NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

37% more ‘early birds’ investing in a Stocks and Shares ISA in 2021!

37% more ‘early birds’ investing in a Stocks and Shares ISA in 2021!
Source: Getty Images


Stocks and shares ISAs provide investors in the UK with a unique opportunity to minimise tax on investments. Every year, we have an ISA allowance to use and it looks like more are choosing to get the ball rolling as soon as possible. Let’s see what these early birds are up to.

Compare stocks and shares ISAs

If you’re planning to open a stocks and shares ISA, choosing the right platform is important. To help you narrow down the choices, we’ve created a list of some of the top stocks and shares ISAs.

Why are some investing early into a stocks and shares ISA?

According to research from Hargreaves Lansdown, the number of people putting money into a stocks and shares ISA in the first month of the tax year is up by 37%!

Why the big increase? One reason for this could be the continuation of extremely low interest rates on offer from banks. People want to make sure the value of their wealth doesn’t depreciate due to inflation. So an investment account is one way to try and stop this from happening.

Recent data also shows that it can be beneficial to invest your full ISA allowance at the beginning of the tax year. This could be another reason why some are getting stuck in to their allowance early on.

Who is investing early in their stocks and shares ISA?

The research shows that it’s the older, and perhaps wiser, investors who are taking action.

Sarah Coles, personal finance analyst at Hargreaves Lansdown explains: “Middle-aged people are the first off the blocks when it comes to ISA investment. It’s not an age we associate with being ahead of the pack and setting the pace, but when it comes to ISAs, those aged 30-54 are the brightest of the early birds.

“Among HL clients, those aged 30-54 were the most likely to invest in an ISA within the first month of the current tax year. Almost half as many people in this age bracket invested in the first month as invested in the whole of the previous tax year.”

“They’re followed by those aged 55-64. This group is keen to take advantage of what are often key years for building investments. Often people in the early years of adulthood are focused on short-term savings needs, while once you get beyond 65, you’re into the withdrawal phase of life, where overall you tend to be running your assets down rather than building them up.”

Are you making these 3 common investing mistakes?

These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold….

To help you side-step these pitfalls, and move forward on your path to wealth-building, we’ve created a free report, “The 3 Worst Mistakes New Investors Make”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.

Is it better to invest in a stocks and shares ISA earlier?

Of course, there are never any guarantees when it comes to investing. But there is data to support the idea that the early bird catches the worm.

If you’re investing for the long term, it’s time in the market that can be the most important factor.

Sarah Coles puts it nicely: “The earlier you use your ISA allowance in the tax year, the better, because your investments have longer to grow, and are protected from tax straight away. Over the long term, this can have an impressive impact on returns.”

“Early bird investors who have a lump sum to invest at the outset gain up to a whole year of dividends and potential growth in the stock market ahead of those who leave it until the last minute.”

Where can I invest in a stocks and shares ISA?

Don’t fret if you’re yet to use your allowance, there’s still plenty of time! We’re really lucky in the UK to have the ISA system. Using these accounts can be your secret weapon to building wealth.

We’ve researched and reviewed some of the best stocks and shares ISA accounts available. This way you can check out some of the options available to you.

You should bear in mind that not all ISAs are the same. So it’s important to try and find a platform that suits your investing strategy and goals. Past performance doesn’t dictate future results. But utilising your ISA allowance each year can give you a great chance of being successful in the long run.

Tax treatment depends on the specific circumstances of the individual and may be subject to change in the future.

Was this article helpful?
YesNo

Reviewed and rated 4 stars out of 5 by MyWalletHero

Need investment advice? Get a free initial review lasting up to 1 hour, plus £50 off any follow-up advice.

MyWalletHero has sourced you a £50 discount off the cost of advice when you find an independent or whole-of-market financial adviser through Unbiased.co.uk*. All advisers are FCA-regulated, qualified and give fully unbiased advice. To find yourself an adviser fast and for free – use the Unbiased matching tool.

*This is an offer from one of our affiliate partners. For more information on why and how we work with partners, click here.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.