The first subscription for the 2024-25 tax year came in at an three minutes past midnight on April 6
Isa investors were quick off the mark at the start of the new tax year, with some maxing out their allowances within moments of the 2024-25 period commencing.
Bestinvest received its last Isa subscription for the 2023-24 tax year came in at 11.55pm on April 5, just before the tax year ended. The first subscription for the 2024-25 tax year came in at an three minutes past midnight on April 6.
One particularly prompt client fully utilised their £20,000 Isa allowance for the new tax year by 52 minutes past midnight, according to Bestinvest. The investment platform has calculated that Isa investors who consistently invest their full allowance on the first day of the tax year could be over £67,000 richer after 25 years, compared to those who wait until the last day.
This is based on investing in global equities and assumes dividends are reinvested up until April 7, 2024. Investors should remember that while “compounding” can significantly boost savings over time, the value of investments can also fall as well as rise, so it’s important to consider the risks.
Jason Hollands, the managing director at Bestinvest, said: “As the saying goes ‘the early bird catches the worm’ and those in a position to use their new Isa now rather than wait until the end of the tax year, should strongly consider doing so.”
“Of course, many people may not be able to make full use of their Isa allowance with a lump sum at the start of the new year, but starting early still makes sense and one option to consider is to take the timing and emotion out of the equation altogether by investing on a regular basis.”
“Regular investing is a great discipline that keeps you going through the ups and down and helps reduce market timing risk as you’ll end up with ‘pound cost averaging’, an average entry price across the year that reflects some days when the market is up and others when it was down.”
Meanwhile, Fidelity International, an investment services provider, claimed its first transaction of the new tax year took place just five minutes after midnight on April 6. In another instance, a client fulfilled their entire Isa allowance of £20,000 just 20 minutes past midnight.
Ed Monk, associate director at Fidelity International, said: “While the annual Isa allowance remains unchanged at £20,000, savers will be able to pay into multiple Isas of the same kind from the start of the 2024/25 tax year, adding some more flexibility over how you choose to build your wealth.”
“This will make it easier to have Isas of the same time in different places in the same tax year and choose the best Isa for your goals.”
