Early bird ISA investors can pack an additional £ 12,000 over a 10 year period

Early bird ISA investors who make the most of their annual allowance early in the tax year could be more than £ 12,000 better off in a decade than those who left them until the last minute.

The UK’s largest fund businesses cracked the numbers before April 5th.

Interactive Investor showed that investing the full ISA allowance of £ 20,000 on the first day of each new tax year, April 6th, would result in a portfolio of £ 264,136 for 10 years, assuming an annual return of 5% is achieved.

That’s £ 12,578 more than anyone who chooses to always invest on the last day of the tax year, April 5th, as they are effectively missing out on one year’s growth by comparison.

Over 20 years the difference is even more pronounced at over £ 33,000.

Hargreaves Lansdown’s calculation also found that holding £ 10,000 a year on April 6 for a decade on the Legal & General International Index Fund would have resulted in £ 145,860, roughly £ 18,000 more than the £ 128,040 return on the Investment on the last day.

Slightly more than one in five (22%) of Hargreaves customers take out an ISA on the first day of the tax year, with men (27%) getting on early more often than women (16%).

The ISA Millionaires – You Can Find Out The Secrets Of Their Success Here– invest almost twice as often on April 6, with 37% using their allowance on day one, compared to 20% for all other Interactive Investor ISA investors.

Myron Jobson, Interactive Investor’s personal finance fighter, said, “Many of us are not fortunate enough to be able to maximize the annual ISA allowance early in the year. However, if you have money to invest, your money will be in the market longer at the start of the tax year and, in turn, benefit from a full year of compound interest. “

Hargreaves Lansdown Personal Financial Analyst Sarah Cole added, “If you don’t have a flat rate right now, getting started early is an early way to get your money in the market through regular investments.”

For more ISA tips, check out our Michellevator Investment Guides:

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Early bird ISA investors can pack an additional £ 12,000 over a 10 year period

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