5 Ways to Boost Your Take-Home Pay
- TBA
- 4 days ago
- 4 min read
Many people across the UK will find their tax bills quietly creeping up this year.
The reason is simple: while inflation nudges incomes upwards, tax thresholds have remained frozen. This means more of us are being ‘pushed’ into higher tax brackets without even realising it – a phenomenon known as fiscal drag.
If you are likely to be affected, taking steps to manage your tax burden legally and effectively has never been more important.
Here are 5 ways to help you plan smarter in 2026 and keep more of your hard-earned money in your pocket.
5 Ways to Boost Your Take-Home Pay
Increase your pension contributions
For most, a pension remains one of the most tax-efficient ways to build wealth. Within the current limits (up to 100% of your annual income, generally capped at £60,000), your contributions can immediately benefit from tax relief.
Basic rate taxpayers receive 20% relief, higher rate taxpayers get 40%, and additional rate earners can receive up to 45%. Essentially, every pound you put into your pension is ‘discounted’ by the government.
Crucially, for those earning over £100,000, putting more into a pension can lower your ‘adjusted net income’. This helps avoid the tapering of the personal allowance (the notorious ‘65% tax trap’), and can help you stay eligible for tax-free childcare.
Make the most of your ISAs
The Individual Savings Account (ISA) is an incredibly powerful tax-free tool.
Each tax year, you can put up to £20,000 into ISA accounts, where all your interest and investment gains are completely tax-free.
Moving your savings into an ISA is a straightforward way to protect your returns. Just keep in mind that if you need to sell assets to move the cash, you might still be liable for Capital Gains Tax (CGT) on any profit made during the fiscal year.
Note that from 6 April 2027, ISA rules are set for a bit of a shake-up: while the total limit stays at £20,000, Cash ISAs will be capped at £12,000 (unless you’re over 65), with the rest needing to go into other types like Stocks and Shares ISAs.
If you’re eligible, don’t forget you can also put up to £4,000 into a Lifetime ISA (LISA).
Balance the tax between family members
If you are married or in a civil partnership, you can take advantage of a very helpful rule: transferring assets between partners is usually tax-free. This allows you to move assets – such as cash, shares, or other investments – into the name of the partner with the lower tax rate, reducing the overall household tax bill.
For example, from 2026, the dividend tax rate for a basic rate taxpayer is 10.75%, whereas an additional rate taxpayer pays a hefty 39.35%.
Consider this:
If one partner holds an investment portfolio generating £10,000 in annual dividends, transferring it to the partner in the lower bracket could save the household over £2,000 a year. It’s a simple piece of ‘internal’ planning that many people overlook.
Report your capital losses promptly
When you sell assets like a second home, shares, crypto, or artwork, any profit over the £3,000 annual exemption is subject to Capital Gains Tax (CGT).
However, it’s easy to forget that losses have value too. You can use losses from the current year – or even those from up to four years ago – to offset your current gains, bringing your tax bill down.
Even if you haven't made a gain this year, it’s still worth reporting any losses to HMRC. They can be ‘carried forward’ to protect your future profits from tax.
Don’t forget Gift Aid
Donating to charity via Gift Aid is a win-win: it helps the charity, and it can provide you with a tax break.
The government adds 25% to your donation, and if you're a higher rate taxpayer, you can claim back even more through your tax return.
For every £100 donated, a higher rate taxpayer can effectively receive £25 in tax relief, rising to £31.25 for additional rate earners.
Better yet, this relief can be backdated by up to four years. It’s well worth looking back at your recent donations. You might find there’s a bit of tax relief waiting to be claimed.
Some advice from TB Accountants
Beyond these 5 ways to boost your take-home pay, a few general habits can help keep your finances in top shape. Make sure you’re using all your available allowances, including the Personal Savings Allowance and the Dividend Allowance.
You might also want to look at tax-efficient investments, such as UK Gilts (which are CGT-exempt) or certain high-quality bonds.
Ultimately, many people pay more tax than they need to simply because the rules are complex. As the tax landscape shifts, staying proactive is the best way to protect your wealth.
If you’re unsure which allowances apply to you, or you’d like to get your finances in order before the new tax year kicks off, we’re here to help.
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