If you plan on opening an ISA in 2022, the best time to invest is just around the corner! Recent research by Hargreaves Lansdown has revealed the best time to max out your account. Here’s everything you need to know about how to maximise your ISA profits in 2022.
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Early bird savers made the most money in 2021/2022
Findings revealed a 66% rise in savers who maxed out their ISAs in the first month of the tax year. These savers are known as early bird savers. The increase in individuals making early contributions reflects the growing enthusiasm around ISAs in the UK.
If the pattern continues, even more investors will max out their accounts this year! The research showed that the majority of early-bird investors were aged between 30 and 54. Furthermore, men were more likely to invest early than women.
The experts at Hargreaves Lansdown have revealed that investing at the beginning of the tax year could be the best way to save. In fact, those who maxed out their accounts on the first day of the tax year could have seen their investments grow by £20,000 more than those who maxed out on the last day.
Therefore, savers should get ready to make deposits over the next few weeks. The next tax year starts on 6 April, so it may be worth making your maximum ISA contribution then.
In fact, the first day of the next tax year is a great time to make any contribution to your ISA. Some 37% more regular savers put money into their ISA on the first day of the current tax year and have seen excellent benefits. Even those who can’t make the maximum contribution of £20,000 should still consider putting money into their account on 6 April.
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Take control of your finances
According to Sarah Coles, senior personal finance analyst, “An awful lot of what’s going on at the moment is completely out of our control, but you don’t need to overcome everything that’s going on in the world to make the most of your savings and investments.”
She added that the earlier in the tax year you invest in your ISA, the better. By investing early, you can protect your savings from tax straight away. Also, you will set yourself up for a strong year of returns.
Early birds see larger gains
Maxing out your ISA account at the beginning of the tax year gives your earnings a whole year of protection from the taxman. This means that you can benefit from price rises throughout the whole year and reap the rewards tax free!
Similarly, investing a small amount into your ISA at the beginning of the tax year puts you in a strong position to make regular investments all year round. In fact, drip-feeding money into your ISA account is a brilliant way to take advantage of market dips.
Many of our top-rated stocks and shares ISAs can be opened with as little as £100, and holders can make deposits as low as £1. You don’t need a large lump sum to profit with an ISA account.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
