Choosing your ISA for this year

ISA review

There can rarely have been a time when the ISA tax allowance looked so appealing compared to the paltry interest rates available from UK banks and building societies.

DEFLATE OR REFLATE?

ISA investment is more relevant than ever these days because, with the UK Government having borrowed billions to reflate the UK economy, we will be paying more tax in future – around £33,000 for every man, woman and child if the latest estimates are to be believed. What’s more, with the ISA allowance on an annual ‘use it or lose it’ basis, if you don’t invest when you can, the opportunity is gone. Of course, investors should never let the ‘tax tail wag the investment dog’.

Investing in the stock market today is a lot better in terms of value for money than in the recent past when share prices were higher. However, psychologically, even the most logical and rational minds can find it difficult investing after prices have fallen.

WHERE TO INVEST?

It’s vital to consider how any new ISA investment fits within your existing portfolio. Any new ISA investment should complement both your overall strategy and, as importantly, the underlying investments of any existing funds held. This might be easier said than done. It’s all too easy to end up unwittingly overinvested in one share if many of your funds hold that particular share. Our advisers can help you review your portfolio. Alternatively, you could choose one of our suggested ISA portfolios or Bestinvest’s Multi-Asset Portfolio service.

Whether you invest for growth or income, make sure that you get the best from your ISA.If you would like further information, call one of our advisers on 020 7189 9999 or visit us online at bestinvest.co.uk/ISA.

Suggestd ISA split for a growth investor with moderate risk

Source: HM Revenue & Customs. If you want to view our full range of ISA splits for different types of asset models, please go to bestinvest.co.uk/isa/models

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