Tax refunds (overpayment of tax, often via PAYE adjustment or self-assessment) feel like windfall money. Most adults spend them on lifestyle. Treating them as investment money — direct into ISA or SIPP — compounds dramatically over time.
Why this matters
Average UK tax refund is £200-1000. Invested into low-cost index fund at age 30, grows to roughly £1500-7500 by age 65. Repeated annually, the cumulative effect is substantial. Spent: gone within months with little lasting benefit.
How to make it automatic
Set up automatic transfer from current account to ISA same day refund arrives. Treat as 'money you didn't see' — easier to invest than money you've held.
Most lifestyle improvements from spending refunds don't survive a year. Investments compound for decades.