Last-Chance Tips for Using Your ISA Allowance
ISAs remain one of the simplest and most effective ways to invest and save on tax. With the tax year ending on 5th April, now is the time to ensure you make full use of your allowance.
Understanding Your ISA Allowance
For the 2024/25 tax year, individuals can invest up to £20,000 in a single ISA or spread it across different types, including Cash ISAs and Stocks & Shares ISAs. Importantly, any unused allowance does not carry over, meaning you lose the opportunity to shelter investments from tax if you don’t use it before the deadline.
Why Maximise Your ISA Allowance?
Tax Efficiency
With capital gains tax (CGT) rates at 18% or 24% (depending on tax status) beyond the £3,000 annual CGT allowance, holding investments in an ISA ensures gains remain tax-free. Even if tax efficiency doesn’t seem relevant now, planning ahead can safeguard your future wealth.
Simplified Finances
Income and gains within an ISA do not need to be reported on a tax return, making financial management easier.
Flexibility
A Stocks & Shares ISA offers access to a diverse range of investments while allowing withdrawals when needed, making it suitable for various saving and investment strategies.
Last-Minute ISA Investment Tips
1. Secure Your Allowance with Cash if Unsure
If you haven’t decided where to invest, securing your allowance by holding cash in your ISA ensures you don’t miss out. However, long-term cash holdings may not keep up with inflation, so consider investing when ready.
2. Consider Managed Investments
For those seeking expert oversight, professionally managed funds offer diversified portfolios aligned with different risk levels. An independent adviser can help identify the best approach tailored to your financial goals.
3. Explore DIY Investment Options
Investors who prefer selecting their own assets can access thousands of options, including funds, UK and overseas shares, bonds, investment trusts, and ETFs. A certified financial adviser near me can provide guidance on choosing the best investments for your ISA.
4. Diversify Your Portfolio
Spreading investments across different asset classes reduces reliance on any single market. Funds are a convenient way to achieve diversification, offering exposure to multiple sectors in one investment.
5. Maximise Allowances as a Couple or for Family Members
Married couples and civil partners can shelter up to £40,000 annually across ISAs. Transfers between spouses are tax-free, allowing strategic use of allowances. Junior ISAs also provide a tax-efficient way to save for children, with a 2024/25 allowance of £9,000 per child.
6. Consider Pensions for Long-Term Tax Efficiency
While ISAs are excellent for tax-free savings, pensions offer additional benefits. Contributions to a pension attract tax relief, with HMRC adding 20% and further relief available for higher earners. A financial adviser can help assess whether a SIPP (Self-Invested Personal Pension) complements your ISA strategy.
Don’t Leave It Too Late
To ensure contributions count for the 2024/25 tax year, make payments before midnight on 5th April. Electronic transfers should be completed by 2nd April to avoid last-minute issues.
For personalised investment strategies, seeking the best financial adviser near me can provide expert guidance tailored to your goals. Whether you need support in finding an independent adviser, understanding fees, or choosing top ISA investments, a professional can ensure your finances remain on track.
Make the most of your ISA allowance before it’s gone – and secure your financial future today.
Founded in 2017, Fintuity has fast become one of the only digital Independent Financial Advisers (IFA) in the United Kingdom. Fintuity offers a wide range of financial advisory services including pensions, protection, investments and mortgage advice. The key difference is that as an exclusively digital service, we can offer significant savings and a service that is direct to you and on demand.
