As the tax year end looms on April 5, 2025, savers and investors are urged to utilise their allowances before they reset, yet “investment anxiety” is causing hesitation among many. According to a study, 70% of UK adults feel deterred by factors such as inexperience or fear of financial loss.
Craig Rickman, a personal finance expert from interactive investor, advises maximising your Isa allowance first, with the current annual cap being £20,000 for new savings.
Rickman said: “If you have unused Isa allowance this tax year and plan to add more, make sure you do before the allowance resets.”
He also points out the array of Isas available, including Lifetime Isas, which offer a government bonus for first-time homebuyers but come with certain conditions and penalties, Innovative Finance Isas that allow investments in businesses, and Junior Isas for children. Savers can opt for cash, stocks and shares, or a mix, depending on their goals and risk tolerance.
Rickman adds that when selecting an Isa, “the best one for you will depend on your personal goals and risk appetite”.
Investing your hard-earned cash can be a risky game, with the potential to lose some of your initial outlay, warns experts. However, the rewards could be sizeable if the investments perform well over time.
Rickman highlights Junior Isas (Jisas) as a savvy option for helping youngsters weather the storm of financial challenges they may face in early adulthood.
“While only a parent or guardian can open a Jisa for a child, anyone can contribute once the account is up and running,” he explains. While considering savings accounts, it’s not just about potential returns and interest rates; savers should also think about whether an account’s ethos matches their own.
Roger Hattam, Triodos Bank UK’s director of retail banking, points out: “Whether you’re saving in a cash Isa, or investing in stocks and shares or innovative finance, your money won’t just sit there: it will be actively used by your bank to fund whichever businesses and sectors that bank sees fit. And this is where your choice really matters.
“Even a small amount of money can make a huge impact when it’s being invested back into transformative projects that deliver measurable positive impact.”
For those interested in ethical savings, Hattam recommends delving into ethical campaigns and independent guides which might lead to more sustainable and transparent savings options.
