As the new tax year gets underway and a fresh ISA allowance becomes available, investors will be considering different approaches to using their tax-free savings. While some act within minutes of the new tax year starting, others wait until much later in the year to make use of their allowance.
Fidelity International data highlights this contrast. The first Fidelity Personal Investing customer to use their full £20,000 ISA allowance for the 2026/27 tax year did so within the first hour, at 00:21 on Monday 6 April. Meanwhile, the final customer to use their full allowance for the 2025/26 tax year invested at 23:40 on Sunday 5 April.
In light of recent market volatility, UK investors are weighing their options carefully. Many still seek to maximise their tax-free ISA returns early in the new tax year, while others may feel uncertain.
Fidelity analysis shows there is more than one effective way to use an ISA allowance.
Little and often: a powerful approach
Investing regularly can provide a practical alternative to committing a lump sum upfront, particularly for those who prefer not to make a single investment decision. By spreading investments over time, investors can avoid trying to predict short-term market movements – something that is difficult to do consistently.
A regular approach can also help smooth the price paid for investments over time, as money is invested across different market conditions. This can help take some of the emotional bias out of investing decisions and support a more consistent long-term approach.
Comparing different approaches
To explore the impact of timing, Fidelity analysed three approaches to investing an ISA over both 25 and 10 years, using the maximum ISA allowance available in each tax year, which has increased over time to £20,000 today. The analysis compares investing the full allowance at the start of each tax year, investing regularly throughout the year, and investing at the end of the tax year.
Returns generated after 25-years of investing the maximum ISA allowance
| Investor | Total contributions | Final pot |
| Early Shirley | £306,560 | £777,803 |
| Monthly Monty | £306,560 | £755,399 |
| Last-Minute Lara | £306,560 | £735,646 |
Source: Datastream, Fidelity International, 05/04/2001-06/04/2026 Total return in GBP of FTSE All Share
Over the longer term, investing at the start of the tax year has historically delivered the strongest outcome. However, investing regularly throughout the year can also generate significant returns, showing that a consistent approach can be effective even without committing a lump sum at the outset. Delaying investment decisions until the end of the tax year can lead to lower overall returns.
Returns generated after 10-years of investing the maximum ISA allowance
| Investor | Total contributions | Final pot |
| Early Shirley | £185,480 | £321,570 |
| Monthly Monty | £185,480 | £303,625 |
| Last-Minute Lara | £185,480 | £299,385 |
Source: Datastream, Fidelity International, 05/04/2016-06/04/2026. Total return in GBP of FTSE All Share
A similar pattern is seen over shorter timeframes, with both early investing and regular investing delivering stronger outcomes than waiting until the end of the tax year.
Marianna Hunt, Personal Finance Expert, Fidelity International comments: “The start of a new tax year is often a prompt for people to review their finances and think about how to make the most of their ISA allowance.
“While some investors choose to invest their full allowance straight away, it’s important to remember you don’t need to make all your decisions at once.
“For many people, investing regularly can make the process feel more manageable. It helps reduce the pressure of trying to time the market and can take some of the emotion out of investment decisions.
“What matters most is making use of your ISA allowance and maintaining a long-term focus.”
Understand how much your savings can grow using Fidelity’s Stocks and Shares ISA calculator.
Volatility describes periods of unpredictable, and sometimes sharp, market rises and falls. It’s natural, but unnerving. Fidelity’s principles for good investing may help investors think through their options during periods of uncertainty. Fidelity’s tools can also help illustrate how changing the amount saved each month may affect outcomes over the long term.
