Early ISA Investment Equates to £30,000

Have you got ISA inertia? Bored of hearing about tax efficient investment? Conquer your lethargy and act now as early bird ISA investment can mean an extra £30,000

Emma Wall 7 April, 2014 | 4:00PM
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Investors routinely leave sorting out their ISA until the last minute. Fund platforms report receiving calls about ISA allowance allocation right up to the minute before midnight on April 5 – and the busiest month for online ISA dealing is March.

But it really is a case of the early bird catches the worm when it comes to ISAs. Calculations by Fidelity show that the impact of compounding interest on investors’ portfolios who contribute to their ISAs at the beginning of the tax year, versus those who wait until the end of the tax year is considerable.

Two potential savers, who have both used their full ISA allowances each tax year since 2000 to invest in the FTSE All Share index, have a potential difference in their ISA pot of more than £30,000 – all because one invested in the first month of the tax year, and the other in the last month.

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About Author

Emma Wall  is former Senior International Editor for Morningstar