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Don’t lose your Stocks & Shares ISA allowance in the stock market crash!

There’s a lot going on right now, as the coronavirus threatens businesses and incomes, and investors panic in the stock market crash. The danger is, amid all the confusion, many people will overlook their annual Stocks and Shares ISA and lose it for good.

Time is short. The deadline for using your £20,000 ISA allowance is looming fast, at midnight on 5 April. Every year, thousands leave it until the last minute. But I wouldn’t recommend doing that this time round.

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The ISA deadline falls on a Sunday this year, which always muddies things. That’s because many wealth platforms are already warning phone lines are blocked as the stock market crash triggers a rush of buyers and sellers. Leave it too late and there’s a danger you’ll fluff it, losing your Stocks and Shares ISA allowance by default.

Don’t squander your Stocks and Shares ISA

Some may even be thinking about giving it a miss this year. Who wants to invest in the middle of a stock market crash anyway? Here at the Fool, we politely reject that line of thinking. We believe a crash is actually the best time to buy shares, rather than the worst.

Shopping for shares in a bear market like this one is a bit like hitting the sales. Almost everything is cheaper than before and shoppers can take their pick. There are bargains everywhere you look.

As with every sale, you should look to buy stocks you really want rather than grabbing anything that looks cheap right now. That means high-quality businesses with loyal customers, strong cash flows, low debt, sustainable dividends, and solid balance sheets.

Stock market crash opportunity

If you can slip a spread of FTSE 100 blue-chips into your Stocks and Shares ISA before the deadline, you’ll be perfectly placed for the recovery when it comes. Treat anything you buy as a long-term investment rather than a short-term trade. Aim to buy companies you would be happy to hold forever. That’s investment legend Warren Buffett’s favourite holding period or, failing that, at least five or 10 years.

The ISA allowance is a hugely generous £20,000. Obviously, most people can’t afford to invest that much each year (including me). You should try to invest the maximum you can afford, even if that’s just £1k or £2k, to build wealth for your future.

Some will be reluctant to pay in a large single lump sum right now, because there’s always the danger that the stock market crash could have further to run. If you’re in that position, you should still secure your Stocks and Shares ISA allowance by the deadline, transferring the funds onto your chosen platform via debit card. You can then drip-feed money into the market afterwards, little by little, taking advantage of any dips to pick up more cheap shares.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.