Early bird ISA investors could be more than £6,000 better off

Investors who use their tax efficient ISA investment allowance earlier rather than later in the tax year, could be £6,361 better off over the longer term according to analysis by Fidelity International. This amount has been calculated using the growth in the FTSE All Share over 15 years. However, investors choosing a more aggressive, actively managed fund, such as Fidelity's Special Situations Fund, could have benefited by an extra £22,039.

Whilst not everyone will be as prompt as Fidelity's earliest bird, who invested at 5.56am on 6th April, Fidelity are encouraging people to consider investing earlier rather than later in the tax year in order to give their money more time to grow in the market over the long run.

However, relatively few investors choose to buy at this time of year, despite these potential additional investment gains. In fact buying an ISA becomes more popular, broadly speaking, as the tax year deadline approaches - analysis of sales from last year's 2010/2011 ISA season has shown that Fidelity received 13% of its ISA applications in the last week of the tax year, with 7% leaving it to the last few days (2nd April to Midnight on 5th April).  One investor even left it to the last 14 seconds of the tax year, making their investment at 23:59:46pm on 5th April!

Rob Fisher, Head of Personal Investments at Fidelity International, says, "Investing earlier rather than later in the tax year simply gives your money more time to grow in the market over the long run. Put another way, more of your money is sheltered from the tax man for longer. Our analysis shows that those who have historically chosen the beginning of the new tax year for their investment rather than leaving it to the last minute could have gained an extra £6,361 - a very attractive additional gain with no further tax to pay."

More details on ISAs can be found on Fidelity's website fidelity.co.uk.