mentioned previously, circumstances and priorities are constantly changing, whether personal or financial. These could be:
- A change in your relationship status or the addition of another family member
- An income boost from a promotion at work
- A large cash influx from inheriting a loved one’s wealth.
These factors can stealthily build up in the background without you realising the strain that they are imposing on your financial plan, which could cause your estate, retirement, and tax planning objectives to become outdated.
Therefore, it’s important that you regularly review your assets to ensure that your financial objectives remain on track.
The value of your assets can directly impact the efficacy of your emergency fund. For example, if you have built up more debt by taking on more assets, like property, then you may need to increase the value of your emergency fund to protect yourself against worst-case scenarios like income loss due to illness or redundancy.
Likewise, the current value of your assets can also have a direct impact on your personal protection. Life insurance, critical illness cover, and income protection all pay out cash based on your income, which can be affected by the assets you hold.
If new assets have increased your income or debt, your personal protection will also need to be adjusted. Otherwise, you and your family might not receive a payout large enough to cover costs should the worst happen.
Get in touch
Creating new helpful habits for financial planning can be difficult. Starting off with these three methods can stop you from feeling overwhelmed and help you achieve realistic results.
If you’d like to learn how professional advice can help you set up healthy financial habits this tax year, get in touch with your Kellands financial planner today.
Email us at hale@kelland.co.uk or call 0161 929 8838.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
The Financial Conduct Authority does not regulate tax planning.