Online investment call as Isa deadline approaches
THE deadline for using this tax year’s Isa allowance is just days away, so you cannot afford to wait any longer before deciding whether to invest.
The tax-free £20,000 allowance expires at midnight on Sunday April 5, and the best way to invest is now online. The coronavirus pandemic has hit the postal service, and provider telephone lines are blocked as customers rush to buy or sell as shares crash.
Cash Isas remain popular, although less so than before, as the personal savings allowance allows basic rate taxpayers to earn £1,000 a year in tax-free interest on non-Isa deposits, or £500 for 40 per cent taxpayers.
However, Coventry Building Society pays 1.25 per cent with easy access, while Paragon Bank pays 1.60 per cent fixed for five years.
The big decision investors face is whether to put money into a Stocks and Shares Isa amid current turmoil in the markets.
Tilney Investment Management Services managing director Jason Hollands said buying shares during a market meltdown can pay off, provided you hold for the long-term: “None of us are Mystic Meg and can predict the exact point when markets bottom out, but they always do.”
If unwilling to put in a large sum, secure your allowance by opening a Stocks and Shares Isa with cash, then drip feeding in money over time, Hollands said.
AJ Bell personal finance analyst Laura Suter said savers aged between 18 and 39 should consider a Lifetime Isa, which offers a 25 per cent Government bonus worth £1,000 if you invest the maximum £4,000: “Don’t forget to top up your children or grandchildren’s Junior Isa, as well.”