You only receive one Individual Savings Account (ISA) allowance each tax year. You can invest up to £20,000 in your ISA during the 2023/24 tax year; however, it cannot be carried over into the next tax year, so if you don’t use it, you will lose it forever.
Plenty of investors wait until the very last minute to use their ISA allowance but there is no reason to delay. In fact, investing early allows you to gain maximum benefit from the associated tax breaks – for example, the earlier you put your money into a deposit account, the more interest you will earn. When investing in stocks and shares for your ISA, it may seem seductive to try to ‘time’ your investment by buying when share prices appear cheaper. However, even experts rarely manage to ‘time’ the market successfully on a consistent basis, so non-experts are unlikely to fare any better.
If you are concerned about market volatility, regularly 'drip-feeding' money into the market can reduce the risk of buying when prices have peaked, whilst ensuring you invest at a range of different price levels. This system can offer long-term benefits, particularly for nervous or first-time investors or during periods of significant market volatility. Ultimately – and regardless of how you invest your money – you only receive one ISA allowance each tax year, and therefore it is wise to begin your research early and speak to your adviser about all your options.
