Somehow, despite more than 200 years of the tax year ending on 5 April, it still catches people off guard. Every year, huge numbers of savers and investors end up racing to sort their finances before the deadline.
If you keep meaning to sort out this year’s ISA, but you haven’t got round to it yet, you still have time. The key is not to let the fact you’ve left it late force you into making some of the most common last-minute mistakes.
With cash ISAs, you might think it’s easiest just to open one with the same bank as your current account. If you’re with a high street giant, this could mean settling for an incredibly disappointing interest rate.
However, it’s worth knowing that it’s not difficult to open a cash ISA. The application form should take about ten minutes, and all you’re likely to need is your national insurance number and the cleared funds in your bank account. So don’t settle for something dismal.
Read more: How to protect yourself against tax traps
The eleventh hour isn’t the ideal time to be building your longer-term investment strategy. If you already know where you want to invest, there’s nothing stopping you doing this late in the day. However, if you have yet to go through this process, it’s a great idea to divide the decision to open an ISA from the choice of where to invest.
Before the deadline expires, you can put money into a stocks and shares ISA as cash, and then move into investments when you’re ready. If you take this approach, don’t let things drift. Set aside time as soon as possible to make a decision and get your money working harder.
Trying to time the market is notoriously difficult, even for professional investors, but even when you’re not trying to do anything particularly clever in terms of timing, you may want to avoid the risk of investing all your annual allowance at once, at what turns out to be a less-than-ideal moment.
The easiest way to do this is put money into cash within a stocks and shares ISA before the deadline, and then gradually drip-feed the money into investments over the coming weeks and months, so you spread the timing risk.
Read more: Savers can still shield up to £220,000 from tax before rules change
It seems like investing in an ISA isn’t the sort of thing you’d forget, but if you put money in at various points through the year and have a cash ISA and stocks and shares ISA with different providers, you can lose track of how much of your allowance you have left.