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There is just over two weeks left until the annual deadline for ISA contributions.
After that date, the ISA allowance for the current tax year will be closed forever. Any new donations will eat into next year’s grant.
With that in mind, here are three things I’m currently doing in preparation.
1. Find out how much money is left
The exact figure varies for some investors depending on their age and the types of ISA involved, but as a general rule, most British adults have an annual ISA contribution limit of £20,000.
Others will have spent all their money. But many people will sit on some or all of their allowances this tax year, unused.
A simple but useful first step now is to check how much of the allowance can be used (if any) in the current tax year before the ISA deadline.
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.
2. Consider how to fill the void
If this year’s allowance is not used by the end of the tax year next month, it will disappear.
However, investing is one of life’s priorities. At any given time, many of us may have other important needs that strain our bank balance.
So, I think now is a good time to sit down and take a moment to decide how much I can put into my ISA before the end of the current tax year.
Some people leave it for last. But arranging finances can take time and so can transfers. So I’m not leaving things to chance when it comes to this year’s donation deadline.
3. Think about the best ISA to use
Another, related, question is what the ISA will put into that money.
There are a wide variety of Stocks and Shares ISAs available in the market. Each has its own features and benefits, and different cost structures.
Now is as good a time as any to decide which other contributions are eligible for the current tax year.
Another thing I do
While those three activities strike me as deserving of immediate attention, something that may be less urgent is investing.
As the name suggests, the deadline is the allowance for depositing money into an ISA. But once it is in the tax fund, it can be invested at any time.
There is no rush. However, for now, I think there are UK stocks worth considering.
Take it Greggs (LSE: GRG) for example.
Greggs’ share price has fallen by 14% in the past year. Appetite for the cake maker has waned due to risks including the high cost of profit-eating National Insurance, diet pills hurting customer demand, and profit from a lack of planning. That happened last summer and it can happen again.
However, I think the fall may be overdue in the long term.
Greggs has thousands of stores and a huge number of customers. Its value proposition is strong as few if any competitors at the national level offer equivalent products at the same price. Gregs economy of scale is very helpful.
Will that change? Gregs continues to grow – and I think he can do so for years to come. I plan to hold on to my Gregs shares.
