The earlybird ISA investor catches the worm

12 April 2017
  • An estimated 45% of people invest in the last three months of the tax year
  • No need to play “Russian roulette” with your long-term savings by making hurried last minute investment decisions

Many investors took the plunge and rushed to invest in an ISA during the final days of the 2016/17 tax year, with the final subscription for an ISA on Tilney’s Bestinvest service for online investors taking place at 11.56pm – with only four minutes to spare before the allowance disappeared for good!

Tilney estimates that around 45% of clients on its Bestinvest service invest in an ISA in the last three months of the tax year, a large chunk of which do so in the last fortnight.  In contrast, around 27% of Bestinvest’s clients were ‘early birds’ who began investing in April 2016.

Jason Hollands, Managing Director at Tilney Group, which runs the Bestinvest service, said: “It is human nature to leave things until the last minute. Last week saw the traditional annual tax-year end stampede of applications for ISAs and pensions; with some only utilising these precious long-term allowances on the final evening of the tax year. The emergence of online investing, by making the process easier than the old days of paper application forms and cheques, seems to have almost encouraged some people to wait until the very final hours in a kind of game of Russian Roulette with their tax allowances.”

Data shows that in fourteen of the last twenty years (April to end of March), the FTSE All Share Index delivered a positive return. This means that statistically, the odds are that the earlier you invest in the new tax year, the better.

Hollands continued: “Not only does investing earlier in the tax year remove some of the pressure to make a hasty decision; it also means your hard earned cash is put to work for longer. After all, as the saying goes ‘the early bird catches the worm’ and in the case of an ISA there is a whole year of potential returns to be had – and potentially less tax paid as well.

“Another option is to take the timing out of the process altogether by investing on a regular basis. Investing regularly takes the emotion out of investing: it is all too easy to have your investment decisions clouded by current sentiment or events that shouldn’t really matter if you are investing for the long-term. Investing regularly should also help to reduce market timing risk as you’ll end up with ‘pound cost averaging’, an average entry price that reflects some days when the market is up and others when it was down.”

Dust down your existing portfolio

Hollands concluded: “The new tax year is also as good a time as any to take stock of your existing investment strategy at a time when a lot of the hype has quietened down. Rebalancing your portfolio and weeding out any underachievers should also help you identify where you should be targeting any new investments so that they will complement your overall strategy.”


Important Information:

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This press release does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers.

Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.

About Tilney

Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years.  Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.

We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.

Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.