I just heard some eye-opening things about Stocks and Shares ISA investors at Hargreaves Lansdown.
The firm said: “In the last hour of the tax year last April, an HL Stocks and Shares ISA was opened or topped up via the website or app every 10.3 seconds“.
And: “The busiest hour on the last day of the tax year was between 9pm and 10pm – when an HL ISA was opened or topped up via the website or app every 6.6 seconds“.
Surprise, surprise!
Head of personal finance, Sarah Coles, points out that “somehow, despite more than 200 years of the tax year ending on 5 April, it sneaks up on us every year.“
So how can we avoid these ISA mistakes that so many of us make at the same time each year?
We should just get the cash in as soon as possible. Logged in at the last minute, hit an online banking problem, and have to wait until tomorrow to call the bank… too late!
And getting cash in early can mean stashing away even more. See how much I have left at the end of the month? Or send over a chosen amount at the start? At least once it’s in, I can’t spend it.
Buying shares
We don’t have to buy shares by the deadline, just get the cash in. And then we can take our time.
If we forget that, we can end up with rushed decisions. We need time to do our research, and choose stocks we’ll be happy to hold in the years ahead.
One way to start, I think, is to look at what Stocks and Shares ISA holders already have. Or, maybe even better, check what ISA millionaires buy.
Income stocks
At AJ Bell, the top five among million-pound ISAs are Shell, Lloyds Banking Group (LSE: LLOY), GSK, BP and Aviva.
Younger investors might want to chance their arm with smaller growth stocks. But for me, I think it would be a mistake not to have at least a couple of boring FTSE 100 dividend stocks in my ISA. And the first I went for was Lloyds.
Choices
I think a top FTSE 100 bank is one of the easiest to put away and forget about for at least 10 years. I know many of us wish we could forget the 2008 banking crash.
But now I reckon Lloyds boasts its best liquidity for many years. And I really don’t see another financial crisis in the next decade.
Hmmm, maybe one of the last-minute ISA mistakes I should watch out for is “don’t tempt fate“!
Cash cows
Lloyds has its risks right now, as the UK’s biggest mortgage lender. And we don’t yet know which way an interest rate could push it.
But I still see it as a long-term cash cow, and I hope for many years of good dividends.
Overall then, the best way to avoid last-minute mistakes, surely, is to get everything done long before the last minute. And don’t rush our buying decisions.
I bet many of us will be logged into our ISAs during that final evening again though.
