7 tips ahead of ISA season

ISA season is right around the corner for all of us. It’s important to make the most of it. Here are seven tips to help you succeed.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

British pound coins in birds' nest

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

ISA season is right around the corner, so it’s important to be prepared to make the most of your opportunities. There are lots of things you can do to make sure you wrap up this tax year well and put yourself on a good footing for the coming year.

Michael Martin, private client manager at 7IM, has shared his seven top tips to make the most of this particular time of year. Let’s take a look at his suggestions.


1. Time in the market is your friend – but be prepared for some fall outs

ISA season means another chance to lock in some tax-efficient investments. If you’re using your stocks and shares ISA properly, you have the opportunity to build up an amazing portfolio.

It’s important to remember that markets don’t just go up in a straight line. It will definitely be a bumpy journey on your way to financial freedom. However, being invested in the market for the long run means you can glide along using the power of compound interest to your advantage.

2. Keep calm and stay invested through turbulent times

Following on from the first tip, keeping steady with your investing strategy can mean you pick up investments at a bargain during times of market uncertainty.

When the stock market drops, you might be bombarded with information. Just remember that over the long term, these events will barely be a blip on your radar. Don’t use up your energy worrying. Staying the course with a well-diversified portfolio means you have a great chance of watching your investments rebound.

3. Ignore what you’ve learned about reducing risk as you get older

Reducing investment risk as you approach retirement has been a universal approach for most. But it’s important to consider that the retirement landscape is changing.

You’re likely to have a longer retirement and less likely to buy something like an annuity. Taking your foot off the gas with your investments could hamper your long and happy retirement.

Shifting everything into lower-risk investments like cash and bonds could prevent growth. This might mean you’re in a worse position to deal with things like inflation or living much longer than you expect!

4. Avoid home bias – but don’t underestimate the UK

Sometimes it can be hard to avoid filling our portfolio with UK-based investments. This is because they are companies we tend to interact with and it is the market we know most about.

Investing in what you know can be helpful, but it can sometimes lead to too much concentration. With ISA season upon us shortly, it’s worthing checking you are not too reliant on the UK.

Some exposure is good, but it might be worth having a quick run through your investments to see if you can arrange things to give you more global balance.


5. Look under the bonnet

ISA season is a great opportunity to do a quick MOT on your portfolio and investments.

Different companies have different ideas of what they think is a cautious investment. Things might have a ‘cautious’ label, but still contain a lot of high volatility assets like equities.

If you’re a risk-averse person, make sure any funds or investments reflect that. Perhaps this could mean choosing funds with a higher percentage bond component.

6. If you’ve got all you need, think about helping your children and grandchildren with their ISAs

Sometimes, we make sure our affairs are all in order and forget we might be able to help others.

Many people have additional ISA allowances that they don’t really know about or use. Making use of gifting allowances and passing on money using things like Junior ISAs can help reduce a potential inheritance tax (IHT) bill in future.

7. Diversify your tax risk

When it comes down to it, ISA season is all about tax. The tax situation can be quite fluid, depending on politics and the greater global landscape.

Therefore it’s important to try and diversify any potential tax risk. This will give you a good chance of protecting yourself against changes. No one has a crystal ball and it’s impossible to be completely ‘future proof’.

That said, doing things like making the most of your current allowances will ensure you’re as prepared as you can be.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

More on Personal Finance

Note paper with question mark on orange background
Personal Finance

Should you invest your ISA in a model portfolio?

Which model ISA portfolios offer both high performance and low fees? Hargreaves Lansdown, Interactive Investor and AJ Bell go under…

Read more »

Economic Uncertainty Ahead Sign With Stormy Background
Personal Finance

Is it time to exit emerging markets investments?

Investors may well be sitting on losses from emerging markets funds. Is it worth keeping the faith for a sustained…

Read more »

Personal Finance

Share trading? Three shares with turnaround potential

Share trading has been difficult in 2022, but which companies have turnaround potential? Jo Groves takes a closer look at…

Read more »

Man using credit card and smartphone for purchasing goods online.
Personal Finance

Revealed! Why Gen Z may be the savviest generation when it comes to credit cards

New research reveals that Gen Z may be the most astute when it comes to credit cards. But why? And…

Read more »

Environmental technology concept.
Personal Finance

The 10 best-performing sectors for ISA investors

The best-performing sectors over the past year invested in real assets such as infrastructure, but is this trend set to…

Read more »

Road sign warning of a risk ahead
Personal Finance

Recession risk ‘on the rise’: is it time for investors to worry?

A major global bank has suggested the risk of a recession in the UK is 'on the rise'. So, should…

Read more »

pensive bearded business man sitting on chair looking out of the window
Personal Finance

1 in 4 cutting back on investments amid cost of living crisis

New research shows one in four investors have cut back on their investing contributions to cope with the rising cost…

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Personal Finance

The 10 most popular stocks among UK investors so far this year

As the new tax year kicks off, here's a look at some of the most popular stocks among UK investors…

Read more »