Research by Quilter has found that over the past decade, the main tax allowances and thresholds have decreased by an average of 11%.
Analysis of the nine main tax allowances provided to individuals found that while the personal allowance - the amount you can earn before paying income tax - has increased by 93% in the last decade, it has come with huge cuts to pension allowances and a freezing of the inheritance tax nil rate band.
The annual allowance you can save into a pension has been reduced by a staggering 84%, while the equivalent lifetime allowance has dropped by 40%. Furthermore, since their introductions, both the dividend allowance and money purchase annual allowance have seen reductions of 60%.
It will be vital for individuals to utilise their tax allowances as much as they can now before they reset in April and take advantage of the situation today, rather than wait and think it will be the same one or two months from now."
Meanwhile, the nil rate band for inheritance tax - the threshold above which inheritance tax is payable - has remained frozen since 2009, however it will rise annually with inflation from April 2021.
These decreases and freezes have come despite inflation averaging 2.7% a year in the decade since 2010.
As we approach the end of the tax year, Quilter is warning people to make use of these allowances now as many have now been frozen as a result of the pandemic and risk getting worse over time.
Rachael Griffin, tax and financial planning expert at Quilter, said: "The various tax allowances and thresholds are great ways to incentivise people to save for their future, distribute their wealth and help establish a strong financial future. However, many of these have taken huge hits in recent years as subsequent governments look to claw back as much tax as possible.
"One could argue that these allowances and thresholds are never going to be as good again and will only get worse from here. The Chancellor recently outlined plans to freeze many of these tax allowances in order to start balancing the books to help pay for the pandemic response.
Griffin: "As such, this is one of the most important ends to a tax year we can remember. It will be vital for individuals to utilise their tax allowances as much as they can now before they reset in April and take advantage of the situation today, rather than wait and think it will be the same one or two months from now.
"It is also worth remembering that many of these allowances have failed to keep up with inflation. Expectations are that inflation is going to rise as the economy reopens, so this will effectively decrease the levels in real terms over time. Putting money into a pension or gifting it to a family member now could make a real difference compared to waiting for the next tax year."