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The ISA deadline for Shares and Shares is 5 April. A tax-efficient investment portfolio is used by millions of Britons each year. If we go back to the first day of trading in 2025 (7th April) and assume that the investor put in a sum of £10k FTSE 100 shares, how will things stand now?
Great benefits
The start of the ISA year in 2025 coincided with a major shake-up in financial markets due to concerns about US tariffs. As a result, the FTSE 100 opened on April 7 at 7,699 points. A month later, it traded above 8,600 points, marking a major recovery as volatility eased.
The market now sits at 10,255 points, up 33.2% in less than a year. That is a very good figure and would mean that the investor would be sitting on an unrealized profit of £3320. However, this is above the historical average return. If someone decided to put £10k into an ISA just a month later, the return would be 19.2%.
The return assumes that the money was invested in an index tracker. In fact, active stock selection could have been used, which would have resulted in a large difference in profits. For example, having a large share Fresnillo it would have made a profit of 280%. On the other hand, any great weight Autotrader it would have lost 34%.
Next year
The 2026 ISA deadline is now less than a month away. Because of that, it makes sense to start looking for opportunities. Of course, if the investor has free cash now and has only used £10k of the current allowance, there is room to buy now as the limit is £20k. But if a person has already done this, he will have to wait for April.
Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content of this article is provided for informational purposes only. It is not intended to be, and does not constitute, any form of tax advice. Students are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.
One stock I like is NatWest Group (LSE:NWG). The stock has caught up in the recent broad market selloff, but I don’t think the company is facing a Middle East situation. So, this could be a temporary dip rather than anything more serious.
In fact, if energy prices remain high, it could push up UK inflation and prompt the Bank of England to raise interest rates. This will increase NatWest’s interest margin, potentially increasing profits in the long run.
Even without this factor, the outlook for next year looks bright. Last month, it announced it was acquiring wealth manager Evelyn Partners. This is its biggest deal in decades and shows a clear push for more expansion in this space. Wealth management businesses typically have high margins and strong revenues.
However, risks remain. Fintech Revolut recently received a UK banking licence, highlighting how competition is increasing and is looking to take market share from traditional firms such as NatWest Group. Even so, I think it could be a stock worth considering for an ISA next year.
