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Your last minute ISA questions answered

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Written by:
05/04/2016
The countdown to midnight on 5 April – the end of the tax year – is on. But there’s still time to use up your ISA allowance. Remember, this year’s ISA limit is £15,240 and you cannot carry forward any unused allowance.  So if you don’t use it up by midnight tonight, it’s gone forever.

Is there still time to open an ISA?

Although leaving your ISA decision-making to the last minute isn’t the best course of action, you can in theory invest your money right up to the deadline.

“You can now open an ISA in just four minutes online, about the same time it takes to boil an egg, which means you can apply almost up to the stroke of midnight on 5 April,” says Laith Khalaf, a senior analyst at Hargreaves Lansdown.

I want to open a cash ISA. What are the best rates?

Rates on cash ISA products have fallen over recent years and are now hovering around the 1% mark.  The best instant access rate available is 1.40% from Coventry Building Society.

If you are willing to tie your money up for one year you can get 1.45% from Kent Reliance, 1.65% from Kent Reliance if you go for a 2 year fixed and 2.33% from United Bank UK for a 5 year fixed.

For more see – Cash ISAs: top rates for last minute savers

I’d like to open a stocks and shares ISA but don’t know where to invest?

If you’re a bit daunted by the prospect of investing in the stock market or simply don’t know where to invest and don’t want to be rushed into making a decision but you don’t want to lose your ISA allowance for the year, you can ‘park’ your money in an ISA cash park. This acts a temporary home for your ISA money until you decide which funds or shares to invest in.  If you want to hold money in cash over the long term, you should consider opening a cash ISA.

For more see – VIDEO: ISA cash parks explained in three minutes 

Which funds are attracting the most amount of ISA money?

According to Hargreaves Lansdown, which has over 500,000 ISA clients, the most popular fund choices in March were an even split between growth and income funds.

Big-name fund managers such as Neil Woodford, Angus Tulloch and Nick Train all made it into the top 10.

Top 10 funds (in alphabetical order)

AXA WF Framlington UK

CF Lindsell Train UK Equity

CF Woodford Equity Income

Fundsmith Equity

HL Multi- Manager Income & Growth Trust

HL Multi-Manager Special Situations Trust

Jupiter Asian Income

Lindsell Train Global Equity

Marlborough Multi Cap Income

Stewart Investors Asia Pacific Leaders

I’d rather invest in shares. What are the recent best sellers?

Glencore, Lloyds, Barclays and Royal Dutch Shell both feature in the list of top selling shares compiled by Hargreaves Lansdown, so share investors are clearly expecting some “bouncebackability” in resource and banking stocks, says Khalaf.

He adds: “Oil and mining shares have generally seen some measure of recovery since the start of the year, while the banking sector has struggled. Lloyds is perhaps the exception. It seems to have been rewarded for being in better shape than other UK-listed banks.”

Top 5 shares (by amount purchased)

Glencore plc

Lloyds Banking Group plc

Barclays plc

Royal Dutch Shell plc B Shares

ITV plc

 

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