The end of the tax year is just weeks away, meaning savers and investors are running out of time to make use of any remaining ISA allowance.
You have until 5 April 2026 to make use of your £20,000 ISA allowance, letting you earn returns tax-free.
The main types of ISAs you can choose from are cash or stocks and shares products.
Some may find the different options daunting. But there are some tricks you can use if you are nervous about where to invest, or if you need to realise capital gains elsewhere.
Here are two big tips which can help, especially at this time of year.
Parking cash
Investing in a stocks and shares ISA can be scary, especially if it is your first time entering financial markets or you are worried about ongoing geopolitical tensions.
You don’t need to rush to put your money into funds and shares though.
Instead, many investment platforms will let you “park” your cash within a stocks and shares ISA wrapper, on the basis that it will be invested eventually.
This then makes use of your ISA allowance and in some cases you could earn interest on the cash until it is put to work in the financial markets.
Joe Farmer, independent financial adviser at The Retirement Studio, said: “Parking is very common, especially near tax year-end. A lot of people want to use their allowance but don’t feel comfortable investing straight away, so they hold it in cash temporarily.
“It’s better than missing the allowance altogether, but the risk is that it then just sits there. Over time, that hesitation can end up costing more than people realise.”
Tom Kimche, head of advice at wealth manager Netwealth, suggests that while this strategy can feel reassuring during volatile markets, holding cash for extended periods can be a drag on returns, particularly when inflation is taken into account.
He added: “There is also the risk that waiting for the ‘right time’ results in missed market gains, as timing the market consistently is notoriously difficult.”
Alternatives include gradually investing - known as pound-cost averaging - or seeking low-risk investments.
If you’re feeling particularly concerned about investing in the current market environment, James Norton, head of retirement and investments at Vanguard Europe, said another option is to temporarily park any remaining ISA allowance in a money market fund, which is a lower-risk investment giving you a place to hold rather than grow your savings, while aiming to give investors a slightly higher return than cash.
He said: “Once you feel more confident, you could then consider moving your money into more growth-oriented investments that help you progress towards long-term goals.”
Ultimately, said Rootes Wealth Management independent financial adviser Rob Mansfield, the “biggest hack” is dealing with things earlier in the tax year so you avoid the last minute rush and execute with a plan.
Bed and ISA
There is also an ISA trick for people who hold assets such as shares or funds outside the ISA wrapper and want to benefit from tax-free growth in future.
The idea is that investors sell their taxable investments and then repurchase them within a tax wrapper, helping to protect future income and gains from tax.
In some cases, investors can use the process to realise gains within their annual capital gains tax exemption, effectively resetting their tax position without paying tax.
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You need to check for any trading fees though, as well as that the fund or product you want to invest in is ISA-compatible.
Timing is also important though, especially in 2026 as the end of the tax year coincides with the Easter weekend - so you need to check any transaction deadlines with your investment platform beforehand.
Lee DeRedder, financial planner at Shackleton Advisers, warned that a drawback of this strategy is that the asset may no longer fit within your risk appetite.
He said: “Keeping an eye on the investment strategy and your level of risk is key to ensuring investments remain appropriate to your needs.
“Another potential drawback is that you essentially forego any opportunity to ‘buy the dips’ after a period of weaker financial market performance or to postpone a decision to invest.
“That said, it’s worth remembering the adage that the key to long-term success is ‘time in the market, rather than timing the market.’”
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
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