Buck the trend and make 30% more in your ISA

Investors could make on average 8% more from their ISA if they invested at the start of the tax season rather than taking part in the traditional ‘ISA season’ rush leading up to 5 April. For some, the difference could be as high as 30%.

eValue FE strategy director Bruce Moss said: “Our research into equity market and cash returns over the past 20 years shows that 75-80% of the time investors would have found it cheaper to invest at the start of the tax year as opposed to its end. Not only does this give investors eleven more months of market performance, the added time and the ISA tax benefits with regards to income means that the dividend growth is also sheltered for a longer period. This can have a marked influence on returns even within such a short time frame.”

“It is not just about the additional time in the market either, but the time in which market exposure is gained. Traditionally the lead time into the Spring period is a time when equity markets fare well, while the summer period tends to be quieter. So far, 2013 has proved to be a good example of this with strong growth seen in the UK equity market over the past few months. For investors buying an ISA now, they will have missed out on this growth. Whereas had they bought the tax wrapper at the start of this tax year, they would be fully participating in the market’s recent strength.”