If you’re not a fan of doing things in a rush, the good news is that it doesn’t always have to be a last-minute sprint. With regular investments throughout the year, you could get into a good rhythm that helps ease the pressure.
It’s always worth remembering though, that investing always comes with risk.
Time to become a creature-of-habit?
Investing isn’t only for people with a large lump sum to work with. You can also invest regular amounts at your own pace, helping you build up your wealth while getting exposure to investment returns.
It’s also a good way to start building up capital for children, grandchildren or other people you care about. By putting aside a little bit every month, rather than holding out for the ‘right time’ to invest, you’re getting exposure to market growth at the earliest stage. Regardless of how much investment knowledge you have, it’s notoriously hard to time the perfect market ‘entry point’.
ISAs: All-in-one, or split through regular payments
If you do want to fund an ISA, you can use regular investments to do so.
The ISA allowance for the 2019/20 tax year is £20,000. By making a monthly investment of around £1,600 through an online service such as Coutts Invest at the start of the tax year, you will ensure you use most of your annual allowance before it’s too late.
After five years, you would have invested nearly £100,000 on which you will pay no tax on your returns, depending on your circumstances and assuming allowances and the rules around using them don’t change.
But remember, investing comes with risk. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment.
Setting up a regular payment into a stocks and shares ISA also has the added bonus of meaning you’re less likely to forget to use your allowance – something we recognise is easy to do in the increasingly hectic lives we all lead.