This article is adapted from a Quilter communication.
Maximising the amount of time you’re invested over the long term could make a notable difference to your investments. When ISAs are concerned, however, we often concentrate on ensuring funds are invested before the end of the tax year to ensure your full allowance is used. But, if we consider that the time invested is also key, it’s interesting to note the difference in returns when funds are invested at the start of the tax year vs at the very end, just before the deadline.
The long-term investment examples below are based on the IA Mixed Investment 40-85% Shares sector, and show the amount of additional growth an investor could have benefitted from if they invested on 6 April (the beginning of the tax year), versus investment on 5 April (the end of the same tax year), over the period up to 5 April 2024.
Source: https://www.quilter.com/
As the figures show, the difference is notable. What this means for you is that even though the ISA deadline of the end of the tax year is when you need to be invested by, it’s the least beneficial time to invest when the long-term growth potential is considered.
With this in mind, if you believe you intend to add more to your ISA during this tax year, the takeaway message is to do this sooner rather than later. We would encourage you to speak to your adviser if this is the position you’re in.
