Families are scrambling to take advantage of a little-known ISA strategy that could protect up to £370,000 from the taxman before the end of the tax year.
With taxes on income and investments rising, and fresh uncertainty around the future of tax-efficient saving, households are moving fast.
New figures from Hargreaves Lansdown show a surge in households using multiple ISAs — including adult, Junior, and Lifetime ISAs — to maximise tax-free savings across the family.
With growing uncertainty over the future of tax-efficient accounts, experts say now is the time to "share the wealth" and make full use of family allowances before the April 5 deadline.
There has been a 25 per cent rise in households paying into Hargreaves Lansdown adult ISAs this year, with 27 per cent contributing to more than one, and a 46 per cent jump in those also topping up Junior ISAs.
By combining allowances across the family, it’s possible to shelter up to £370,400 from tax in just a single tax year — but it requires careful planning.
ISA reform could be comingGETTY Sarah Coles, head of personal finance at Hargreaves Lansdown said: "ISAs are a family affair this year. Rising taxes on income and investments, plus rumours about the future of tax-efficient saving and investment, have supercharged our enthusiasm for protecting what we can."
While an individual's ISA allowance of £20,000 might seem limited, family planning can multiply this protection substantially. Spouses can each utilise their full £20,000 ISA allowance, even if one partner earns significantly more than the other.
Assets can be passed between spouses without triggering tax bills, allowing couples to maximise both allowances regardless of income disparity.
Children under 18 can contribute up to £9,000 into Junior ISAs annually, providing a tax-efficient way to build wealth for their future. These funds remain invested until the child turns 18, at which point the money becomes entirely theirs.
Experts are warning of the "risks" posed by the proposed British ISA GETTY For adult children, parents can gift £4,000 to be paid into a Lifetime ISA, which the government will top up to £5,000 with its bonus. This strategic approach across generations creates substantial tax protection while helping younger family members build financial security.
Family pension planning offers additional tax advantages beyond ISAs. Most individuals can contribute up to £60,000 annually to their pension, or their total earnings if lower.
For non-earning spouses in marriages or civil partnerships, their partner can still contribute £2,880 to their pension, which tax relief will boost to £3,600.
The same principle applies to children under 18, with parents able to pay £2,880 into a Junior SIPP that becomes £3,600 after tax relief.
Coles added: "A JSIPP is an incredible way to super-charge their pension savings, because it will have such a long time to benefit from the miracle of compound growth."
By combining tax-efficient saving tools like ISAs, Junior ISAs (JISAs), pensions, and Junior SIPPs, families can build a powerful tax shield
GETTYJunior ISAs provide accessible funds for early adulthood needs like education or property purchases. Meanwhile, gifting adult children money for Lifetime ISAs can boost their property deposits with the government's £1,000 annual bonus.
By combining tax-efficient saving tools like ISAs, Junior ISAs (JISAs), pensions, and Junior SIPPs, families can build a powerful tax shield. Here’s how a married couple with two children under 18 can use their full allowances in just one tax year:
- £60,000 into a pension (individual)
- £60,000 into a spouse’s pension
- £20,000 into an ISA (individual)
- £20,000 into a spouse’s ISA
- £9,000 into a Junior ISA (child 1)
- £9,000 into a Junior ISA (child 2)
- £3,600 into a Junior SIPP (child 1)
- £3,600 into a Junior SIPP (child 2)
That totals £185,200 in tax-free contributions across the family in just one go.
Double the benefit with smart timing
Because the UK tax year ends on April 5, families who act quickly can max out allowances before the deadline — and then do it all again just after April 6, using the new tax year’s limits.
That means this strategy could shield up to £370,400 from tax across pensions and ISAs in the space of a few weeks.
However, giving money to family members requires careful consideration beyond tax efficiency. When gifting money, people must accept that it becomes the recipient's property to use as they wish.
Coles warned: "If you want to retain control over the cash, you have to keep it yourself."
Fairness between siblings can become an issue when investment returns vary over time. Parents often contribute equal amounts for each child, but market fluctuations mean one may ultimately receive more than another.
This potential disparity should be discussed openly from the beginning to prevent future family tensions.
Some parents begin contributions when their finances allow rather than at each child's birth, potentially giving younger children longer investment periods. In such cases, parents should consider whether to compensate older children in other ways to maintain fairness.
The strategic combination of ISAs, JISAs and pension contributions allows families to protect substantial sums from taxation while supporting younger generations.
