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18/8/2022

Decline in cash use eases after pandemic slump

Although cards remain a far more popular way to pay, cash is a preferred option for many, a report says.

18/8/2022

Train strikes: Passengers face disruption as rail services hit

Half of Britain's lines are shut and some places have no trains at all, as 45,000 workers walk out.

Today is the start of the new tax year, so this could be the best time to take advantage of one of the tax breaks available to you, by opening a Stocks and Shares ISA.

The end of the tax year is often referred to in the media as the ‘ISA season’, which gives the impression that March is the best time of year to open an ISA. However, this is not necessarily the case for several reasons.

It always makes sense to utilise all your tax allowances to the full, so opening an ISA at the start of each tax year means your investments are sheltered from tax straight away. The ISA allowance for 2021/22 remains at £20,000 a year, allowing every UK adult over the age of 18 to invest this amount and profit tax-free.

Time in the market is recognised as one of the fundamental tenets of good long-term investing practice, so investing at the start of the tax year gives your money an extra 12 months to grow. The earlier you invest in ISAs in the tax year, the longer your investments can grow free of UK tax and this can have a major effect on investment performance.

Due to the pandemic, markets have seen some volatility but returns have more than held up - and as we tentatively start to get back to some sort of normality, things should only get better. For the more cautious investor, however, when investing for the long-term, there are ways to mitigate market volatility.

For example, investing a regular sum of money each month means you will buy into shares or funds at different prices - diluting your exposure to a sudden fall in the market.

Over the course of a year this is likely to be beneficial, as some months you may pay more but in others, you will pay less for the assets you hold.

The pandemic has seen many of us saving more, due to restrictions on leisure activities and holidays abroad. According to Office for National Statistics and Bank of England data, Cash ISAs had near record balances of £297 billion at the end of 2020, but interest rates are at their lowest for more than 20 years. So, if you are one of the many relying on a Cash ISA, then maybe it’s a good time to consider the benefits of a Stocks and Shares Isa instead.

If you would like to start the new tax year off by taking advantage of your ISA allowance, talk to one of our financial advisers today.

Please be aware that the value of investments linked to the stock market and the income from them, may rise or fall depending on market conditions and that you may not always recoup your initial investment. In addition, past performance should not be seen as an indication of future returns.

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