INVESTMENT CLINIC

I WANT to start a stocks and shares Isa. Do I need to set one up before the end of the tax year? S.S., Surrey. There’s no rush. You can set up an Isa at any time and pay in £20,000 each tax year. The only reason to hurry is if you have more than £20,000 to invest.

If you set up an Isa before Friday, when the tax year ends, you’ll be able to put in this year’s allowance and add the rest once the new tax year starts on April 6.

Major providers such as hargreaves Lansdown — which has an excellent call centre operation — and AJ Bell say it should take only a few minutes.

Take note of the charges, which vary between providers. hargreaves Lansdown takes 0.45 pc of your investments as an annual fee. AJ Bell charges 0.25 pc.

For now, all you need to do is load some cash into your account. You can take your time picking your investments — it won’t affect your allowances.

You could buy individual shares or try a fund, where a manager picks the stocks for you. Funds are less risky because your cash is spread out among many firms.

You need to figure out how much risk you’re willing to take. If you don’t like the idea of losing much money and are content with generally lower returns, ryan hughes, head of fund selection at AJ Bell, recommends a cautious fund such as the M&G Absolute return Bond, which has returned 1.7 pc in a year.

For a chance of better returns, you need to take more risk of losing out if the market turns against you. Mr hughes tips the Invesco Perpetual Asian fund, which is up 8.8 pc in a year.

EMAIL your questions to moneymail@dailymail.co.uk or post to Investment Clinic, Money Mail, Northcliffe House, London W8 5TT.