Investor Insights: What you need to do with your ISA before the tax year ends

What you need to do before the tax year ends

The UK tax year ends on 5 April, making this an important time for investors to review their finances.

Use your ISA allowance

The ISA allowance is £20,000 per tax year. Use it or lose it.

Unused allowance cannot be carried forward, meaning investors lose it once the new tax year begins. The allowance can be split across Cash, Stocks & Shares, Innovative Finance and Lifetime ISAs.

Top up existing ISAs

You do not need to open a new ISA every year.

Most investors simply:

Add new funds to an existing ISA - even if you don't want to buy any more securities such as stocks or bonds before the tax year ends - given the current volatility this may be sensible - it can be worthwhile topping up the cash balance to deploy at a later, more attractive phase.

Increase their holdings in current investments. 

Review your portfolio

The tax year end is a good opportunity to reassess your portfolio.

Questions to consider:

Are you too concentrated in one sector?

Has one investment grown too large?

Does your portfolio still match your risk tolerance?
Consider your fees - are you invested in some of the lower ETFs for example?

Recently we looked at 5 funds exemplifying different investing strategies for your ISA ahead of the tax year end.

Avoid rushing decisions

ISA deadlines can lead to last-minute investing.

However, it’s usually better to stick with a long-term strategy rather than chasing short-term trends.
Think ahead - you get a fresh £20,000 annual allowance from 6 April - are you prepared?

Is now a good time to invest?

Stock markets have fallen sharply since the onset of the conflict in the Middle East. The FTSE 100 for instance has registered a decline of roughly 9% since the start of March. Whilst the drop has led to lower equity valuations, potentially making for a more attractive entry point, there are clearly significant risks to equity markets given the uncertain macro context.

Recently I looked at the highest yielding FTSE stocks that had risen over the last 3-month and 12-month periods.