You only receive one Isa allowance every tax year. This cannot be carried over into the next year, so if you do not use it, you will lose it. The annual allowance has been raised and for 2013/14 it is £11,520. Up to £5,760 can now be placed in cash and the balance into stock and shares.
Although plenty of investors wait until the last minute to use their allowance, however, there is no reason to delay and investing early means you gain greater benefit from the tax allowances for example, the earlier you put your money into a deposit account, the more interest you will earn.
For stocks and shares Isas, it can be seductive to try and ‘time’ your investment in and out, buying when prices appear cheaper. However, experts seldom manage to time the market on a consistent basis so non experts are unlikely to fare any better. If you are concerned about market volatility, ‘dripfeeding’ money into the market on a regular basis can reduce the risk of buying at the top of the market and ensure you invest at a range of different price levels. This system can offer long term benefits, particularly for nervous or first time investors or at times of significant market volatility.
Regardless of how you invest your money, however, remember you only receive one allowance a year. It is therefore best to start your research early and speak to your adviser about all the options. This will help ensure you make an appropriate decision.
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