For financial advisers up and down the UK, March and April are extremely busy months. This is because many people rush to put money into their pensions or Stocks and Shares ISA before the tax year ends on 5 April.
Because certain tax allowances end and cannot be rolled over to the following tax year, the final weeks leading up to 5 April is when many investors spring into action. Yet waiting for the end of the tax year could reduce their money’s long term growth potential, which might be detrimental to their wealth.
If instead they invested at the beginning of the tax year, investors could help to boost their money’s long-term value. In addition to this, it could also mean the process of investing becomes smoother. Read on to discover three reasons why this is.
1. Your money has time to grow
In the world of finance there is a well-known phrase, which goes: it’s time in the market that matters, not timing the market. This means that the longer your money is invested, the more likely it is to grow.
By investing at the start of the tax year, you’re increasing the time that your money is exposed to potential growth. As such, you could have an additional 10 or 11 months invested, which might provide a boost to your returns.
To demonstrate this, you might want to consider the following illustration. It reveals the performance of the FTSE 100, which follows the performance of the top 100 companies registered on the London Stock Exchange, between 7 April 2025 and 4 April 2026.
Source: London Stock Exchange
As you can see, those who invested at the beginning of 2025/26 could have enjoyed more growth than those who invested in the latter part of it. Always remember that previous performance is no guarantee of future performance and markets can go up as well as down. Capital exposed to the market will always be subject to risk.
2. You won’t miss out on an opportunity
Because many investors wait until the end of the tax year, financial advisers can become extremely busy dealing with their client’s instructions to invest. Consequently, some pension and ISA providers can struggle with the administration created by the rush, meaning some investments may not be completed in time to meet the 5 April deadline.
This means, for example, investors may miss out on valuable tax relief if they cannot invest in their pension in time. Alternatively, they may not be able to take advantage of the £20,000 (2026/27) ISA allowance, which is lost when the next tax year begins.
As Stocks and Shares ISAs are not exposed to Capital Gains Tax or Dividend Tax, missing the opportunity to place £20,000 into such a tax-efficient environment could be something investors regret.
Talking to your financial adviser early in the new tax year provides peace of mind that you’ve used all your allowance, and that your provider has plenty of time to process your instructions.
3. You have time to spread your investments
Another benefit of starting early in the new tax year is that you can drip feed your investments if you’d rather, instead of investing a lump sum at the end of the tax year. For example, you might prefer to set up a monthly plan that makes regular investments throughout the year, meaning you could benefit from ‘pound cost averaging’.
This is where the rise and fall of the value of the markets, and the potential impact it could have on your investments, is smoothed out as you continue to make regular investments over time.
As a result of this, the average price you pay for your investments could be reduced, meaning your money may go further. This could boost your money’s long-term growth potential and may mean you can achieve your goals more quickly.
That said, you should always discuss pound cost averaging with a financial adviser to ensure it’s the right strategy for you.
Get in touch
If you’re an investor, or considering investing, doing so at the start of the tax year could provide major advantages. If you would like to learn more about the benefits of investing earlier or would like to discuss whether investing is right for you, please call us on 0333 010 0008 to arrange no obligation initial meeting with one of our independent advisers.
While we hope this blog is useful, please remember that it is for general information purposes only and should not be seen as advice.
30 April 2026