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Get in early to make the most of this year’s ISA

It's still early in the new tax year and if you use your new £20,000 ISA allowance, sooner rather than later, it could help you achieve better returns in the long run.

Generally, the earlier in the tax year you start your new ISA, the better, as any investment returns you might make have longer to grow or compound. Investing now gives you nearly an entire year of extra opportunity.

Why invest early?

An ISA investor who used their ISA allowance at the start of every tax year since 2009 to invest in a fund tracking the FTSE All-Share Index could now be over £20,000 better off than someone who only invested on the last day of the tax year. Of course it’s important to remember past performance is not a guarantee of future returns and the value of investments can go down as well as up, so you may get back less than you invest.

See what a difference early investing can make

Three investors contribute the maximum allowance of £136,360 to their ISAs over a 10-year period. Find out how their investment planning affects their investments over time by clicking the three options below:

Investing £136,360 in an ISA between 2009/10 and 2018/19 but at different times in the tax year.

Start TAX YEAR End

Early Shirley used her full ISA allowance at the start of each tax year. Over time, she is over £20,000 better off than our last minute investor, Lara.

Monthly Monty split his ISA contribution into 12 equal monthly payments. Even as a regular saver, Monthly Monty is still over £10,000 better off in the long term than our last minute investor, Lara.

Last-minute Lara left it until the last day of each tax year to invest. Her gains lag behind both Monty’s and Shirley’s.

Total contributions for all three investors is £136,360
Investor Final investment value

Early Shirley

£199,832

+47%

Monthly Monty

£192,500

+41%

Last-minute Lara

£179,611

+32%

Investor Total contributions Final investment value Gain (%)

Early Shirley

£136,360

£199,832

47%

Monthly Monty

£192,500

41%

Last-minute Lara

£179,611

32%

Past performance is not a reliable indicator of future returns.
For illustrative purposes only. This is a hypothetical illustration based on the performance of the FTSE All-Share Index between 6 April 2009 and 5 April 2019 and does not take into account the impact of any charges or fees.
Source: Datastream, as at 08/04/19. Basis: bid-bid with income reinvested.

Ready to invest?

Our Stocks and Shares ISA is an easy-to-manage, tax-efficient ISA. It’s a great way to invest your ISA allowance this tax year, and you can start investing in our broad range of investment options from funds, to shares, investment trusts and exchange- traded funds (ETFs) in just a few easy steps.

Please remember that the value of investments can go down as well as up, so you may not get back the amount you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future.