THE new ISA allowance for 2015/16 became available on 6th April, giving UK residents the chance to put more of their money into tax-efficient savings accounts and investments.

Yet this year, like so many before, the flurry of activity came, not at the start of the new tax year, but at the end of the last, when there was a dash to get money invested before the 5th April deadline.

It is always a mystery why so many people leave their ISA investing to the end of the tax year, instead of doing it at the start. As soon as money is invested or saved into an ISA, the money starts to benefit from being in a tax-efficient wrapper. This means that any interest is paid free of tax and dividends paid from stocks and shares. ISAs have a non-refundable 10 per cent tax deduction.

We are already two months into this tax year, with the months going by rather quickly.

It makes no sense to leave money in accounts which are tax-paying all year only to transfer into an ISA at the last possible moment – after all, why would you pay tax on interest or income from your savings/investments when you don’t have to?

Financial planning can sometimes be about conquering human nature. This means thinking through your goals and objectives and working out the financial steps and taking action to get there. If you were a last-minute ISA investor this year it may make sense to change the habit and get ahead of the game.

This year, there are some additional changes to ISAs which were announced by George Osborne in his 2015 Budget which are of extra benefit. ISA allowances increased on 6th April 2015 this year, as did the JISA and Child Trust Fund subscription limits.

Also announced was a proposed flexibility to ISAs. The Chancellor announced that savers will soon be able to withdraw and replace money in the same tax year without losing the tax advantages. This development should be launched in autumn 2015, following consultation with ISA providers.

Of course, there is always the issue of timing with any investment, but this is extremely difficult as unfortunately none of us (as far as I know) are equipped with a crystal ball. This is why, if you do invest money, then it is important that you are prepared to play at least a medium game as far as timeframes are concerned. This would normally mean putting your money away for at least five years.

It is also extremely important that you review your ISAs on a regular basis to make sure your funds are performing well relative to their sector and are still relevant to your attitude to risk.

Finally, if you are nervous about investing all your money into an ISA straight away you can always drip-feed it in monthly as this will take advantage of pound cost averaging.

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